Cadbury confirms strong start to 2008
British confectionery company Cadbury has shown a strong first half of 2008 with growth expected to be above 4-6% and double-digit growth in emerging markets.
Todd Stitzer, Cadbury’s CEO, says: “We’re off to a strong start as a focused confectionery business and expect first half revenues above our goal range and good progress on margins. These results will demonstrate the benefits of the significant investments made in recent years. Despite further increases in input costs in the second half, we are confident of a successful outcome for 2008.” The company expects that the second quarter growth is likely to be modestly higher than the 7% like-for-like growth reported for the first quarter.
In Britain, Ireland, the Middle East and Africa (BIMA), higher marketing and double-digit growth have driven revenue growth from the emerging market businesses. In Britain, revenue growth is expected to be ahead of the confectionery market, which is ahead 2% year-to-date. The exit from some less profitable promotions has been more than offset by good growth in core brands, including Cadbury Dairy Milk.
In Europe, gum growth remains strong reflecting the combination of market growth across the region and share gains in Southern Europe. In the US, the gum market is ahead 8% year to date, benefiting from the 2007 price increases, and performance has been boosted by improved results from Halls. In Asia Pacific, revenue growth in the half has benefited from an improved performance from confectionery in Australia and strong double-digit growth in emerging markets.
The reported results are impacted by restructuring and the de-merger of Cadbury and Schweppes on 7 May 2008. In the first half, the company expects restructuring charges to be around £80 million (€101m).
