Cadbury Schweppes Reports Good Performance in First Half 2004
Results in Line With Expectations LONDON, July 21
/PRNewswire-FirstCall/ -- Cadbury Schweppes plc reports on
financial performance for the 24 weeks ended 13 June 2004 Reported
Constant Currency # 2004 2003 Growth % Growth % Growth % Base
Business* Turnover m pounds sterling 2,954 2,700 +9 +14 +3
Underlying Group Operating m Profit pounds 448 412 +9 +16 - Share
of associate m profits pounds 21 24 - Goodwill/ intangibles m
amortisation pounds (67) (44) - Operating m exceptionals pounds
(43) (26) Total Operating Profit including m associates pounds 359
366 -2 +5 Underlying Profit m Before Tax** pounds 371 365 +2 +9 +5
Profit Before Tax m pounds 265 294 -10 -3 Underlying EPS** p 12.6
12.4 +2 +9 +5 Basic EPS p 8.5 9.2 -8 -1 Dividend per share p 3.80
3.65 +4 * Base business excludes the impact of acquisitions and
disposals (see note 2 on page 8) ** Both underlying profit before
tax and underlying earnings per share (EPS) include associates,
exclude goodwill/intangibles amortisation and exceptional items
(see notes 7 and 8 on page 15 for a reconciliation to profit before
tax and earnings per share) # Constant currency growth excludes the
impact of exchange rate movements during the period 2004 Half Year
Highlights# * Base business sales growth at 3% led by Smart Variety
and innovation * Dr Pepper volumes ahead 3% and diet soft drinks
23% ahead in US * Cadbury Trebor Bassett continues to benefit from
focus on core brands, with sales ahead by 3% * Fuel for Growth cost
savings on track and underlying margins increase 30 basis points *
Underlying EPS 9% ahead, benefiting from strong Adams contribution
Todd Stitzer, Chief Executive Officer, said, "I'm pleased to report
a good first half performance with results in line with
expectations. Our focus on innovation and marketplace execution
have driven sales growth and share gain, particularly in our US
carbonated soft drinks business, our UK confectionery business and
our major gum operations around the world. The Adams integration is
on track and the business is performing well. "Fuel for Growth is
delivering as expected and we are achieving margin growth despite
some above inflation cost increases. Although we have a number of
challenging integration projects in the second half, we remain
cautiously optimistic about the outcome for the full year and
expect to deliver results within our goal ranges." PERFORMANCE
OVERVIEW 2004 Half Year Performance Summary We have had a good
first half overall with the business performing in line with
expectations. * Sales from our base business, excluding the impact
of acquisitions, rose by 3% at constant currency. The rate of
growth in the base business was impacted by the phasing of Adams
sales between the first quarter when it was treated as an
acquisition, and the second quarter when it was included in the
base business comparatives. * Underlying operating margins were 30
basis points ahead at constant currency with good Fuel for Growth
savings being offset by above inflation cost increases in a number
of areas. * Underlying earnings per share grew by 9% at constant
currency, with the base business (excluding acquisitions) growing
by 5% and acquisitions (Adams) contributing the balance. Our
performance in the first half was driven by our core markets and
brands, notably: * Carbonated soft drinks in the United States led
by Dr Pepper (volumes ahead by 3%) and our strong portfolio of diet
products (volumes ahead by 23%) * Cadbury Trebor Bassett in the UK,
which has continued to benefit from new product introductions under
its main brand names. Sales rose by 3% during the half and market
share was maintained at 31%, an 11 percentage point lead over our
nearest competitor (Source: Nielsen) * Our core gum and medicated
brands in the Americas * Our confectionery and food & beverage
operations in Australia Adams performance was strong and accretive
to first half earnings. The business is performing well, the brands
are responding to greater innovation and investment, we are
maintaining or growing market shares in key territories, are
beginning to leverage our combined technologies and routes to
market and are driving out costs. The early benefits of our Smart
Variety strategy are evident throughout the business. In the UK we
have leveraged the strength of the Cadbury Dairy Milk brand by
introducing Dairy Milk variants from Australia. In Europe, Halls is
growing rapidly through Cadbury Schweppes' strong distribution
networks and in Russia, our gum brands have been relaunched using
technology from the US and production assets in France and Spain.
Fuel for Growth is on track with around 40% of the target savings
for the year delivered in the first half. Cashflow performance is
considerably ahead of prior year reflecting the stronger trading
performance. Outlook Looking to the full year, we expect the good
progress we made in the first half to continue. Our US beverage
business is benefiting from the restructuring undertaken last year
and the focus on its core brands, most notably Dr Pepper. The Adams
businesses are responding well to increased focus, innovation and
investment and we are seeing strengthening performances in many of
our key markets around the world. We expect the Fuel for Growth
cost reduction activities to deliver in line with expectations
reflecting the successful execution of a number of key projects. We
expect to continue to experience above inflation cost increases
through the balance of the year which will offset some of the Fuel
for Growth cost savings. Although we have a number of key
integration projects to implement in the second half, particularly
in Americas Confectionery, we remain cautiously optimistic about
the outcome for the full year and continue to expect to deliver
results within our goal ranges for financial performance. OPERATING
REVIEW Americas Beverages Half Year Results (m pounds) Base
Acquisitions/ Exchange 2003 Business Disposals Effects 2004
Turnover 848 19 -- (97) 770 2 % -- (11%) (9%) Underlying Operating
Profit 245 12 -- (29) 228 5 % -- (12%) (7%) Underlying Operating
Margins 28.9 % +70bps -- -- 29.6 % Performance from the Americas
Beverages region in the half benefited from strengthened revenue
results driven by our carbonated soft drinks (CSDs) portfolio in
the US which grew volumes by 3%. Our stronger carbonates
performance was driven by the combination of growth in: * Our
flagship Dr Pepper brand where volumes were 3% ahead in the half.
We saw strong growth in Diet Dr Pepper and sales through fountain
and food service outlets, with performance overall benefiting from
better sales and marketing execution, particularly in core markets.
* Diet CSDs where our total portfolio increased volumes by 23%,
significantly ahead of the market which grew by 9% (Source:
Nielsen) * Our flavour range of products which, excluding 7 UP,
grew volumes by 7% during the half, benefiting from the scale
advantages conferred to the range through the transfer of 7 UP into
our independent bottlers. Including 7 UP, volumes of our flavour
brands were ahead by 3%. Sales from our non-CSD portfolio were flat
overall at the half year, reflecting the combination of weak
consumer demand and reduced levels of marketing and new product
activity at Mott's/Snapple where the business was focused on
integration. Hawaiian Punch grew strongly with sales up 6% and
Clamato grew by 3%. This was offset by weaker performances from
Snapple, where sales were down 2% and Mott's Apple Juice, down 3%.
Margins in the half benefited from Fuel for Growth cost savings and
improved mix although these were to some extent offset by higher
employee and "one-off" IT related costs. The combination of our
North American operations into a cohesive commercial unit is now
complete and we expect to begin to see the real commercial benefits
of the new structure in 2005. Americas Confectionery Half Year
Results (m pounds) Base Acquisitions/ Exchange 2003 Business
Disposals Effects 2004 Turnover 271 11 199 (24) 457 4 % 73 % (8%)
69 % Underlying Operating Profit 14 3 36 (2) 51 19 % 262 % (9%) 272
% Underlying Operating Margins 5.1 % +70bps +510bps +30bps 11.2 %
The Americas Confectionery results were significantly impacted by
the acquisition of Adams: the base business numbers above include
second quarter results from the Adams operations which were
consolidated from 31 March 2003. If we had owned Adams for the
whole of the first half last year, sales would have been 8% ahead
on a like-for-like basis at constant exchange rates. During the
half we saw strong growth from our core gum businesses around the
region as a result of strong consumer demand and new product
activity, particularly under the Trident, Dentyne and Chiclets
brand names. Overall, Halls performance was good with the exception
of Canada where we were cycling significant innovation activity in
the first half of 2003. Margins for the region rose strongly during
the half due to the consolidation of higher margin Adams operations
and Fuel for Growth cost savings. Adams integration projects
continue to be implemented to plan with the successful installation
of SAP in Brazil and the consolidation of back-offices across the
Latin Americas region. In North America, significant resources have
been allocated to planning for the transition from Pfizer's shared
service system: the project is on track to be implemented in the US
during the third quarter of this year and in Canada in the first
quarter for 2005. Europe, Middle East and Africa (EMEA) Half Year
Results (m pounds) Base Acquisitions/ Exchange 2003 Business
Disposals Effects 2004 Turnover 913 15 43 (9) 962 2 % 4 % (1%) 5 %
Underlying Operating Profit 130 6 10 (1) 145 5 % 7 % -- 12 %
Underlying Operating Margins 14.2 % +40bps +40bps +10bps 15.1 % A
2% increase in base business sales in our EMEA region compares with
a strong first half last year when sales were 6% ahead. Sales were,
in addition, affected by softer sales in Ireland and Bromor in
South Africa. Key highlights of the half around the region were: *
In the UK, Cadbury Trebor Bassett (CTB) grew sales by 3% and market
share was stable at 31%. The market share gap to the next largest
player now stands at 11 percentage points. (Source: Nielsen) The
business continues to show the benefits of our focus on a small
range of powerful core brands which have been reinvigorated through
new product activity, more focused marketing spend and improved
sales execution. We saw double-digit sales growth in Cadbury Dairy
Milk (CDM) following the relaunch of the brand in the second half
of last year. * In France, the transformation of Hollywood from a
sugarised gum brand into the leading sugar-free brand continued to
drive market share gains with CS total gum share now standing at
52.4% an increase of 3.5 percentage points over prior year (Source:
Nielsen). * In Spain, using our experience from our French gum
business, we relaunched Trident in April with encouraging initial
results. * In Ireland, our sales were down 8% in a market which
remains challenging. * We saw an 11% increase in sales in Russia
where we've successfully launched a range of pocket confectionery
under the Dirol and Stimorol brands with product supplied from
France and Spain. Cadbury chocolate products and Halls are also
growing strongly. * Our operations in Africa and the Middle East
once again did well although Bromor, our food and drinks business
in South Africa, had a more difficult half. Margins rose by 90
basis points in the half, broadly equally split between
improvements in the base business and the impact of consolidating
higher margin Adams' businesses in the first quarter. Excellent
Fuel for Growth cost benefits were partially offset by increases in
raw material, IT and employee costs. Europe Beverages Half Year
Results (m pounds) Base Acquisitions/ Exchange 2003 Business
Disposals Effects 2004 Turnover 295 10 -- (2) 303 4 % -- (1%) 3 %
Underlying Operating Profit 43 3 -- 0 46 8 % -- (1)% 7 % Underlying
Operating Margins 14.7 % +60bps -- -- 15.3 % In our Europe
Beverages region, the 4% increase in sales and 8% rise in operating
profit at constant exchange rates, is a good result given weak and
competitive markets in two of the regions most important
territories -- Spain and Germany. A 4% sales increase in France was
driven by a higher trade buy-in ahead of the peak summer season. In
Spain, sales benefited from improvements in price and mix. In
Germany, sales were 9% lower with our premium water business
impacted by competition from hard discounters and growth of
own-label. The expanded bottling arrangements with San Benedetto in
France formally started trading in March. The transfer of Orangina
assets took place smoothly. The integration of the commercial
organisation in France is proceeding to plan and we expect to begin
to see the benefits of the strengthened commercial and supply chain
organisations in the second half and beyond. Asia Pacific Half Year
Results (m pounds) Base Acquisitions/ Exchange 2003 Business
Disposals Effects 2004 Turnover 368 30 44 16 458 8 % 12 % 4 % 24 %
Underlying Operating Profit 33 3 3 3 42 9 % 10 % 7 % 26 %
Underlying Operating Margins 8.9 % +10bps -20bps +20bps 9.0 % In
Asia Pacific sales for the half-year were strongly ahead of last
year. This principally reflects a healthy recovery in both our
confectionery and food & beverages operations in Australia
which had difficult first halves last year. Our Australian
confectionery business benefited both from new product activity and
good growth with key grocery customers and our chocolate market
share grew by 40 basis points to 57% (Source: Nielsen). The food
& beverage business also grew strongly, gaining share in both
carbonated and non-carbonated soft drinks, with growth driven by
increased sales of franchise products and sales in the higher
margin impulse trade. In India, where the business was affected by
a product storage issue in the fourth quarter of last year, we're
seeing a steady recovery in chocolate sales although profits were
lower as we invested in repackaging, trade promotions and marketing
to rebuild consumer and customer confidence. In China, we acquired
the Adams business in March. The commercial integration was
completed in June. Losses are slightly higher year on year
reflecting the integration of the Adams business. Elsewhere in
Asia, we've seen further growth in sales and share in the key
markets of Thailand and Japan, primarily through the introduction
of new gum products. Margins in the region were only modestly ahead
in the half with cost savings largely offset by the combination of
higher raw material costs, higher losses in China and increased
investment in the Cadbury brand in India. FINANCIAL REVIEW Sales at
3.0 billion pounds were 9% higher than last year, and 14% above
prior year at constant exchange rates. Acquisitions, net of
disposals, contributed 11% to revenue growth. The most significant
contributor to growth from acquisitions was Adams. Like-for-like
base business sales grew 3% (at constant currency). Underlying
operating profit excluding associates (operating profit before
goodwill/intangibles amortisation and exceptional items) was up 9%.
At constant currency the growth was 16%, with the base business
growing by 5% and acquisitions (primarily 11 weeks of Adams)
contributing 11%. Currency movements had a 7% adverse impact on
underlying operating profits with US dollar weakness more than
offsetting strength in the Euro and Australian dollar. Central
costs rose by 11 million pounds to 64 million pounds due to the
costs of strengthening our Global Commercial and Science &
Technology functions together with higher IT costs. Underlying
operating margins fell by 10 basis points from 15.3% to 15.2%.
Excluding the impact of exchange rate movements, underlying
operating margins rose by 30 basis points to 15.6%. The dilution of
margins due to exchange rate movements reflects the impact on
overall Group margins of the weaker dollar on the translation of
our high margin carbonates business in the US. Income from
associates at 21 million pounds was 3 million pounds lower than in
2003. 2 million pounds of the adverse movement relates to currency
movements with the remainder being due to lower contribution from
our bottling arrangement in France. The Group charge for operating
exceptionals of 43 million pounds was 17 million pounds higher than
last year and relates to our four year Fuel for Growth cost
reductions. Our activities are on track and we expect the full year
benefit to be in line with previous guidance of 75 million pounds
before reinvestment. Goodwill/intangibles amortisation at 67
million pounds was 23 million pounds higher than last year,
reflecting the acquisition of Adams. The interest charge was
significantly higher at 98 million pounds (2003: 71 million
pounds), due to the cost of financing the Adams acquisition during
the half year compared to 11 weeks in the first half of 2003.
Underlying profit before tax (profit before tax and
goodwill/intangibles amortisation and exceptional items) rose by 2%
to 371 million pounds and by 9% at constant exchange rates.
Reported profit before tax fell by 10% to 265 million pounds
primarily reflecting higher restructuring and goodwill/intangibles
amortisation items. The underlying tax charge was 28.3% as against
28.5%. Underlying earnings per share (earnings before
goodwill/intangibles amortisation and exceptional items) at 12.6
pence were 2% ahead of last year. At constant exchange rates
underlying earnings per share were up 9%. Acquisitions net of
disposals contributed 0.5 pence or 4 percentage points of the total
growth in underlying earnings per share. Basic earnings per share
(after goodwill/intangibles amortisation and exceptional items)
fell by 8% to 8.5 pence principally reflecting the increase in
exceptional items (driven by business restructuring) and goodwill
amortisation arising on acquisitions. Marketing Investment
Marketing expenditure in during the half was 336 million pounds, an
increase of 3% over last year and an increase of 8% at constant
exchange rates. This represents a marketing to sales ratio of
11.4%, a 60 basis point reduction over prior year. This reflects in
part the phasing of spending and in part higher investment in
innovation and science & technology which are not classified as
marketing expenditure. Capital Spend Capital spend fell by 25
million pounds to 103 million pounds as a result of phasing of Fuel
for Growth expenditure. For the full year 2004, we expect capital
spend to be in the range of 300 million pounds to 330 million
pounds. Cash Flow The Group traditionally has a seasonal working
capital outflow in the first half, which is reversed in the second
half. This year's free cash flow outflow of 165 million pounds is
96 million pounds lower than last year mainly due to the
improvement in trading performance and a positive cash contribution
from Adams which produced a significant cash outflow for the same
period in 2003. Debt Refinancing Following the Adams acquisition,
the Group had 3.9 billion pounds of debt maturing in less than 2
years, reflecting both the 2.7 billion pounds acquisition price and
1.2 billion pounds of existing Group debt. Over the last year, 2.4
billion pounds of this debt has been refinanced in the bond markets
with euro 1.2 billion raised following the end of the half year via
the issue of fixed and floating rate euro notes. As a result, the
percentage of fixed rate debt has increased to 79% from 54% a year
ago (as at June 2003) and the proportion of debt with more than 3
years maturity has risen to 63% from 13% a year ago. The average
interest rate on the Group's fixed rate debt is 4.8%. Dividends The
Board has declared an interim dividend of 3.80 pence, up from 3.65
pence in 2003, an increase of 4%. This will be paid on 15 October
2004 to Ordinary Shareholders on the Register at the close of
business on 17 September 2004. Interim Report The Interim Results
Report of the Directors will be mailed to Shareowners in early
August 2004. This will include a UK/ US GAAP reconciliation and the
Independent Review Report of the Auditors. A presentation on the
results will be webcast live on the Group's website
http://www.cadburyschweppes.com/ at 09.30 a.m. Copies of the slides
accompanying the presentation will be available on the website on
21 July from 11 am. High-resolution photographs are available to
the media free of charge from 1.30 p.m. today at
http://www.newscast.co.uk/ +44(0)20 7608 1000. Forward Looking
Statements This material may be deemed to include forward-looking
statements within the meaning of Section 27A of the US Securities
Act of 1933 and Section 21E of the US Securities Exchange Act of
1934. These forward-looking statements are only predictions and you
should not rely unduly on them. Actual results might differ
materially from those projected in any such forward-looking
statements, which involve known and unknown risks, uncertainties
and other factors that may 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 the
forward-looking statements. In evaluating forward-looking
statements, which are generally identifiable by use of the words
"may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend" or "project" or the negative of these words or
other variations on these words or comparable terminology, you
should consider various factors including the risks outlined in our
Form 20-F filed with the SEC. Although we believe the expectations
reflected in forward-looking statements are reasonable we cannot
guarantee future results, levels of activity, performance or
achievements. This presentation should be viewed in conjunction
with our periodic interim and annual reports and registration
statements filed with the Securities and Exchange Commission,
copies of which are available from Cadbury Schweppes plc, 25
Berkeley Square, London W1J 6HB, UK. Notes to Editors: 1. About
Cadbury Schweppes Cadbury Schweppes is a major global Group which
manufactures, markets and distributes branded beverages and
confectionery products around the world. 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 54,000 people and is a leading world-wide confectionery
company. It is number one in sugar and functional confectionery, a
strong number two in gum and the world's third largest soft drinks
company 2. The contribution from acquisitions during the period
equates to the first twelve month's impact of businesses acquired
or disposed of in the current and prior year. Once an acquisition
or disposal has lapped its acquisition date then it is included
within the base business results. 3. The following schedules are
attached: Pages Group Profit & Loss Account 9 Movements in
Shareholders' Funds 10 Group Balance Sheet 11 Group Cash Flow
Statement 12 Turnover and Operating Profit Analysis 13 4. Notes to
the Schedules 14-16 Cadbury Schweppes plc Group Profit and Loss
Account For the 24 weeks ended 13 June 2004 (unaudited) Year 2003
Notes 2004 (Unaudited) Before Total exceptional Exceptional Total
items and items and goodwill/ goodwill/ intangibles intangibles
amortisation amortisation m pounds m pounds m pounds m pounds 6,441
Turnover 2,954 -- 2,954 (5,742) Operating costs (2,506) (110)
(2,616) 699 Group Operating Profit 448 (110) 338 51 Share of
operating profit in associates 21 -- 21 Total Operating Profit 750
6 Including Associates 469 (110) 359 (7) Profit/ (loss) on disposal
of fixed assets -- 4 4 2 3 Profit/ (loss) on -- -- -- sale of
subsidiaries and investments Profit on Ordinary 745 Activities
Before Interest 469 (106) 363 (181) 4 Net interest (98) -- (98)
Profit on Ordinary 564 7 Activities Before 371 (106) 265 Taxation
(173) 5 Taxation (105) 21 (84) Profit on Ordinary 391 Activities
After Taxation 266 (85) 181 (4) Equity minority interests (1) --
(1) (21) Non-equity minority interests (9) -- (9) 366 Profit for
the Financial Period 256 (85) 171 Dividends paid and (242) proposed
to Ordinary Shareholders (77) Profit Retained for 124 the Financial
Period 94 8 Earnings per Ordinary Share of 12.5p 18.2 - Basic 12.6
(4.1) 8.5 18.1 - Diluted 12.6 (4.2) 8.4 Dividends per Ordinary
Share 3.65 - Interim 3.80 8.35 - Final Year 2003 Notes 2003
(Unaudited) Before Total exceptional Exceptional Total items and
items and goodwill/ goodwill/ intangibles intangibles amortisation
amortisation m pounds m pounds m pounds m pounds 6,441 Turnover
2,700 -- 2,700 (5,742) Operating costs (2,288) (70) (2,358) 699
Group Operating Profit 412 (70) 342 51 Share of operating profit in
associates 24 -- 24 Total Operating Profit 750 6 Including
Associates 436 (70) 366 (7) Profit/ (loss) on disposal of fixed
assets -- -- -- 2 3 Profit/ (loss) on -- (1) (1) sale of
subsidiaries and investments Profit on Ordinary 745 Activities
Before Interest 436 (71) 365 (181) 4 Net interest (71) -- (71)
Profit on Ordinary 564 7 Activities Before 365 (71) 294 Taxation
(173) 5 Taxation (104) 7 (97) Profit on Ordinary 391 Activities
After Taxation 261 (64) 197 (4) Equity minority interests (2) --
(2) (21) Non-equity minority interests (10) -- (10) 366 Profit for
the Financial Period 249 (64) 185 Dividends paid and (242) proposed
to Ordinary Shareholders (74) Profit Retained for 124 the Financial
Period 111 8 Earnings per Ordinary Share of 12.5p 18.2 - Basic 12.4
(3.2) 9.2 18.1 - Diluted 12.4 (3.2) 9.2 Dividends per Ordinary
Share 3.65 - Interim 3.65 8.35 - Final Cadbury Schweppes plc
Statement of Total Recognised Gains and Losses Movements in
Shareholders' Funds For the 24 weeks ended 13 June 2004 (unaudited)
Half Year Year (Unaudited) 2003 2004 2003 m pounds m pounds m
pounds Statement of Total Recognised Gains and Losses 366 Profit
for the period 171 185 (213) Currency translation differences (126)
(19) 153 Total Recognised Gains and Losses in the period 45 166
Details of the prior year adjustment arising from the adoption of
UITF Abstract 38 are given in Note 1. Half Year (Unaudited) 2003
Reconciliation of Movements in 2004 2003 (restated) Shareholders'
Funds (restated) m pounds m pounds m pounds 3,020 Shareholders'
Funds at the beginning of 3,020 the year (as previously stated)
(177) Prior year adjustment - UITF 38 (see note 1) (177) 2,843
Shareholders' Funds at the beginning of the year (as restated)
2,780 2,843 153 Total recognised gains and losses in the period 45
166 (242) Dividends to Ordinary Shareholders (77) (74) 7 Movement
in Own Shares reserve 22 5 19 New share capital subscribed 17 10
2,780 Shareholders' Funds at the end of the period 2,787 2,950
Cadbury Schweppes plc Group Balance Sheet At 13 June 2004
(unaudited) Half Year (unaudited) Year 2003 2004 2003 (restated)
(restated) m Notes m pounds m pounds pounds Fixed Assets 5,827
Intangible assets and goodwill 5,614 6,115 1,633 Tangible fixed
assets 1,571 1,665 313 Investment in associates 323 313 15
Investments 11 11 7,788 7,519 8,104 Current Assets 672 Stocks 713
721 Debtors 1,221 - due within one year 1,201 1,300 81 - due after
one year 71 83 242 9 Investments 219 264 191 9 Cash at bank and in
hand 169 167 2,407 2,373 2,535 Current Liabilities Creditors:
amounts falling due within one year (1,069) 9 - Borrowings (1,164)
(2,735) (1,977) - Other (1,671) (1,694) (639) Net Current
Liabilities (462) (1,894) 7,149 Total Assets less Current
Liabilities 7,057 6,210 Non-current Liabilities Creditors: amounts
falling due after more than one year (3,575) 9 - Borrowings (3,495)
(2,459) (123) - Other (132) (123) (428) Provisions for liabilities
and charges (405) (420) (4,126) (4,032) (3,002) 3,023 Net Assets
3,025 3,208 Capital and Reserves 258 Called up share capital 259
257 1,071 Share premium account 1,090 1,062 59 Revaluation reserve
59 59 (80) Other reserves (58) (82) 1,472 Profit and loss account
1,437 1,654 2,780 Shareholders' Funds 2,787 2,950 Minority
Interests 18 Equity minority interests 18 19 225 Non-equity
minority interests 220 239 243 238 258 3,023 Total Capital Employed
3,025 3,208 Cadbury Schweppes plc Group Cash Flow Statement For the
24 weeks ended 13 June 2004 (unaudited) Half Year Year (Unaudited)
2003 Notes 2004 2003 (restated) (restated) m pounds m pounds m
pounds Net cash flow from operating activities 699 Group operating
profit 338 342 213 Depreciation 96 88 129 Goodwill/Intangibles
amortisation 67 44 110 Other items (4) (8) (97) Changes in working
capital (229) (287) 1,054 268 179 9 Dividends received from
associates -- -- Returns on investments and servicing of finance
(156) Interest paid, net (88) (52) (21) Dividends paid to minority
interests (5) (5) (177) (93) (57) (195) Taxation (72) (94) Capital
expenditure and financial investments (285) Net capital expenditure
(including investments) (99) (128) Acquisitions and disposals
(2,770) Acquisitions of businesses (15) (2,761) 13 Net cash assumed
on acquisition 1 -- -- Spend against fair value provisions (1) --
Net proceeds from sale of investments, 5 3 associates and
subsidiary undertakings -- -- (2,752) (15) (2,761) (234) Dividends
paid to Ordinary Shareholders (169) (161) (2,580) Cash outflow
before use of liquid (180) (3,022) resources and financing 52 9
Management of liquid resources 22 32 Financing 19 Issues of
Ordinary Shares 17 10 10 Net movement of shares held under the
Employee Trust 13 12 2,517 9 Net change in borrowings and other
financing 90 2,998 2,546 Net cash inflow from financing 120 3,020
18 9 (Decrease)/Increase in cash (38) 30 Free cash flow (2,580)
Cash outflow before use of liquid resources and financing (180)
(3,022) 2,752 Add back: cash flows relating to acquisitions and
disposals 15 2,761 172 (165) (261) Cadbury Schweppes plc Turnover
and Operating Profit Analysis For the 24 weeks ended 13 June 2004
Half Year (Unaudited) Turnover 2004 2003 m pounds m pounds Americas
Beverages 770 848 Americas Confectionery 457 271 EMEA 962 913
Europe Beverages 303 295 Asia Pacific 458 368 2,950 2,695 Central 4
5 2,954 2,700 Half Year (Unaudited) Group Operating profit before
exceptional items 2004 2003 and goodwill/intangibles amortisation m
pounds m pounds Americas Beverages 228 245 Americas Confectionery
51 14 EMEA 145 130 Europe Beverages 46 43 Asia Pacific 42 33 512
465 Central (64) (53) Underlying operating profit (a) 448 412
Exceptional restructuring costs (43) (26) Goodwill/ intangibles
amortisation (67) (44) Group Operating profit 338 342 (a) Excluding
exceptional restructuring costs of 43m pounds in 2004 (2003: 26m
pounds) (Note 2), goodwill/intangibles amortisation of 67m pounds
(2003: 44m pounds) and share of operating profit in associates of
21m pounds (2003: 24m pounds). Cadbury Schweppes plc Notes to the
Schedules 1. Group Accounts a. The half year accounts are prepared
on the basis of the accounting policies as set out in the Group's
published accounts for the 52 weeks ended 28 December 2003, except:
The Group has adopted UITF 38 "Accounting for ESOP Trusts". Shares
purchased through Employee Share Option Trusts (ESOPs) are taken as
a deduction in arriving at Shareholders' Funds. Previously these
were held within investments. The balance sheets as at 15 June 2003
and 28 December 2003 have been restated to reflect this change in
accounting policy. The impact on the profit and loss account has
been immaterial. b. The half year accounts are unaudited and were
approved by the Board of Directors on 20 July 2004. The full year
figures for 2003 included in this announcement do not comprise
statutory accounts for the purpose of Section 240 of the Companies
Act 1985, and have been extracted from the Group's Report &
Accounts and Form 20-F for 2003, a copy of which has been delivered
to the Registrar of Companies and on which an unqualified report
has been made by the auditors under Section 235 of the Companies
Act 1985. 2. Exceptional Restructuring Costs During the first half
of 2004, the Group incurred 43m pounds (2003: 26m pounds) of
exceptional restructuring costs. These have been incurred as part
of Fuel For Growth which commenced in 2003. 3. Profit on Sale of
Subsidiaries and Investments There has been no sale of subsidiaries
or investments in the period. During the prior period the Group
completed the sale of Bouquet d'Or, a French confectionery company.
4. Net Interest Year Half Year (Unaudited) 2003 2004 2003 m pounds
m pounds m pounds 166 Net interest arising in Group companies 93 64
15 Share of net interest arising in associates 5 7 181 98 71 5.
Taxation Year Half Year (Unaudited) 2003 2004 2003 m pounds m
pounds m pounds (31) UK (8) 3 195 Overseas 88 89 9 Associates 4 5
173 84 97 - Tax on profit on disposal of subsidiaries and
investments -- -- 173 84 97 6. Underlying Total Operating Profit
including Associates The calculation of underlying total operating
profit including associates is as follows: Year Half Year
(Unaudited) 2003 2004 2003 m pounds m pounds m pounds 750 Total
Operating Profit including associates 359 366 224 Add: exceptional
restructuring costs 43 26 129 Add: goodwill/intangibles
amortisation 67 44 1,103 Total operating profit including
associates 469 436 7. Underlying Profit before Tax The calculation
of underlying profit before tax is as follows: Year Half Year
(Unaudited) 2003 2004 2003 m pounds m pounds m pounds 564 Profit on
Ordinary Activities Before Taxation 265 294 224 Add: exceptional
restructuring costs 43 26 129 Add: goodwill/intangibles
amortisation 67 44 5 Non-operating exceptional items (4) 1 922
Underlying profit before tax 371 365 8. Earnings per Ordinary Share
Basic EPS for the half year is calculated on the weighted average
of 2,024 million shares in issue during the half year (2003 half
year: 2,011 million; 2003 full year: 2,013 million). Diluted EPS is
calculated on the weighted average of 2,038 million shares (2003
half year: 2,015 million; 2003 full year: 2,019 million), which
includes dilutive options outstanding. The earnings used in
calculating the Basic and Underlying EPS figures were as follows:
Year Half Year (Unaudited) Earnings EPS Earnings EPS 2003 2003 2004
2003 2004 2003 m pounds p m pounds m pounds p p 366.3 18.2 Earnings
/ Basic EPS 171.3 185.0 8.5 9.2 223.7 11.1 Add: Exceptional
restructuring costs 43.0 26.4 2.1 1.3 129.3 6.4 Add:
Goodwill/intangibles amortisation 67.1 44.2 3.3 2.2 (2.5) (0.1)
Add: Loss on disposals -- 1.0 -- 0.1 7.3 0.4 (Profit)/loss on sale
of fixed assets (4.3) -- (0.2) -- (80.7) (4.0) Effect of tax on
above items (21.3) (7.6) (1.1) (0.4) 643.4 32.0 Underlying earnings
/ EPS 255.8 249.0 12.6 12.4 Cadbury Schweppes believes that
underlying operating profit, underlying profit before tax,
underlying earnings and underlying earnings per share provide
additional information on underlying earnings trends to
shareholders. These measures are used by Cadbury Schweppes for
internal performance analysis and incentive compensation
arrangements for employees. The term underlying is not a defined
term under UK or US Generally Accepted Accounting Principles
(GAAP), and may not therefore be comparable with similarly titled
profit measurements reported by other companies. It is not intended
to be a substitute for, or superior to GAAP measurements of profit.
9. Net Borrowings Net borrowings are made up as follows: Year Half
Year (Unaudited) 2003 2004 2003 m pounds m pounds m pounds 191 Cash
at bank and in hand 169 167 (31) Bank overdrafts (52) (19) 160 Net
cash 117 148 242 Liquid resources 219 264 (1,038) Other short term
borrowings (1,112) (2,716) (3,575) Long term borrowings (3,495)
(2,459) (4,211) (4,271) (4,763) Movements in cash and net
borrowings in the period were as follows: Total net Net Liquid
borrowings cash resources Borrowings m pounds m pounds m pounds m
pounds At 28 December 2003 (4,211) 160 242 (4,613) Cash flow for
the period (150) (38) (22) (90) Assumed on acquisition (11) -- --
(11) Amortisation of prepaid fees and discount (3) -- -- (3)
Exchange rate adjustments 104 (5) (1) 110 At 13 June 2004 (4,271)
117 219 (4,607) DATASOURCE: Cadbury Schweppes plc CONTACT: Cadbury
Schweppes plc: +020-7409-1313; or Capital Market Enquiries: Sally
Jones, +020-7830-5095, or Mary Jackets, +020-7830-5124; or Media
Enquiries: Andraea Dawson-Shepherd, or Dora McCabe, +020-7409-1313;
or The Maitland Consultancy: Angus Maitland, or Philip Gawith,
+020-7379-5151, all for Cadbury Schweppes plc Web site:
http://www.cadburyschweppes.com/ http://www.newscast.co.uk/
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