6 October 2005 - Cadbury Schweppes is holding an investor seminar in Dallas, Texas on 10th and 11th October. Ahead of the seminar, the Group is also updating the market on recent trading.
Todd Stitzer, CEO of Cadbury Schweppes, said, "We continue to experience strong sales momentum across the Group and expect revenue growth for the year to be around the top end of our goal range. Despite intensifying cost pressures and significant growth-related investment, we expect a further improvement in margin in 2005, although we are unlikely to make sufficient progress to be within our margin goal range this year. We are making good progress on cash flow, and expect to see a significant increase this year."
Investor Relations Seminar
Presentations will be given by CEO, Todd Stitzer, CFO Ken Hanna and key members of the Americas Beverages and Americas Confectionery management teams. The seminar will also include a presentation by Dr Pepper/Seven Up Bottling Group Inc.'s management and a visit to its Irving plant.
The presentations will review our progress against the goals and priorities set out in 2003. At the Group level, the review will also highlight the improvements made to the management of our capital resources. In 2004, Americas Beverages and Americas Confectionery together accounted for around 40% of Group revenue. Their presentations will focus on how each region is driving profitable growth through more effective commercial programmes and increased investment in marketing, innovation, science & technology and distribution.
Trading Update
We have continued to see good sales momentum across the Group's confectionery businesses driven by innovation and market-place execution. Our US carbonated soft drink share has been resilient and the performance of our non-carbonated business has shown further improvement, despite increased competition. The effect of the recent hurricanes on sales is difficult to assess, although at this stage we expect only a minor impact.
Cost pressures have intensified in the second half, particularly in the US. Oil price increases and hurricane-related disruption have resulted in higher transport and PET resin costs. In addition, severe financial difficulties experienced by an important supplier to our beverage business in the US have led to significant price increases for glass bottles.
Overall, the implementation of our new IT system in the UK is proceeding satisfactorily. We are currently experiencing some disruption to customer service levels which we are working to resolve. However, at this stage we anticipate that the total impact will be within the range of our expectations.
We expect continued sales momentum to deliver revenue growth for the full year around the top end of our goal range. Despite intensifying cost pressures and significant growth-related investment, we expect a further improvement in margin in 2005, although we are unlikely to make sufficient progress to be within our margin goal range this year. We are making good progress on cash flow, and expect to see a significant increase this year.