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"We have a strong pipeline of cost-savings initiatives," said Tim McLevish, Executive Vice President and Chief Financial Officer. "We expect significant near-term savings in end-to-end productivity, including procurement, manufacturing and customer service and logistics. Plus, optimizing the efficiency and effectiveness of our corporate and business unit support functions will drive overhead leverage."

As a result of these and other initiatives, Kraft Foods is targeting:

-- Productivity as a percentage of cost of goods sold of greater than 4

percent by 2011, up from less than 3 percent in 2008

-- A reduction of about five days in its cash conversion cycle by 2011,

from 46 days in 2008

-- Overhead as a percentage of net revenue of approximately 12.5 percent in

2011, down from about 14 percent in 2008

-- Operating income margins in the mid-teens by 2011, up from 12.3(1)

percent in 2008

Delivering Growth and Improved Profitability in Europe

In addition, Michael Clarke, Executive Vice President and President, Kraft Foods Europe, outlined the pillars of the company's growth and margin-improvement initiatives in Europe. These include greater focus on priority brands, end-to-end productivity and lower overheads.

"We have scale, a balanced portfolio and strong share positions in biscuits, chocolate, coffee and cheese," said Clarke. "By focusing on our higher-margin brands and growth platforms, we are continuing to drive productivity and overhead savings in Kraft Foods Europe."

The company's European productivity savings are expected to come from procurement, manufacturing and distribution efficiencies. Leveraging the company's pan-European operating structure and further integrating biscuit operations is expected to reduce overhead as a percentage of net revenue by about 200 basis points by 2011.

Ten priority brands - Milka and Cote d'Or chocolates; Oreo, Belvita, Tuc and Mikado biscuits; Jacobs, Carte Noire and Kenco coffees; and Philadelphia cream cheese - are expected to drive European organic revenue growth, targeted at 1-3 percent. At the same time, Kraft Foods continues to target increasing profit margins to industry benchmark levels through productivity and overhead savings.

Kraft Foods' presentation was accompanied by slides. Access to a replay of the webcast with accompanying slides is available at www.kraftfoodscompany.com.

Proposed Combination with Cadbury plc

On September 7, Kraft Foods announced that it had made a proposal to the Board of Cadbury plc to combine the two companies. For further information, please go to www.transactioninfo.com/ kraftfoods.

About Kraft Foods

Kraft Foods (www.kraftfoodscompany.com) makes today delicious in 150 countries around the globe. Our 100,000 employees work tirelessly to make delicious foods consumers can feel good about.