Summary Financial Statement 2006

Operations

Our global business is divided into four major operating regions. Three of these – our Americas Confectionery and Beverages businesses and Asia Pacific – performed strongly in 2006 and delivered handsomely against their key financial targets. It is a particular pleasure to report how well our Adams acquisition has now been integrated into our confectionery businesses around the world and what an important contribution it continues to make to our accelerated revenue growth.

Our EMEA business (Europe, Middle East and Africa) had a more difficult year as it dealt with the triple impact of a slow start to the year, a major product recall in the United Kingdom in the summer and the discovery of accounting irregularities in our majority-owned Nigerian business in the autumn. We have dealt with the implications of all these issues and the lessons learned have been applied across the whole of our business.

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Strategy

We are committed to building a global confectionery business based on the three components of chocolate, chewing gum and sugar confectionery. While our focus has continued to be on the development of the Adams business, we made a number of small acquisitions during the year, notably Dan Products in South Africa, increased our holding in our Kent business in Turkey to 95% and moved to a majority holding in Cadbury Nigeria. We also continued to dispose of businesses which do not fit naturally into our confectionery and beverages portfolio, for instance, Bromor Foods in South Africa, Holland House Cooking Wines and Slush Puppie in the US.

In beverages, we have continuously sought to exit those markets where our competitive position is not sufficiently robust and to strengthen our regional presence in those markets where it is. To this end, in February we completed the sale of our beverages business in Europe and later in the year also sold our beverage operations in Syria and South Africa. Our beverage portfolio is now concentrated in the US, Canada, Mexico and Australia and accounts for nearly 50% of our total operating profit.

We further bolstered our US business through the acquisition of the Dr Pepper/Seven Up Bottling Group in which we had previously held a minority stake. Ownership of this and other acquired bottling businesses allowed us to consolidate our brand ownership and bottling assets in the US into one cohesive unit, thus creating a far stronger amalgamation of strategic purpose, route-to-market and cost savings. Integration of these businesses has proceeded most effectively and made a positive contribution to earnings within the year.

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Corporate and Social Responsibility

Cadbury Schweppes regards itself as an integral part of the economies in which it operates. In each we seek to provide employment, opportunity, contribution to local tax revenues and to have a community of interest with all sectors of the societies in which we are present. Our commitment to minimising the impact of our operations on the environment and the work of our community programmes in their outreach to the disadvantaged are illustrations of this purpose.

Our biennial Corporate and Social Responsibility Report was published this year and expands on these matters in substantial detail.

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Reputation

Our reputation is of crucial importance to the Company and everybody who works in it. Very occasionally we make mistakes, as evidenced in the events that led to the product recall in the United Kingdom in the summer. Such events are extremely rare and when they do occur we seek to learn every possible lesson from them to ensure that there can be no repetition. Every employee in the Company, individually and collectively, has a role as guardian of our reputation and I know they share with me a deep concern to ensure that we do not let consumers and ourselves down.

We now employ over 70,000 people around the world and my and the Board's thanks go to them for this stewardship and for their contribution to a successful 2006. Their standing, and the constancy of this delivery, was recognised for the 11th year in a row as Cadbury Schweppes was voted amongst the top ten in Management Today's peer poll of Britain's Most Admired Companies.

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Board changes

We welcomed Sanjiv Ahuja to the Board in May and Ray Viault in September, both as non-executive Directors. Sanjiv brings entrepreneurial insight and international business perspectives and Ray depth of experience in the fast moving consumer goods industry with particular knowledge of the United States. In February 2007, we announced the appointment of Ellen Marram as a non-executive Director with effect from 1 June 2007. Ellen has a highly successful background in beverages and related industries in the US.

At the end of 2006, Baroness Wilcox resigned after almost ten years' service. We are hugely indebted to Judith for her support and contribution over that period, and particularly for chairing our Corporate and Social Responsibility Committee from its inception and for her work in engaging with minority interests both outside and within the Company.

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Dividend

The Board will be proposing a final dividend of 9.9 pence, an increase of 10%, bringing the total increase for the year to 8%. This reflects a decision by your Board to increase the proportion of profits paid back to shareowners through dividends.

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Outlook

We expect another good year of revenue growth in 2007, supported by a broad innovation programme. We are making a substantial investment in organic growth opportunities including the launch of chewing gum in the UK. While we are seeing increased costs in our beverages operations in 2007, we continue to implement cost reduction opportunities both from our Fuel for Growth and other efficiency programmes.

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