Speaking at the Consumer Analyst Group of New York conference in Scottsdale, Arizona, Irene Rosenfeld, CEO of Kraft Foods, announced a comprehensive strategy to accelerate the company’s growth, as well as providing 2007 earnings guidance and details of its financial outlook for 2008 and 2009.
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In her presentation, Rosenfeld outlined four strategies: to rewire the organisation for growth; reframe Kraft’s categories to make them more relevant to consumers; exploit Kraft’s sales capabilities; and drive down costs without compromising quality
Rosenfeld said: “This is a pivotal time in Kraft’s history, and while there are things we have to fix, our organisation is energised about pursuing a number of trajectory-changing initiatives. I am confident that our new strategies will return Kraft to predictable and consistent growth.”
She said that the company expects a return to consistent growth in three stages. In 2007, Kraft will grow its top line 3% to 4% organically, and invest all of its growth, as well as restructuring savings, back into the first wave of trajectory-changing growth initiatives. That would represent an incremental investment of US$300m to $400m, Rosenfeld said.
As a result of this investment, a higher tax rate, spin-related dilution and divestitures, Rosenfeld said the company expects earnings per share of $1.50 to $1.55 for 2007, or $1.75 to $1.80 excluding 25 cents of restructuring costs.
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By GlobalDataIn 2008, the company expects its operational turnaround to gain momentum, and to grow revenue by 3% to 4% organically. “By 2009, we’ll hit our stride,” Rosenfeld said. “We’ll fully realise the financial benefits of our investments and deliver our long-term targets of at least 4% organic net revenue growth and 7% to 9% EPS growth.”
