Kraft Foods have reported strong third quarter 2012 results with growth fuelled by new products and gains in productivity, says the newly independent business.
The group reveal a 13% growth in net income on the back of higher advertising, increases in productivity and “significant gains from new products.”
The results are the first since US-based Kraft Foods Group Inc split with its global snack food business Mondelez International, which was intended to allow each of the companies to focus on a more targeted portfolio of products – thus accelerating growth.
Kraft said it hopes innovation and brand growth will help to redefine the newly single business.
“Our third quarter results demonstrate the power of our brands, our people and our innovation,” said Tony Vernon, CEO of Kraft.
“We have an excellent foundation as a new and independent Kraft, and we’re confident we have what it takes to fulfill our mission of becoming the best food and beverage company in North America.”
The global food manufacturer posted nine month revenues of $4.6bn (€3.6bn), up by 3.2% on last year. However the company cautioned that there are limitations to the conclusions that can be drawn from the comparisons to last year – before Kraft Foods and Mondelez companies split.
In a conference call, Vernon said feelings within the individual Kraft Foods Group could be compared to that of a start up company, with executives keen to revitalise current brands and betting on innovation to drive growth.
Tim McLevish, EVP and CFO said the results demonstrate the ‘extraordinary’ efforts and commitment of the people who continued to grow the Kraft Foods businesses while also enabling the spin-off of Mondelez.
“As we look forward, we believe we’re well-positioned to continue our progress and deliver 2013 results consistent with what we’ve previously outlined,” said McLevish.
Although it stands by the outlook for 2013, Kraft noted that revenue in the fourth quarter is predicted to be flat or down, as it prunes less-profitable products and continues to incur restructuring costs.
Kraft said innovation behind its Lunchables and Oscar Mayer cold cuts and bacon continued to deliver profitable growth in its refrigerated meals business, while brand-building investments and innovation have continued to drive its grocery arm.