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Cadbury Schweppes shareholders today (Friday 11 April) approved the demerger of the group’s American beverage business from its core confectionery operations by a 99.75% landslide vote during the annual meeting. There were no abstentions and only 0.25% of votes against the plan.

Earlier in the day, Cadbury reported a disappointing performance by the Americas Beverages unit during the first quarter of 2008, although the confectionery operations grew strongly. Confectionery sales rose 7%, with price increases offsetting higher commodity costs and economy measures improving profit margins. However, revenue from the drinks business grew only 3% – or 1% on a like-for-like basis, excluding acquisitions and currency effects.

The company said Americas Beverages had suffered from the loss of glacéau distribution rights to Coca-Cola bottlers, and a change in the timing of annual price increases for concentrate. Sales were also hit by Cadbury’s decision to raise beverage prices 4%, to offset increased commodity costs, while its bigger rivals Coca-Cola and PepsiCo raised prices only 2%.

The share of Dr Pepper and other carbonates in the Americas Beverages portfolio “fell modestly,” but the core non-carbonates Snapple, Mott's and Clamato continued to perform strongly. “We confirm our previous 2008 guidance of business revenue growth of 3-5% , and underlying margins modestly lower year-on-year,” said the company.

Cadbury Schweppes CEO Todd Stitzer commented: "We have had a strong start to the year in confectionery, with revenues in the first quarter driven by excellent performances from our gum and emerging market businesses, and higher pricing to recover increased commodity costs. Americas Beverages is performing in line with expectations, with revenues benefiting from good growth in our core non-carbonate brands.

"While the economic outlook in 2008 is challenging, we are encouraged by the performances of our confectionery and Americas Beverages businesses, and the continued progress being made on their separate strategic agendas.”

Now the demerger has been approved by shareholders, Cadbury Schweppes’ vast global confectionery business will be listed on the London Stock Exchange as Cadbury plc from 2 May, while Americas Beverages will become the Dr Pepper Snapple Group (DPSG), an independent US-based company listed on the New York Stock Exchange from 7 May.

There will be no cash payout to Cadbury Schweppes stockholders, to avoid saddling DPSG with a heavy burden of debt. But in exchange for every 100 existing Cadbury Schweppes shares, stockholders will receive 64 shares in Cadbury plc and 12 shares in DPSG