Working Together to Create Brands People Love
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working together to create brands people love Fact File 2002/3 our brands Cadbury Sch internationa confectioner loved brands worldwide. H our top sellin hweppes is a major al beverage and ry company, selling much s in over 200 countries Here we show some of ng brands. working together b to create people love brands e Working Together Cadbury Schweppes’ origins go back over 200 a leading brand in the profitable and high growth In the Middle East we sell Cadbury branded years. Jacob Schweppe perfected his process for premium ready-to-drink tea and juice sector of products as well as Bim Bim in Egypt. In Africa we manufacturing mineral water in Geneva in 1783; the beverage market. have operations across the continent, although our John Cadbury first started selling tea and coffee main activity is focused in South Africa where we in 1824 in Birmingham. Cocoa and chocolate, Our Mexico Beverages business, whose major are number one in confectionery as well as owning initially incidental, became Cadbury’s main business brands include the Peñafiel water range and a foods and beverages business, Bromor Foods. within a few years. carbonated soft drinks brands Squirt and Crush, will also join this regional unit from 2004. The two companies – Cadbury and Schweppes – merged in 1969 and since then we have expanded our business worldwide. The acquisition of Dr Pepper/Seven Up in 1995, our biggest step since the merger, transformed our opportunities European in beverages and made the Americas the most profitable region for us. In 2000 we extended americas e our position in this market further through the n bev rages acquisition of Snapple. We have developed our co fectionery chewing gum portfolio through the acquisition of Hollywood in France in 2000, Dandy, based in Denmark, in 2002 and, most recently, Adams, our biggest acquisition ever. Our key markets in this region are France, Spain gg q ygp We are combining our existing operations in and Germany, the largest soft drinks market in Organisation structure Canada, the US and Argentina with the Adams Europe. We sell carbonated soft drinks, mineral Cadbury Schweppes introduced a new, simpler confectionery companies in the Americas. 75% waters and still drinks and our principal brands organisation structure in February 2003, of Adams’ business comes from this region, with include Schweppes, Orangina, La Casera, designed to clarify accountability and enable Brazil and Mexico particularly important. In the Apollinaris, Oasis, TriNa and Pampryl. We have swifter decision-making. Five new regions are US the Cadbury, Peter Paul and York brands are bottling and partnership operations and license supported by five staff functions. The new global sold under licence. Cadbury Schweppes also our brands in other countries in this region. leadership team of ten key executives will report has manufacturing businesses in Canada and to the CEO to drive our growth and efficiency Argentina, and distribution operations in the US programmes as well as various integration and Mexico. Key Cadbury Schweppes brands sold programmes. in the region include Cadbury, Fry’s, Allan, Fuzzy Peach, Swedish Fish, Sour Patch Kids, Sharps, Stani, Beldent, Bazooka, Mantecol and Pascall. Asia c Ameri as Europe, pacific beverages middle east and africa We have confectionery businesses in Australia, New Zealand, Malaysia, Indonesia and China and confectionery a food and beverages business in Australia, Our core beverages market is the US, the largest Schweppes Cottee’s. We are also adding India and soft drinks market in the world. As well as Pakistan to this region. Throughout this region we carbonated soft drinks we offer a broad portfolio Our major confectionery operation combines our sell Cadbury branded products, as well as Trebor of still drinks, juices and water. We are combining Great Britain & Ireland, European and the majority and Pascall sugar confectionery, and the Sportlife our Dr Pepper/Seven Up (DPSU), Mott’s and of our current Africa, India and Middle East chewing gum brand in China. In the Australian Snapple businesses into one new refreshment business units. Our largest market in this region is beverages market we sell a range of products beverages company. This will generate cost savings the UK, where we sell brands under the Cadbury, including carbonated soft drinks, fruit juices as well as opportunities for growing revenue as Trebor, Bassett’s, Fry’s, Maynards, Sharps, Barratt and fruit flavoured drinks, water and flavoured we broaden our distribution reach across our and Butterkist names. Our famous portfolio dairy beverages under brand names including combined portfolio. DPSU’s brands include includes the ‘moulded’ chocolate range (Cadbury’s Schweppes, Solo, Spring Valley and Wave. We Dr Pepper, 7 UP, Schweppes, Canada Dry, A&W, Dairy Milk and its variants), TimeOut, Flake, Dream, are also licensed to distribute some of PepsiCo’s Hawaiian Punch, Squirt and Slush Puppie. Licensed Crunchie, Twirl, Caramel, Cadbury’s Easter Egg brands: Pepsi, Mountain Dew and Gatorade. products include Sunkist, Country Time and range, Roses, Miniature Heroes, Eclairs, Trebor Welch’s. DPSU operates as a licensor, selling Softmints, Trebor 24-7, Bassett’s Liquorice Allsorts concentrate to bottling and distribution operations and Maynards Wine Gums. including Dr Pepper/Seven Up Bottling Group, an independent bottling company in which we have a In continental Europe our key confectionery brands 40% interest. include Poulain, Hollywood and La Pie Qui Chante in France, Wedel in Poland, Dulciora in Spain, Mott’s produces Mott’s apple sauce and juice Cadbury in Russia, Stimorol across Europe, and the brands, Clamato, Hawaiian Punch and a variety chewing gums V6 in northern and western Europe of speciality products. Snapple Beverage Group and Dirol in eastern Europe. In Turkey we are the is a premium beverage company whose brands leading sugar confectionery company with Kent, include Snapple, Mistic, Stewart’s, Orangina, whose brands include Miss, Elegan and Jelibon and Yoo-Hoo and Nantucket Nectars. Snapple is Relax gum. Financial Highlights 2002 2001 % Sales £m 5,298 4,960 + 7 † Underlying Operating Profit* £m 1,041 992 + 5 Underlying Profit 935Before 886 + 6Tax*£m Underlying EPS*pence 32.0 30.0 + 7 Basic EPS pence 27.4 27.0 + 1 Dividends per share pence 11.5 11.0 + 5 *Excludes goodwill amortisation, major restructuring charges and disposal gains/losses † Includes associates Strategic development Acquisitions Our governing objective is growth in shareowner 2002 saw this programme continue with a series value. In pursuit of this, our strategy over the last six of acquisitions both in beverages and years has been to focus on developing robust and confectionery. In beverages we acquired Squirt in sustainable regional positions in the markets in Mexico, Nantucket Nectars in the US, consolidating which we operate. We have done this through our premium juice business, and purchased full organic growth and by acquisition, in order to control of our Apollinaris Schweppes joint venture broaden the markets in which we participate in Germany, Europe’s largest soft drinks market. and to widen our portfolio, so reducing our dependence on carbonated beverages and In confectionery we bought out most of the chocolate. minority shareholders in Cadbury India, one of our key developing markets. We acquired Kent, Turkey’s Robust and sustainable leading sugar confectionery business and a major Six years ago our beverage business had 77% of its part of our expanding European confectionery sales in carbonated beverages and operated on a business. And in Denmark we bought Dandy, global basis. Today our refreshment beverages consolidating our position as number two in the portfolio ranges from still drinks, juices and water overall European chewing gum market. to carbonated, with the latter now only representing 56% of that total. Today we operate The total spent on these and other value creating in three main geographies – North America, acquisitions during the year amounted to Europe and Australia. And in most of these markets £628 million. Finally, we made a successful offer to we have pushed our market shares close to 20%. purchase the Adams confectionery business, which We are still number three, but a much stronger will make us the world’s leading confectionery number three than we were six years ago, with a company. strengthened route to market. 2002 overview In confectionery, we have evolved from a reliance 2002 was another good year for Cadbury on chocolate to one where we will have a full Schweppes. Once again we exceeded our financial range of confectionery products encompassing targets for both underlying earnings growth and chocolate, sugar, medicated and functional generation of free cash flow. At constant exchange confectionery and chewing gum. Following the rates underlying earnings rose 11% and free cash acquisition of Adams, Cadbury Schweppes flow was £315 million. A highlight of the year was will be a global operator in a very strong the strong growth of our core confectionery competitive position with huge potential to operations, benefiting from recent years’ high cross-sell our different portfolios in a great variety levels of investment in growth and efficiency of markets. projects. Key acquisitions and disposals Since the mid 1980s Cadbury Schweppes has expanded throughout the world by a programme of acquisitions and disposals to allow us to concentrate on core brands in the confectionery and soft drinks markets. 1986 Streamlined our strategic focus on soft drinks and confectionery with the sale of Typhoo Tea, Kenco Coffee and Jeyes cleaning fluid. Acquired Canada Dry and the rights to the Sunkist soft drinks brand. (Sunkist is a registered trademark of Sunkist Growers Inc.) o 1987 Coca-Cola & Schweppes Beverages joint venture acquisition f adams created within Great Britain. Red Tulip confectionery brand acquired in Australia. 1988 Chocolat Poulain acquired in France. Licensed our Adams transforms the scale of our confectionery and sugar free gum in the world.