UK: UK chocolate revival, US gum cheer Cadbury
A recovery in its UK chocolate sales and growing gum sales in the US have led Cadbury Schweppes to up its sales and margin guidance for its confectionery business this year.
UK-based Cadbury, the world's largest confectioner, said this morning (11 December) it now expects like-for-like confectionery sales to be "above the top end" of its 4-6% target.
The company said its underlying confectionery margins would be "modestly ahead" at constant exchange rates and before "business improvement costs".
Cadbury Schweppes CEO Todd Stitzer said: "Our continued strong confectionery performance reflects sustained investment behind growth and capabilities combined with a recovery in UK chocolate.
"While the economic outlook for 2008 is uncertain, we are confident that our trading momentum will carry on into the New Year, supported by our confectionery growth and efficiency initiatives."
Cadbury said the UK relaunch of its Wispa brand, coupled with a marketing push for Dairy Milk, had helped its chocolate business recover share.
The company said its business in the Americas was having an "outstanding year", driven by its gum portfolio, which includes Trident and Stride.
Cadbury is busy restructuring its operations worldwide in a bid to boost margins and said it would book restructuring charges of around GBP170m (US$348m) in its confectionery business.
Charges from its US drinks arm, which Cadbury is in the process of de-merging, will stand at GBP50.
Cadbury said the de-merger was "on track" and revealed today that the business would be named Dr Pepper Snapple Group.
Cadbury will announce its full-year results for 2007 on 19 February.
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