Sugar boost

27 October 2003

Todd Stitzer is squeezing out £400m of costs and reinvesting a third of the savings in boosting growth. To some extent, this is catching up with rivals’ best practice. If he succeeds, Cadbury could close the valuation gap with its competitors.

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Cadbury Schweppes announced a fouryear cost cutting programme on Monday. The UK confectionary company's Fuel for Growth plans to cut £400m a year by 2007, cut 10% of its workforce and close 20% of its factories worldwide. It will invest up to onethird of the benefits from its cost reduction programme into a new marketing and innovation initiative called Smart Variety.

The company expects to reach net sales growth of 3% to 5% each year, increase underlying operating profit margins every year, and achieve free cash flow of £1.5bn between 2004 and 2007.

In March Cadbury acquired chewing gum company Adams for $4.3bn.

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