Cadbury Schweppes, the world's biggest maker of chocolate, said today that net profits plunged by 65% last year as the results were skewed by the 2006 sale of its Europe Beverages unit.
Net profits crumbled to £407m sterling in 2007, compared with £1.165 billion in 2006, the group said in an annual results statement.
British group Cadbury added that pre-tax profit sank by 9% last year to £670m, as it also took a big hit from ongoing restructuring. Sales rose by 7% to £7.971 billion.
Cadbury Schweppes' American CEO Todd Stitzer said the sales rise reflected restructuring initiatives undertaken between 2003 and 2007 and continued investment behind its brands.
'Although the economic outlook for 2008 remains uncertain, we are encouraged by the good trading momentum we have seen in the new year and our continued progress on cost reduction initiatives. We expect meaningful margin progression in 2008,' Stitzer said.
Cadbury said today that it would demerge its US drinks arm, Americas Beverages, later this year. The group decided last year to split off, rather than sell, its US drinks division because of turbulent conditions in the debt markets that had hampered potential bidders.
The company said there would be no capital return to shareholders following the demerger of Americas Beverages.
Stitzer said the demerger would become effective by the end of the second quarter.
The confectionery business, to be named Cadbury, would be listed in London. The beverages business would be renamed Dr Pepper Snapple Group and be listed on the New York Stock Exchange.
In 2006, Cadbury sold its European drinks business, including the brands Schweppes, Orangina and Oasis, to investment funds Blackstone Group International and Lion Capital for £1.3 billion.
