Cadbury Reconfirms Guidance for Strong Profit Growth in 2008

Cadbury plc pleased to confirm that the Group has continued to perform in line with expectations and that to deliver strong profit growth for the year as a whole.

17/12/08 Cadbury plc confirms that, despite weakening economic conditions in the fourth quarter, the Group as a whole has performed in line with expectations. We continue to expect strong profit growth for the year and reconfirm the revenue and margin guidance provided in July and again in October.

Our Britain, Ireland, the Middle East and Africa region has continued to grow well despite lapping a strong finish to 2007. The Europe region has sustained a steady performance despite continued difficult market conditions. In the Americas, growth has remained strong in South America while softening in North America.  Emerging markets in Asia Pacific continued to perform well, offsetting expected weaker trading in Australia.

At the time of our interim results we announced an intention to review the position of our Australia Beverages business. As a result, we have decided to proceed towards a sale of this operation.  The separation of the integrated beverage and confectionery businesses in Australia is now well advanced and we will update the market on further developments in due course.

Todd Stitzer, Chief Executive of Cadbury plc, said: “I am pleased to confirm that the Group has continued to perform in line with expectations and that we expect to deliver strong profit growth for the year as a whole.  Looking forward, despite forecasting a 6-8% rise in input costs for 2009 and weakening economic conditions, we remain committed to delivering mid-teen margins by 2011 and making further progress towards that goal in 2009.”

Technical Guidance

The net impact on 2008 results from foreign exchange translation is broadly unchanged from October: assuming current rates remain unchanged for the balance of the year, exchange will increase net revenues by 9% and increase net underlying operating profit by 13%

Restructuring costs for 2008 are expected to be around £170m, reflecting cash outflows of around £150m. Of these costs, around £130m relates to the Vision Into Action programme, £15m to Americas Beverages separation costs and £10m to acquisition integration costs.

As a result of increased volatility in financial markets which has adversely impacted the net cost of short-term debt, the Group’s revised 2008 underlying net interest charge (before any pension credit) is now expected to be between £110m and £115m.

Overall, capital expenditure for the year is expected to be around £400m, of which £340m relates to the continuing Cadbury plc and £60m reflects capital expenditures incurred by the Americas Beverages business prior to demerger in May 2008.