Morgan Stanley Global
Consumer Conference
Todd Stitzer
3 November, 2004
3
Changing Times, Constant Values
AGENDA
• Advantaged business model
• Update on progress against goals and priorities
4
Long Established Brands
1927
1871
17831885
19051905
1824
5
Portfolio Development
• Business significantly strengthened through M&A
• Acquired
- Snapple (2000)
- Hollywood (2000)
- Orangina (2001)
- Dandy (2002)
- Adams (2003)
• Sold
- Beverage operations in over 160 countries (1999)
6
Strong Positions in all Geographies and Product Categories
Hershey
Mars
Wrigley
Nestle
CS
23.0%
19.9%
5.7%
5.3%
5.2%
Share (%)N.America
CS
Nestle
Kraft
Mars
Hershey
Wrigley
16.4%
8.6%
4.3%
2.8%
2.7%
1.8%
Share (%)Latin.America
CS
Nestle
Mars
Ferrero
Kraft
Wrigley
10.3%
10.1%
8.0%
7.3%
7.1%
4.4%
Share (%)EMEA
Lotte
CS
Meiji
Nestle
Mars
Perfetti
11.5%
8.8%
5.0%
4.5%
3.9%
3.7%
Share (%)Asia Pacific
Chocolate
Sugar
Gum
Total Confectionery
#1 and #2 share positions in
top confectionery markets
Source: Euromonitor 2003/2002
14
15
29
23
7
Multi-Category Participation
UK
France
Spain
Poland
S.Africa
US
Canada
Mexico
Brazil
Australia
Japan
Thailand
India
Chocolate Sugar GumKey Markets
EMEA
Americas
Asia Pac
8
Focusing our Beverage Investments
still
carbonate
0%
20%
40%
60%
80%
100%
1997 2003
still
carbonate
Sales Contribution by Product • Focus on Americas, Europe,
Australia
• Acquisitions broadened product
portfolio in scale markets
• CSD positions: Number 2
- France, Australia
• CSD positions: strong number 3:
- US, Mexico, Canada, Spain
9
Advantaged Business Model
• Attractive and growing markets
• Expandable consumption
• Strong positions
• Impulse categories less exposed to retail consolidation
• High barriers to entry
Attractive and Resilient Returns
10
Organisational Change
• Comprehensive structural and leadership change
• Consolidated operational structure
• Increased scale of each regional operating unit
• Separated supply chain management from commercial
management
11
Our Goals and Priorities
5. Reinforce reputation with
employees and society
• Ratchet up innovation
• Hone people and systems capabilities
4. Ensure our capabilities are
best in class
• Integrate North America Beverages
• Integrate Europe Beverages
3. Profitably secure and grow
regional beverages share
• Integrate Adams and “Beat the Model”
• Execute “Smart Variety”
2. Profitably and significantly
increase global
confectionery share
• Deliver annual contract
• Execute “Fuel for Growth”
1. Deliver superior
shareowner performance
• Motivate, develop & reward our people
• Continue high CSR standards
12
TSR Performance
* All assuming constant currencies 5
Peer Group TSR Performance 2004 Year to Date
-20%
-10%
0%
10%
20%
30%
40%
Cok
eUnileve
rColga
teNes
tle
CCE
Diage
oGile
tte
Cam
pbell
Dan
one
Heinz
CSM P&G
Con
agra
Kraf
t
Peps
iSa
ra le
e
CS
Allie
d
Scot
tish
& N
ewca
stle
Kello
gg
PBG
Wrigley
Reck
itt
ABF
Pern
odHer
shey
Tate
Lind
tTotal Shareowner Return
(%
)
Cadbury Schweppes
13
Financial Goals: 2004 - 2007
• Operating margin growth of 50 – 75* basis points pa
• Net sales value growth of 3% - 5%* pa
• Free cash flow of £1.5bn* over the period
* All assuming constant currencies 5
14
Execute “Fuel for Growth”
• Targeting a 10% reduction in direct and indirect costs
− 20% reduction in factory base
− 10% reduction in headcount
• Savings across: supply chain; commercial; back office
• Total cost of £900m over 4 years
− £450m in restructuring
− £450m in capital spend
• Up to a third of benefits reinvested in top line growth
• Operational gearing from volume growth
£400m pa reduction in costs by 2007
15
2003/4 Announced in 2003/4
completed (yet to be completed)
Factory closures 7 7
• All regions on track with their plans
• £25m of cost savings in 2003; £75m expected in 2004
Execute “Fuel For Growth”:Progress
• Creating manufacturing centres of excellence
• Shared Business Service Centre in US
16
Our Goals and Priorities
5. Reinforce reputation with
employees and society
• Ratchet up innovation
• Hone people and systems capabilities
4. Ensure our capabilities are
best in class
• Integrate North America Beverages
• Integrate Europe Beverages
3. Profitably secure and grow
regional beverages share
• Integrate Adams and “Beat the Model”
• Execute “Smart Variety”
2. Profitably and significantly
increase global
confectionery share
• Deliver annual contract
• Execute “Fuel for Growth”
1. Deliver superior
shareowner performance
• Motivate, develop & reward our people
• Continue high CSR standards
17
Confectionery Share Gains
EuropeUK: Cadbury Dairy Milk +1.5 ptsFrance: Poulain +1.0 ptsFrance: Hollywood + 2.6 pts Spain: Trident: +2.7 pts
North AmericaCan: Trident +4.4 ptsUS: Trident +0.6 ptsUS: Dentyne +0.3 ptsMexico: Trident +1.4 ptsMexico: Clorets + 0.3 pts
Latin AmericaBrazil: Trident +2.3 ptsBrazil: Clorets +0.6 ptsVenezuela: Trident +3.0 ptsColombia: Trident +3.4 pts
Asia Pacific: –Aus: CDM + 3.0 ptsJapan: Whiteen +1.2 ptsThailand: Trident +2.9 pts Thailand: Clorets + 3.1 pts
Souce: Nielsen/IRI for 2004 YTD
18
Adams Integration
• Performance in line with acquisition case
• Cost synergies being generated
− Country integrations ahead of schedule
− Transition from Pfizer systems in the US successful
• Beginning to capture revenue synergies
• Base business performance improved
19
Improvement in US Gum
90
95
100
105
110
115
120
Sales M
AT Dec 00 =
100
US Gum Sales
Dec 00 June 04
20
“Smart Variety”
• Powerful offer of local and regional brands
• “Smart Variety” leverages the advantage of
− Range of our products
− Geographic reach
− Strong routes to market
• Commercial and manufacturing benefits
21
Cadbury Dairy Milk - Australia
0
50
100
150
200
250
'99 '00 '01 '02 '03
Cadbury Scan Sales Growth
Values $ M
illion
+12%
+6%
+16%
+8%
H1 2004 +15%
22
Cadbury Dairy Milk - UK
23
Cadbury Dairy Milk - UK
0%
5%
10%
15%
20%
25%
CDM growth in year pre- and post- relaunch
+14%
+22%
To Sept 2003 To Sept 2004
24
Masterbrand Share of Voice
11.5
22.6
0
5
10
15
20
25
Cadbury Master brand Share of Voice in Chocolate
%age Share of
Voice
2003
2004 F'cast
25
Hollywood Masterbrand
26
Gum Share in France
51.0
45.3
5.7
51.0
47.0
4.0
52.9
49.9
3.0
Wrigley’s
- Freedent
- Other brands
48.3
34.2
14.1
47.5
30.8
16.7
45.4
32.1
13.3
Others 0.7 1.5 1.7
2002 2003 2004 Ytd
Cadbury Schweppes
- Hollywood
- Other brands
Source : Nielsen Grocery – Market share in value
27
France Market Share
Nestlé : 11.4 %
Ferrero : 10.8 %
Kraft : 10.3 % Lindt : 7.7 %
Wrigley’s : 7.2 %
Mars : 6.1 %
Haribo : 2.5 %
Others : 16.3 %
PLB : 9.9 % Cadbury : 17.8 %
Source : Nielsen Grocery 2003 – Market shares in value
28
Multi-Category Promotion
29
Smart Variety in Gum
France: Hollywood Spain: Trident
30
Smart Variety in Gum
31
Smart Variety with Halls
32
Smart Variety in Sugar
33
The Natural Confectionery Range
34
Our Goals and Priorities
5. Reinforce reputation with
employees and society
• Ratchet up innovation
• Hone people and systems capabilities
4. Ensure our capabilities are
best in class
• Integrate North America Beverages
• Integrate Europe Beverages
3. Profitably secure and grow
regional beverages share
• Integrate Adams and “Beat the Model”
• Execute “Smart Variety”
2. Profitably and significantly
increase global
confectionery share
• Deliver annual contract
• Execute “Fuel for Growth”
1. Deliver superior
shareowner performance
• Motivate, develop & reward our people
• Continue high CSR standards
35
Continued Recovery in Dr Pepper
IH ‘03 2H ‘03 IH 2004
Y-o-Y
Chg (%
)
-4.0%
-2.0%
0.0%
2.0%
4.0%
36
Growth in Diets
• CSAB has 6 of the top 10 non-
cola diet brands in the US
• 23% growth in diet CSDs led
by Dr Pepper and Diet Rite
• Under represented versus the
market30%+9%Total Market
22%+23%DPSU Diets
100%+64%Diet Rite
28%+33%Diet A&W
30%+0%Diet 7 UP
21%+18%Diet Dr Pepper
Diet % of Total
IH growthBrand
14%+70%Diet Sunkist
Source: DPSU/Nieslen/Beverage Digest
37
Flavour Brand Growth
-10%
-5%
0%
5%
10%
IH 03 2H 03 1H 04
YOY Volume Increase %
Flavours including 7UP
Flavours excluding 7UP
38
Re-focussing on non CSDs
39
European Beverages
• Poor summer weather – markets
down significantly
• Smooth transition of Orangina
plants into bottling joint venture
• New management team in place
in Germany
40
Our Goals and Priorities
5. Reinforce reputation with
employees and society
• Ratchet up innovation
• Hone people and systems capabilities
4. Ensure our capabilities are
best in class
• Integrate North America Beverages
• Integrate Europe Beverages
3. Profitably secure and grow
regional beverages share
• Integrate Adams and “Beat the Model”
• Execute “Smart Variety”
2. Profitably and significantly
increase global
confectionery share
• Deliver annual contract
• Execute “Fuel for Growth”
1. Deliver superior
shareowner performance
• Motivate, develop & reward our people
• Continue high CSR standards
41
Enhanced Commercial Capability
• Global Head of Science and Technology appointed
• Investment in:
- Consumer segmentation in confectionery
markets
- Innovation management software
42
Beverage Innovations
43
Masterbrand Innovation: Expanding Footprints
44
Masterbrand Innovation: Driving Value
£1.29 RSP £1.75 RSP
34p RSP
51p RSP
45p RSP
£2.25 RSP
45
Our Goals and Priorities
5. Reinforce reputation with
employees and society
• Ratchet up innovation
• Hone people and systems capabilities
4. Ensure our capabilities are
best in class
• Integrate North America Beverages
• Integrate Europe Beverages
3. Profitably secure and grow
regional beverages share
• Integrate Adams and “Beat the Model”
• Execute “Smart Variety”
2. Profitably and significantly
increase global
confectionery share
• Deliver annual contract
• Execute “Fuel for Growth”
1. Deliver superior
shareowner performance
• Motivate, develop & reward our people
• Continue high CSR standards
46
Share Price Performance
280
330
380
430
480
530
Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04
CS Share Price (p)
47
Corporate Social Responsibility
48
Cadbury Schweppes Today
• Advantaged Business Model
• Unique portfolio of brands
• Attractive, growing categories
• Strong platform to exploit potential
• Clear goals and priorities
1905 2005
49
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.