UK: Cadbury Schweppes Q1 steady, demerger on course
Cadbury Schweppes has issued a first quarter trading update, whilst maintaining that the demerger of its US soft drinks business remains on schedule.
The UK-based company, which said last month that the demerger will complete in May, said today (11 April) that revenue growth at Americas Beverages in the first three months of 2008 rose by 3% year-on-year.
The loss of Glaceau distribution rights late last year to The Coca-Cola Company and lower bottler inventory, following a change in the timing of annual concentrate price increases, reduced revenues by 4 percentage points in the quarter. In CSDs, share fell slightly, reflecting higher pricing to offset commodity cost pressures. In non-CSDs, however, growth was driven by a combination of price increases and continued strong performances from the Snapple, Mott's and Clamato brands. "We confirm our previous 2008 guidance of business revenue growth of 3% - 5% and underlying margins modestly lower year-on-year," the company said.
Company CEO, Todd Stitzer, said: "Americas Beverages is performing in line with expectations with revenues benefiting from good growth in our core non-carbonate brands.
"While the economic outlook in 2008 is challenging, we are encouraged by the performances of our confectionery and Americas Beverages businesses and the continued progress being made on their separate strategic agendas."
Cadbury Schweppes also confirmed that the demerger of Dr Pepper Snapple Group, as the US beverage unit will be known, is on schedule to complete next month.
The last day of dealing for Cadbury's ordinary shares and ADRs will be 1 May. Ordinary shareowners will receive 64 ordinary shares in Cadbury plc, and 36 Cadbury plc beverages shares for every 100 Cadbury Schweppes shares. Listing of DPSG shares in New York will commence, as planned, on 7 May.
Separately, the company announced the addition of two directors, John Adams and Ronald Rogers, to the DPSG board, which, on demerger, will comprise a total of nine directors, seven of which will be non-executive directors.
Adams has held a number of positions in Texas Commerce Bank, Chemical Bank and the Chase Bank of Texas, where he was chairman and CEO. He is currently on the board of Trinity Industries and Group Automotive Inc. Rogers worked from 1972 to 2007 for the Bank of Montreal in a number of roles, culminating in his appointment as deputy chairman.
Colas may be the most popular type of soft drink in the world but they have historically been high in sugar, and are among the first products mentioned when rising obesity levels are being discussed. ...
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