Cadbury Schweppes plc today announced interim results for the first half year to 18 June 2000.

        Full Year                               Half Year

1999 2000 1999
(millions of pounds) %

Continuing Operations:
4,234 Sales 1,954 1,843 + 6
731 Underlying Operating Profit 322 289 +11
686 Underlying Profit Before Tax 308 267 +15
22.5p Underlying Earnings Per Share 9.9p 8.5p +16
31.7p Basic Earnings Per Share 9.4p 8.0p +18
10.0p Dividend Per Share 3.20p 3.05p + 5

NB: Underlying numbers are before goodwill amortisation, restructuring
and exceptional items.


A strong sales and profit performance in the half-year drove a 16% underlying earnings per share increase.

  • A robust performance in beverages reflected volume growth and market share gains particularly in North America.
  • Confectionery performance was satisfactory overall, despite a slow market in the UK. Good progress was made in Europe and key emerging markets such as India and China.
  • Two important recent acquisitions — Hawaiian Punch and Dr. Pepper/Seven Up Bottling Group — both made a positive contribution to earnings and exceeded expectation.
  • Proposed acquisitions announced during the half year included Hollywood gum and sugar confectionery which will make Cadbury Schweppes the leading player in the French confectionery market.


Commenting on the half year, John Sunderland, Cadbury Schweppes’ CEO, said, “We have delivered a strong performance in the first half and this gives us confidence that we can achieve our financial targets for the full year. The food industry is undergoing significant change and we have the strategy, financial strength and management to respond to this new environment to the benefit of our shareowners”.

Statement to Shareowners

“Sales from continuing operations were up 6% to nearly 2bn pounds sterling, and underlying operating profit at 322m pounds grew by 11%. Underlying profit before tax rose 15% to 308m pounds. This drove an underlying earnings per share increase of 16% to 9.9p. The Board has declared an increase in the dividend of 5% to 3.2 pence and intends to continue with its rolling share buyback programme.

“Our marketing to sales ratio was up 1.6 points and our trading margin increased by 0.5 points to 14.9%. Underlying economic profit increased by 14% to 151m pounds, reflecting the continuing benefits from the Managing for Value process in both more rigorous deployment of capital expenditure and significant improvements to our working capital ratios.

“We have had an excellent performance from the great majority of our beverage businesses with trading profit up 14% (8% excluding Hawaiian Punch). A satisfactory confectionery performance saw overall trading profit up 6%.

“Hawaiian Punch has been successfully absorbed into both Mott’s and Dr. Pepper/Seven Up (DPSU) and made an important contribution to these results. The Dr. Pepper/Seven Up Bottling Group (DPSUBG) had a strong first half year and we have recommenced our search for further consolidation opportunities in the independent bottling system.

“Of the proposed acquisitions announced, the largest is that of the Hollywood gum and sugar confectionery business in France which, combined with our existing businesses, will make us the clear No. 1 in French confectionery. We also acquired Mauna La’i tropical fruit juice in the USA.

“We have mutually agreed with The Coca-Cola Company to no longer pursue the sale of our businesses in Canada and Mexico. We now have a substantial beverages business enjoying significant positions in the key markets of NAFTA, Europe and Australia.

“We have delivered a strong performance in the first half and this gives us confidence that we can achieve our financial targets for the full year. The food industry is undergoing significant change and we have the strategy, financial strength and management to respond to this new environment to the benefit of our shareowners”.

    Derek Bonham                          John Sunderland
Non-Executive Chairman Chief Executive Officer

Review of Operations


“We have seen a satisfactory confectionery performance overall. Branded volume is up over 1%, sales up 3% and profits up 6% on a constant currency basis. Top line growth has been impacted by a slow UK market and some shortfalls in developing markets. Importantly, we continue to invest behind our brands — the ratio of marketing to sales is up one point to 11.4% — and to work on making the business more efficient, hence the significant improvement in trading margin.

“Our confectionery business is built on strong and profitable shares in core chocolate markets — the UK, Australia, Ireland, New Zealand and Canada. In most of these markets we are growing share.

“In Australia we have grown value share to 52.5%. First half chocolate volumes are up 8%, driven by new products like Breakaway, and our association with the Olympics will support a strong second half. We have also seen share gains in Ireland and Canada, and volume growth in New Zealand, in each case driven by strong growth of Cadbury’s Dairy Milk Megabrand.

“In the UK chocolate category growth is subdued while levels of trade investment continue to increase. Nevertheless, we have made significant improvements to operating efficiencies and focused successfully on driving our most advantaged brands in the market place.

“The benefits of Trebor Bassett’s product and operating rationalisation are starting to come through and the leaner, branded business that is emerging will be integrated with Cadbury Ltd. to create an even more effective force in the UK confectionery market. Trebor Allan in Canada has had a difficult start to the year mainly because of the loss of some contract business in the US. As a result, profits for American confectionery are down compared with first half 1999. We are, however, combining our two confectionery businesses in Canada to create a much stronger business going forward.

“We have built an important presence in some of the most significant developing markets — India, China, Russia, Egypt and South Africa — and overall we are making good progress despite some difficulties in South Africa and Egypt. In India we have grown share of chocolate by more than two points to 71%. Overall volumes were up 15% and profits up 20%. In China volumes are up 77% and losses for the first half were down to half a million sterling.

“In Russia volumes were up 49% in the first half and margins also improved. We are taking significant steps to reduce our cost base.

“In France La Pie Qui Chante has extended our leadership of the bagged sugar market to over 25%, driven by the Carambar brand. In chocolate we have launched a series of innovations to grow share in the premium categories. Overall, French volume is up 10% year on year and profit is also ahead at this early stage.

“The reduced losses in Russia and improved performance in France delivered a better performance in Europe. Our Polish business, Cadbury Wedel, is making steady progress in a difficult market.


“Beverages has had an excellent first half, driven by a strong performance in the US and most of the rest of the world. Looking at continuing operations, including Hawaiian Punch, total Beverages volume is up 5%, sales are up 11% and trading profit has increased by 14% to 190 million pounds on a constant currency basis. Margin increased by 0.8 points and we have invested more behind our brands.

“DPSU grew ahead of the total market for the first time in 1999, and that momentum has continued into 2000 with volumes up 3% in a flat market. Overall, our volume share has increased from 16.5% to 17.1%. The Dr. Pepper brand is growing ahead of the market for the 16th consecutive year. 7 UP has now had nine months of consistent growth and our flavours category leaders like Sunkist and WELCH‘s are delivering double digit growth. A&W and Country Time are also performing well.

“DPSU performance has been supported by the formation of the Dr. Pepper/Seven Up Bottling Group which had a strong first half. Total volumes are up 5% and we have seen significant share increases in key markets like Southern California and Chicago.

“Our other US business, Mott’s, has had a good start to the year, with base business volumes up 9%. We have grown market share in Clamato and Mixers, and Hawaiian Punch is delivering ahead of expectations. The acquisition of Mauna La’i gives us a profitable niche brand in the fastest growing juice drink segment.

“Beverages outside the US delivered a good performance overall. Profits in Mexico have more than doubled as we reap the benefits of last year’s restructuring. Europe has delivered double digit profit growth on the back of 10% volume growth in France and the benefits of restructuring in Spain”.

John Brock
Chief Operating Officer

Interim Dividend

The interim dividend of 3.20 pence per ordinary share will be paid on 17 November 2000 to ordinary shareholders on the register at close of play on 11 August 2000.

Copies of the full statement will be sent to all shareholders and further copies will be available from the Company Secretary, Cadbury Schweppes plc, 25 Berkeley Square, London W1X 6HT.


1. The following schedules are attached:
Group Profit and Loss Account
Group Balance Sheet
Movements in Shareholders’ Funds
Group Cash Flow Statement
Sales and Trading Profit Analysis

2. Notes to the Accounts

                            Cadbury Schweppes plc
Group Profit and Loss Account
For the 24 weeks ended 18 June 2000

Year Half Year
1999 Notes 2000 1999
(in millions of pounds)
4,234 Continuing operations 1,954 1,843
67 Discontinued operations – 47
4,301 1,954 1,890
Underlying Trading Profit
685 Continuing operations 291 265
16 Discontinued operations — 10
701 291 275
(64) 2 Restructuring costs (11) (8)
(3) Goodwill amortisation (2) (2)
634 Group Operating Profit 278 265
35 Share of operating profit in 31 21
669 Total Operating Profit including 309 286
350 3 (Loss) / profit on sale of — (2)
subsidiaries and investments
(61) 4 Net interest (14) (32)
958 Profit Before Taxation 295 252
5 Taxation:
(181) On operating profit, associates (89) (73)
and interest
(34) On (loss) / profit on sale of — —
subsidiaries and investments
(215) (89) (73)
743 Profit After Taxation 206 179
(101) Minority interests (18) (16)
642 Profit Attributable to Ordinary 188 163
(202) Dividends to Ordinary (64) (63)
440 Profit Retained for the Financial 124 100
p 6 Earnings per Ordinary Share of p p
31.7 Basic 9.4 8.0
31.3 Diluted 9.3 7.9
19.5 Underlying 9.5 8.2
22.5 Underlying pre-restructuring 9.9 8.5
10.0 Dividends per Ordinary Share 3.20 3.05
2.0 Underlying dividend cover (times) 3.0 2.7

Cadbury Schweppes plc
Group Balance Sheet
At 18 June 2000

Year Half Year
1999 Notes 2000 1999
(in millions of pounds)
Fixed Assets
1,725 Intangible assets and 1,815 1,814
1,091 Tangible assets 1,073 1,129
385 Investments 467 269
3,201 3,355 3,212
Net Current Assets
404 Stocks 443 459
798 Debtors 791 783
(1,334) Creditors (1,183) (1,042)
(132) 51 200
Other Liabilities
(182) 7 Net Borrowings (296) (953)
(263) Provisions for liabilities (241) (162)
and charges
2,624 Net Assets 2,869 2,297
Capital and Reserves
Attributable to equity
253 Called up share capital 254 255
1,987 Reserves 2,214 1,725
2,240 Shareholders’ Funds 2,468 1,980
Minority Interests
139 Equity minority interests 141 70
245 Non-equity minority interests 260 247
2,624 Total Capital Employed 2,869 2,297

Movements in Shareholders’ Funds
For the 24 weeks ended 18 June 2000

1,843 Shareholders’ Funds at beginning of year 2,240 1,843
Recognised gains and losses for the period
642 Profit for the period 188 163
(25) Currency translation differences 80 24
Other movements
(202) Dividends to Ordinary Shareholders (64) (63)
51 Goodwill adjustments — —
(86) Shares repurchased — —
17 New share capital subscribed 24 13
2,240 Shareholders’ Funds at end of period 2,468 1,980

Cadbury Schweppes plc
Group Cash Flow Statement
For the 24 weeks ended 18 June 2000

Year Half Year
1999 2000 1999
(in millions of pounds)
Cash flow from operating
634 Group Operating Profit 278 265
150 Depreciation 74 70
34 Other items (20) 2
6 Changes in working capital (117) (131)
824 215 206
13 Dividends received from 1 5
(80) Returns on investments and (19) (41)
servicing of finance
(161) Taxation (69) (83)
Capital expenditure and financial
(108) Net capital expenditure (45) (50)
(88) Purchase of shares by Employee (55) (87)
(196) (100) (137)
Acquisitions and disposals
(350) 8 Acquisitions of businesses — (225)
3 Net proceeds from sale of
563 investments, associates and (5) (3)
subsidiary undertakings
213 (5) (228)
(196) Dividends paid to Ordinary (140) (135)
417 Cash (outflow) / inflow before (117) (413)
use of liquid resources and
13 7 Management of liquid resources (84) 168
17 Issues of Ordinary Shares 24 13
(79) Share repurchases (7) —
(302) 7 Net change in borrowings and 101 195
other financing
(364) Net cash inflow / (outflow) from 118 208
66 7 (Decrease)/Increase in cash (83) (37)
Free cash flow
417 Cash (outflow) / inflow before (117) (413)
use of liquid resources and
Add back: cash flows from
(125) acquisitions, disposals and 60 315
purchase of shares by Employee
292 (57) (98)