Breaking News on Food & Beverage Development - North America

Kraft Q1 revenues soar by 26 percent after Cadbury acquisition

By Mike Stones, 10-May-2010

Related topics: Chocolate and confectionery ingredients, Suppliers, Food finance and prices, Kraft's Cadbury bid

US food giant Kraft has announced first quarter 2010 revenues up 26 percent to $11.3bn after its acquisition of British food and confectionery company Cadbury.

The company’s chairman and CEO, Irene Rosenfeld said: "Our first quarter results are early evidence of our future potential in combination with Cadbury. We demonstrated strong momentum in our Kraft Foods' base business, including high-quality top-line growth and strong operating gains.”

The full benefits of the acquisition are not expected to be realized until next year.

First quarter revenue growth reflected a contribution of 18.9 percent from the Cadbury acquisition and 4.2 percentage points from currency factors, said Rosenfeld.
Combined organic net revenues grew 3.9 percent, reflecting 3.3 percent organic net revenue growth of Kraft Foods' base business and Cadbury’s 8.2 percent organic net revenue growth.

Cadbury’s operations

Operating income in the first quarter increased 2.6 percent to $1.2bn, including a contribution of 17.8 percentage points from Cadbury's operations.

Growth was partially offset by a negative impact of 25.3 percentage points from acquisition costs and integration costs.

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

Its North America division revealed net revenues up 7.3 percent, including a 4.6 percentage point impact from the Cadbury acquisition and a favorable 1.9 percentage point impact from currency.

Kraft Foods Europe’s net revenues increased 40.5 percent, including a 30.7 percentage point impact from the Cadbury acquisition and a favorable 7.8 percentage point impact from currency.

Developing markets

Net revenues in developing markets increased 66.7 percent, including a 49.2 percentage point impact from the Cadbury acquisition and a 7.7 percentage point impact from currency.

The company acquired Cadbury in a deal worth £11.9 billion last February.

The Cadbury acquisition is expected to add $0.05 per share to 2011 earnings, according to analysts

In the fiscal year 2009, Kraft generated a 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.