Cadbury Schweppes Expects Good Revenue Growth In 2006

June 07, 2006

Cadbury Schweppes plc issues regular trading updates ahead of its interim and preliminary results. Today’s update comments on year-to-date performance in 2006 in our underlying business, excluding Dr Pepper/Seven Up Bottling Group, which was acquired on 2 May, 2006. The interim results for 2006 will be announced on 2 August 2006.

Todd Stitzer, CEO of Cadbury Schweppes said, “We expect to deliver good revenue growth in 2006, towards the upper end of our goal range. The majority of our businesses have performed well so far this year with our active innovation programme driving increased momentum across the Group in the second quarter. We expect further growth in margins this year, although with continuing rises in oil prices it is unlikely that we will deliver margin growth within our goal ranges in 2006.”

Year to Date Performance

Overall, we have made a good start to 2006. Most of our key businesses are showing healthy growth and we have made further share gains in a number of markets. After a relatively slow first quarter, which was impacted by difficult trading in our Europe, Middle East and Africa region, performance has improved in the second quarter as the rate of new product activity has increased.

Americas Beverages

In US carbonates, strong growth is being driven by good performances from Dr Pepper and by our other flavour brands such as Sunkist and A&W. Innovations launched in the second quarter include Dr Pepper Berries and Cream and 7 UP Natural. Our non-carbonated portfolio continues to benefit from increased focus on our core brands. Performance overall has been driven by recent price increases and innovation, including the introduction of a premium range of Snapple White Teas and Hawaiian Punch Plus, a fortified low sugar product. In Mexico, our beverages business continues to show double-digit sales growth.

Americas Confectionery

Gum sales in the Americas have been strong, driven by the US and Latin America. In the US, successful innovations are increasing our share in a buoyant market. New products launched in 2006 include Stride, a new soft chew gum brand with long lasting flavour. The Trident brand has performed particularly well across the region, benefiting from the roll-out of new products, notably Trident Splash and new packaging formats on the core Trident brand. Good growth in Halls in Latin America has been offset by a weaker performance in North America with lower demand during the key winter months due to a weaker cough and cold season. Our businesses in Latin America continue to grow strongly, with a slower start in Mexico more than offset by excellent performances from the rest of the region.

Europe, Africa and Middle East (EMEA)

Our EMEA region has had a challenging start to the year, particularly Cadbury Trebor Bassett (CTB) in the UK. Revenues and profits in CTB have been impacted by an estimated £20 million and £12 million respectively due to the combination of a weak market and increased discounting to clear

high levels of inventory built up during the implementation of a new IT system in the fourth quarter. The UK market is now modestly ahead and our performance is improving with share gains driven by Easter and a number of new product launches in the second quarter. Green & Black’s continues to perform strongly with further increases in distribution in the UK.

Elsewhere in Europe, Cadbury Ireland had a good Easter and Trident is driving healthy gum share gains in Spain, boosted by the launch of Trident Splash. In France, the market environment has been difficult due to retail price deflation and increased competition. Performance in our emerging market businesses in the region has been impacted by a slow start in two of our major markets, Russia and South Africa.

Asia Pacific

Our businesses in the Asia Pacific region are performing well with strong growth in emerging markets. India has had a particularly good half with increased distribution, innovation and growth in our chocolate power brands driving further share gains. Our operations across South East Asia, notably in Thailand and Malaysia, are all seeing strong momentum from Halls and gum. In Australia, our confectionery and beverage businesses are performing well.

First Half and Full Year Outlook

For the year as a whole, we expect to deliver underlying business revenue growth towards the upper end of our goal range. Growth will be weighted towards the second half given the timing of new product activity.

Our pricing and cost reduction initiatives are progressing in line with plan and are helping offset further increases in input and other costs. Fuel for Growth savings are on track to be £90m in 2006. Growth investment will again be higher than last year with key projects including the opening of new Science & Technology centres in the US and Singapore and strengthening of our route to market capabilities in the US, Mexico, India and Australia.

We expect margins for the underlying business for 2006 to show a further increase over last year. However, with continuing rises in oil prices, it is unlikely that we will deliver margin growth within our goal ranges. Margins are expected to be flat in the first half given the higher discount costs in the UK and the increase in oil and other commodity costs.

Strategic Developments

Following the successful integration of Adams, which was completed ahead of schedule, we have been making changes to our business portfolio to ensure that the investment of capital is focused on those businesses and markets where we can generate the highest growth and returns.

In February, we completed the sale of Europe Beverages for €1.85 billion (£1.26 billion). In May, £198 million of these proceeds were used to increase our stake in Dr Pepper/Seven Up Bottling Group (BG), our largest bottler in the US, from 45% to 100%. The purchase of BG has given us a scale route to market for our beverage brands in the US and enhances the long-term growth and return potential of this important business.

We also took majority control of Cadbury Nigeria, the largest confectionery business in the fast growing Nigerian market, increased our stake in Kent, our Turkish confectionery business, to 95%, and purchased the leading gum business in South Africa. In addition, we have announced the disposal of Bromor, our South African drinks business.

Accounting Items

Change in Half Year End

In 2006, the Group has moved its internal reporting cycle from a four weekly to a monthly basis. As a result, the first half will consist of 26 weeks of trading versus 24 weeks in 2005 and prior years.

Significant M&A Activity

Europe Beverages is classified as a discontinued operation. Europe Beverages was sold on 2 February 2006. Revenue, Profit from Operations, Profit before tax and taxation from these operations will be excluded from the half year results for 2006: post tax profits will be included as a single line item below Profit after tax. The half year results for 2005 will be re-presented to adjust for these changes.

On 20 February 2006, we took majority control of Cadbury Nigeria, increasing our stake from 46% to over 50%. On 2 May 2006, we completed the purchase of the 55% of Dr Pepper/Seven Up Bottling Group we did not already own. The results from these businesses will be fully consolidated from the date of control where as previously they were accounted for as associates.

Teleconference Calls

A teleconference for media will take place at 7.30am (BST) today.

Dial-in numbers:
UK Toll + 44 207 365 1836
Alternative Number 0800 032 4094

Replay
UK Toll +44 207 806 1970

Replay Access Number: 7461727#



A teleconference for analysts and investors will take place at 9.00am (BST) today, 10.00am (central Europe).

Dial-in numbers:
UK Toll +44 207 365 1854
Alternative Number 0800 904 7785

Replay
UK Toll +44 207 806 1970

Replay Access Number: 7992426#


A further teleconference call for analysts and investors will take place at 3pm (GMT) today, 4pm (central Europe), 10am (EST).

Dial-in numbers:
UK and Europe +44 207 138 0816
USA Toll Free +1 718 354 1171

Replay
UK and Europe +44 207 806 1790
USA +1 718 354 1112

Replay Access Number: 8304577#

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for further information contact:

Capital Market Enquiries
Sally Jones +44 20 7830 5124
Mary Jackets +44 20 7830 5124
Charles King +44 20 7830 5124

Media Enquiries
Andraea Dawson-Shepherd +44 20 7830 5011
Katie Macdonald-Smith +44 20 7830 5011

The Maitland Consultancy
Philip Gawith + 44 20 7379 5151
notes to editors:

1. About Cadbury Schweppes

Cadbury Schweppes is the world’s largest confectionery company and has strong regional beverages businesses in North America and Australia. With origins stretching back over 200 years, today Cadbury Schweppes’ products - which include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper, Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in almost every country around the world. The Group employs around 60,000 people.

2. Cadbury Schweppes’ Financial Goal Ranges

In pursuit of the Group’s goal of superior shareowner returns, three external financial performance goal ranges have been set for the 2004-2007 period. These are:

* Revenue growth of between 3% and 5% per annum excluding the impact of acquisitions and disposals at constant currency
* Underlying operating margin growth (before brand intangible amortisation, restructuring costs, non-trading items and the volatility introduced from IAS 39 fair value accounting) of between 50 and 75 basis points per annum at constant currency. In 2006, the margin goal range will exclude Dr Pepper/Seven Up Bottling Group, which was acquired in May 2006.
* Free cash flow (as explained in our Report & Accounts) totalling £1.5 billion at constant currency over the four year period. Cadbury Schweppes’ definition of free cash flow is after the payment of dividends.

Forward Looking Statements

This material may be deemed to include forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. These forward-looking statements are only predictions and you should not rely unduly on them. Actual results might differ materially from those projected in any such forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In evaluating forward-looking statements, which are generally identifiable by use of the words “may”, “will”, “should”, “expect”, “anticipate”, “estimate”, “believe”, “intend” or “project” or the negative of these words or other variations on these words or comparable terminology, you should consider various factors including the risks outlined in our Form 20-F filed with the SEC. Although we believe the expectations reflected in forward-looking statements are reasonable we cannot guarantee future results, levels of activity, performance or achievements. This material should be viewed in conjunction with our periodic interim and annual reports and registration statements filed with the Securities and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK.

Contact Information

Andraea Dawson-Shepherd

Cadbury Schweppes plc

Contact via E-mail