Cadbury plc today starts trading as a standalone confectionery company. The demerger of Cadbury Schweppes plc's Americas Beverages business is expected to be completed on 7 May when Dr Pepper Snapple Group starts trading on the New York Stock Exchange.
The new Cadbury business has revenues of over £5 billion and underlying profit from operations of around £500 million. With origins stretching back nearly 200 years, Cadbury's brands include many global, regional and local favourites including: Cadbury, Creme Egg, Flake, and Green and Black's in chocolate; Trident, Dentyne, Clorets, Stimorol, Hollywood and Bubbaloo in gum; and Halls, Cadbury Eclairs, Bassett's and the Natural Confectionery Company in candy. The anticipated market capitalisation should make it a FTSE 50 company.
Cadbury plc has very strong positions in markets with superior growth potential:
- Global leader with 10.1% market share (becoming no 2 globally and remaining number one outside the US when Mars' acquisition of Wrigley completes);
- Number 1 or 2 market share positions in over 20 of the world's top 50 markets;
- Superior exposure to fast growing markets and categories - emerging markets and gum each account for over 30% of Cadbury's revenues
The potential of Cadbury has been transformed over the past five years by the successful integration of the Adams business and by a significant increase in investment in innovation, marketing and distribution. Adams made Cadbury the first total confectionery company with the broadest product range and global reach. It gave Cadbury the largest emerging market confectionery presence and a strong number 2 position in the global gum market, with a share of over 27% (2002: 7%).
Cadbury's growth has also been significantly improved since 2003. By successfully integrating and unlocking the potential of the Adams business and increasing investment in growth and capabilities, organic revenue growth of the combined business has more than doubled, from less than 3% a year to an average of 6% every year. In 2007, revenues grew by 7% and continued to grow at this rate in the first quarter of 2008.
The company's 2008-11 Vision Into Action confectionery strategy, announced in June last year, aims to capture the significant under-exploited potential in the business - in revenue growth, margins and returns. It is based around a concept of "Fewer, Faster, Bigger, Better" focusing the company's resources and efforts on fewer, bigger and more value creating initiatives.
Cadbury has committed to deliver 4-6% sales growth on an annual basis, to delivering mid-teens margins by 2011 (2006: 9.8%), to grow dividends strongly and improve returns on invested capital.
Todd Stitzer, Chief Executive, said: "Cadbury is a wonderful company whose success has been built on a heritage of strong brands and an ethical culture. The separation of beverages allows us to take the company back to the future. The past few years have seen a transformation of the group's performance and as a focused confectionery company we will be able to do better still. Our superior geographic and category reach offers excellent organic growth opportunities, and we have the strategy to capture them. We are absolutely focused on delivering superior performance - meeting our revenue and margin targets - and we will continue to do this by doing business in the right way."