15 Dec 2009 --- The Board of Cadbury plc has published its shareholder circular in response to the offer posted by Kraft Foods Inc. on 4 December 2009. As stated in Cadbury’s announcement on 9 November 2009, the Board unanimously rejects Kraft’s wholly inadequate offer as it substantially undervalues Cadbury and recommends shareholders reject the Offer.

The Board is committed to maximising shareholder value and believes that this is best achieved through the strong continuing performance of an independent Cadbury. They listed the following benefits of being independent:

• Cadbury is a business with exceptional growth opportunities, reflecting its strong position as a unique pure-play confectionery business, with iconic brands and leading positions in the attractive confectionery market
• Cadbury has also built the leading position in emerging markets, which has driven significant revenue growth and which we expect to drive strong growth in the future
• The first two years of Vision into Action have transformed Cadbury into a financially stronger, more competitive business which has delivered ahead of our plan
• Kraft’s offer fails to recognise the value of Cadbury’s performance to date and the benefits of completing the Vision into Action plan set out in June 2007
• Following a mid-term review of Cadbury's plan, started in Spring 2009, the company is setting out upgraded targets for the next four years which are expected to deliver significant additional value. New long-term targets include:
• Organic revenue growth of 5-7% per annum
• Improved margins of 16-18% by 2013
• 80-90% operating cash conversion from 2010
• Double digit growth in dividends per share from 2010 onwards

In addition to the announcement of its new Vision into Action targets, Cadbury has provided an update on current trading and guidance for 2009, the text of which is included below.

Roger Carr, Chairman of Cadbury, said “Cadbury is an exceptional business worth much more than the offer put forward by Kraft. It is clear to all that Cadbury is a particularly attractive asset in the sector with iconic brands, a sharp category focus and an enviable geographic footprint.”

“We believe our shareholders should have the opportunity to reap the full rewards of the investment that has already been made in creating a platform for future improved revenue growth, enhanced profitability and high cash returns. Cadbury will have delivered average revenue growth of 6% per annum and improved margins by 350bps for the period 2007-09.* We are committed to the achievement of the higher Vision into Action targets and the creation of significant value - benefits that should fully accrue to our shareholders.”

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don’t let Kraft steal your company with its derisory offer.”

Performance through to the end of November has been in line with the upgraded expectations announced at the time of the company’s third quarter Interim Management Statement on 21 October 2009. 

All three categories continue to deliver good results with continued growth in Chocolate, further improvements in Gum and excellent growth in Candy. In Chocolate momentum continues in our emerging markets, particularly India and in key developed markets, including the UK where the business continues to grow despite lapping a record fourth quarter in 2008. In Gum, our innovation launches show early signs of good performance. Trident Layers in the US continues to gain share as distribution expands, while in South America new innovations, including new Trident packs, have supported strong growth. In Candy, excellent growth has been supported by Halls where effective commercial programmes and the unusually high flu incidence drove strong growth in the US.

Cadbury’s emerging markets, led by India, Middle East and Africa and South America continue to show strong momentum. In developed markets, we continued to deliver robust growth in the UK and strengthening growth in the US.

Todd Stitzer, Cadbury’s CEO said: “Our strong momentum continues, as our standalone confectionery strategy continues to exceed expectations, with further good progress in October and November. As a result, we are reconfirming our guidance for full year constant currency revenue growth to be around the middle of our 4-6% goal range, and for an improvement of at least 135 basis points in constant currency trading margin.”