Kraft predicts additional $1bn revenue from Cadbury

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Kraft foods

Kraft has said it expects to make an additional $1bn in revenue by 2013 because of better access to global markets and distribution networks following its takeover of Cadbury earlier this year.

Ahead of a meeting with analysts and investors in New York on Wednesday, Kraft said it has become a world leader in snacks – a sector that it said now accounts for more than one half of its revenues. Its brand presence in the global sweets and snacks markets includes Cadbury and Milka chocolates, Trident gum and Oreo and LU-brand cookies.

And the company said its acquisition of UK confectioner Cadbury also means that more than half of its revenues now come from outside North America, with particularly strong performance in Brazil, Mexico, China and India.

“By 2013, the proportion of business in Developing Markets will increase from a quarter of total revenue to roughly one-third,”​ the company said in a statement.

The company operates three divisions: Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets.

In fiscal 2009, the company generated total revenue of $40.4bn. Kraft Foods North America generated $23.7bn, Kraft Foods Europe earned $8.8bn and Kraft Foods Developing Markets contributed $8bn.

Kraft’s chief financial officer Tim McLevish said that the company is confident that it will: "generate organic revenue growth of 5 percent or more, margins in the mid- to high-teens and EPS growth of 9 to 11 percent.”

“Delivering on these commitments will make Kraft Foods a sustainable top-tier performer in the global food industry,"​ McLevish said.

The company reiterated that it expects to make $750m in cost synergies from the Cadbury deal, and said the $1bn figure was additional to this.

“The combination of Kraft Foods and Cadbury provides the scale necessary to grow sales and distribution in new and existing markets, delivering $1 billion in incremental revenue synergies…to 2013,”​ it said.

Kraft acquired Cadbury in a hostile takeover bid worth $18.4bn in February this year.

Related topics: Manufacturers, Mondelez International

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