Kraft expects sales boost from Cadbury buy

Kraft expects sales boost from Cadbury buy

US food giant Kraft Foods expects the acquisition of UK confectioner Cadbury to raise its revenue by US$1bn by 2013.

Ahead of a meeting with analysts today (15 September), Kraft, which owns brands from Tang powdered beverages to Dairylea cheese, said today (15 September) that the acquisition of Cadbury had made it "the undisputed world leader in snacks", a category that now accounts for more than half of its revenue.

The acquisition of Cadbury is also expected to generate $750m in cost synergies by 2013, Kraft said.

Kraft also spoke of "additional savings" from procurement, manufacturing and logistics will drive productivity gains in excess of 4% of cost of goods sold.

The company, meanwhile, set a target for revenue growth in developing markets over the next three years. A quarter of Kraft's sales are made in emerging markets and the company wants to increase this to a third by 2013.

"This combination of factors gives us great confidence that our company will generate organic revenue growth of 5% or more, margins in the mid- to high-teens and EPS growth of 9 to 11%," said CFO Tim McLevish. "Delivering on these commitments will make Kraft Foods a sustainable top-tier performer in the global food industry."

Check back later for coverage of Kraft's analyst meeting in New York.