Kraft Foods Net Revenues Grow by 10% to $54 billion Ahead of Planned Separation

Feb 22 2012 --- Kraft Foods Inc. reported strong fourth quarter and full year 2011 results, driven by robust revenue growth, effective cost management and focused investments in the company's iconic brands.

 

For the full year, net revenues were $54.4 billion, up 10.5 percent. Organic Net Revenues grew 6.6 percent, driven by strong growth across all geographies. Pricing contributed 6.0 percentage points of growth, and volume/mix contributed 0.6 percentage points.

 

Net revenues for the fourth quarter were $14.7 billion, up 6.6 percent. Organic Net Revenues grew 6.1 percent.

 

"We delivered terrific results in 2011, and our businesses are healthier than ever due to the disciplined execution of our strategy," said Irene Rosenfeld, Chairman and CEO. "We expect to deliver top-tier growth in 2012, in line with our long-term targets, while we prepare to successfully launch the North American grocery and global snacks companies later this year."

 

Operating income for the full year was $6.7 billion, and operating income margin was 12.2 percent. Diluted earnings per share for the fourth quarter were $0.47.

 

Kraft believes that all of its major regions – Europe, Developing Markets and North America – are benefiting from ‘a virtuous cycle of growth’. In 2011, net revenues grew 10.5 percent globally. Focused investments in Power Brands, up 8 percent, drove Organic Net Revenue growth of 6.6 percent.

 

Rosenfeld highlighted impressive growth in Developing Markets, where net revenues rose 16.2 percent. Power Brands grew 17 percent, driving Organic Net Revenue growth of 11.2 percent. Within Kraft Foods Europe, net revenues also grew strongly, up 14.9 percent. Power Brands grew 7 percent, fueling Organic Net Revenue growth of 4.6 percent – an eighth consecutive quarter of growth, despite the Eurozone crisis.

 

The North American grocery company, with roughly $18 billion in sales, will retain the Kraft Foods name and be a major force in the industry. By growing with its categories and capturing significant cost savings opportunities, the business is expected to deliver strong margins and substantial free cash flow with a highly competitive dividend payout.

 

The separate global snacks company, whose proposed name will be announced in March, will have sales of about $35 billion. With a diverse geographical profile and significant exposure to high-growth Developing Markets, it is expected to deliver strong revenue growth and top-tier earnings growth while paying a modest dividend.

 

Until the companies separate later this year, Kraft Foods will continue to report as one company