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Cadbury Schweppes issues regular trading updates ahead of its interim and preliminary results.  Today's update comments on year-to-date performance in 2006. The preliminary results for 2006 will be announced on 20 February, 2007.

Todd Stitzer, Cadbury Schweppes' CEO said, "2006 has been a challenging year for Cadbury Schweppes with very strong performances across large parts of our business partly offset by events in the UK and Nigeria. Although these have taken the edge off another year of strategic and operating progress for the group, our performance in 2006 will be in line with previous guidance. As we move forward into 2007, we believe that the fundamentals of our business remain strong."

Trading Performance

Overall, trading remains in line with expectations outlined in October ahead of our IR Seminar. We expect like-for-like revenue growth around the middle of our goal range. Underlying margins (excluding Cadbury Schweppes Bottling Group and Cadbury Nigeria) are likely to be broadly level with last year, with Fuel for Growth savings offset by higher commodity costs, increased investment in growth and a challenging year in the UK.

We measure performance against our goal range for revenues excluding acquisitions and disposals, and for margins including acquisitions and disposals. In November, Cadbury Nigeria discovered a significant overstatement of its financial position. A review by the investigating accountants is continuing and for the purposes of this update, the results of Cadbury Nigeria (a fully consolidated subsidiary from February 2006) have been excluded from our comments on underlying performance. For the full year, after confirmation of the audited results, we expect to include Cadbury Nigeria's current year trading losses in our underlying results.

Three of our four regions - Americas Beverages, Americas Confectionery and Asia Pacific - continue to make strong progress benefiting from further share gains, successful innovation and growth in emerging markets.

In Americas Beverages, share gains in carbonated soft drinks (CSDs) are being driven by good performances from key brands, including Dr Pepper, 7 UP, Sunkist and A&W. In non-CSDs, the core brands are showing good growth with Snapple showing some improvement following the introduction of a range of premium teas. The performance of our recently acquired bottling operations has been strong and their integration remains on track, with good progress being made on cost and revenue synergies.

Our Americas Confectionery businesses are having an excellent year. In US gum, our share remains 300 basis points ahead year-to-date benefiting from flavour and packaging innovation on Trident, and the introduction of a new brand, Stride which now has a 2.7% share of the $3.6 billion US gum market. Our Latin American businesses continue to grow strongly with innovation driving improved results in Mexico.

Performance in Europe, Middle East and Africa (EMEA) has been mixed in the second half with stronger top-line growth in emerging markets largely offset by a weaker performance from the UK. Profits in the second half will be impacted by challenging trading in the UK and costs relating to increased innovation across the region. In Continental Europe, our businesses in France, Spain and Greece are benefiting from successful gum innovations including further launches of centre-filled gum products under the Hollywood and Trident brands.

In the UK, the confectionery market is improving and the important pre-Christmas selling season is progressing satisfactorily with recent innovations, Cadbury Melts and Flake Dark, continuing to perform strongly. Although competitive activity has been strong, our share year-to-date is in line with last year and we remain encouraged by the progress made. In the last few days, we have announced to the trade that we will be launching Trident Splash and Trident Soft gum brands at the end of January.

Our businesses in the Asia Pacific region have continued to perform well.  We expect good results from Australia and New Zealand despite intensified retail competition in the second half. In emerging markets, India is having a particularly good year with recent performance boosted by a very strong demand during the important Diwali festival.

Cadbury Nigeria

Following its announcement on 16 November, Cadbury Nigeria (our 50.02% owned subsidiary) has today announced that it has received a preliminary report from the investigating accountants into the accounting irregularities. This has confirmed a significant and deliberate overstatement of the company's financial position over a number of years. The CEO and Finance Director have been relieved of their positions. A complete review of the business has been initiated by the Board of Cadbury Nigeria.

Cadbury Nigeria has announced that it expects to report an operating loss in 2006 in the range of £5 - £10 million. In addition, it will also make one-time exceptional charges in respect of profit and balance sheet overstatements for the current and prior years of around £55 - £60 million. These operating losses and exceptionals remain subject to year end audit processes. Cadbury Schweppes' share of the one-time charges will be booked in non-underlying items in the 2006 accounts (see below).

The gross value of Cadbury Nigeria on Cadbury Schweppes' balance sheet as at 30 June 2006 was £70 million, including £25 million of goodwill. The net value after deducting minority interests is £48 million. In 2005, Cadbury Nigeria was reported as an associate in Cadbury Schweppes' accounts and contributed a net profit of £6 million. In the first half of 2006, Cadbury Nigeria contributed a net profit of £1 million to the Group. It was accounted for as an associate until 28 February and as a fully consolidated subsidiary for the remaining 4 months.

Non-Underlying Items

In 2006, non-underlying items are expected to be a net credit and will include:

• A net credit arising from the disposal of businesses and fixed assets in the current and prior years including:
  • Around a £600 million profit on the disposal of our beverages businesses in Europe, South Africa and Syria
  • Around a £30 million factory insurance recovery following a fire in 2005 at our Monkhill Confectionery business in the UK
  • A write-back of approximately £30 million relating to tax provisions following an agreement with the UK tax authorities in respect of the disposal in 1997 of Coca-Cola & Schweppes Beverages, a bottling joint venture in the UK.  At the time of the disposal, a tax provision of £100 million was created. The settlement will result in a final cash tax payment of around £60 million which will be made in the current year.
• Charges in respect of the UK contamination, which have increased from an estimated £20 million to around £30 million, primarily reflecting higher manufacturing and facility rectification and remediation costs. 
• A charge of £20 - £25 million reflecting the Group's share of the one-time exceptionals which will be booked by Cadbury Nigeria. Following the results of the review, we will assess the carrying value of Cadbury Nigeria in the Group's balance sheet.

Teleconference Calls

A teleconference for analysts and investors will take place at 9.00am (GMT) today, 10.00am (central Europe). A podcast of this call is available in our results & presentations section.

A further teleconference call for analysts and investors will take place at 3pm (GMT) today, 4pm (central Europe), 10am (EST). A podcast of this call is available in our results & presentations section.

Next Events

Forthcoming Group announcements/events are listed below:

1. About Cadbury Schweppes

Cadbury Schweppes is the world's largest confectionery business and has a strong regional beverages presence in North America and in 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 70,000 people. 

2. About Cadbury Nigeria

Cadbury Nigeria is the leading producer of candy, gum and food beverages for the Nigerian market and the West African sub-region.  Its brands include Tom Tom, Bournvita and Bubba bubble gum.  Cadbury Nigeria also owns a cocoa processing business, the Stanmark Cocoa Processing Company, which produces cocoa products for the Nigerian market and for export. Cadbury Nigeria is listed on the Nigerian Stock Exchange. Its headquarters are in Lagos and it employs around 1,700 people. 
In the year ended 31 December 2005, Cadbury Nigeria's audited accounts reported revenues of £122 million and underlying operating profit of £22 million. These numbers include revenues of £20 million and underlying operating profit of £2 million from a contract with Knorr which was terminated in November 2005. In the six months to 30 June 2006, Cadbury Nigeria reported revenues of £49 million and underlying operating profit of £3 million.
Cadbury Nigeria was reported as an associate in Cadbury Schweppes' group accounts in 2005. In the first half of 2006, it was reported as an associate until 28 February and as a fully consolidated subsidiary from 28 February to the 30 June half year end. The following table shows the contribution of Cadbury Nigeria to Cadbury Schweppes for the full year 2005 and first half 2006.

Cadbury Nigeria: Contribution to Cadbury Schweppes' Group Income

* Associate profits net of interest and tax
# Cadbury Nigeria accounted for as an associate
** Cadbury Nigeria accounted for as a subsidiary

Forward Looking Statements

Except for historical information and discussions contained herein, statements contained in these materials may constitute "forward looking statements" within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. Forward looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. Forward looking statements involve a number of known and unknown risks, uncertainties and other factors that could 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 such forward looking statements.  In evaluating forward looking statements, you should consider various factors including the risk factors outlined in our Form 20-F filed with the US Securities and Exchange Commission.  These materials should be viewed in conjunction with our periodic interim and annual reports, registration statements and other filings filed with or furnished to the Securities and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK and from the Securities and Exchange Commission's website at www.sec.gov. Cadbury Schweppes plc does not undertake publicly to update or revise any forward looking statement that may be made in these materials, whether as a result of new information, future events or otherwise.