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Press releases

An extended PDF of this press release is available HERE 

Cadbury Schweppes reports on financial performance for the year ended 31 December 2007.

£ millions	Total 2007	Total 2006	Reported Currency Growth %	Constant Currency Growth1 %
Revenue	7,971	7,427	+7	+11
Underlying Profit from Operations2	1,050	1,073	-2	+4
Restructuring, exceptional & other items	(262)	(164)
Profit from Operations	788	909
Underlying Profit before Tax2	915	931	-2	+5
Profit before Tax	670	738
Discontinued Operations	-	642
Underlying EPS2	30.2p	31.6p	-4	+2
Reported EPS	19.4p	56.4p
Dividend per share (p)	15.5p	14.0p	+11

¹ Constant currency growth excludes the impact of exchange rate movements during the period.

² Cadbury Schweppes believes that underlying profit and earnings provide additional information on underlying trends. The term underlying is not a defined term under IFRS, and may not be comparable with similarly titled profit measurements reported by other companies. A full reconciliation between underlying and reported measures is included in the segmental analysis on pages 22 and 23.

Operational Highlights*

Confectionery

• Record revenue growth** +7%: best for a decade
• Excellent growth in gum and chocolate led by Trident +26% and CDM +5%
• Underlying confectionery margins before business improvement costs +30bps driven by strong second half growth +80bps

Americas Beverages

• Americas Beverages revenue growth** +4%: good performance in challenging markets
• 40bps CSD share gain led by Sunkist and A&W; Snapple revenue +5% driven by innovation
• Underlying beverage margins impacted by bottler acquisitions and Accelerade launch costs

Financial Highlights*

• Underlying EPS up 2%
• Reported EPS down due to restructuring costs and 2006 profit on Europe Beverages sale
• Dividend growth of 11% to 15.5p reflecting Board's confidence in future outlook
  * all numbers at constant exchange rates except where stated
  ** base business growth

 Demerger Update

• Confectionery and Beverages running as separate businesses: clear benefits of focus
• Roger Carr, current Deputy Chairman, appointed Chairman of Cadbury plc
• Wayne Sanders, former President and CEO of Kimberly-Clark, appointed Chairman of new beverages company (Dr Pepper Snapple Group, Inc.)
• Demerger process continues: further update by end March

Todd Stitzer, Cadbury Schweppes CEO said: "Our confectionery business had an excellent year with strong commercial execution and tight control of costs driving 7% revenue growth and a good margin performance in the second half. These results reflect the benefits of restructuring initiatives undertaken between 2003 and 2007 and continued investment behind our brands.  Although the economic outlook for 2008 remains uncertain, we are encouraged by the good trading momentum we have seen in the new year and our continued progress on cost reduction initiatives. We expect meaningful margin progression in 2008."

"Americas Beverages performed well in a tough market with its share of the carbonates market growing for the fourth year in a row. Snapple had an encouraging year driven by successful new premium product launches. As the business prepares for demerger, we believe that the initiatives taken in recent years to invest in core brands, reduce costs and strengthen its route to market gives the business a strong platform for its future success as an independent company."

Basis of Preparation

The results of Americas Beverages are reported as part of continuing operations. On the proposed demerger, Americas Beverages will be reported within discontinued operations with the prior periods re-presented on a consistent basis.

Group and Regional commentaries on pages 2 to 10 relate to the continuing business, excluding discontinued operations. Comments on movements in revenues, underlying profit from operations and margins are made on a constant exchange rate basis. References to base business are made on a constant exchange rate basis and exclude the impact of acquisitions and disposals and business improvement costs. From 2007, ongoing business improvement costs of approximately 0.5% of revenue are included within underlying profit from operations. In 2006, there were no ongoing business improvement costs as all restructuring costs were incurred as part of the Fuel for Growth programme and as such were reported outside of underlying profit from operations. Constant currency growth was calculated by applying the 2006 average exchange rates for the year to the 2007 reported results. In 2007, movements in exchange rates, primarily the US Dollar, the Mexican Peso and the South African Rand reduced Revenue by 4%, Underlying Profit before Tax by 7% and Underlying EPS by 6%. The contribution from acquisitions and disposals during the period equates to the first 12 months' impact of businesses acquired or disposed in the current or prior period. Once an acquisition has lapped its acquisition date, it is included within base business results.

 PRELIMINARY RESULTS OVERVIEW

The results of confectionery and Americas Beverages in 2007 have been reported as a single consolidated business within continuing operations. However, given the impending separation of confectionery and Americas Beverages, the following operating review focuses on the performance of the businesses separately. The financial review on page 13, provides a commentary on our consolidated results.

2007 was another significant year in the evolution of Cadbury Schweppes and it marked the end of the 2004 - 2007 strategic plan we set out in late 2003. In March 2007, we announced the decision to separate our confectionery and Americas Beverages businesses and in June, we set out a new four-year "Vision into Action" plan for confectionery. In October, we confirmed that the separation would take place by way of a demerger with completion likely during the second quarter of 2008.

Both businesses have substantially achieved the goals we set out for them in 2003. Strategically, they have been strengthened through acquisitions and disposals. Commercially, performance has been driven by a significant investment in marketing and commercial capabilities and a doubling of our innovation rate.

In 2007, the performance of confectionery and Americas Beverages benefited from these strategic and operational improvements. By the end of the year, the businesses were operating largely as independent entities and were already beginning to show the benefits of greater focus.

In confectionery:

• Base business revenues grew by 7%, above the top end of our new confectionery goal range, bringing the four year annual growth rate to over 6%;
• Revenue growth was broadly based across most of our markets with gum and emerging markets continuing to show double-digit growth;
• Underlying margins (before the impact of business improvement costs and exchange) increased by 30bps despite a significant increase in growth investment and a further escalation in raw material costs. Margins in the second half increased by 80bps driven by operating leverage and tight cost control;
• We made good early progress on our new "Vision into Action" plan including initiating significant elements of our cost reduction programme by the end of the year;
• Acquisitions made during the year significantly strengthened existing positions (Intergum in Turkey and Sansei in Japan) and gave us a strong position in a new emerging market (Kandia Excelent in Romania).

In Americas Beverages:

• Base business revenues grew by 4%, a good result in view of the challenging US CSD market;
• Our CSDs continued to benefit from the trend away from colas to flavoured CSDs and an excellent performance from Snapple reflected highly successful innovation in super-premium teas and juices;
• Underlying margins (before the impact of exchange) fell by 340bps reflecting consolidation of bottling acquisitions and the losses arising from the launch of Accelerade;
  A major reorganisation was planned and completed during the fourth quarter and is expected to deliver £35 million of benefit in 2008, a payback of around a year;
• The acquisition of SeaBev, an independent bottler, strengthened our route to market in the south east of the US.

The Board has proposed a 6% increase in the final dividend to 10.5 pence. Together with the 22% increase in the interim dividend to 5.0 pence, this will bring the total dividend for the year to 15.5 pence, an increase of 11% and reflects the continued confidence of the Board in the future prospects of the businesses.

 Demerger Update

We are today providing an update on the demerger including indicative capital structures for the two new businesses, the appointment of the Chairmen and the long-term financial policies of the new beverage business, Dr Pepper Snapple Group, Inc.

The demerger process continues and we are working towards completion during the second quarter subject to legal and shareowner approvals and debt refinancing. 

Throughout the separation process, the Board has been focused on creating capital structures for both businesses which maximise shareowner value. In the light of current turbulent conditions in the debt markets, particularly the cost and availability of sub-investment grade debt, it has become clear that both companies can only be financed economically by implementing investment grade capital structures. On this basis, there will be no capital return to shareowners on demerger. Additional information is provided on page 11 and a further update will be provided by the end of March.

As we continue to prepare for demerger, we are announcing the appointment of the Chairmen for the two new companies. Roger Carr, currently Deputy Chairman will be appointed Chairman of the new confectionery company, Cadbury plc. Wayne Sanders, former President and CEO of Kimberly-Clark, will be appointed Chairman of the new beverages company, Dr Pepper Snapple Group, Inc. See separate press release.

 2008 Outlook

Confectionery

Our strong confectionery revenue momentum has been driven by the sustained investment in growth and capabilities in recent years and this momentum has continued. In 2008, we expect to grow base business revenues towards the upper end of our 4% - 6% goal range. As previously indicated, commodity input costs are expected to be 5% - 6% higher in 2008 and we will seek to offset these increases through price rises. We are making good progress on our cost reduction initiatives and expect to deliver significant cost savings during the year. As a result, we expect to report meaningful margin progression in 2008 in line with our mid-teens margin goal by 2011.

Americas Beverages

In 2008, we expect Americas Beverages to grow base business revenues between 3% - 5% in spite of  the impact of the loss of the Glacéau contract (which generated around £110 million of revenues in 2007). Commodity costs are expected to be around 6% higher, as previously indicated, with price increases on CSDs and juice products being implemented to offset these cost increases. We expect the margin impact from the lost contribution from Glacéau (around £20 million) and a full year's dilution from bottling acquisitions to be partially offset by savings from the restructuring programme announced in October 2007 and the elimination of launch costs from Accelerade.  As a result, underlying margins in 2008 are expected to be modestly lower year-on-year. Given the relative timing of commodity price increases and marketing spend phasing, operating profit growth is expected to be weighted toward the second half.

Next Events

Scheduled events in 2008 are listed below:

• 11 April: Interim Management Trading Statement (quarter 1)
  19 June: Trading Update
  30 July: Interim Results

2007 CONFECTIONERY OPERATING REVIEW

³ Ongoing business improvement costs charged to underlying profit from operations in 2007 were £24 million. There were no ongoing business improvement costs in the comparable period in 2006 as all costs were incurred as part of the Fuel for Growth programme which was included as restructuring costs outside underlying.

Underlying base business revenue (excluding acquisitions, disposals and exchange) grew by 7%, above the top end of our new confectionery goal range, bringing the four year average growth rate to over 6%. Growth was strong across the majority of our markets with revenues up 4% in developed markets and up 14% in emerging markets. Results from our underperforming emerging markets (Russia, Nigeria and China) improved significantly and in Britain performance was boosted by both a strong market recovery and stronger commercial execution in the second half. Our focus brands, markets and customers grew by 10%, 7% and 12% respectively. Growth in our focus markets was impacted by a difficult year in Australia and by portfolio rationalisation in France.

Underlying operating margins rose by 30bps (excluding the impact of business improvement costs and exchange) despite a significant increase in growth investment and sharply escalating raw material costs. The launch of gum in Britain during the year reduced margins by 30bps and acquisitions and disposals reduced margins by a further 10bps. Margin delivery in the second half at +80bps, was significantly stronger than the first half due to the combination of operating leverage and the impact of cost and efficiency programmes.

Key commercial highlights include:

• Double-digit growth in gum and emerging markets for the fourth consecutive year including a 26% growth in Trident;
• Continued roll-out of key global gum technologies into new and existing markets with centre-filled now in 23 markets across Americas, Europe, Africa and Asia and longer-lasting gum in 5 markets;
• Further roll-out of focus brands into "white space" markets: Trident into Britain and Turkey, Bubbaloo into India; Green & Black's into Australia, Ireland and South Africa; and The Natural Confectionery Company into Britain; 
• A successful year for Cadbury Dairy Milk our largest chocolate brand, with revenues up 5% as a result of good results in Britain and strong growth in emerging markets.
  

During 2007, we made significant progress on our cost reduction programme. We started initiatives which will lead to a reduction of 2,500 roles and deliver a significant proportion of our expected central SG&A and supply chain savings. Initiatives include:

• The move of Group headquarters to a new shared office with our Britain and Ireland confectionery business in the second quarter of 2008 combined with around a 15% reduction in our central function headcount;
• A senior management reorganisation of our Britain and Ireland business which with a broader reorganisation is expected to result in a 15% reduction in G&A headcount; 
• A reduction of 270 employees in Americas Confectionery by the end of 2007, representing 16% of G&A headcount in the region; 
• The negotiation and consultation in connection with the closure of our Somerdale chocolate plant in the UK and transfer of production to Bournville and Poland by 2010;
• A reduction of 450 employees (30% of workforce) at our chocolate manufacturing site at Coolock in Ireland;
• A programme to reduce supply chain indirect headcount by over 300 in the Americas; 
• The proposed reconfiguration of our candy manufacturing footprint in Australia and New Zealand. 
  Central and regional SG&A initiatives will deliver significant benefits in 2008 and 2009, while supply chain configuration benefits will reduce manufacturing costs from 2009 onwards.

Britain, Ireland, Middle East and Africa (BIMA)

⁴ Ongoing business improvement costs charged to underlying profit from operations in the full year of 2007 were £3 million. There were no ongoing business improvement costs charged to underlying profit from operations in the comparable period in 2006 as all costs were incurred as part of the Fuel for Growth programme which was included as restructuring outside underlying.

In Britain, Ireland, the Middle East and Africa (BIMA), underlying base business revenue growth of 6% reflects buoyant confectionery category growth in Britain and strong growth in our emerging market operations in Africa and the Middle East. Acquisitions made in 2006 (mainly Cadbury Nigeria and Dandy Products in South Africa) contributed an additional £11 million or 1% to revenues.

Our business in Britain grew revenues by 5%, broadly in line with the overall confectionery market which benefited from a good recovery in chocolate following our product recall, a hot summer in the UK in 2006 and a 16% growth in the gum market following our launch of Trident early in the year. Our overall share performance strengthened in the second half despite the adverse impact of flooding at our Sheffield factory on candy revenues. In chocolate, revenues in the second half benefited from the successful relaunch of Wispa and our new advertising campaign for Cadbury Dairy Milk. Our gum business secured a 10% share of the UK gum market in its first year, and accounted for the majority of the growth in the gum market during the year.

Revenues in emerging market operations grew by 15%. In South Africa, we had a good year as a result of strong growth in gum and affordable chocolate count-lines. In Nigeria, the business made solid progress after a difficult 2006 and was stabilised with revenues ahead and operating losses reduced.

Base business  margins (before the impact of business improvement costs) were lower year-on-year, mainly as the result of a significant increase in marketing investment in the UK behind media advertising for our core Cadbury Dairy Milk brand, the launch of gum which diluted margins by over 150 bps and higher milk costs.

Europe

⁵ Ongoing business improvement costs charged to underlying profit from operations in the full year of 2007 were £5 million. There were no ongoing business improvement costs charged to underlying profit from operations in the comparable period in 2006 as all costs were incurred as part of the Fuel for Growth programme which was included as restructuring outside underlying.

Our Europe region had an excellent year with base business revenues up nearly 7%. The impact of acquisitions (Intergum and Kandia) and disposals (Adams Italia) was neutral. The growth in revenues was driven by strong performances across the region particularly in gum where revenues were up by 11%. Developed market revenues grew by 5% and emerging markets by 11%.

Gum revenues benefited from the continued co-ordinated roll-out of key global product and packaging technologies and by strong market-place execution. Centre-filled gum was launched in Russia, Turkey, Spain and Portugal under the Dirol and Trident brands; longer-lasting gum was launched in France and Greece under the Hollywood and Trident brands respectively.

In France, revenues grew modestly reflecting planned rationalisation of our candy portfolio which was more than offset by continued strong growth in gum and the launch of Halls. Our businesses in northern Europe had a very good year with share gains in many markets. In southern Europe, we had an excellent year in Spain, with a further increase in our gum share to 46% following the launch of Trident Splash.

In our emerging market operations, revenues in Russia were ahead by over 20% due to strong market growth and share gains in gum. In Turkey, our business benefited from good market growth and the expansion into chocolate gifting products for the important Bayram religious festivals and the launch of Trident Splash.

The recent acquisitions of Intergum in Turkey and Kandia in Romania are being integrated into the region and performance was satisfactory. Intergum made a modest loss in the year reflecting planned de-stocking of the trade while Kandia made a small profit. Overall acquisitions diluted the region margin by 40bps. Before the impact of acquisitions and business improvement costs, margins in the region were ahead.

Americas Confectionery

⁶ Ongoing business improvement costs charged to underlying profit from operations in the full year of 2007 were £4 million. There were no ongoing business improvement costs charged to underlying profit from operations in the comparable period in 2006 as all costs were incurred as part of the Fuel for Growth programme which was included as restructuring outside underlying.

Our Americas region had an outstanding year with strong growth in revenues and margins. Base business revenue growth was 11% with double-digit growth in nearly every market. Revenues grew by 9% in our developed markets in North America and by 15% in our emerging markets in Latin America. This continued strong momentum was driven by gum category growth, share gains and new product launches, notably the roll-out of centre-filled gum into Latin America. The disposal of Allan Candy in Canada, reduced revenues by £26 million or 2%.

In the US, the gum market grew by 9%, benefiting from the combination of price rises and innovation. Our gum share rose by 310 bps in the year despite an increase in competitive activity.  This share gain was due to strong growth in our Trident and Stride brands with Stride's share of the gum market rising from 3.0% to 6.3% during the course of the year. Although the cough category grew 4%, Halls lost 70 bps of share and revenues in the US were modestly lower year-on-year as a result.

In Canada, base business revenues were 3% ahead, with growth in our core brands partly offset by the rationalisation of non-core brands and SKUs. Margins continued to benefit from the focus on our advantaged core brands. The Stride gum brand was launched in Canada at the end of the year.

Performance was strong across all our businesses in Latin America including in Mexico where revenues were ahead by 12% as a result of continued investments in extending our route to market and the launch of Trident Splash centre-filled gum. In a market which grew by 13%, our share of the Mexican gum market rose by 100bps, reaching 80% at the end of the year.  Elsewhere in Latin America, revenues grew strongly in Argentina, Brazil and Venezuela due to the combination of pricing, route to market investments, growth in core brands (Trident, Halls and Beldent) and innovation. Trident centre-filled gum was also launched in Brazil, Colombia and Ecuador.

Margins in the region increased significantly during the year, to 18.2% before exchange rates.  The 280bps increase in base business margins was driven by higher pricing, supply chain savings, positive mix and operational leverage. In the fourth quarter of the year, a major reorganisation of the region was implemented with significant SG&A savings expected to benefit margins in 2008.

Asia Pacific

⁷ Ongoing business improvement costs charged to underlying profit from operations in the full year of 2007 were £12 million. There were no ongoing business improvement costs charged to underlying profit from operations in the comparable period in 2006 as all costs were incurred as part of the Fuel for Growth programme which was included as restructuring outside underlying.

Base business revenues in Asia Pacific grew by nearly 4%, with continued double-digit (14%) growth in emerging markets, partly offset by a slower year in developed markets where revenues were 1% ahead. The slower growth in developed markets reflected the combination of our exit from non-core beverage and confectionery contracts and a challenging retail market in Australia. The net impact of acquisitions (Sansei in Japan) and disposals (Cottee's Foods in Australia) reduced revenue growth by £3 million.

In developed markets, revenue growth in Australia slowed to 1%. Against a background of a competitive and challenging retail environment, confectionery revenues were modestly lower and beverages revenues were ahead 4%. While the Australian confectionery market grew strongly in the year, the reduction in our confectionery revenues was due to the combination of retailer de-stocking and a reduction in our promotional activity. Elsewhere, New Zealand had a good year with a 170bps increase in share driven by both chocolate and candy. In beverages, our market share rose by 100bps with strong growth in our flavoured carbonate brands and energy drinks benefiting from good consumer demand and our focus on core brands. Excluding the exit from a low-margin co-packing contract, beverage revenues were ahead by 10%. In Japan, we continued to gain share in gum, with our share up 120bps to nearly 20% at the end of the year. Sansei, a functional candy business, is being integrated into our existing business and is performing in line with expectations.

In emerging markets, performance in India was excellent, with revenues growing by over 20%. All our core brands including Cadbury Dairy Milk and Cadbury Eclairs contributed to the growth with results also benefiting from the successful launch of Bubbas branded bubblegum. Performance in South East Asia strengthened into the second half with continued good results from Malaysia where revenues rose by 18%. In China, we completed the refocus on a smaller number of key cities and while revenues were over 20% lower as a result, losses were reduced, in line with expectations.

Underlying margins (before business improvement costs) were modestly lower year-on-year, primarily due to the adverse mix in Australia and higher growth in emerging markets.

AMERICAS BEVERAGES
2007 OPERATING REVIEW

In Americas Beverages, base business revenues grew by 4%, a good result given the challenging market conditions in our key US CSD market. Acquisitions and disposals contributed a net £403 million or 16% to revenues. The contribution from acquisitions relate to bottling businesses bought during 2006 and 2007, including Dr Pepper/Seven Up Bottling Group and SeaBev.

Our carbonates revenues in the US grew by 1% and our share of the US CSD market rose by 40 bps, our fourth consecutive year of share gains. These share gains were made despite the fact that the business was cycling a year of significant innovation activity, notably in Dr Pepper and 7 UP, where bottler volumes fell by 2.5% and 3% respectively. Excluding innovations, base Dr Pepper bottler volumes were modestly ahead.  Other key flavour brands (Sunkist, A&W and Canada Dry) had a good year with bottler volumes up 3% reflecting the trend away from colas to flavoured CSDs and the greater focus provided by our more integrated route to market.

In non-CSDs in the US, revenues grew by 3%, with performance boosted by the successful launches of Snapple super premium teas and enhanced waters. The Snapple brand grew revenues by 5%. As previously indicated, the national launch of our new sports drink brand Accelerade was disappointing with around a £30 million loss in the year arising from the launch. The decision has been taken to focus on a narrower range of profitable outlets going forward and further losses are not expected to be incurred. Our Mexican business had a more challenging year with results adversely impacted by poor weather and increased competitive activity, however revenues were 4% ahead.

Americas Beverages underlying margins were 340bps lower year-on-year reflecting the strategic acquisitions of bottling businesses and the losses arising from the launch of Accelerade. Commodity costs continued to rise during the year, but these were more than offset through price increases and tight cost control. At the end of the year, a significant cost reduction programme was successfully implemented which is expected to generate full year cost savings of around £35 million in 2008.  In November, our contract to manufacture and distribute Glacéau was terminated following Coca-Cola's acquisition of Energy Brands. In 2007, this contract contributed around £110 million to revenues and around £20 million to underlying profit from operations.

DEMERGER UPDATE

In March 2007, we announced that we intended to separate our confectionery and Americas Beverages businesses. The separation reflects the Board's belief that the strengthened businesses will generate more value for shareowners as separate companies.

In October 2007, we confirmed that the separation would take place by way of a demerger and that we expected completion during the second quarter of 2008. We are today providing an update on the demerger including indicative capital structures for the two new businesses, the appointment of the Chairmen and the long-term financial policies of the new beverage business, Dr Pepper Snapple Group, Inc (DPSG). The strategy and financial policies for the new confectionery business, Cadbury plc, were announced in June, 2007.

The demerger process continues and we are working towards completion during the second quarter subject to legal and shareowner approvals and debt refinancing.  To date, we have made a number of draft filings with the regulatory authorities in the UK and US including a second amendment to the Form 10 filing on 12 February, and are currently in the process of arranging the financing for the two new businesses.

The Group had net debt outstanding of £3.2 billion at the end of 2007 and a proportion of this will stay with the confectionery group, Cadbury plc, on demerger with the balance being repaid. The newly listed beverage business, DPSG, will be financed with new debt and we are working with five major banks to arrange the financing.

Throughout the separation process, the Board has been focused on creating capital structures for both businesses which maximise shareowner value. In the light of current turbulent conditions in the debt markets, particularly the cost and availability of sub-investment grade debt, it has become clear that both companies can only be financed economically by implementing investment grade capital structures. As a result on demerger:

• Cadbury plc will target an initial debt rating of BBB
  Dr Pepper Snapple Group, Inc. will target an initial debt rating of BBB minus
• On this basis, there will be no capital return to shareowners on demerger.

As we continue to prepare for demerger, we are announcing the appointment of the Chairmen for the two new companies. Roger Carr, currently Deputy Chairman will be appointed Chairman of Cadbury plc. Wayne Sanders, former President and CEO of Kimberly-Clark, will be appointed Chairman of Dr Pepper Snapple Group, Inc.

Roger Carr is the Group's Deputy Chairman and senior non-executive independent director and joined the Cadbury Schweppes Board in 2001. The Board believes that Roger's broad industry experience, familiarity with the financial markets and knowledge of the Group will provide Cadbury plc with an excellent balance of skills to steer the confectionery business through the next phase of its development. He is also Chairman of Centrica, Chairman of Mitchells and Butler and a member of the Court of Directors of the Bank of England.

Wayne Sanders spent 28 years at Kimberly-Clark where he served 11 years as Chairman and CEO before retiring in 2003. Wayne is currently on the Board of Texas Instruments and Belo Inc., and is a former Board member of Adolph Coors Company. Given his experience in the consumer goods industry and his demerger experience at Belo, the Board of Cadbury Schweppes believes that he has excellent credentials for the role as Chairman of DPSG and to guide the business through its transition from being a division of a consumer goods group into a focused and separately US-listed beverages company.

A further update on the demerger will be provided by the end of March.

 Dr Pepper Snapple Group Long-Term Financial Policies

Dr Pepper Snapple Group is a leading integrated brand owner, bottler and distributor of soft drinks in North America with a diverse portfolio of long established, strong brands. The creation of a more integrated route to market through the acquisition of a number of its independent bottlers (including Dr Pepper/Seven Up Bottling Group) has significantly strengthened the business and provided additional opportunities to drive revenue and profit growth. DPSG will seek to drive growth and returns through:

• Building and enhancing its leading brands;
• Focusing on opportunities in high growth and high margin categories;
• Increasing its penetration in high margin channels and packages;
• Leveraging its integrated business model;
• Further strengthening its route to market through acquisitions;
• Improving operating efficiencies.

As a result, over the next several years, DPSG expects organic annual revenue growth of between 3-5% with growth benefiting from increased investment in expanding its presence in higher margin cold-channel equipment and convenience outlets and in state-of-the-art manufacturing facilities.  In order to fund this growth, DPSG expects annual capital expenditures over the next 3 years to be around 5% of revenues, an increase from around 3% to 4% currently.  Underlying EPS growth, subject to finalisation of the capital structure, is expected to be in high single digits driven by the combination of revenue growth, an improvement in margins and de-leveraging. Additional standalone costs associated with the creation of a separately listed company, are expected to be around £25 million, as previously indicated.

FINANCIAL REVIEW

Continuing Operations

Group revenues at £8 billion were 7% higher than last year at reported exchange rates, reflecting 5% growth from confectionery and 12% growth from Americas Beverages. Base business (excluding the impact of acquisitions, disposals and exchange rates) revenues grew by 6%, with 7% growth from confectionery and 4% from Americas Beverages.  Acquisitions and disposals were broadly neutral for confectionery, but acquisitions (primarily Dr Pepper/Seven Up Bottling Group) contributed 16% to Americas Beverages growth.

Group underlying profit from continuing operations was down 2% at reported exchange rates, or up 4% at constant exchange rates with Group underlying operating margin falling by 120bps to 13.2% at reported exchange rates.

Confectionery underlying operating margins decreased by 30bps from 10.1% to 9.8% at reported exchange rates.  This reflects a 40bps increase in base performance, offset by a 10bps decrease reflecting the impact of acquisitions and disposals, the inclusion of ongoing business improvement costs (0.5% of revenue) in confectionery underlying profit from operations from 2007 representing a decrease of 50bps and a 10bps adverse impact from exchange rates. Central costs have been attributed to confectionery as these costs principally relate to this business.

Americas Beverages underlying operating margins decreased by 360bps from 22.8% to 19.2%.  This reflects a 20bps increase in base performance, offset by a 100bps impact from the unsuccessful Accelerade launch, 260bps dilution from the bottling acquisitions and a 20bps adverse impact from exchange rates.

Group marketing spend at £707 million was £14 million higher than 2006 and 6% higher at constant exchange rates.  Confectionery marketing spend at 10.1% of revenues was 7% higher at constant exchange rates, with a significant proportion of the increase in the UK.  Americas Beverages marketing spend at 6.7% of revenues was 3% higher at constant exchange rates.

Central costs increased by £11 million to £170 million, a 7% rise principally as a result of investment in IT and an increase in our share based payment expense.  The majority of this increase was seen in the first half, with central costs broadly flat in the second half.

Restructuring, Exceptional & Other Items

Restructuring, exceptional & other items totalled £262 million in the year and comprised of restructuring (£200 million); Glacéau contract termination gain (£31 million credit); amortisation and impairment of acquisition intangibles (£42 million); non-trading items (£38 million); and the IAS 39 adjustment (£13 million).

The charge in respect of business restructuring reported outside underlying profit was £200 million, being £165 million in Confectionery and £35 million in Americas Beverages.  Included in the confectionery charge is £151 million relating to the confectionery cost reduction initiatives, £9 million as a result of penalties from our previously announced decision to reduce contract manufacturing volumes with Gumlink, and costs relating to the separation of Americas Beverages (£5 million).   The Americas Beverages restructuring charge includes £26 million from the recently implemented cost reduction programme and £9 million relating to the integration of bottling acquisitions.

Americas Beverages recognised an exceptional gain of £31 million in 2007 in respect of the termination of distribution agreements for Glacéau products.  These agreements were terminated with effect from 2 November 2007, following the acquisition of Energy Brands by Coca Cola. 

Fair value accounting under IAS 39 contributed a loss of £13 million to our reported Profit from Operations due to the difference between spot commodity prices and exchange rates compared to the commercial hedge rates used in the underlying results.

Group amortisation and impairment of intangibles was £42 million, £18 million relating to confectionery and £24 million relating to Americas Beverages.  The confectionery figure includes a £13 million charge relating to the impairment of China goodwill following the change in strategy announced during the first half of 2007.

The charge for non-trading items of £38 million (2006: £40 million credit) includes: £17 million  net profit on disposal of Cadbury Italia, Allan Candy and Cottees; a £12 million charge relating to the impairment of property, plant and equipment in China; costs incurred during the year relating to the separation of Americas Beverages £40m; and a £41 million charge to write down the carrying value of the Monkhill business to its recoverable value, partially offset by a further £38 million of insurance recoveries relating to the rebuild of the Monkhill Pontefract factory destroyed by fire in 2005. We announced the sale of our Monkhill business on 18 January 2008.

Group Profit from Operations (excluding associates) was down 13% as a result of increased restructuring, exceptional and other items and exchange rates.

Associates, Financing and Taxation

The Group's share of profits in associates (net of interest and tax) at £8 million was £24 million higher than in 2006 as we recognised a £23 million charge in 2006 relating to the significant overstatement of results of Cadbury Nigeria.

The Group underlying net financing charge at £143 million was £6 million lower than the prior year due to a lower level of average net debt, partially offset by an increase in underlying interest rates to 5.6% from 5.1%.

The Group reported net financing charge was £126 million, £17 million lower than the underlying financing charge, reflecting the impact of the IAS 39 financing adjustment including a £19 million gain on marking our commodity derivatives to market prices.

Group Underlying Profit before Tax was down 2% to £915 million but up 5% to £973 million at constant exchange rates. Reported Profit before Tax was down by 9% to £670 million reflecting the impact of exchange rates and an increase in restructuring, exceptional and other items.

The Group underlying tax rate in 2007 was 31.0% as against 30.4% in 2006.  

Discontinued Operations

There are no discontinued operations in 2007.  Profit from discontinued operations for 2006 was £642 million relating to the profit on disposal of the European, South African and Syrian Beverages businesses and their pre-disposal trading results.

Earnings

Total Group underlying earnings per share were down 4% to 30.2p principally as a result of the impact of exchange rates (-6%). The growth in underlying earnings per share as a result of base business performance (+8%) was offset by the inclusion in 2007 of ongoing business improvement costs within underlying performance (-2%), the impact of acquisitions and disposals (-2%) and  increases in the number of shares and underlying tax rate (both -1%).

Total Group earnings per share were 19.4p. Total Group earnings per share in 2006 were 56.4p reflecting the profit recognised on the disposal of the European, South African and Syrian beverage businesses.

Dividends

The Board has proposed a 6% increase in the final dividend to 10.5 pence, taking the full year dividend to 15.5p, an overall increase of 11%. This will be paid on May 16, 2008 to Ordinary Shareholders on the Register at the close of business on May 1, 2008.

Cash Flow Statement

Group Free cash inflow in the year was £527 million compared with £472 million in 2006. The year-on-year movement is due to more efficient working capital management and lower tax paid, partially offset by increased capital spend. Capital spend was £409 million, a £25 million increase on last year. Free cash flow has also been adversely impacted by exchange rates.

Net Debt

Net debt increased from £2.9 billion at the end of 2006 to £3.2 billion at the end of 2007 primarily reflecting the net payments from acquisitions and disposals and the payment of external dividends, partially offset by the free cash flow for the period.

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 over 70,000 people. 

About Cadbury plc

Cadbury plc is the world's largest confectionery business with number one or number two positions in 20 of the world's 50 largest confectionery markets. It also has the largest and most broadly spread emerging markets business of any confectionery company. With origins stretching back over 150 years, Cadbury's brands include many global, regional and local favourites including Cadbury, Crème Egg and Green and Black's in chocolate; Trident, Dentyne, Hollywood and Bubbaloo in gum; and Halls, Cadbury Eclairs, Maynards and the Natural Confectionery Company in candy.

Cadbury plc's goal is to leverage our scale and advantaged positions to maximise growth and returns by:

• Driving growth through a concentration on "fewer, faster, bigger, better" participation and innovation, supported by our global category structure introduced last year;
• Driving cost and efficiency gains to increase margins; and
  Continuing to invest in capabilities to support our growth and efficiency agendas.

Financial Scorecard

Cadbury plc's ambition to maintain revenue growth while improving margins and returns is reflected in the  financial scorecard for the 2008 to 2011 period:

• Annual organic revenue growth of 4-6%
• Total confectionery share gain
• Mid teens trading margin by 2011
• Strong dividend growth
• Efficient balance sheet
• Growth in return on invested capital

About Dr Pepper Snapple Group, Inc.

Dr Pepper Snapple Group, Inc. (DPSG) is a leading brand owner, bottler and distributor of beverages in the North America market. It is the market leader in the flavoured carbonates soft drinks segment in the US and the number three liquid refreshment beverage business in North America.

The business operates in four segments:

• Beverage concentrates
• Finished goods
• Bottling Group
• Mexico and the Caribbean

Approximately 75% of DPSG's volumes are generated by brands which hold either the number one or number two positions in their respective markets. Leading brands include Dr Pepper, Sunkist, 7 UP, A&W, Canada Dry, Schweppes, Snapple, Mott's, Hawaiian Punch and Clamato.

Tuesday 19 February Events:

Presentation
A presentation on the results will be webcast live on the Group's website http://www.cadburyschweppes.com at 9.00am (GMT) today. Copies of the presentation will be available on the website from 8.30am (GMT).

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

Conference telephone number UK/Europe     +44 (0)20 7138 0839       
Conference telephone number US                +1 718 354 1362      

Replay Details UK/Europe                            +44 (0)20 7806 1970       
Replay Details US                                       +1 718 354 1112              
Replay Pass code                                        3738417#

Video interview
A video interview with CEO Todd Stitzer is available from 07:00 today on http://www.cantos.com

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 fact that they do not relate only to historical or current facts or 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. Such forward looking statements include our plans for the separation of the Americas Beverages business. 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.  These forward looking statements are based on numerous assumptions regarding the present and future strategies of each business and the environment in which they will operate in the future. 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. All subsequent oral or written forward-looking statements attributable to Cadbury Schweppes, Cadbury plc or CSAB or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.