2004 Preliminary Results Analysts...

2004 Preliminary ResultsAnalyst Presentation22 February, 2005

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.

IntroductionJohn Sunderland

Chairman

IntroductionJohn SunderlandOperating ReviewTodd Stitzer

Financial ReviewKen Hanna

SummaryTodd Stitzer

Agenda

2004 Preliminary Results Overview

Year End 2004 2003 reported at constant

(£m) currency/52 wks

Sales 6,738 6,441 +5% +8%

- base business 6,452 +0% +4%

- acquisitions 286

Underlying Op Profit* 1,115 1,052 +6% +11%

Underlying Op Margin 16.5% 16.3% +20bps +50bps

Underlying PBT# 933 922 +1% +7%

Underlying EPS# (p) 32.6 32.0 +2% +8%

Dividends per Share (p) 12.5 12.0 +4%

Marketing/Sales 11.0% 10.9% +10bps +20bps

* Operating profit before associates, goodwill/intangibles amortisation and exceptional items# Excludes goodwill/intangibles amortisation, exceptional costs and disposal gains / losses

Operating ReviewTodd Stitzer

Chief Executive Officer

2004 Goals and Priorities

5. Reinforce reputation with

employees and society

7. Ratchet up innovation

8. Hone people and systems capabilities

4. Ensure our capabilities are

best in class

5. Integrate North America Beverages

6. Integrate Europe Beverages

3. Profitably secure and grow

regional beverages share

3. Integrate Adams and “Beat the Model”

4. Execute “Smart Variety”

2. Profitably and significantly

increase global confectionery

share

1. Deliver annual contract

2. Execute “Fuel for Growth”

1. Deliver superior shareowner

performance

9. Motivate, develop & reward our people

10. Continue high CSR standards

Goals Priorities

Superior Shareowner Performance2

00

4 g

row

th i

n %

Cadbury Schweppes

TSR +27%

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00Peer Group 2004 Average TSR Performance

Delivering Annual Contract

2004 – 2007 2004Goals

Underlying sales growth 3% - 5% 3.8%

Operating margins +50 – 75bps +50bps

Free Cash flow £1.5bn over £265m

4 years

• Performance within financial goal ranges

• Reinvestment behind growth - marketing/sales up by 20 bps

Execute Fuel For Growth

• On track

• £75m of cost savings in 2004

• Cumulative savings of £100m

• Investment to deliver £400m of savings reduced through tighter

financial discipline

Grow Confectionery Share

• 2004 confectionery sales up 6%

• Grew or maintained confectionery share in 11 of 14 top markets

• Adams exceeding expectations

- Strong top-line performance

- Turn-around of problem markets

- Delivery of cost synergies

- Beginning to deliver revenue synergies

• Smart Variety driving growth around the world

Secure and Grow Regional Beverages

• 2004 beverages sales growth of 2%

• Recovery in US carbonates and Australian beverages

• Continued strong performance in Mexico

• Stage set for recovery in US non-carbonates, France and Spain

• Integration of North America Beverages complete

- Cost and revenue benefits boost 2004 performance

• Integration of European Beverages underway

Best in Class Capabilities

• Raising capabilities: senior external hires

• Central team

- Chief Financial Officer

- Chief Information Officer

- Chief Science & Technology Officer

• Regional teams

- Chief Marketing Officer – Americas Beverages

- Regional Finance Director – Asia Pacific

- Heads of Sales – US and Canadian Confectionery

• Matt Shattock appointed President of EMEA

Innovation and Systems

• New structures and systems to drive innovation goal of 15% of sales

by 2007

• Major consumer segmentation study

• Innovation raised to 9% of sales (from 6% in 2003)

• Successful implementation of major systems projects

Reinforce Reputation

• Passionate about performance, people and stewardship

• New compensation scheme

• Better ways of working

• Global employee survey

Business Awards in 2004

• “Britain’s Most Admired Company” – Management Today

• “Deal of the Year – Investment Grade Bonds”

• UK: “Manufacturer of the Year”

• “Best new product” - The National Confectionery Company launch – Ireland

• Australia: Woolworth’s “Supplier of the Year”

• Wedel: Poland’s “Most valued/ trusted brand”

• Adams Columbia: “Best place to work”, in Columbia

• Cadbury India: India’s “Top 25 Great Places to Work”

Active Community Programmes

• Increasing regional community programmes

• Brazil: Bola Bola after school football programme

• Mexico: Puebla Orphanage Christmas Fund

• UK: Ghana Wells Project

• India: education for underprivileged children

• Australia: Clown doctors

• Worldwide: Asia tsunami appeal

Corporate Social Responsibility

• Good progress on five pillars of CSR agenda

1. Human Rights and Employment Standards

2. Ethical Sourcing and Procurement

3. Environment, Health and Safety

4. Marketing and Consumer Issues

5. Community Investment

Americas Beverages

Y/E Jan 2nd 2004 2004 vs 2003 (constant FX)£m like-for-like acquisition/other total

Sales 1,686 +2% +1% +3%

Underlying Operating Profit* 506 +5% +1% +6%

• Strong North American carbonate performance: sales +5%

• Early improvement in our non-CSD brands

• Mexico sales up 16%

• Organisational change delivering real benefits

• Successful project execution: PROBE and Shared Business Services

* Operating profit before associates, goodwill/intangibles amortisation and exceptional items

US Carbonates Outperform Market

• Continued momentum in US carbonates : volumes +2%

• Diets ahead by 19%

Bo

ttle

r V

olu

me G

row

th %

-10

-5

0

5

10

15

20

25

H1 03 H2 03 H1 04 H2 04

DietRegular

Dr Pepper

• Dr Pepper volumes ahead by 3%

DP Regular excludes Red Fusion

Bo

ttle

r V

olu

me G

row

th %

-10

-5

0

5

10

15

20

H1 03 H2 03 H1 04 H2 04

DietRegular

Improving Seven Up Trends

• 7 Up volumes down 6%

• Launch of 7 UP Plus helps revitalise brand in 2H

Bo

ttle

r V

olu

me G

row

th %

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

0H1 03 H2 03 H1 04 H2 04

Non-Carbonates Performance

Mott’sSnapple Base

Sale

s V

alu

e C

han

ge %

-6

-5

-4

-3

-2

-1

0

1

2

3

Q1 Q2 Q3 Q4

Americas Confectionery


Sales 1,093 +10% +24% +34%


• Excellent year: 10% like-for-like sales growth

• Sales driven by innovation on core brands

• Margins driven by FFG savings and improved price and mix (notably Canada and Brazil)

• Significant organisational change

- US transition off Pfizer shared services

- SAP and back office consolidation in Brandina

- Sales force reorganisations in US, Canada and Brazil


Strong Power Brand Sales Growth

Americas Confectionery Power Brand Performance

Year-

on

-year

incr

ease

5

13

7

11

22

18

7

0

5

10

15

20

25

Trident Dentyne Halls Bubbas PowerBrands

Other Total

US Gum

Sale

s M

AT

-2

0

2

4

6

8

10

Sep 01 Dec 04Acquisition

0

2

4

6

8

10

12

14

16

Canadian Gum

Sep 01 Dec 04Acquisition

Sale

s M

AT

Recovery in Brazil

• 2004 sales +22% and margins up 500 basis points

• Radical change to management and structures post acquisition

• Refocusing the portfolio

- Launch of Trident White and Halls Creamies

• Reorganised sales force

• Tight cost control

Europe, Middle East and Africa


Sales 2,246 +4% +3% +7%


• Good year with a building momentum in 2H and a strong Christmas

• Performance broadly based: markets and categories

• Ireland improving

• Sales in developing market businesses up 10%

• Russia restructuring and management changes


Innovation Drives Growth atCadbury Trebor Bassett

Sales from New Products Launched in 2004

Sales Growth in 2004

3.1%3.5% 3.5%

-3.1%

Market CTB#2

competitor

#3competitor

Source: Retail sales value per Nielsen 53 weeks to December 2004

£19m

£56m

£28m

CTB#2

competitor#3

competitor

Innovation Drives Growth atCadbury Trebor Bassett

Growing Adams Brands in EMEA

• Adams brands up 10% reflecting exploitation of brands, technologies

and route to market

• Halls up 15% across the region

- Share gains in existing markets

- Performance through CS route to market

• Bubblegum in Nigeria and Russia

• Trident up 20%

- Spanish relaunch

Revitalising Gum in Spain

Mark

et

Sh

are

%

Nov 03 Nov 04

25%

30%

35% Trident

Orbit

Europe Beverages


Sales 653 -5% - -5%

Underlying Operating Profit* 117 -1% - -1%

• Weak markets: poor summer demand and pricing pressure in Germany

• Some share loss in key markets

• Margins benefit from Fuel for Growth savings and improved supply chain

• Management and organisational changes in 2H

• More focused marketing and innovation programme in place


Asia Pacific


Sales 1,050 +6% +6% +12%


• Continued good top-line growth

• Strong recovery in beverages: market share and margin gains

• Chocolate performance driven by recovery India and share gains in Australia

• Good growth in gum and Halls in Thailand and Japan

• Margins impacted by:

- Adverse mix

- Investment in India, China and regional capabilities


Regaining Momentum in India

Oct Nov Jun

03 03 04

Intend to buy 87 56 85

Buy as a gift 84 41 82

Dec

01

= 1

00

Indian Chocolate Sales Dec 01 – Dec 04

Returning Confidence

90

100

110

120

130

Dec-0

1

Dec-0

2

Dec-0

3

Dec-0

4

Source: CS Estimates Source: IMRB International

Relaunching Cadbury Dairy Milkin China

CDM Market Share

2

2.5

3

3.5

4

4.5

5

5.5

June July Aug Sept Oct Nov Dec

2004

Share of market

Source: ACNielsen 4 week share ending 31/12/04

Integration begins to deliver in ANZ

Dec Dec Change2003 2004

Australia

Chocolate 53.6 54.5 +0.9

Moulded 69.1 71.6 +2.5

Total soft drinks 15.7 16.4 +0.7

Carbonates 22.8 23.7 +0.9

New Zealand

Moulded 60.1 58.9 -1.2

Market Shares in Australia and New Zealand

Source: ACNielsen MAT to 2 January 2005

2004 Summary

Successful first year of a four year programme

• Delivered financial performance within our goal ranges

• Executing Fuel for Growth in line with plan

• Building momentum in confectionery

• Integrated Adams and beat the model

• Improved beverages performance

• Ratcheting up innovation

• Building capabilities

• Reinforcing our reputation

Financial ReviewKen Hanna

Chief Financial Officer

Agenda

• Sales and Margins

• Income Statement and Cashflow

• Adams

• Fuel for Growth

• Growth Investment

• Outlook

Base and Reported Sales Growth

ReportedGrowth

£297m+5%

Exchange

(£285)m-4%

Constant CurrencyGrowth

£582m+9%

Q1 Adams and other

acquisitions

£286m+4%

£247m+4%

BaseGrowth

53rdWeek

£49m+1%

Base Business Sales Performance

AmericasConfectionery

£89m+10%

EMEA

£93m+4%

EuropeanBeverages

£(34m)-5%

Asia Pacific

£58m+6%

£41m+2%

AmericasBeverages

£247m+4%

TotalGroup

First Half/Second Half BaseBusiness Sales Growth

2004 v 2003* 1st Half 2nd Half Full Year (% growth) (52 Weeks)

Americas Beverages 2.2 2.2 2.2

Americas Confectionery # 3.9 13.1 10.3

EMEA Confectionery 1.7 6.5 4.4

Europe Beverages 3.6 (11.1) (4.9)

Asia Pacific 8.2 4.9 6.2

Total Group 3.1 4.4 3.8

* Base business excluding acquisitions at constant currency

# Americas Confectionery reported first half base growth was +4%, which includes Adams within acquisitions until 31 March 2004. Underlying growth in first half was +8% including Adams performance for the full period

Underlying Operating Profitand Margin

Acquisitions

£45m

200416.5%

Actual FX

£1,115m

FX impact

(£68m)£11m

53rd week

£1,052m

200316.3%

200416.8%

Constant FX

£1,183m

Base business

£75m

Summary Income Statement

*Operating profit before associates, goodwill/intangibles amortisation and exceptional items

# Excludes goodwill/intangibles amortisation and exceptional items

Year End (£m) 2003 2004

Sales 6,441 6,738

Underlying Operating Profit* 1,052 1,115

Associates 51 44

Total Operating Profit 1,103 1,159

Interest (181) (226)

Underlying Profit Before Tax# 922 933

Restructuring (184) (140)

Goodwill (129) (139)

Exceptional costs (40) (31)

Profit/(loss) on disposal (5) 19

Reported Profit Before Tax 564 642

Taxation (173) (189)

Minorities (25) (22)

Reported Earnings 366 431

Cash Flow


• Free Cash Flow at 2003 currency rates is £265m towards £1.5 billion cumulative target for 2004

to 2007

Year End (£m) 2003 Restated 2004

Underlying Operating Profit* 1,052 1,115

Restructuring (121) (165)

Depreciation 213 215

Working Capital Movement (97) (70)

Other 7 11

Operating Cash Flow 1,054 1,106

Capital Expenditure (306) (285)

Disposals 21 26

Interest (156) (211)

Tax (195) (150)

Dividends (246) (257)

Free Cash Flow 172 229

Adams Performance

Sales 1,170 +12% 887 +11%

Underlying Op. Profit 155 +45% 111 +27%

Underlying Op. Margin 13.2% +300bps 12.5% +160bps

* At reported currency

** Includes growth from base 2003 including period from Jan –March 2003 prior to Cadbury Schweppes ownership of Adams

• Underlying Operating Profit stated after allocation of regional costs

£’m FY* Growth** at 9 months* Growth at2004 constant FX 2004 constant FX

Confectionery Sales Growth

Group Confectionery growth in 2004

1%

3% Base Confectionery growth in 2003

Incremental growth from base Cadbury brands growing at 4%

Base

Confectionery

growth 20044%

Confectionery Sales Growth

Incremental growth from Adams brands growing at 11%

Group Confectionery growth in 2004

2%

1%

3% Base Confectionery growth in 2003

Incremental growth from base Cadbury brands growing at 4%

6%Total

Confectionery

growth 2004

Fuel for Growth Progress

In £’m 2003 2004 Cumulative

Gross Savings 25 75 100

Restructuring 162 140 302

Capex 76 80 156

Total spend 238 220 458

Completed Completed Cumulative Announced2003 2004 not completed

Factory Closures 6 3 9 4

Headcount reduction 1,300 1,400 2,700 1,000

Fuel for Growth Progress

• Manchester factory closed in December 2004

Fuel for Growth

• Savings profile 2005 –2007: Approximately £100m per annum

Original Spend£900m

Revised Spend£800m

450302

500

450

156

300

0

200

400

600

800

1,000

Oct-03 To Date Latest Estimate

Tota

l Spe

nd in

£'m

Restructuring Capital Expenditure

Current Spend£458m

Systems Projects

Completed in 2004

• Transition from Pfizer Systems - US

• PROBE – US CSDs, Ireland, Japan

• SAP – Brazil & Andina,

US non-CSDs

• Shared Business Services – US

Planned for 2005

• Transition from Pfizer Systems -

Canada Q1

• PROBE – UK Q2

• Innovation Management Software

• Shared Business Services – Mexico

• £20m cost of PROBE in the UK in 2005

Growth Investment

2004

• Marketing:sales ratio increased by +20bps

• Incremental other growth investment: £10m

2005

• Further increase in Marketing:sales ratio

• Incremental other growth investment: £20m

- S&T recruitment

- European R&D centre

- Innovation resources

- Building Commercial Capabilities training

Outlook

2004

• IFRS impact in line with expectations – c.5% impact on Underlying Profit before tax

• No IAS 39 impact for 2004

2005 Outlook

• Cost environment manageable but higher regulatory costs

• Marketing to be phased more evenly between H1 and H2 in 2005

• Incremental PROBE costs in H1

• Currency impact c.2% on 2005 EPS at February 2005 FX rates

• Cash flow focus

Operating ReviewTodd Stitzer

Chief Executive Officer

2005 Goals and Priorities

5. Reinforce reputation with

employees and society

7. Roll-out Building Commercial Capabilities

8. Refine Supply Chain disciplines

4. Ensure our capabilities are

best in class

5. Invest, Innovate and execute

6. Strengthen non CSDs and RTM

3. Profitably secure and grow

regional beverages share

3. Invest, Innovate and execute

4. Execute “Smart Variety”

2. Profitably and significantly

increase global confectionery

share

1. Deliver annual contract

2. Execute “Fuel for Growth” and focus on Free Cash Flow

1. Deliver superior shareowner

performance

9. Motivate, develop & reward our people

10. Continue high CSR standards

Goals Priorities

2005 Outlook

• Good sales momentum

• Fuel for Growth cost benefits

• External cost environment manageable

• Investing behind growth

Expect to deliver within our financial goal ranges

Conclusion

• Advantaged business model

• Attractive, growing categories

• Unique portfolio of brands

• Strong platform to exploit potential

• Strong management

Supplementary Information

Growing Confectionery Share Around the World

US Gum

- Trident

- Dentyne

US Cough

Canada Gum

- Trident

+40bps

+60bps

+10bps

+30bps

+370bpps

+330bps

Share +/-N.America

Mexico

Brazil

- Gum

- Sugar

Argentina Gum

Colombia

Share +/-Latin.America

UK

- Chocolate

France

- gum

Spain gum

South Africa

Share +/-EMEA

Australia

- Chocolate

Japan gum

Thailand gum

India

- Chocolate

Share +/-Asia Pacific

Chocolate

Sugar

Gum

Total Confectionery

Source: IRI/Nielsen YTD 2004

4

9

11

12+30bps

-220bps

-330bps

-20bps

+10bpps

-250bps

#1 and #2 share positions in top

confectionery markets

+0bps

+10bps

+50bps

+250bps

+60bpps

+130bps

+10bps

+100bps

+60bps

+240bps

+10bps

-20bps

Source:Euromonitor 2003 (14 countries)

Americas Beverages 1,814 41 - 19 (188) 1,686

Americas Confectionery 871 89 200 3 (70) 1,093

EMEA 2,117 93 39 18 (21) 2,246

Europe Beverages 692 (34) 1 - (6) 653

Asia Pacific 937 58 46 9 (-) 1,050

Central 10 - - - 10

Group sales 6,441 247 286 49 (285) 6,738

+4% +4% +1% (4%) +5%

Full Year (£m) 2003 Increased Exchange 2004Activity M&A 53rd Week Effects

Sales Analysis

Full Year 2003 Increased Exchange 2004(£m) Activity M&A 53rd Week Effects

Underlying Operating Profit

Underlying Operating Profit*

Americas Beverages 532 24 - 6 (56) 506

Americas Confectionery 91 22 35 1 (10) 139

EMEA 308 31 9 3 (2) 349

Europe Beverages 120 (1) - - (2) 117

Asia Pacific 128 1 4 2 2 137

Central Costs (127) (2) (3) (1) - (133)

Total 1,052 75 45 11 (68) 1,115

+7% +4% +1% (6%) +6%

Turnover 6,441 247 286 49 (285) 6,738


Year End (£m) 2003 2004

restated

Net Current Assets (126) (135)

Fixed Assets 1,633 1,613

Brands and Goodwill 5,827 5,485

Associates & Investments 328 335

Other Provisions (428) (340)

Net Borrowings (4,211) (3,870)

Net Assets 3,023 3,088

Ordinary Shareholders’ Funds 2,780 2,859

Minority Interests 243 229

Total Capital Employed 3,023 3,088

Balance Sheet

Borrowing Profile

As at year end 2003 2004

Debt Maturity Profile

Less than 1 Year 15% 7%

1- 3 Years 35% 40%

More than 3 Years 50% 53%

Fixed rate debt:

% total debt 71% 85%

Average length of fix 5.1yrs 4.2yrs

Average interest rate 4.9% 4.8%

Group average interest rate 4.2% 5.0%

Sales, Profits and Borrowings by Currency

As at year end (£m) 2004 as %

Sales generated in:

US dollars 1,889 28

Sterling 1,064 16

Euro 1,253 19

Australian dollars 675 10

Other 1,857 27

Underlying Operating Profit* generated in:

US dollars 473 42

Sterling 62 6

Euro 199 18

Australian dollars 102 9

Other 279 25

Net borrowing held in:

Dollar Block 50

Sterling 31

Euro 16

Other 3


Exchange Rates

US $ 1.83 1.64 (11.5)

Canadian $ 2.21 2.30 +3.9

Euro 1.47 1.45 (1.0)

Australian $ 2.48 2.54 +2.2

South African Rand 11.7 12.4 +5.5

Mexican Peso 20.6 17.7 (16.4)

Average Rate vs Sterling 2004 2003 %mvt

Investment behind Growth

Indirect CostsS&T equipment/scientists; consumer

research; market analysis

Commercial

capabilities

MarketingTV commercials; Print media adverts;

Billboards & outdoor media

Media/Advertising

MarketingMedia production costs; advertising agency

fees; public relations costs

Media/marketing

MarketingConsumer coupons; direct mail leaflets;

direct consumer samples

Consumer

promotions

As deduction

from sales

In-store promotion samples; trade

couponing & bill-backs; innovation support

Trade promotions

In P&LExamplesType of spend

IFRS Update

Approximate impact of changes excluding IAS 39:

£(22)m

N/a

£(22)m

N/a

N/a

N/a

Assoc

£20m

N/a

£12m

£8m

-

N/a

Interest

-£(10)mN/aAssociates

N/aN/aN/aDividends

£(40)m£(47)m£(45)mTOTAL

£(10)m£(7)m£(15)mPensions

£(30)m£(30)m£(30)mShare awards

N/aN/aN/aGoodwill

EarningsUPBTUOP

Underlying2004 impact:

Note – figures are unaudited

IFRS Reporting Timetable

2005 Interim results:Press release

Analyst presentation

2004 Pro-forma Accounts

2004 Report & Accounts

2004 Preliminary results:Press release

Analyst presentation

Information

H1

2005 & 2004

July 05

2004May 05

Guidance for 2004

2003 & 2004Apr 05

Guidance for 2004

2003 & 2004

2003 & 2004

Feb 05

IFRSUK GAAPDate

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