Kraft Foods has reviewed the company’s job-cutting sustainable growth plan progress and reaffirmed its 2006 earnings guidance.
At the end of January, the company broadened its ongoing plan by vowing to cut an additional 8,000 jobs, approximately 8% of the workforce, and closing as many as 20 production facilities by 2008.
The food and beverages brand is focusing on ‘fewer, bigger and better’ growth platforms to yield higher revenue-per-pound.
Kraft CEO Roger Deromedi said: “Our sustainable growth plan is fixing our business, enabling us to take better advantage of both our scale and one of the best brand portfolios in the food and beverage industry. While our financial performance has lagged our improving business fundamentals, I’m confident that strong execution of our strategies will deliver improved results in 2006 and beyond.”
Kraft has reconfirmed Kraft’s 2006 full-year guidance, first issued in January, projecting diluted earnings per share of US$1.38-$1.43 in 2006, including $0.50 in restructuring and impairment charges.
Deromedi said: “We expect our momentum to build as 2006 progresses, we believe that our market shares will continue to improve, our top-line growth will accelerate, our cost savings will grow and the quality of our earnings will improve.”
Kraft’s long-term financial targets include 3% growth in ongoing, constant currency revenues, 4-7% growth in operating income, 6-9% earnings per share growth and discretionary cash flow growth of 1-2 percentage points higher than growth in earnings per share.