UK confectionery and soft drinks giant Cadbury Schweppes has issued a year to date trading statement ahead of its interim and preliminary results, which will be announced on 17 July 2002.
CEO John Sunderland said: “We have made a sound start to the year. Acquisitions made are in line with our strategy and will make positive contributions this year. Overall we remain confident of achieving our financial targets.”
The company said that underlying earnings for its H1 are expected to be in line with its target to deliver double digit earnings growth for the full year.
In the UK, Cadbury Trebor Bassett has carried forward the momentum gained towards the end of last year, the company said. Growth in chocolate volumes has been led by innovation and the business continues to benefit from past restructuring. There is also improved performance in impulse channels.
“Top line growth remains our focus in this key market and we are encouraged with results achieved to date,” said the company.
Elsewhere in European confectionery, Poland is again performing well and Russia remains on track to be profitable in the full year. Consolidation of the French sales force has been successful with minimal disruption. Hollywood continues to perform strongly in France.
In the Americas confectionery region, Jaret in the US is seeing good volume and profit growth through product innovation, while Canada continues to make progress following last year’s integration and supply capacity problems. Reported profit in the overall region will however be impacted by the economic situation in Argentina and resulting currency devaluation.
In the Asia Pacific region, the Australian and New Zealand confectionery businesses are again delivering strong volume growth driven by focused marketing. The Food & Beverage business has started more slowly, reflecting the disappointing summer weather that has contributed to a downturn in overall beverage industry volumes. Investment in marketing spend and systems costs will hold back H1 profit increases, but the region remains on track to deliver its full year profit growth targets.
The Africa, India and Middle East group has started the year well, with particularly strong volume growth being achieved in Egypt and India.
US beverages operations overall have had a satisfactory start to the year, with good volume growth in the non-carbonated businesses driven by Clamato and Hawaiian Punch. Carbonated volumes were slightly impacted by brand transfers and refranchising, although strengthened marketing campaigns are beginning to have a more positive impact on performance, with the launch of Red Fusion to follow in July. After a satisfactory Q1, the Snapple range is currently performing a little below expectation although a number of new product launches are in the process of introduction.
Meanwhile, European beverages have made a steady start to the year. Integration of the recently acquired Orangina-Pampryl business in France is a top priority and the project is progressing satisfactorily. In Spain the integration of La Casera is on track and the business is performing in line with expectations. Mexico has started the year well.
Acquisitions, said the company, “have again strengthened our position in chosen markets”.
In the H1 2002, the group has completed the acquisitions of the Squirt brand in Mexico; a majority shareholding in Kent, the market leading sugar confectionery business in Turkey; and the Nantucket Nectars business in the US. It expects each of these businesses to be earnings enhancing this year. In addition, its holding in Cadbury India has increased to over 90%.