Summary Financial Statement 2006
Americas Beverages
Americas Beverages sells carbonated and non-carbonated drinks in the US, Canada and Mexico. In carbonates, it has leading brands in the flavours (non-cola) category, including Dr Pepper, 7 UP, A&W, Sunkist, Peñafiel, Schweppes and Canada Dry. Its non-carbonate brands include still fruit juices, iced teas and water, with Snapple, Mott's, Hawaiian Punch and Clamato being the four largest brands. It also distributes brands owned by third-parties, such as Monster energy drink, Glaceau vitamin water and Fiji mineral water.
| £ millions | 2005 | Base business |
Acquisitions/ Disposals |
Exchange | 2006 |
|---|---|---|---|---|---|
| Revenue | 1,781 | 62 | 738 | (15) | 2,566 |
| —year-on-year change | +3% | +42% | -1% | +44% | |
| Underlying profit from operations | 524 | 35 | 29 | (4) | 584 |
| —year-on-year change | +7% | +5% | -1% | +11% | |
| Underlying operating margin | 29.4% | 22.8% | |||
| —Excluding CSBG | 29.4% | 30.2% |
| 35% Share of Group revenue |
47% Share of Group profit* |
|
* Underlying profit from operations, excluding central costs
Americas Beverages delivered good revenue and profit growth despite declining volumes in the US carbonated soft drinks market, significant cost headwinds and considerable organisational change as the bottling acquisitions were integrated. Performance benefited both from further successful innovations and from greater focus and alignment through our newly consolidated bottling operations.
In the US, our share of the carbonated soft drinks market grew by 60 basis points, the third successive year of share increases. Volumes and shares were ahead for nearly all of our key flavour brands - Dr Pepper, Sunkist, A&W and Canada Dry. 7 UP volumes were down for the year as a whole, but ahead 7% in the second half following its reformulation and relaunch as 7 UP Natural. Dr Pepper volumes benefited from continued gains in fountain, particularly for Diet Dr Pepper. Non-carbonates revenues were up 2%, with the core four brands (Snapple, Mott's, Hawaiian Punch and Clamato) ahead by 3%. Snapple was flat for the year as a whole with a better second half following the launch of a range of Snapple super-premium teas.
Mexico grew at double-digit rates, although the second half was more difficult as competitive activity became more aggressive.
The integration of Dr Pepper/Seven Up Bottling Group and the other bottler and distribution businesses, now collectively known as Cadbury Schweppes Bottling Group (CSBG), is on track. The financial results for 2006 were in line with the acquisition case and we began to see the strategic benefits of the acquisition in terms of: reduced complexity and costs; aligned brand and channel strategies; and better engagement with, and service to, our retail partners.
