Upgrades guidance* for revenue growth and margin improvement
HIGHLIGHTS
Third quarter revenue growth of 7% in constant currency
Good growth in Chocolate (up 7%), led by continued strong performances in the UK, India and South Africa Improved growth in Gum (up 4%) and Candy (up 11%) reflecting strong performances in emerging markets and growth in North America and Europe Excellent growth in Britain & Ireland (up 10%) and emerging markets (South America up 18%, Asia and Middle East and Africa up 14%) Year to date revenue growth of 5%, ahead of previous guidance for the yearYear to date underlying operating margin growth of over 180 bps underpinned by a strong third quarter
Year to date gross margin improved by 20bps on a constant currency basis Marketing investment as a percentage of sales was 10.4% on a constant currency basis reflecting the benefits of media deflation. Absolute marketing spend in the quarter was unchanged compared to the prior year Year to date savings from Vision into Action plan reduced SG&A costs by c.110 bpsUpgraded guidance* for 2009 with our Vision into Action plan well on track to deliver its goals
2009 revenue growth in constant currency now expected to be around the middle of our 4-6% goal range Improved momentum increases our confidence in good revenue growth in 2010 and 2011 2009 underlying operating margin expected to improve by at least 135bps in constant currency from 11.9% in 2008 Excellent margin progress in first two years of the plan, combined with the benefit of expected supply chain and SG&A savings, reinforces our confidence in achieving good mid-teens margins by 2011Todd Stitzer, Cadbury’s CEO said: “We have great momentum in our business and our confectionery strategy continues to yield benefits beyond expectations. In the third quarter we have delivered growth in every category and every business. At the same time, we have maintained our investments in innovation and marketing to reinforce our commitment to delivering future growth.

As a result, despite lapping strong fourth quarter comparatives from 2008, we are increasing our guidance for revenue growth to be around the middle of our 4-6% goal range for the year as a whole and our underlying operating margin improvement to be at least 135bps in constant currency in 2009.”*

Roger Carr, Chairman of Cadbury, added: “The strength of our operating performance continues to underpin the Board's confidence in both our growth prospects and the potential for creating further, material shareholder value as a pure play standalone confectionery business".

Except where stated, all percentages and comments on movements in revenue and margins relate to the group’s continuing operations, are calculated using constant currency and exclude the impact of acquisitions and disposals. Underlying operating margin is calculated as underlying profit from operations as a percentage of revenue.

* This statement includes a profit forecast (the “Profit Forecast”) for the purpose of Rule 28 of the City Code. As such, it is a requirement that this statement be reported on by the Company’s reporting accountants and financial advisers in accordance with Rule 28 of the City Code. The bases and assumptions behind the guidance statements are set out in Appendix 1 of this release. The reports of the reporting accountant and financial advisers are set out in Appendices 2 and 3 respectively of this release. The reporting accountant and financial advisers have given and not withdrawn their consent to publication.