Uxbridge / UK. (cb) Cadbury PLC posted strong third-quarter sales figures that sent a sharp message to hopeful acquirer Kraft Foods Inc.: a takeover would not come cheap. The British sweets maker also raised its sales and profit outlook for the year in a move that further bolstered its defence against the unwanted suitor. The company, which makes chocolate, gum and candy, said the new sales figures and growth expectations showed shareholders that their interests were best served with Cadbury remaining an independent company. Summary:
Third quarter revenue growth of seven percent in constant currency
- Good growth in Chocolate (up seven percent), led by continued strong performances in the UK, India and South Africa
- Improved growth in Gum (up four percent) and Candy (up eleven percent) reflecting strong performances in emerging markets and growth in North America and Europe
- Excellent growth in Britain + Ireland (up ten percent) and emerging markets (South America up 18 percent, Asia and Middle East and Africa up 14 percent)
Year to date revenue growth of five percent,
ahead of previous guidance for the year
- Year to date underlying operating margin growth of over 180 bps underpinned by a strong third quarter
- Year to date gross margin improved by 20bps on a constant currency basis
- Marketing investment as a percentage of sales was 10,4 percent on a constant currency basis reflecting the benefits of media deflation. Absolute marketing spend in the quarter was unchanged compared to the prior year
- Year to date savings from Vision into Action plan reduced SG+A costs
Upgraded guidance with Cadbury´s Vision into Action plan
well on track to deliver its goals
- 2009 the four to six percent goal range
- Improved momentum increases Cadbury´s confidence in good revenue growth in 2010 and 2011
- 2009 underlying operating margin expected to improve by at least 135bps in constant currency from 11,9 percent in 2008
- Excellent margin progress in first two years of the plan, combined with the benefit of expected supply chain and SG+A savings, reinforces the company´s confidence in achieving good mid-teens margins by 2011
Comments
Todd Stitzer, Cadbury´s CEO: «We have great momentum in our business and our confectionery strategy continues to yield benefits beyond expectations. In the third quarter we have delivered growth in every category and every business. At the same time, we have maintained our investments in innovation and marketing to reinforce our commitment to delivering future growth. As a result, despite lapping strong fourth quarter comparatives from 2008, we are increasing our guidance for revenue growth to be around the middle of our four to six percent goal range for the year as a whole and our underlying operating margin improvement to be at least 135bps in constant currency in 2009».
Roger Carr, Chairman: «The strength of our operating performance continues to underpin the Board´s confidence in both our growth prospects and the potential for creating further, material shareholder value as a pure play standalone confectionery business».
