At today's Annual General Meeting, Chairman John Sunderland will make the following comments about recent corporate developments and trading in 2006.
"2005 was another successful year for Cadbury Schweppes. We achieved our highest rate of revenue growth for a decade, with all of our major businesses making a significant contribution. Increased innovation and improved market-place execution drove this performance and we saw share gains in the majority of our key markets. I am pleased to report that the Adams business, the largest acquisition in our history, has been integrated ahead of schedule and performance is exceeding our expectations.
"We continue to focus on ensuring our business portfolio is optimally positioned for growth and returns in terms of both category and geographic participation. Over the last year, we have sold a number of businesses and are redeploying the capital into businesses and markets which we believe will generate superior growth and returns.
"We successfully sold our Europe Beverages business earlier this year for £1.3 billion, a price which exceeded the market's expectations. The sale of other smaller businesses has netted us around £40 million. We expect to raise between £300 and £350 million over the next two years through the disposal of other small businesses and surplus properties.
"We recently completed the purchase of the remaining 55% of Dr Pepper/Seven Up Bottling Group which we did not already own. The integration of our biggest bottler in the US with our Americas Beverages business significantly enhances our ability to grow our brands in that market.
"Other acquisitions include: Green & Black's, the UK's fastest growing premium chocolate brand; a further 30% stake in our leading Turkish confectionery business, taking our shareholding to 95%; moving to majority in Cadbury Nigeria, the largest confectionery business in that market; and Dan Products, the number one gum business in South Africa.
"We are also investing in major capital projects including a new £70 million gum plant in Poland to service our fast growing European gum business and a £40 million expansion of Cadbury Dairy Milk production capacity in the UK. In addition to investment in growth and returns, we are investing in our people by increasing the funding of our pension funds, through a £125 million one-off payment and increased annual contributions over the next few years. We expect these payments to significantly reduce the deficit.
"From a trading perspective, we had a relatively slow start in the first quarter of 2006, particularly in Europe. We are now seeing increased momentum in our gum and beverage businesses and Easter was satisfactory in our key chocolate markets. Input costs remain challenging, particularly given the further rise in oil prices. We will update the market on current year trading at our interim update on 7 June."
Forthcoming Events
Forthcoming Group announcements/events are listed below:
| Date |
Event |
| 7 June 2006 |
Interim Trading Update |
| 2 August 2006 |
Interim Results |
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 around 60,000 people.
2. Cadbury Schweppes' Financial Goal Ranges
In pursuit of the Group's goal of superior shareowner returns, three external financial performance goal ranges have been set for the 2004-2007 period. These are:
- Revenue growth of between 3% and 5% per annum excluding the impact of acquisitions and disposals at constant currency
- Underlying operating margin growth (before brand intangible amortisation, restructuring costs, non-trading items and the volatility introduced from IAS 39 fair value accounting) of between 50 and 75 basis points per annum at constant currency
- Free cash flow (as explained in our Report & Accounts) totalling £1.5 billion at constant currency over the four year period. Cadbury Schweppes' definition of free cash flow is after the payment of dividends.
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 that 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.