Cadbury boosts Kraft results
THE ACQUISITION of Cadbury has boosted revenues of US food giant Kraft by almost 26%, although the full integration of the business is not expected to deliver maximum benefit to the group until next year.
Kraft’s first quarter results showed net revenues of $11.3billion, with Cadbury driving the major proportion of the increase.
“Our first quarter results are early evidence of our future potential in combination with Cadbury,” said Irene Rosenfeld, Chairman and CEO. “We demonstrated strong momentum in our Kraft Foods’ base business, including high-quality top-line growth and strong operating gains. In addition, our Cadbury business delivered solid financial results.”
Rosenfeld continued, “Our integration is progressing extremely well. We moved quickly to name our leadership teams, and I’m pleased that about a third of our top 50 executives are from Cadbury. We’ve confirmed our synergy targets and the specific initiatives that will drive future margin expansion and accelerate our growth.”
Kraft’s revenues from continuing operations in the first quarter increased 26.0 percent to $11.3 billion, including the favourable impact of 18.9 percentage points from the Cadbury acquisition, 4.2 percentage points from currency and a negative 0.4 percentage point impact from divestitures.
Mike Clarke, head of Kraft Europe, told the Financial Times that the two businesses were yet to be fully integrated and acknowledged the reputational damage done to Kraft by its closure of a Cadbury plant despite promises to keep it open. He said: “Consumers love our brands and now we need to do a bit of work on our corporate reputation.”
