Cadbury cautiously optimistic
the coming financial year, having today trading updates ahead of
its interim and preliminary results. The company said that its US
division had particularly shown a strong recovery, following its
disappointing results in 2003.
The company said that the upturn it experienced towards the end of 2003 had continued into 2004, with all key businesses showing an 'encouraging' start to the year. It said that in particular the United States and our confectionery operations in the Americas had been strong, with the Adam's business reported to be back on track.
"Americas Beverages performance has been led by carbonated soft drinks, in particular Dr Pepper and our broad range of diet brands," a press statement said. "Americas Confectionery is performing well, benefiting from healthy consumer demand in key markets and new product launches in gum."
The company also described its confectionery operations in the Europe, Middle East and Africa region as having had 'a steady start to the year', with continuing top-line growth in most of main markets across the region.
In the UK, further market share gains were reported and Easter sales were slightly ahead year-on-year. The European beverage business was said to be benefiting from core brand focus and improved supply chain efficiencies although consumer demand in a competitive French market was reported as being weak.
In Asia Pacific, confectionery and beverage operations in Australia were said to be showing good growth versus a difficult first half last year. In Thailand and Japan, the company's gum and medicated businesses continue to perform well and we have seen a satisfactory sales recovery in India.
The company's Fuel for Growth cost reduction programme is said to be delivering savings in line with plan with further benefits expected in the second half. However we are, as expected, experiencing some above inflation cost increases.
For the half-year, sales growth for the group is expected be within goal ranges for the base business at constant currency.
"We continue to expect underlying operating margins - before associates and at constant currency - to be modestly higher than the first half of 2003," the statement added.
Todd Stitzer, Cadbury Schweppes' CEO said, "We have had an encouraging start to the year with good results from all our key business units. Particularly pleasing is the continued improvement in our US beverage business and strong sales growth in Americas Confectionery where the business is benefiting from investment in marketing and innovation. Although we have a number of key integration projects to implement in the second half, particularly in Americas Confectionery, we are cautiously optimistic about the outcome for the full year and continue to expect to deliver results within our goal ranges."
