Cadbury results beat expectations
Cadbury, the owner of Dairy Milk, Wispa and Trident brands, has reported “excellent” third quarter results, beating expectations as revenue rose 7%.
The company increased its full year sales and margin targets and says it expects to report full year revenue growth at around the middle of its 4-6% goal and improve its operating margin from 11.9% in 2008.
The company says “the benefits of our standalone, pure play confectionary strategy continue to exceed expectations”
Cadbury’s strong Q3 performance puts pressure on Kraft to offer a significantly higher bid for the confectionary company.
Performance was boosted by growth in gum, up 4% thanks in part to the launch of Trebor gum in the UK and Trident Layers in the US, while the company claims chocolate and candy benefited from the stay-at-home trend.
Marketing spend for the period remained unchanged on the previous year, but costs were reduced as a result of media cost deflation.
Todd Stitzer, Cadbury’s CEO says: “We have great momentum in our business and our confectionery strategy continues to yield benefits beyond expectations. We have maintained our investments in innovation and marketing to reinforce our commitment to delivering future growth.”
In September, Cadbury rejected a £10.2bn takeover bid from US food company, Kraft. In an open letter, Cadbury chairman Roger Carr called Kraft’s offer an “unappealing prospect” that would absorb the confectionary maker into a “low growth, conglomerate business model”.
Under UK legislation, Kraft must make a second formal bid by 9 November or hold fire for six months.
Kraft is expected to report Q3 results on 3 November.
