Developing markets drive profit at Kraft Foods
February 16, 2010
NORTHFIELD, ILL. — Earnings for Kraft Foods, Inc. rose 5% in 2009 as the company had a strong fourth quarter and had success in developing markets. In addition, the company is experiencing benefits from its restructuring plan.
Kraft posted earnings of $3,021 million, equal to $2.04 per share on the common stock, during the year, which compared with earnings of $2,884 million, or $1.92 per share, during the previous year. Revenue for the year was $40,386 million, down 4% from $41,932 million during the previous year.
“2009 was a strong finish to our three-year turnaround and gave us excellent momentum heading into 2010,” said Irene Rosenfeld, chairman and chief executive officer. “Despite the challenging economic environment, we generated exceptional profit and free cash flow. We continue to benefit from investments in our iconic brands. This is driving volume/mix gains and leveraging our cost structure to deliver sustainable, profitable growth. And our top line reflected our resolve to avoid chasing unsustainable promoted volume.”
Earnings in the fourth quarter were $710 million, or 48c per share, up sharply from $178 million, or 12c per share, during the same quarter of the previous year. Revenue in the quarter was $11,025 million, up 3% from $10,681 million during the same quarter of the previous year.
During the fourth quarter, Kraft benefited from strength in developing markets, including a 10% gain in organic net revenues driven by strong growth in volume/mix and higher price levels. Specifically, priority brands such as Tang powdered beverages led double-digit sales growth in Latin America, while Oreo cookies and Philadelphia cream cheese boosted revenues in Asia Pacific. In Central and Eastern Europe, Middle East & Africa, strong organic revenue growth was driven in part by more than 20% growth in Jacobs coffee.
“We’re ready to begin an exciting new chapter at Kraft Foods with Cadbury’s brands as a valuable addition to our portfolio,” Ms. Rosenfeld said. “Together, we’ll remain focused on driving sustainable top-line growth while delivering against our cost savings and synergy opportunities. As a combined entity, we are well positioned to deliver top-tier performance and accelerate our long-term growth.”