Cadbury Schweppes plc (NYSE: CSG) now issues regular trading updates ahead of its interim and preliminary results. Today’s update comments on year to date performance in 2001: the 2001 interim results will be announced on 25th July.

Trading Performance Highlights

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  • Underlying earnings for the first half are expected to be in line with our target to deliver ten percent plus earnings growth for the full year.
  • After a slow start to the year, performance of the US soft drinks market in the second quarter has improved in carbonated soft drinks (“CSDs”) and non-CSDs and this has been reflected at both Dr Pepper/Seven Up (“DPSU”) and Snapple.
  • DPSU is expected to show healthy profit gains in the half, helped by acquisitions. Mott’s has had an excellent start to the year with good performances throughout its portfolio. Snapple results are broadly in line with expectations with further progress expected in the second half as the business benefits from the roll-out of new products in the important summer selling season. The integration remains on track.
  • After a strong 2000, European Beverages continues to perform well with volume and profit gains led by France and Spain.
  • The difficult trading conditions experienced in the UK confectionery market in the second half of 2000 have continued into the current year. The market has been flat in the first half despite a high level of promotional activity. Cadbury Trebor Bassett volumes for the half are expected to be in line with the market with profits slightly lower. We continue to focus on stimulation of market growth, investing in long- term brand building and the unique opportunities represented by the merger of Cadbury and Trebor Bassett. * Our other European confectionery operations have had a positive start to the year with good progress being made in both Russia and Poland. In France, the integration of Hollywood is on schedule.
  • In Asia Pacific, the Australian and New Zealand confectionery businesses have continued to make sound progress, while volumes in China have benefited both from growth in our core chocolate business and the addition of the SportLife gum operation. Schweppes Cottee’s, our Australian beverage operation, has seen volume gains both from the base business and acquisitions.
  • The Africa, India, Middle East region is performing well overall with further gains in India and a strong recovery in Egypt. Our South African operations have had a reasonable start to the year, but the economic conditions there remain challenging.

Strategic Developments

We are focused on driving profitable growth, both organically and by acquisition. In the current year we are investing behind a number of significant growth initiatives.


  • The integration of Cadbury and Trebor Bassett will give us clear leadership in the UK confectionery market. Significant changes to the processes and structure of the organisation will create a business with a world class commercial capability, able to drive category growth through enhanced customer service, innovation, availability and marketing. There has been significant up-front investment, including capital expenditure, management resource and the reinvestment of the cost benefits of the integration, behind growth. The new business — Cadbury Trebor Bassett — will be formally launched early in the second half. We expect the financial benefits of the merger to accrue in 2002 and beyond.
  • Capital expenditure in 2001 will be higher than in recent years. We are in the early stages of investing in a three year programme to upgrade our business system processes based on a standard global operating platform. This will lead to major efficiency gains across the business and will facilitate our growth agenda.
  • We have announced that we are in discussions to acquire Orangina and other soft drink brands from Pernod Ricard in France and to acquire the business of La Casera in Spain. Both these businesses would significantly strengthen our existing soft drinks operations in those countries. Discussions continue and further updates will be provided as appropriate.

John Sunderland, Cadbury Schweppes’ CEO, said, “We have made a satisfactory start to the year and the first half results are expected to be in line with our target to deliver ten percent plus earnings growth for the full year. We are investing for growth, both organic and through acquisitions, and are fully engaged and committed to achieving the financial targets set in the second phase of Managing for Value”.

Notes:


  1. The trading update will be followed by a conference call for analysts at 3 pm (GMT) today. The conference call will be audio webcast live on Cadbury Schweppes corporate website at www.cadburyschweppes.com

  2. This news release 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. It should be read in conjunction with our 2000 Annual Report and Form 20-F for the 52 weeks ended 31 December 2000, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1X 6HT.

  3. Cadbury Schweppes is a major global company which manufactures, markets and distributes branded beverages and confectionery products around the world. With origins stretching back over 200 years, today Cadbury Schweppes’ products — which include brands like Cadbury, Schweppes, Dr Pepper, Snapple, Trebor and Bassett — are enjoyed in almost 200 countries across the world. Employing over 36,000 people, Cadbury Schweppes is the world’s third largest soft drinks company and the fourth largest confectionery company.

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