Cadbury Schweppes reports on financial performance for the year ended 31 December 2006.
2006 Highlights
- Underlying revenue growth of 4%, driven by innovation and by emerging markets +10%
- Underlying Profit before Tax +9%
- Confectionery revenues +4%; gum revenues +10%; Trident +23%
- Beverage revenues +4%; 60bps share gain in US carbonates; Dr Pepper +2%
- Dr Pepper/Seven Up Bottling Group performing in line with acquisition case
- Proposed final dividend up 10% to 9.9p taking full year increase to +8%
(except where stated all movements are at constant exchange rates)
Todd Stitzer, Chief Executive Officer said: "Overall we made significant progress in 2006 despite the challenges faced in EMEA, with three of our four regions performing strongly. Our underlying results reflect the scale of changes made in the last three years to strengthen our business, reduce our cost base and focus on higher growth categories and markets. We start 2007 with optimism and are continuing to invest behind growth, with a strong innovation pipeline including the launch of Trident, our global gum brand, into the UK."
| £ millions |
2006 |
2005 |
Reported
Currency
Growth
% |
Constant
Currency 2
Growth
% |
|
Revenue |
| Base Business |
6,628 |
6,432 |
+3 |
+4 |
| Acquisitions / Disposals |
799 |
- |
|
|
| Total |
7,427 |
6,432 |
+15 |
+16 |
| |
|
|
|
|
|
|
Underlying Profit from Operations 1 |
1,073 |
1,025 |
+5 |
+6 |
| UK product recall |
(30) |
- |
|
|
| Nigeria goodwill impairment |
(15) |
- |
|
|
| Restructuring costs |
(133) |
(71) |
|
|
| Other |
14 |
41 |
|
|
| Profit from Operations |
909 |
995 |
-9 |
-7 |
| |
|
| Underlying Profit before Tax 1 |
931 |
865 |
+8 |
+9 |
| Profit before Tax |
738 |
835 |
-12 |
-10 |
| Discontinued Operations |
642 |
76 |
|
|
|
|
|
|
|
| |
|
|
|
|
| Underlying EPS 1 & 3 |
31.6 |
33.9 |
-7 |
-5 |
| Reported EPS 3 |
56.4 |
37.3 |
|
|
| Dividend per share |
14.0p |
13.0p |
+8 |
n/a |
|
1 Cadbury Schweppes believes that underlying profit from operations, underlying profit before tax, underlying earnings and underlying earnings per share provide additional information on underlying trends to shareholders. The term underlying is not a defined term under IFRS, and may not therefore be comparable with similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to IFRS measurements of profit. A full reconciliation between underlying and reported measures is included in the segmental analysis on pages 19 and 20 of the full 2006 preliminary results press release.
2 Constant currency growth excludes the impact of exchange rate movements during the period (see note 3: Basis of Preparation page 14 of the full 2006 preliminary results press release).
3 EPS is presented on a basic total group basis including earnings contributed by Europe, Syria and South Africa Beverages.
Basis of Preparation
Comments on the Group and Regional performances in the commentaries on pages 2 to 8 of the full 2006 preliminary results press release are made on the continuing business, excluding discontinued operations. Comments on movements in revenues, underlying profit from operations and margins are made on a constant exchange rate basis. References to like-for-like movements are made on a constant exchange rate basis and exclude the impact of acquisitions and disposals. In 2006, movements in exchange rates, primarily the US Dollar, the Australian Dollar and the South African Rand reduced Revenue and Underlying Profit before Tax by 1% and Underlying EPS by 2%. A full explanation of the basis of preparation is included in Note 3: Basis of Preparation on page 14 of the full 2006 preliminary results press release.
1. About Cadbury Schweppes
Cadbury Schweppes is the world's largest confectionery company and has strong regional beverages businesses in North America and Australia. With origins stretching back over 200 years, today Cadbury Schweppes' products - which include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper, Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in almost every country around the world. The Group employs over 70,000 people.
2. Basis of Preparation
Impact of Exchange Rates
Over 80% of the Group's sales and profits in 2006 were generated outside the United Kingdom. Constant currency growth was calculated by applying the 2005 exchange rates to the 2006 reported results for the base business (excluding acquisitions and disposals).
Acquisitions and Disposals
The contribution from acquisitions and disposals during the period equates to the first twelve months' impact of businesses acquired or disposed of in the current and prior year. Once an acquisition or disposal has lapped its acquisition date then it is included within the base business results.
In 2006, we disposed of our beverage operations in Europe, South Africa and Syria. These disposals reflect our strategic decision to exit beverages outside the Americas and Australia. These businesses are classified as discontinued operations and the prior period has been re-presented on a consistent basis.
Forward Looking Statements
This material may be deemed to include forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. These forward-looking statements are only predictions and you should not rely unduly on them. Actual results might differ materially from those projected in any such forward-looking statements, which involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In evaluating forward-looking statements, which are generally identifiable by use of the words "may", "will", "should", "expect", "anticipate", "estimate", "believe", "intend" or "project" or the negative of these words or other variations on these words or comparable terminology, you should consider various factors including the risks outlined in our Form 20-F filed with the SEC. Although we believe the expectations reflected in forward-looking statements are reasonable we cannot guarantee future results, levels of activity, performance or achievements. This material should be viewed in conjunction with our periodic interim and annual reports and registration statements filed with the Securities and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK.