Cadbury confident despite Kraft bid

By Carina Perkins

- Last updated on GMT

Related tags Cadbury Management

Cadbury has given a confident presentation of its stand-alone strategy in the midst of speculation that the company is unlikely to hold onto its independence following Kraft’s failed take-over bid.

Speaking at the Sanford Bernstein Conference yesterday, the company’s chief executive Todd Stitzer insisted that Cadbury has a “clear strategy”​ to drive growth in the global confectionary market.

He said that the “dynamic” business platform developed under its 2007 Vision to Action plan has put Cadbury in a strong position and predicted that the by the end of the plan, the company will be leaner and more flexible, with the “vision and innovation to seize the opportunities that arise and the scale and financial strength to do so.”

Stitzer’s confident comments come following predictions that the Cadbury’s rejection of Kraft’s bid would trigger a bidding war between the world’s leading confectionery producers, such as Nestle and Hershey.

Cadbury’s board of directors rejected Kraft Food’s initial bid out of hand, arguing that offer of £7.45 per share ($12.30) significantly undervalued the Cadbury business. Analysts warned that the board would need to justify its decision with a “compelling strategy”​ for future growth.

Strategy for future

Stitzer began his presentation by outlining Cadbury’s successes so far, identifying strong earnings growth and increased dividends as signs of success, adding that free cash generation should be increasingly strong from 2010.

He pointed out that predictions for the future confectionary market are good, adding that Cadbury is well placed to take advantage of any increases in consumer spending.

Laying out the strategic choices that Cadbury is making to drive its growth and market share, Stitzer said that the company will focus on strengthening its routes to market and capitalizing its position in emerging market such as India, South America and South Africa.

He said that the company would strive to deliver an innovative marketing and product development, and that acquisitions may have an important role to play.

“I hope you see, as clearly as we do, that we have a strong range of exciting growth opportunities to capitalize on,”​ he said.“At the same time we are reducing our costs and making some significant improvements. Taken together, our exciting revenue growth opportunities and robust cost reduction plans give us confidence that we will deliver our Vision into Action plan.”

Stitzer concluded by stating that Cadbury has plans to develop the business further to capitalize on its strong position, which it will share over the next few months.

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