Mondelez says sales in Russia drop due to self-imposed advertising freeze

MOSCOW. Nov 2 (Interfax) - Mondelez International , Inc., one of the world's largest manufacturers of snacks and confectionery products, notes a decline in sales in Russia due to the company's refusal to advertise its products.

"Our net revenue in Russia decreased in the third quarter of 2023 due to the suspension of advertising as well as currency weakness," the company said in its quarterly report.

Mondelez said that, along with advertising, capital investments were also suspended in Russia.

In Q3, Russia's share in the company's consolidated net revenue decreased to 2.7% from 4.6% a year earlier. "But despite the decline in revenue, the profitability of our Russian business has increased and contributed to the growth of consolidated results," the report says. "We're continuing to reduce our activities and expect further volume and sales declines as we work to make our Russia operations self-sufficient. We plan to have the Russia business stand-alone with a self-sufficient supply chain before the end of the year."

The company said it could not predict "whether recent growth in the Russian business will continue into the future."

According to the report, the company's net revenue for nine months of this year increased 17.1%, to $26.7 billion from $22.8 billion in the same period last year, while in Q3, it increased 15.4%, to $9 billion from $7.8 billion, respectively.

Mondelez has been operating on the Russian market for more than 20 years and owns three factories in the Vladimir and Novgorod regions. The company produces products under the brands Alpen Gold, Milka, TUC, Yubileynoye, Oreo, and others.

According to the SPARK-Interfax analytical system, in 2022 the revenue of Mondelez Rus LLC increased to 91.983 billion rubles from 66.827 billion rubles in 2021, while net profit rose to 27.081 billion rubles from 6.727 billion rubles, respectively.