Financial Review

Americas beverages

£ millions	2004 (52 weeks)	Base Business	Acquisitions/ Disposals	Exchange	2005
Revenue	1,667	99	-	15	1,781
- year-on year change		+6%	+0%	+1%	+7%
Underlying Profit from Operations	497	24	-	3	524
- year-on year change		+5%	+0%	+0%	+5%
Underlying Operating Margin	29.8%				29.4%

Americas Beverages had another good year. Revenues grew by 6% for the year and 7% in the second half reflecting the combination of strong carbonated soft drink (CSD) performance and improving non-carbonated soft drink (non-CSD) sales.

In the US, CSD sales rose by 6%. We outperformed the US CSD market for the second year in a row, gaining 40 basis points of share to 17.0%. Performance was driven by a 6% volume growth in Dr Pepper which benefited from the national roll-out of Dr Pepper Cherry Vanilla, strong growth in diets and fountain. Performance of our flavour brands was impacted by 7 UP where volumes fell by 8%. Non-CSD performance in the US improved through the year with sales ahead by 4% in the year and 8% in the second half reflecting a strong performance from the core four brands (Snapple, Mott's, Clamato and Hawaiian Punch) and some sell-in to the trade ahead of Q1 2006 price increases. Sales in Mexico were up by 14%.

Margins were slightly lower year-on-year mainly due to the sharp increase in oil, glass, PET and transport related input costs. Price increases on our non-CSD portfolio were taken in late 2005 and early 2006 in order to recover these cost increases.