Dirk Van De Put
Chairman And Chief Executive Officer at Mondelez International
Thanks, Shep, and thanks to everyone for joining the call today. I will start on slide four. I'm pleased to share that we have delivered a strong first half of the year with robust volume growth and solid pricing execution that supports raising our full year growth outlook to 8% plus. Our core chocolate and biscuit businesses continue to demonstrate volume and pricing resilience. As consumers around the world continue to seek out our trusted and iconic brands to meet their snacking needs. And although we may see a more mixed consumer sentiment in the near term, given the macro environment, we expect the consumers to consume more at home and be more selective in the brands they buy, which we believe to be a net positive for.
We also continue to effectively navigate a dynamic operating environment. Input cost inflation remains challenging. And although we may see commodity inflation beginning to ease, we expect other costs like wages to show significant inflation. Our strong track record in having cost efficiency and simplification positions us well to mitigate the impact of these inflationary factors. At the same time, our consistent results enable us to maintain our course in driving a virtuous cycle where strong net revenue and gross profit or to continuous investment in our brands, distribution capabilities and acquisitions. We also continue to make great progress in reshaping our portfolio.
A great example of that is our agreement to acquire Clif Bar, which will improve our position in the attractive and fast-growing snack bar category. I'll share some additional context on the exciting in a few minutes. Along with the Clif acquisition, we announced plans to divest our developed market Gum & Halls businesses, allowing us to focus our portfolio and further invest in our faster-growing businesses of chocolate and biscuits. We remain confident that the strength of our brands, our proven strategy and our increasing investments position us well to deliver attractive sustainable growth for the remainder of 2022 and beyond.
Above all, I'm extremely confident in our people, who continue to demonstrate exceptional passion and dedication to serving our consumers despite ongoing challenges with inflation, supply and periodic in COVID conditions. Day in and day out are 80,000-plus makers and bakers strive to help people snack right. We respect and honor our colleagues around the world, and we truly believe that team Mondelez is a very theme in the consumer packaged goods industry. Turning to slide five. You can see that our strategy is continuing to drive a virtuous cycle. The strength of our brands, increasing investments, volume growth and significant pricing actions are sustaining top line momentum and solid profitability despite substantial inflation.
We grew revenue this quarter by 13.1% and 10.7% for the first half of the year. We delivered gross profit growth of 9.7% due to healthy volume growth and pricing actions. Our A&C investments have increased double digits as to gain or hold share across more than half our revenue base and positioning us well for future periods. An example of our commitment to brand investment is the renovation of Milka to make this leading chocolate brand, most tenders and creamy ever. This program includes an upgraded taste profile, premier and bent and distinctive packaging, celebrating the brand's Alpine soul. This initiative represents our largest chocolate brand renovation in 25 years. Illustration of the campaign is featured on our earnings presentation coverage page.
We are supporting the launch with a fully-integrated 18-month marketing and advertising support program starting in H2 '22. And last, we increased operating income by 8.5% for the quarter and 11.2% in the first half while delivering great free cash flow results. As you can see on slide six, we delivered 10 points growth during the first half of the year. We view this strong performance as evidence that our long-term strategy continues to pay off. In late 2018, we launched a new growth plan focused on gross profit dollar growth, local first commercial execution, a virtuous cycle of increasing investment and a new approach to incentives. We are confident that this approach will continue to consistently deliver attractive growth.
Importantly, we are also delivering strong volume, which is important to Mondelez. It is a proof that consumers are eating more of our products every day and an indication of sustainable long-term growth. Like many companies, as shown on slide seven, we are experiencing a dynamic operating environment driven by global cost inflation, supply chain volatility and currency headwinds. Let's take a closer look at each of these dynamics and the steps we are taking to address them. First, we continue to elevated input cost inflation especially in the areas of energy, transportation, packaging, wheat, dairy and edible oils.
To offset these challenges, we recently announced further pricing actions across key markets, and continue to do appropriate action to hedge our commodity costs along with ongoing productivity and cost reduction initiatives. Second, we continue to manage through volatility in the supply chain, especially in the United States due to labor shortages at third parties as well as the continuing gap in demand and supply of trucking capacity containers. Although we do have more work to do, we are making progress against our plans to unlock manufacturing warehouse capacity, improve service levels and implement new measures to support employee retention.
Third, we are working through the impact of the strengthening U.S. dollar particularly against the euro and the British pound by focusing on what we can control. This includes mitigating our translation exposure through currency hedges and net investment hedges. Delivering a real dollar earnings is an ongoing focus. And though we may see some significant currency trends in the short term, we have delivered robust real dollar earnings growth over the past several years. Turning to our categories and the consumer on page eifht. Our annual state of snacking survey shows that consumers increasingly prefer snacking over traditional meals. And because snacking plays such an important role in consumers' lives, our core categories of chocolate and biscuits historically have resilience to economic downturns and pricing actions.
This trend continues to play out around the world despite an overall drop in consumer confidence. While developed consumers express growing frustration with rising prices for a broad range of goods and services, they continue to perceive chocolate and biscuits as affordable indulgences and an important pick-me-up. In fact, almost 40% of U.K. shoppers said that chocolate is a necessity and remains one of the best valued snack products. Due to enduring consumer loyalty, category volume growth and penetration is holding up well in most of our key developments. Elasticity have notched up slightly but remained low compared to historical benchmarks. Private label is either flat or down in the vast majority of our markets, and shoppers say they are much less likely to switch to private label in chocolate and biscuits compared to other categories.
Meantime, in emerging markets, consumer confidence remains relatively strong, recovering to almost pre-COVID levels. And our core category shows solid volume and penetration growth despite price increases. Compared to developed markets, emerging market consumers are less likely to reduce overall consumption of our categories or switch when faced with price increases. Instead, they are more likely to switch stores to find deals on their favorite brands or look for different sizes. Overall, we remain confident that the strength of our beloved and trusted brands will continue to help us navigate inflationary periods like the one we have today.
Moving to our efforts around portfolio reshape on slide nine. I'd like to share a bit more color on our recently announced agreement to acquire Clif Bar. Clif is a leader in growth, well-being snackbars. The company's own-trend brands including Clif, Luna and Clif Kids, a greater to our global snacking portfolio, and they are differentiated this page. Each of these brands is strong and healthy. pretty high advocacy and loyalty. Clif also enjoys high brand loyalty among the 18 to 24 age group. The brand also performs well on key tastes a critical differentiation across age groups in a category where many products does so well. Clif is also widely recognized as a leader in well-being and sustainable snacking. The company's purpose and culture are well aligned with our purpose of empowering people to snack right.
We look forward to working with the passionate, dedicated Clif team to advance our shares. On Slide 10, you can see that we have moved from a small bar business in 2018 to about $300 million last year with the addition of perfect Snacks in Grenade and to a $1 billion-plus global snack bar platform factoring Clif. This gives us an attractive position in a $16 billion market with revenues roughly split between U.S. and international. As a significant 700 million-plus presence in the U.S., protein and energy space, which is expected to continue to grow well over the coming years as a diverse range of consumers increasingly count snack bars as meal replacements, energy or a better way of snacking.
Slide 11 shows that the Clif Bar acquisition offers an opportunity for us to do business to our marketing expertise, operational excellence and financial discipline to create significant value. There are clear and substantial cost synergies, which include leveraging our experience with logistics and warehousing, reducing waste in existing and ties in marketing and advertising to optimize A&C spend. In terms of growth, we see substantial opportunities to increase household penetration and distribution in alternative and e-commerce as well as existing outlets. There is also an opportunity to unlock growth through revenue growth management and enhanced in-store excellence. And beyond the U.S., there are clear opportunities to drive international growth.
We are excited about the announcement to acquire the Clif business and the top and bottom line growth opportunities that lie ahead. We also see material upside to the returns versus our low cost of capital. Moving to Slide 12. Clif is just the latest example of our continuing efforts to reshape our portfolio through strategic M&A that increases our exposure to incremental fast-growing snacking segment. Since we announced our growth strategy in 2018, we have completed or announced 9 acquisitions that strengthen and complement our portfolio and fill key gaps adding more than $2.8 billion in annual revenues and averaging growth in the high single digits.
So 2022, in addition to announcing the Clif transaction, we have closed and integrated our acquisition of Chipita, a high-growth European leader in croissants and baked goods. And announced an agreement via Ricolino, Mexico's leading company for Bimbo. These strategic acquisitions will complement and build on our substantial M&A progress in 2021, which brought us a leading U.K. performance nutrition company, Gourmet Fola leading Australian premium biscuit and cracker company and Hu, a well-being snacking company in -- These acquisitions have been regional in nature, we can largely be managed by local teams. This includes the recent Chipita acquisition, which we successfully and rapidly traded at the end of Q2. We are confident that executing our strong patient playbook will allow us to drive sustained growth, accretive to our algorithm across the portfolio.
With that, I will hand over to Luca for more details on our financials.