CHICAGO — While some of the market forces that have challenged food and beverage processors during the past 12 months may be easing, the leaders of Mondelez International see more of the same in the near future.

“As far as assumptions go, we are planning for another year of double-digit inflation with dollars higher than in '22,” said Luca Zaramella, chief financial officer, during a Jan. 31 conference call to discuss fiscal 2022 results. “This inflation is driven by the continued elevated cost in packaging, energy, ingredients and labor. These input costs are also more pronounced in Europe and some select emerging markets.

“We also had favorable coverage versus the market in '22. And, although spot rates have been easing in many cases, new hedges are coming (in) at higher levels than what was incorporated in March of last year.”

One bright spot management sees is improved supply chain conditions.

“Our US supply chain is gradually getting back to normal after a long period of suboptimal customer service triggered by the 2021 strike and the subsequent overall supply chain volatility,” said Dirk Van de Put, chairman and chief executive officer. “We are continuing to implement appropriate incremental price increases across key markets, including Europe.”

Europe is a region of particular concern for the company.

“We continue to see more pronounced inflation in (Europe) based on energy and other input costs,” Mr. Zaramella said. “We also expect to see challenged margins in Q1 given our expectations of customer disruption. Although we saw a small uptick in elasticity for Q4, the European consumer has continued to hold up well, and the preference for snacking and trusted brands remain strong with elasticity levels below normal.”

Mondelez International raised and implemented prices in December and in Europe the snack maker has begun discussions with customers.

“I would say we are 60% done of what we need to do,” Mr. Van de Put said.

He added that the company does not plan to promote more in the year ahead.

“Since we are rebuilding our customer service and our inventories in clients, there is no need for us to promote more,” Mr. Van de Put said. “In fact, what we've done in last month is promote less to get our customer service back up.”

Net income for the year ended Dec. 31 fell substantially to $2.7 billion, equal to $1.97 per share on the common stock, from $4.3 billion, equal to $3.06 per share in 2021.

Annual sales rose to $31.5 billion in 2022 from $28.7 billion in 2021.

“Our strong top-line performance was driven by excellent pricing execution and continued volume strength, as consumers all over the world remain loyal to our iconic snacking brands,” Mr. Van de Put said. “We delivered strong top-line performance in both emerging and developed markets while continuing to exercise cost discipline.”

Items affecting the company’s bottom line were many, including unfavorable year-over-year mark-to-market impacts from derivatives, the impact of a legal matter in Europe, high acquisition-related costs, higher costs incurred due to the war in Ukraine and higher acquisition integration costs.

North American sales rose 17% during the year to $9.7 billion.

“As you think about volume in the US, clearly, the share situation is improving,” Mr. Zaramella said. “The category, despite double-digit pricing, is posting volume growth, particularly in Q4. So, we saw value and volume growing within the category, as I said, shall improve. But importantly, we are also recuperating service level, and that clearly helps a bit. So, I believe all in all, there is a strong foundation in the biscuit business in the US.