LONDON — The chief executive officer of Cadbury Schweppes plc today said the company was off to a good start toward meeting its 2005 financial goals.
At today's Annual General Meeting, C.E.O. Todd Stitzer noted continued sales momentum in the beverage and confectionery businesses.
The company issues regular trading updates ahead of its interim and preliminary results. The interim results for 2005 will be announced on July 26.
"Margins in the first half are forecast to be broadly unchanged despite increased investment in growth and some above inflation cost increases," he said. "For the full year, we continue to expect to deliver results within our goal ranges."
In the U.S., the carbonated soft drinks business continues to perform well, led once again by Dr Pepper and the portfolio of diet brands, Mr. Stitzer said. Volumes of non-carbonated brands in the U.S., notably Snapple and Mott's, are improving, although the initial investment in supporting this growth has been significant, he said.
The beverage businesses in Mexico and Australia are producing strong results, and European beverage operations are having a satisfactory start to the year, he added.
The company’s confectionery businesses around the world are performing strongly with the momentum seen during 2004 continuing into 2005, Mr. Stitzer said.
"This is being driven by a combination of market growth and market share gains, particularly in our gum and Halls businesses," he said. "In the U.K., innovation and continued focus on our core brands including Cadbury, Maynards and Bassett's, are driving sales gains."
Implementation of the PROBE IT system in the U.K. in early July is a key focus, Mr. Stitzer said. As previously announced, the investment will be around ₤20 million during the year, broadly balanced between the first and second halves.
Elsewhere, the transition of the Adams confectionery business in Canada to Cadbury Schweppes' back-office and logistics infrastructure has gone smoothly, he noted.
"The distribution issues experienced following the U.S. transition have been resolved, although we are incurring some additional costs as we restore customer service levels," Mr. Stitzer said.
Fuel for Growth savings are on track to be ₤100 million in 2005 and will once again have a second half bias, he said.
"Overall, we expect sales growth in 2005 to be weighted toward the first half given more demanding second half comparatives," Mr. Stitzer said. "Margins in the first half are expected to be broadly unchanged on the comparable period last year despite higher marketing and promotional spend, implementing PROBE in the U.K. and increased oil based input and distribution costs. "