Revenues Up at New Kraft Foods
Newly independent Kraft Foods Group Inc. reported “strong” third-quarter 2012 results with top- and bottom-line growth for which the company credits new products, increased investments in advertising and consumer spending, and “significant” productivity gains.
“Our third-quarter results demonstrate the power of our brands, our people and our innovation,” said Tony Vernon, Kraft CEO. “We have an excellent foundation as a new and independent Kraft, and we’re confident we have what it takes to fulfill our mission of becoming the best food and beverage company in North America.”
Net Q3 revenues grew 3 percent to $4.6 billion, while operating income increased 7.6 percent to $762 million. Operating income growth reflected volume/mix gains, improved productivity and increased investments in advertising and consumer spending.
Restructuring costs of $54 million negatively impacted operating income growth by 7.7 percentage points, while the year-over-year change in unrealized gains/losses from hedging activities added 10.2 percentage points of growth.
Financial statements for Kraft, spun off by Mondelez International Inc. in October, reflect an allocation of costs incurred by its former parent company.
Among segments, beverages delivered strong consumption gains among the Maxwell House, Gevalia, Kool-Aid Jammers and Mio brands, though top-line growth was tempered by lower merchandising levels of Capri Sun and lower pricing in coffee; Kraft natural cheese, Philadelphia and Velveeta drove strong volume/mix gains; innovation behind Lunchables and Oscar Mayer cold cuts and bacon continued to deliver profitable growth; and brand-building investments and innovation continued to drive strong gains in Kraft Macaroni & Cheese, Velveeta dinners and Cool Whip.
“Our results demonstrate the extraordinary efforts and commitment of our people who continued to grow our businesses while enabling a seamless spin-off,” said Tim McLevish, EVP and CFO. “As we look forward, we believe we’re well-positioned to continue our progress and deliver 2013 results consistent with what we’ve previously outlined.”