Kraft, the American food giant, stumbled with its first results since winning control of Cadbury, posting disappointing sales figures for the final months of last year.
Irene Rosenfeld, the chief executive, admitted that the company was "not pitching a perfect game", as she tried to persuade shareholders old and new of the merits of her plans to combine the British chocolatier into one of the world's largest food groups.
Kraft has begun sending notices to the final 10 per cent of Cadbury shareholders that have not yet accepted the £11.4bn cash-and-shares takeover agreed last month, telling them their stock will now be compulsorily purchased.
Ms Rosenfeld raised Kraft's target for revenue growth from 4 per cent annually to 5 per cent, thanks to the additional strength that Cadbury will bring in emerging markets such as India, and she said that Kraft will spend $1.3bn integrating the company by the end of 2012. There will be annual savings of $675m when the two are fully integrated.
She said that the acquisition of Cadbury marked the start of a new chapter for Kraft, as it came to the end of the three-year cost saving plan that she had launched on taking over as chief executive in 2006.
The company's portfolio of brands includes Kraft cheese, Planters nuts, Oreo cookies, Maxwell House coffee and Milka chocolate, and Kraft said yesterday that it had given up some sales rather than cutting prices to win market share. Revenues were also hit by lower prices for its cheeses, which it reduced in line with the falling price of milk.
The total for fourth-quarter revenues, $11.03bn, up 3.2 per cent on the final three months of 2008, was shy of Wall Street forecasts by $40m, and sent Kraft shares down 2 per cent in New York trading even as the rest of the market was higher.
Analysts were hoping to see more evidence of top-line growth now that Kraft's cost-cutting plan is winding down. Erin Swanson of Morningstar said: "For instance, in the firm's US cheese segment, which accounts for 9 per cent of revenue, operating profit grew 7.4 per cent from the year-ago quarter, despite a 13 per cent-plus decline in sales. But while this divergence of the top and bottom lines is not sustainable in the long run, Kraft is positioning itself well for the eventual strengthening of consumer demand by investing in product innovation and marketing support for its core brands."
Ms Rosenfeld told analysts on a conference call: "To be fair, we are not pitching a perfect game, but you know that is difficult when you are managing a broad portfolio." She said profit margins would improve from their dip in the fourth quarter, a period in which Kraft had deliberately upped its marketing spending.
The acquisition of Cadbury has left some of Kraft's existing shareholders bruised, not least Warren Buffett, the billionaire investor who said the company was paying too much. Meanwhile, Cadbury shareholders are considering whether to hold on to the Kraft stock they received as part of the deal.
Milka comes to the UK: Kraft to pit brand against Cadbury's Dairy Milk
The US food giant Kraft has confirmed it is to launch its flagship chocolate brand Milka in the UK just weeks after completing the takeover of Cadbury for £11.7bn.
The launch slated for the spring is controversial as it will pitch Milka up against the UK confectioner's Dairy Milk brand, which is the market leader with sales of £371m last year.
Kraft will kick off its TV advertisements for Milka on 19 April, which will highlight that its six different variants are made with Alpine milk.
A Kraft spokesperson said: "Milka is a leading chocolate brand in Europe and a key focus within the Kraft Foods European brand portfolio."
In a soft launch, the maker of Oreo cookies piloted Milka in selected UK retail outlets last year.
The launch is likely to further raise eyebrows in Bournville, Birmingham, where Cadbury is based. There has been significant opposition among Cadbury's staff to the hostile take-over bid by Kraft, which eventually won the day at 850p a share, including a 10p special dividend.
Last week, unions accused Kraft of "deliberately misleading" 400 workers at Cadbury's Somerdale factory, near Bristol, after the US company said it would close the facility in 2011, despite saying it would try to keep it open.
Kraft acquired Milka in 1990 when it was sold in just two countries. It is now a global brand sold in 22 countries, with annual sales of about £1bn.Reuse content