GLOBAL: Cadbury sees repeat of H1 for full-year
Cadbury Schweppes believes its full-year figures should mirror those for the first half of 2003.
In a statement, group chief executive Todd Stitzer said: "We confirm our expectation that underlying results for 2003 will be broadly in line with the first-half prior to currency movements.
"We have consistently described 2003 as a transitional year for Cadbury Schweppes as we put in place our new organisational structure, integrated Adams and weathered some challenging trading conditions in a number of our major markets.
"In October we set out our four-year strategic and operational agenda at the heart of which lie our far reaching 'Fuel for Growth' cost reduction and 'Smart Variety' growth initiatives." The cost reduction programme will involve the loss of 5,500 jobs and the closure of 27 factories. "By exploiting the stronger business platform we have created, we expect to progressively deliver superior business performance and thereby superior shareowner returns."
The company said that the performance of its Americas beverage business during the year had been negatively impacted by an industry-wide slow-down and by changes to the distribution arrangements for 7 UP.
However, in recent months, an improved performance has been seen from the group's carbonated soft drinks (CSD) business, led by Dr Pepper which is outperforming the US CSD market in the second half, the company said.
Cadbury continues to expect sales and operating profits for the year at constant currency for the region to be broadly level with those of last year.
Results from the European beverage operations benefited from a full year contribution from Apollinaris & Schweppes. Sales in the second half in France and Spain were boosted by the hot summer weather, but the costs of meeting this higher demand adversely impacted margins. The next phase of the integration of the commercial and supply chain operations of Schweppes and Orangina in France is moving ahead positively.
The company says it is confident about the prospects for 2004 as it begins to deliver the benefits of Fuel for Growth. Some cost increases are anticipated during the year, most notably in raw materials, insurance, employee benefits and depreciation.
Overall in 2004 the group expects to deliver results within its goal ranges of 3% - 5% net sales growth and 50 to 75 basis points of margin increase every year.
In July, the company posted a drop of 4% in half-year earnings per share and a fall of 5% in underlying pre-tax profits. The full-year figures are due to be announced on 18 February.
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