Mondelez International Inc

Items Affecting Comparability of Financial Results

The following table includes significant income or (expense) items that affected the comparability of our results of operations and our effective tax rates. Please refer to the notes to the consolidated financial statements indicated below for more information. Refer also to the Consolidated Results of Operations – Net Earnings and Earnings per Share Attributable to Mondelēz International table for the after-tax per share impacts of these items.

(1)Includes impacts recorded in operating income, benefit plan non-service income and interest expense and other, net. Mark-to-market gains/(losses) above also include our equity method investment-related derivative contract mark-to-market gains/(losses) (refer to Note 10, Financial Instruments) that are recorded in thegain on equity method investment transactions on our consolidated statement of earnings.

(2)ERP System Implementation program costs represent incremental operating expenses above the normal ongoing level of spending on information technology to support operations. These expenses include third-party consulting fees, direct labor costs associated with the program, accelerated depreciation of our existing SAP financial systems and various other expenses, all associated with the implementation of our information technology upgrades.

(3)(Loss)/gain on equity method investment transactions includes impairments and is recorded outside pre-tax operating results on the consolidated statement of earnings. See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives. In addition, the amount shown in 2024 is inclusive of the gain on economic hedges related to sales proceeds from our JDEP transaction, which was recorded in Interest and other expense, net.

Consolidated Results of Operations

The following discussion compares our consolidated results of operations for 2024 with 2023 and 2023 with 2022.

Net Revenues

Net revenues increased $425 million (1.2%) to $36,441 million in 2024, and Organic Net Revenue(1) increased $1,544 million (4.3%) to $37,054 million. Emerging markets net revenues increased 1.1% and emerging markets Organic Net Revenue increased 6.2%(1). Developed markets net revenues increased 1.2% and developed markets Organic Net Revenue increased 3.2%(1). The underlying changes in net revenues and Organic Net Revenue are detailed below:

(1)Please see the Non-GAAP Financial Measures section for additional information.

Net revenue increase of 1.2% was driven by our underlying Organic Net Revenue growth of 4.3% and the impact of an acquisition, partially offset by unfavorable currency-related items and the impact of our 2023 divestiture of the developed market gum business. Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix. Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during 2024. Overall, unfavorable volume/mix was driven by volume declines, reflecting the impacts of expected customer price negotiation disruptions in Europe primarily in the second quarter, consumer demand softness in the U.S. and Mexico in the first half of the year and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix. Unfavorable volume/mix was reflected in Europe and Latin America, partially offset by a gain in AMEA, while North America was essentially flat. The November 1, 2024 acquisition of Evirth added incremental net revenues of $72 million (constant currency basis) in 2024. Currency-related items decreased net revenues by $710 million, driven by unfavorable currency translation rate changes, partially offset by the adjustment for extreme pricing in Argentina. Refer to Recent Developments and Significant Items Affecting Comparabilityfor additional information. Unfavorable currency translation rate changes were due to the strength of the U.S. dollar relative to most currencies, primarily the Argentinean peso, as well as the Brazilian real, Nigerian naira, Turkish Lira, Russian ruble, Egyptian pound, Mexican peso and Chinese yuan, partially offset by the strength of a few currencies relative to the U.S. dollar, including the British pound sterling, Polish zloty, euro and Colombian peso. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $484 million in 2024. Refer to Note 2, Acquisitions and Divestitures, for additional information.

Operating Income

Operating income increased $843 million (15.3%) to $6,345 million in 2024, Adjusted Operating Income(1) increased $265 million (4.7%) to $5,899 million and Adjusted Operating Income on a constant currency basis increased $456 million (8.1%) to $6,090 million due to the following:

(1)Refer to the Non-GAAP Financial Measures section for additional information.

(2)Refer to Note 8, Restructuring Program, for more information.

(3)Refer to Note 6, Goodwill and Intangible Assets, for more information.

(4)Refer to Note 10, Financial Instruments, and the Non-GAAP Financial Measures section for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(5)Refer to Note 2, Acquisitions and Divestitures, for more information on the November 1, 2024 acquisition of Evirth, October 1, 2023 sale of the developed market gum business, November 1, 2022 acquisition of Ricolino, August 1, 2022 acquisition of Clif Bar and the January 3, 2022 acquisition of Chipita.

(6)Refer to Note 14, Commitments and Contingencies, for more information.

(7)Refer to Note 1, Summary of Significant Accounting Policies–War in Ukraine, for more information.

(8)Refer to Recent Developments and Significant Items Affecting Comparability -ERP System Implementation, for additional information.

(9)Refer to Note 1, Summary of Significant Accounting Policies –Currency Translation and Highly Inflationary Accounting, for information on our application of highly inflationary accounting for Argentina, Türkiye, Egypt and Nigeria.

During 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix. Higher net pricing, which included the carryover impact of pricing actions taken in 2023 as well as the effects of input cost-driven pricing actions taken during 2024, was reflected across all regions. The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by productivity. Higher raw material costs were in part due to higher cocoa, sugar, nuts and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower energy, edible oils, grains, dairy and packaging costs. Overall, unfavorable volume/mix was due to volume declines partially offset by favorable product mix. Unfavorable volume/mix was experienced in all regions.

Total selling, general and administrative expenses decreased $563 million from 2023, which was net of benefits from a number of factors noted in the table above, including in part, favorable contingent consideration adjustments related to the Clif Bar acquisition and lower acquisition integration costs, lapping prior-year divestiture-related costs, the elimination of costs from the developed market gum business divested in 2023, lower remeasurement loss of net monetary position, a favorable currency translation impact related to expenses and lapping prior-year impact from the European Commission legal matter, marginally offset by costs incurred for the ERP System Implementation program and higher implementation costs incurred for the Simplify to Grow program. Excluding these factors, selling, general and administrative expenses increased $215 million from 2023. The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Unfavorable currency-related items, net of the adjustment for extreme pricing in Argentina, decreased operating income by $191 million primarily due to the strength of the U.S. dollar relative to most currencies, including the Argentinean peso, Russian ruble, Brazilian real, Egyptian pound, Turkish lira, Chinese yuan and Nigerian naira, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the British pound sterling and Polish zloty.

Operating income margin increased from 15.3% in 2023 to 17.4% in 2024. The increase in operating income margin was driven primarily by favorable year-over-year change in acquisition integration costs and contingent consideration adjustments, favorable year-over-year change in mark-to-market gains/(losses) from commodity and currency hedging activities, higher Adjusted Operating Income margin, lower divestiture-related costs, lapping prior-year impact from the European Commission legal matter and lower remeasurement loss of net monetary position, partially offset by higher intangible asset impairment charges, lapping the prior-year gain and the impact from the developed market gum business divested in 2023 and costs incurred for the ERP System Implementation program. Adjusted Operating Income margin increased from 15.9% in 2023 to 16.2% in 2024. The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity and overhead cost leverage, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International

Net earnings attributable to Mondelēz International of $4,611 million decreased by $(348) million (7.0%) in 2024. Diluted EPS attributable to Mondelēz International was $3.42 in 2024, down $(0.20) (5.5%) from 2023. Adjusted EPS(1) was $3.36 in 2024, up $0.28 (9.1%) from 2023. Adjusted EPS on a constant currency basis was $3.48 in 2024, up $0.40 (13.0%) from 2023.

(1)Refer to the Non-GAAP Financial Measures section appearing for additional information. The tax expense/(benefit) of each of the pre-tax items excluded from our GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.

•2024 taxes for the: Simplify to Grow Program were $(36) million, intangible asset impairment charges were $(40) million, mark-to-market gains from derivatives were $107 million, acquisition integration costs and contingent consideration adjustments were $89 million, operating results from divestitures were zero, ERP Systems Implementation costs were $(19) million, remeasurement of net monetary position were zero, impact from pension participation changes were $(3) million, initial impacts from enacted tax law changes were $24 million and loss on equity method investment transactions were $4 million.

•2023 taxes for the: Simplify to Grow Program were $(26) million, intangible asset impairment charges were $(6) million, mark-to-market gains from derivatives were $21 million, acquisition integration costs and contingent consideration adjustments were $(60) million, divestiture-related costs were $(25) million, operating results from divestitures were $46 million, gain on divestiture were $(8) million, European Commission legal matter were $(24) million, remeasurement of net monetary position were zero, impact from pension participation changes were $(3) million, initial impacts from enacted tax law changes were $83 million, gain on marketable securities were $133 million and gain on equity method investment transactions were $124 million.

(2)See the Operating Income table above and the related footnotes for more information.

(3)Divestitures include completed sales of businesses, partial or full sales of equity method investments and exits of major product lines upon completion of a sale or licensing agreement.

(4)Refer to Note 16, Income Taxes, for information on income taxes.

(5)Refer to Note 7, Investments, for more information on gains on marketable securities and gains and losses on equity method investment transactions.

(6)Excludes the currency impact on interest expense related to our non-U.S. dollar-denominated debt which is included in currency translation.

(7)Refer to Note 12, Stock Plans, for more information on our equity compensation programs and share repurchase program and Note 17, Earnings per Share, for earnings per share weighted-average share information.

Net Revenues

Net revenues increased $4,520 million (14.4%) to $36,016 million in 2023, and Organic Net Revenue(1) increased $4,572 million (14.7%) to $35,570 million. Emerging markets net revenues increased 15.0% and emerging markets Organic Net Revenue increased 20.4%(1). Developed markets net revenues increased 13.9% and developed markets Organic Net Revenue increased 11.1%(1). The underlying changes in net revenues and Organic Net Revenue are detailed below:

(1)Please see the Non-GAAP Financial Measures section for additional information.

Net revenue increase of 14.4% was driven by our underlying Organic Net Revenue growth of 14.7%, the impact of acquisitions and the impact of a short-term distributor agreement, partially offset by unfavorable currency translation and the impact of divestitures. Overall, we continued to see strong demand for our snack category products across most regions. Organic Net Revenue growth was driven by higher net pricing and favorable volume/mix. Higher net pricing in all regions was due to the benefit of carryover pricing from 2022 as well as the effects of input cost-driven pricing actions taken during 2023. Favorable volume/mix was driven by AMEA, Latin America and Europe reflecting both improved product mix and volume gains, while volume/mix was essentially flat in North America. The November 1, 2022 acquisition of Ricolino added incremental net revenues of $507 million (constant currency basis) through the one-year anniversary of the acquisition. The August 1, 2022 acquisition of Clif Bar added incremental net revenues of $529 million through the one-year anniversary of the acquisition. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $22 million. Unfavorable currency impacts decreased net revenues by $1,096 million, due primarily to the strength of the U.S. dollar relative to several currencies, primarily due to the Argentinean peso and Russian ruble as well as the Turkish lira, Egyptian pound, Indian rupee, Chinese yuan, Nigerian naira, Australian dollar,

South African rand, Pakistan rupee and Canadian dollar, partially offset by the strength of several currencies relative to the U.S. dollar, including the Mexican peso, euro, Brazilian real, Polish zloty and British pound sterling. The impact of 2023 and 2022 divestitures resulted in a year-over-year reduction in net revenues of $14 million. Refer to Note 2, Acquisitions and Divestitures, for additional information.

Operating Income

Operating income increased $1,968 million (55.7%) to $5,502 million in 2023, Adjusted Operating Income(1) increased $749 million (15.3%) to $5,634 million and Adjusted Operating Income on a constant currency basis increased $939 million (19.2%) to $5,824 million due to the following:

(1)Refer to the Non-GAAP Financial Measures section.

(2)Refer to Note 8, Restructuring Program, for more information.

(3)Refer to Note 6, Goodwill and Intangible Assets, for more information.

(4)Refer to Note 10, Financial Instruments, Note 18, Segment Reporting, and Non-GAAP Financial Measures for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(5)Refer to Note 2, Acquisitions and Divestitures, for more information on the October 1, 2023 sale of the developed market gum business, November 1, 2022 acquisition of Ricolino, August 1, 2022 acquisition of Clif Bar and the January 3, 2022 acquisition of Chipita.

(6)Refer to Note 14, Commitments and Contingencies, for more information.

(7)Refer to Note 1, Summary of Significant Accounting Policies–War in Ukraine, for more information.

(8)Refer to Note 1, Summary of Significant Accounting Policies –Currency Translation and Highly Inflationary Accounting, for information on our application of highly inflationary accounting for Argentina and Türkiye.

(9)Refer to Note 11, Benefit Plans, for more information.

During 2023, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs. Higher net pricing, which included the carryover impact of pricing actions taken in 2022 as well as the effects of input cost-driven pricing actions taken during 2023, was reflected across all regions. Overall, volume/mix benefited from improved product mix and continued strong demand for our snack category products across most regions. Favorable volume/mix was driven by AMEA, Latin America and Europe, which was marginally offset by slightly unfavorable volume/mix in North America. The increase in input costs was driven by higher raw material costs, slightly offset by lower manufacturing costs driven by productivity. Higher raw material costs were in part due to higher energy, sugar, grains, dairy, cocoa, packaging, edible oils and other ingredients costs as well as unfavorable year-over-year currency exchange transaction costs on imported materials.

Total selling, general and administrative expenses increased $618 million from 2022, due to a number of factors noted in the table above, including in part, the impact of acquisitions, higher acquisition integration costs and contingent consideration adjustments, higher divestiture-related costs, higher remeasurement loss of net monetary position and lapping prior-year 2017 malware incident net recoveries, which were offset by a lower impact from the European Commission legal matter, lapping prior year acquisition-related costs, a favorable currency impact related to expenses, lower implementation costs incurred for the Simplify to Grow program, the impact from divestitures and lower incremental costs due to the war in Ukraine. Excluding these factors, selling, general and administrative expenses increased $947 million from 2022. The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Unfavorable currency changes decreased operating income by $190 million, primarily due to the strength of the U.S. dollar relative to most currencies, including the Russian ruble, Argentinean peso, Egyptian pound, Chinese yuan, Indian rupee, Turkish lira, Australian dollar and South African rand, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the euro, Mexican peso, Brazilian real and Polish zloty.

Operating income margin decreased from 11.2% in 2022 to 15.3% in 2023. The decrease in operating income margin was driven primarily by the favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, lapping prior year acquisition-related costs, lower impact from the European Commission legal matter, lower incremental costs due to the war in Ukraine, gain on the sale of our developed market gum business, lower intangible asset impairment charges, higher Adjusted Operating Income margin and lapping prior year inventory step-up charges, partially offset by higher acquisition integration costs and contingent consideration adjustments, higher divestiture-related costs, higher remeasurement loss of net monetary position and lapping prior year 2017 malware incident net recoveries. Adjusted Operating Income margin increased from 15.8% in 2022 to 15.9% in 2023. The increase was driven primarily by higher net pricing, overhead cost leverage, lower manufacturing costs driven by productivity and favorable product mix, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International

Net earnings attributable to Mondelēz International of $4,959 million increased by $2,242 million (82.5%) in 2023. Diluted EPS attributable to Mondelēz International was $3.62 in 2023, up $1.66 (84.7%) from 2022. Adjusted EPS(1) was $3.08 in 2023, up $0.41 (15.4%) from 2022. Adjusted EPS on a constant currency basis was $3.21 in 2023, up $0.54 (20.2%) from 2022.

(1)The tax expense/(benefit) of each of the pre-tax items excluded from our GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.

•2023 taxes for the: Simplify to Grow Program were $(26) million, intangible asset impairment charges were $(6) million, mark-to-market gains from derivatives were $21 million, acquisition integration costs and contingent consideration adjustments were $(60) million, divestiture-related costs were $(25) million, operating results from divestitures were $46 million, gain on divestiture were $(8) million, European Commission legal matter were $(24) million, remeasurement of net monetary position were zero, impact from pension participation changes were $(3) million, initial impacts from enacted tax law changes were $83 million, gain on marketable securities were $133 million and gain on equity method investment transactions were $124 million.

•2022 taxes for the: Simplify to Grow Program were $(26) million, intangible asset impairment charge were $(25) million, mark-to-market losses from derivatives were $(56) million, acquisition integration costs and contingent consideration adjustments were $(72) million, inventory step-up charges were $(7) million, acquisition-related costs were $11 million, divestiture-related costs were $(9) million operating results from divestitures were $50 million, 2017 malware incident net recoveries were $10 million, European Commission legal matter were zero, incremental costs due to the war in Ukraine were $4 million, remeasurement of net monetary position were zero, impact from pension participation changes were $(3) million, loss on debt extinguishment and related expenses were $(31) million, initial impacts from enacted tax law changes were $17 million and loss on equity method investment transactions were $2 million.

(2)See the Adjusted Operating Income table above and the related footnotes for more information.

(3)Refer to Note 9, Debt and Borrowing Arrangements, for more information on losses on debt extinguishment.

(4)Refer to Note 16, Income Taxes, for information on income taxes.

(5)Refer to Note 7, Investments, for more information on gains and losses on equity method investment transactions.

(6)Excludes the currency impact on interest expense related to our non-U.S. dollar-denominated debt which is included in currency translation.

(7)Refer to Note 12, Stock Plans, for more information on our equity compensation programs and share repurchase program and Note 17, Earnings per Share, for earnings per share weighted-average share information.

Results of Operations by Operating Segment

•AMEA

We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions.

We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. See Note 18, Segment Reporting, for additional information on our segments and Items Affecting Comparability of Financial Results earlier in this section for items affecting our segment operating results.

Our segment net revenues and operating earnings were:

Latin America

Net revenues decreased $80 million (1.6%), due to unfavorable impact of currency-related items (6.2 pp) and unfavorable volume/mix (2.4 pp), partially offset by higher net pricing (7.0 pp). Currency-related items were unfavorable, net of the adjustment for extreme pricing in Argentina, due to currency translation rate changes. Unfavorable currency translation impacts were primarily due to the strength of the U.S. dollar relative to most currencies in the region, primarily the Argentinean peso, Brazilian real, Mexican peso and Chilean peso, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the Colombian peso. Overall, unfavorable volume/mix reflected volume declines due to consumer softness, primarily in Mexico and Argentina, partially offset by favorable product mix. Overall, unfavorable volume/mix was driven by declines in chocolate, candy, cheese & grocery and refreshment beverages, partially offset by gains in biscuits & baked snacks and gum. Higher net pricing, net of the adjustment for extreme pricing in Argentina, was driven by input cost-driven pricing actions and reflected across all categories, primarily in Argentina, Mexico and Brazil.

Segment operating income increased $3 million (0.6%), primarily due to higher net pricing, lower remeasurement loss on net monetary position, lower manufacturing costs driven by productivity, lower acquisition integration costs and lower other selling, general and administrative expenses. These favorable items were mostly offset by higher raw material costs, unfavorable currency-related items, unfavorable volume/mix, higher advertising and consumer promotion costs, higher costs incurred for the Simplify to Grow Program, costs incurred for the ERP Systems Implementation program and intangible asset impairment charges incurred in 2024.

Net revenues increased $1,377 million (37.9%), due to higher net pricing (31.0 pp), the impact of acquisitions (14.0 pp) and favorable volume/mix (3.8 pp), partially offset by unfavorable currency (10.0 pp) and the impact of divestitures (0.9 pp). Higher net pricing was reflected across all categories, driven primarily by Argentina as well as Brazil and Mexico. The November 1, 2022 acquisition of Ricolino added incremental net revenues of $507 million (constant currency basis) through the one-year anniversary of the acquisition in 2023. Favorable volume/mix reflected strong volume growth as the region continued to see increased demand for most of our snack category products. Favorable volume/mix was driven by gains in gum, biscuits & baked snacks, candy and cheese & grocery, partially offset by declines in refreshment beverages and chocolate. Unfavorable currency impacts were primarily due to the strength of the U.S. dollar relative to a few currencies in the region, primarily the Argentinean peso, partially offset by the strength of most currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real. The impact of our 2022 divestitures resulted in a year-over-year decline in net revenues of $22 million.

Segment operating income increased $141 million (36.3%), primarily due to higher net pricing, the impact of our Ricolino acquisition, favorable volume/mix, lower manufacturing costs driven by productivity and lapping prior year inventory step-up charges. These favorable items were partially offset by higher raw material costs, higher other selling, general and administrative expenses, higher advertising and consumer promotion costs, higher remeasurement loss on net monetary position and higher acquisition integration costs.

AMEA

Net revenues increased $221 million (3.1%), due to higher net pricing (5.5 pp) the impact of an acquisition (1.0 pp), and favorable volume/mix (0.7 pp), partly offset by unfavorable currency translation rate changes (4.1 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. The November 1, 2024 acquisition of Evirth added incremental net revenues of $72 million (constant currency basis) in 2024. Overall, favorable volume/mix reflected favorable product mix, partially offset by volume declines reflecting the impact of geopolitical events in the region. Favorable volume/mix was driven by gains in gum, biscuits & baked snacks, chocolate and cheese & grocery, partially offset by declines in refreshment beverages and candy. Unfavorable currency translation impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Nigerian naira, Egyptian pound, Chinese yuan, Indian rupee, Vietnam dong, Philippine peso and Japanese yen.

Segment operating income increased $79 million (7.1%), primarily due to higher net pricing, lower manufacturing costs driven by productivity and the impact from our Evirth acquisition. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, unfavorable currency translation rate changes, higher other selling, general and administrative expenses, unfavorable volume/mix, costs incurred for the ERP Systems Implementation program, higher acquisition integration costs and contingent consideration adjustments and an intangible asset impairment charge incurred in 2024.

Net revenues increased $308 million (4.6%), due to higher net pricing (8.6 pp) and favorable volume/mix (3.1 pp), partially offset by unfavorable currency (7.1 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. Favorable volume/mix reflected overall volume gains from increased demand for most of our snack category products. Favorable volume/mix was driven by gains in chocolate, gum, candy and refreshment beverages, partially offset by declines in biscuits & baked snacks and cheese & grocery. Unfavorable currency impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Egyptian pound, Indian rupee, Chinese yuan, Nigerian naira, Australian dollar, South African Rand, Pakistan rupee and Japanese yen.

Segment operating income increased $184 million (19.8%), primarily due to higher net pricing, favorable volume/mix, lapping prior-year intangible asset impairment charges, lower manufacturing costs driven by productivity and lower costs incurred for the Simplify to Grow Program. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, unfavorable currency, higher other selling, general and administrative expenses and higher fixed asset impairment charges.

Europe

Net revenues increased $452 million (3.5%), due to higher net pricing (7.8 pp), partially offset by unfavorable volume/mix (2.1 pp), the impact of divestitures (1.4 pp) and unfavorable currency translation rate changes (0.8 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories except cheese & grocery. Overall, unfavorable volume/mix reflected volume declines due to the impact from customer price negotiation disruptions primarily in the second quarter, partially offset by favorable product mix. Unfavorable volume/mix was driven by declines in chocolate, biscuits & baked snacks, refreshment beverages, candy and gum, partially offset by a gain in cheese & grocery. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $174 million. Unfavorable currency translation rate changes reflected the strength of the U.S. dollar relative to most currencies across the region, including the Turkish lira, Russian ruble and Ukrainian hryvnya, partially offset by the strength of a few currencies relative to the U.S. dollar, including the British pound sterling, Polish zloty and euro.

Segment operating income increased $90 million (4.6%), primarily due to higher net pricing, lower divestiture-related costs, lower impact from the European Commission legal matter, lower costs incurred for the Simplify to Grow Program, lower manufacturing costs driven by productivity and lower remeasurement loss on net monetary position. These favorable items were partially offset by higher raw material costs, higher intangible asset impairment charges, higher advertising and consumer promotion costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable volume/mix, unfavorable currency translation rate changes, higher other selling, general and administrative expenses, costs incurred for the ERP Systems Implementation program and higher fixed asset impairment costs.

Net revenues increased $1,437 million (12.6%), due to higher net pricing (13.8 pp), favorable volume/mix (0.7 pp) and the impact from short-term distributor agreements (0.2 pp), partially offset by unfavorable currency (1.9 pp) and the impact of divestitures (0.2 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. Overall, volume/mix was favorable driven by improved product mix. Favorable volume/mix was driven by gains in biscuits & baked snacks, chocolate, gum and refreshment beverages, partially offset by declines in cheese & grocery and candy. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $22 million. Unfavorable currency impacts reflected the strength of the U.S. dollar relative to several currencies across the region, including the Russian ruble, Turkish lira, Norwegian krone, Ukrainian hryvnya and Swedish krona, partially offset by the strength of several currencies relative to the U.S. dollar, including the euro, Polish zloty, British pound sterling and Swiss franc. The impact of divestitures reflected a year-over-year decline in net revenues of $4 million from our 2023 divested developed market gum business.

Segment operating income increased $497 million (33.6%), primarily due to higher net pricing, lower impact from the European Commission legal matter, lapping the prior year incremental costs incurred due to the war in Ukraine, lower acquisition integration costs and favorable volume/mix. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, unfavorable currency, divestiture-related costs incurred in 2023, higher costs incurred for the Simplify to Grow Program, higher other selling, general and administrative expenses, higher remeasurement loss on net monetary position, higher manufacturing costs and an intangible asset impairment charge incurred in 2023.

North America

Net revenues decreased $168 million (1.5%), due to the impact of divestitures (2.8 pp), unfavorable currency translation rate changes (0.2 pp) and flat volume/mix (– pp), partially offset by higher net pricing (1.5 pp). The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $310 million. Unfavorable currency translation rate changes were due to the strength of the U.S. dollar relative to the Canadian dollar. Volume/mix was flat for the year as volume trends improved in the second half of 2024 offsetting consumer softness experienced in the U.S. in the first half of 2024. Overall, a volume/mix gain in chocolate was offset by declines in biscuits & baked snacks and candy. Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Segment operating income increased $400 million (19.1%), primarily due to a favorable contingent consideration adjustment related to Clif Bar as well as lower acquisition integration costs, higher net pricing, lower manufacturing costs due to productivity, lapping prior-year intangible asset impairment charges, lower divestiture-related costs, lower other selling, general and administrative expenses and lower fixed asset impairment charges. These favorable items were partially offset by higher raw material costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable volume/mix, higher costs incurred for the Simplify to Grow Program, higher advertising and consumer promotion costs and costs incurred for the ERP Systems Implementation program.

Net revenues increased $1,398 million (14.4%), due to higher net pricing (9.5 pp), the impact of acquisitions (5.6 pp) and flat volume/mix (- pp), partially offset by the impact of divestitures (0.4 pp) and unfavorable currency (0.3 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. The August 1, 2022 acquisition of Clif Bar added incremental net revenues of $529 million through the one-year anniversary of the acquisition in 2023. Overall, volume/mix was flat as slight volume gains were offset by unfavorable mix. Flat volume/mix was driven by gains in candy and chocolate offset by a decline in biscuits & baked snacks. While the impact of divestitures reflected a year-over-year increase in net revenues of $12 million (net of the loss of revenue for the fourth quarter) from our 2023 divested developed market gum business, it had a negative impact on the net revenue growth rate as the divested business did not grow as fast as the remaining segment. Unfavorable currency impact was due to the strength of the U.S. dollar relative to the Canadian dollar.

Segment operating income increased $323 million (18.3%), primarily due to higher net pricing, the impact of our Clif Bar acquisition, higher operating results from the divested developed market gum business, lower costs incurred for the Simplify to Grow Program and lapping prior year inventory step-up charges. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, higher acquisition integration costs and contingent consideration adjustments, higher other selling, general and administrative expenses, an intangible asset impairment charge incurred in 2023, divestiture-related costs incurred in 2023, unfavorable volume/mix and unfavorable currency.