Cadbury boosts Kraft profits

6 August 2010 – Kraft’s acquisition of Cadbury has helped the US firm to post higher-than-expected profits despite a decline in its own North American sales.

Kraft said net profit was $937m (£590m), up from $827m in the same period a year earlier earlier. Cadbury accounted for 90% of the 25% rise in Kraft’s net revenues. The rise was despite net revenues declining 1.9% in North America due to weak consumer conditions and aggressive promotional activity by rivals.

Cadbury – the owner of brands including Dairy Milk, Halls and Green & Black’s – saw revenues grow by about 7.5% over the same period after successful new product launches for gum brands Trident and Dentyne.

Kraft’s revenues increased 34% in Europe, of which 31.8% came from the Cadbury acquisition. Cadbury’s own performance was flat in the quarter as solid growth in Britain and France was offset by weak conditions in southern Europe, particularly Spain and Greece, as well as the impact of an early Easter.

"Our first quarter results are early evidence of our future potential in combination with Cadbury," says Irene Rosenfeld, Kraft chairman and chief executive.