Cadbury Schweppes profit down in year
February 19, 2008
by FoodBusinessNews.net Staff
LONDON — Cadbury Schweppes P.L.C. posted ₤788 million ($1,536 million) in profit from operations for the year ended Dec. 31, down 13% from ₤909 million during the previous year. Revenue for the year was ₤7,971 million ($15,538 million), down 7% from ₤7,427 million during the previous year.
"Our confectionery business had an excellent year with strong commercial execution and tight control of costs driving 7% revenue growth and a good margin performance in the second half," said Todd Stitzer, chief executive officer. "These results reflect the benefits of restructuring initiatives undertaken between 2003 and 2007 and continued investment behind our brands. Although the economic outlook for 2008 remains uncertain, we are encouraged by the good trading momentum we have seen in the new year and our continued progress on cost reduction initiatives. We expect meaningful margin progression in 2008."
The company is working to complete a demerger as the company splits into Cadbury P.L.C. and Dr Pepper Snapple Group, Inc. The company said it will work to complete the separation during the second quarter.
"Americans Beverages performed well in a tough market with its share of the carbonates market growing for the fourth year in a row," Mr. Stitzer said. "Snapple had an encouraging year driven by successful new premium product launches. As the business prepares for demerger, we believe that the initiatives taken in recent years to invest in core brands, reduce costs and strengthen its route to market gives the business a strong platform for its future success as an independent company."
For 2008, the company said it expects to grow its base business revenues toward the upper end of the 4% to 6% goal range. The company expects commodity input costs to be 5% to 6% higher in 2008, and Cadbury will offset the increases with pricing actions. The company is making progress on its cost reduction initiatives and expects to deliver notable cost savings during the year.
The company also announced Sir John Sunderland will be retiring as chairman of Cadbury Schweppes in mid-2008. Roger Carr has been named chairman of Cadbury P.L.C. and Wayne Sanders has been named chairman of Dr Pepper Snapple Group following the demerger.
Mr. Carr is the company’s deputy chairman and senior non-executive independent director, and Mr. Sanders spent 28 years at Kimberly-Clark where he was chairman and c.e.o. for 11 years.
"I am delighted to be handing over stewardship of Cadbury P.L.C. to Roger Carr and Dr Pepper Snapple Group, Inc. to Wayne Sanders," Mr. Sunderland said. "Both are leading industrialists with excellent credentials tailored to meet the individual needs of our confectionery and Americas Beverages businesses as they embark on their next phase of growth and development."