Cadbury Reconfirms Guidance For 2009
The company’s Britain & Ireland business sustained its strong performance in the UK which offset difficult trading in Ireland. Major emerging market businesses in South America, the Middle East and Africa and Asia also performed well.
18/06/09 Cadbury plc has confirmed that it has built on its good first quarter with improved trading in April and May. Growth in Chocolate remained robust, reflecting a good seasonal performance and the benefit of new product innovations. Gum and Candy both grew, helped by improved performances in a number of developed markets.
The company’s Britain & Ireland business sustained its strong performance in the UK which offset difficult trading in Ireland. Major emerging market businesses in South America, the Middle East and Africa and Asia also performed well. The Pacific business benefited from good seasonal chocolate sales and an improved candy performance in Japan. In addition, Cadbury’s North America revenue continued to recover from the impact of destocking early in the first quarter. As a result, despite conditions in Europe remaining very challenging, revenue guidance for the full year is unchanged, with the expected slower start to the year set to be balanced by a stronger second half, underpinned by planned new product launches. Margin guidance for the full year is also unchanged with the first half margin improvement expected to be higher than for the year as a whole, reflecting the impact of re-phasing some of the company’s marketing investment to the second half to support the new product launches.
Todd Stitzer, Chief Executive of Cadbury plc, said: “Our early progress has continued into the second quarter with our businesses focused on delivering market share gains and efficiency improvements. As a result, we reconfirm our full year guidance for revenue growth around the lower end of our 4-6% goal range and to make good progress toward our goal of mid-teens margins by 2011.”
Cadbury said that the impact of foreign exchange translation on its net revenue and underlying operating profit is impossible to predict with certainty. “Since the last update, the recent weakness of the US Dollar (now 1.64 from 1.48 in April), Euro and Mexican Peso and, in Venezuela, the use, as required by international accounting standards, of parallel rates (10.51 in June) as opposed to using official rates (3.13 in April) have had an impact on foreign exchange translation. As a result, assuming exchange rates remain unchanged for the balance of the year from those as at 11 June 2009, exchange should, for the full year, increase net revenue by around 5% and increase net underlying operating profit by around 6%. For the half year, exchange should increase net revenue by around 10% and increase net underlying operating profit by around 14%.”
