Cadbury Schweppes posts 1% profits rise

Confectionery group Cadbury Schweppes today said it expected a better year for its European soft drinks division as it posted a 1% rise in profits to £933m (€1.3bn).

The company, which was hit by the poor weather last summer, said a successful year for its sweets and chocolates business helped it meet its financial goals during the year to January 2.

Key brands such as Cadbury chocolate, Trident chewing gum and Halls cough sweets contributed to sales rising 5% to £6.74bn (€9.7bn). This was an improvement of 4% on an underlying basis – hitting its target of growth of 3% to 5%.

Chief executive Todd Stitzer said: “While the external commercial environment remains competitive, we are confident that we have the strategy, brands and people to deliver within our goal ranges in 2005.”

Cadbury’s US fizzy drinks business had a good year on the back of demand for drinks such as Dr Pepper and diet brands – although the group warned that sustaining these “outstanding” growth rates would be challenging.

The group said 2004 was not an easy year for its European drinks business, but that it was starting to see the result of changes such as an improved supply chain.

The group employs more than 50,000 people around the world, thousands in Ireland and the UK at sites such as the Cadbury factory in Coolock, Dublin, the chocolate crumb factory in Rathmore, Co. Kerry and a chocolate factory at Bournville in Birmingham.

As well as the Dairy Milk range, its chocolate brands include Roses, Flake, Crunchie, Double Decker, Picnic, Turkish Delight and Boost.

New product ranges such as wafer-thin Cadbury Snaps and Flake Moments helped drive strong chocolate sales during the fourth quarter of the year.

Confectionery sales in the US rose by 10% on a like-for-like basis, stripping out the impact of acquisitions and disposals. This included a good performance by its four “power brands” Trident, Halls, Dentyne and Bubbas bubblegum.

Cadbury said its cost-cutting Fuel for Growth programme saved about £75m (€108.2m) during the year, bringing the total to £100m (€144m) since it started in mid-2003.

It expected “further significant savings” from the plan, which involves closing 20% of the company’s 133 factories worldwide and reducing its workforce by 10%.