Executive summary
| 2006 £m |
2005 re-presented £m |
Reported currency growth % |
Constant currency2 growth % |
|
|---|---|---|---|---|
| Revenue | 7,427 | 6,432 | +15 | +16 |
| Underlying profit from operations1 | 1,073 | 1,025 | +5 | +6 |
| Underlying operating margin | 14.4 | 15.9 | ||
| Profit from operations | 909 | 995 | -9 | -7 |
| Underlying profit before tax1 | 931 | 865 | +8 | +9 |
| Profit before tax | 738 | 835 | -12 | -10 |
| Discontinued operations | 642 | 76 | ||
| Underlying EPS1&3 | 31.6 | 33.9 | -7 | -5 |
| Reported EPS3 | 56.4 | 37.3 | ||
| Dividend per share | 14.0p | 13.0p | +8 | n/a |
| 1 | A full reconciliation between Underlying and reported measures is included in the segmental analysis on pages 109 to 110 and Note 13 on page 127. |
|---|---|
| 2 | Constant currency growth excludes the impact of exchange rate movements during the period. |
| 3 | In this review, EPS is presented on a basic total group basis and therefore includes the earnings contribution from the discontinued beverage businesses in Europe, South Africa and Syria. All other amounts are presented on a continuing basis. |
Revenue in 2006 was £7,427 million. This was £995 million, or 15%, higher than in 2005. The net effect of exchange movements during the year decreased reported revenue by £60 million (or 1%), mainly driven by a weakening in the US Dollar, the Australian Dollar and the South Africa Rand.
In 2006, acquisitions, net of disposals, resulted in a £799 million increase in reported revenue relative to the prior year. The most significant acquisitions were Dr Pepper/Seven Up Bottling Group (now named Cadbury Schweppes Bottling Group or CSBG), which was acquired in May 2006, and Cadbury Nigeria in which we increased our stake from 46% to just over 50% in February 2006.
Base business revenue grew £256 million or 4%, with growth in all four of our continuing business segments, led by Americas Confectionery and Asia Pacific.
Underlying profit from operations (profit from operations before restructuring costs, non-trading items, UK product recall, amortisation and impairment of intangibles and the IAS 39 adjustment) was £1,073 million. This was £48 million or 5% higher than in 2005.
Consistent with the impact on revenue, currency movements had a £14 million (or 1%) adverse impact on Underlying profit from operations. The full-year impact of acquisitions, net of disposals, was £18 million due primarily to CSBG and Cadbury Nigeria.
After allowing for these items the base business grew by £44 million or 4%. Further explanations of these movements are set out in the business segment performance analysis starting on page 78.
Profit from operations at £909 million was down £86 million (9%) compared to 2005. This was principally driven by a £62 million increase in restructuring costs, the £30 million impact of the UK product recall, a £17 million increase in the amortisation of acquisition intangibles, a £15 million impairment of goodwill recognised in respect of Cadbury Nigeria and a £25 million decrease in the IAS 39 adjustment partially offset by the £48 million increase in Underlying profit from operations.
Reported profit before tax decreased by 12% to £738 million. The decrease reflected the decrease in profit from operations and a decrease in our share of our associates' profits partially offset by a decrease in net finance costs.