Kraft 2007 Annual Report Download - page 12

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Drive down costs without compromising quality
We continue to make progress on our restructuring program. We’re achieving faster savings
at lower costs and expect to complete the program in 2008 with total annualized savings
reaching $1.2 billion by the end of 2009—up $200 million from last year. And we’ll do it at a
cost of no more than $2.8 billion—$200 million less than we had planned.
Beyond 2008, our efforts to contain and reduce overhead costs will be an essential element
of our profit model, and we will move away from non-GAAP reporting in our earnings
releases and EPS guidance.
On the quality side, our shift from “good enough” to “truly delicious” has had a measurable
impact. In 2006, only 44% of our global revenue came from products that consumers
preferred to the competition. In 2007, that number jumped to 55%. We plan to be at 60%
by the end of this year and 65% in 2009.
We’re investing another $100 million in quality upgrades in 2008. This will further strengthen
our brands and improve our pricing power.
The new Kraft
To help guide us as we execute our growth plan, we strengthened our corporate governance
by adding six new independent directors to our board and appointing a lead director. Now,
11 of our 12 directors are independent.
To sum up—in 2007, we did what we said we would do. It’s working. And, we’re going to
keep on doing it.
I want to thank you for your support of our company. Because we know that our actions
speak louder than our words, I encourage you to visit www.newkraft.com, our special
website that accompanies this report, to see for yourself some of the exciting things going
on at the new Kraft. And, I invite you to keep an eye on us as we build on our momentum
and get growing on both the top and bottom lines in 2008.
Sincerely,
Irene B. Rosenfeld
Chairman and Chief Executive Officer
March 25, 2008
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