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Cadbury plc (CBRY)

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Monday 14 December, 2009

Cadbury plc

Cadbury Issues Defence Document

14December 2009

                        Cadbury Issues Defence Document                        

         Announces higher Vision into Action targets for 2010 to 2013          

                 Confirms Q4 trading in line with expectations                 

                         Reconfirms guidance for 2009                          

The Board of Cadbury plc ("Cadbury" or the "Company") is today publishing its
shareholder circular (the "Circular") in response to the offer (the "Offer")
posted by Kraft Foods Inc. ("Kraft") on 4 December 2009. As stated in Cadbury's
announcement on 9 November 2009, the Board unanimously rejects Kraft's wholly
inadequate offer as it substantially undervalues Cadbury and recommends
shareholders reject the Offer.

The Board is committed to maximising shareholder value and believes that this
is best achieved through the strong continuing performance of an independent

  * Cadbury is a business with exceptional growth opportunities, reflecting its
    strong position as a unique pure-play confectionery business, with iconic
    brands and leading positions in the attractive confectionery market
  * Cadbury has also built the leading position in emerging markets, which has
    driven significant revenue growth and which we expect to drive strong
    growth in the future
  * The first two years of Vision into Action have transformed Cadbury into a
    financially stronger, more competitive business which has delivered ahead
    of our plan
  * Kraft's offer fails to recognise the value of Cadbury's performance to date
    and the benefits of completing the Vision into Action plan set out in June
  * Following a mid-term review of our plan, started in Spring 2009, we are
    today setting out upgraded targets for the next four years which are
    expected to deliver significant additional value. New long-term targets
  * Organic revenue growth of 5-7% per annum
  * Improved margins of 16-18% by 2013
  * 80-90% operating cash conversion from 2010
  * Double digit growth in dividends per share from 2010 onwards
In addition to the announcement of its new Vision into Action targets, Cadbury
has today provided an update on current trading and guidance for 2009, the text
of which is included below.

Roger Carr, Chairman of Cadbury, said "Cadbury is an exceptional business worth
much more than the offer put forward by Kraft. It is clear to all that Cadbury
is a particularly attractive asset in the sector with iconic brands, a sharp
category focus and an enviable geographic footprint."

"We believe our shareholders should have the opportunity to reap the full
rewards of the investment that has already been made in creating a platform for
future improved revenue growth, enhanced profitability and high cash returns.
Cadbury will have delivered average revenue growth of 6% per annum and improved
margins by 350bps for the period 2007-09.* We are committed to the achievement
of the higher Vision into Action targets and the creation of significant value
- benefits that should fully accrue to our shareholders."

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to
their unattractive low-growth conglomerate business model. Don't let Kraft
steal your company with its derisory offer."

Current Trading and Guidance for 2009

Performance through to the end of November has been in line with the upgraded
expectations announced at the time of our third quarter Interim Management
Statement on 21 October 2009.

All three categories continue to deliver good results with continued growth in
Chocolate, further improvements in Gum and excellent growth in Candy. In C
hocolate momentum continues in our emerging markets, particularly India and in
key developed markets, including the UK where the business continues to grow
despite lapping a record fourth quarter in 2008. In Gum, our innovation
launches show early signs of good performance. Trident Layers in the US
continues to gain share as distribution expands, while in South America new
innovations, including new Trident packs, have supported strong growth. In 
Candy, excellent growth has been supported by Halls where effective commercial
programmes and the unusually high flu incidence drove strong growth in the US.

Our emerging markets, led by India, Middle East and Africa and South America
continue to show strong momentum. In developed markets, we continued to deliver
robust growth in the UK and strengthening growth in the US.

Todd Stitzer, Cadbury's CEO said: "Our strong momentum continues, as our
standalone confectionery strategy continues to exceed expectations, with
further good progress in October and November. As a result, we are reconfirming
our guidance for full year constant currency revenue growth to be around the
middle of our 4-6% goal range, and for an improvement of at least 135 basis
points in constant currency trading margin."*

* This statement includes a profit forecast for the purpose of Rule 28 of the
City Code. As such, it is a requirement that this statement be reported on by
the Company's reporting accountants and financial advisers in accordance with
Rule 28 of the City Code. The bases and assumptions behind the guidance
statements and the reports of the reporting accountant and financial advisers
are set out in Appendix 2 of the Circular. The reporting accountant and
financial advisers have given and not withdrawn their consent to publication.

Circular to shareholders

The Circular sets out in full the strengths and prospects of Cadbury including
details on the next phase of its Vision into Action plan and explains why the
Board believes shareholders should reject the Offer from Kraft.

Presentation for analysts and investors

Cadbury will host a presentation for analysts and investors at 10:30am today
(the "Investor Presentation"), which will also include its regular pre-close
trading update. The presentation will be webcast ( with a
facility to participate in the Q&A session.

Conference call

Cadbury management will also hold a conference call at 3:00pm today for the
benefit of investors unable to join the earlier presentation:

                                 UK and Europe           USA                   
15:00 GMT (16:00 CET, 10:00 ET)                                                
Teleconference                   0808 109 0700 /         +1 866 966 5335       
                                 +44 (0)203 003 2666                                              
Replay                           +44 (0)208 196 1998     +1 866 583 1035       
Replay Access Number:            3760437#                3760437#              

Podcasts and transcripts of the conference calls will be available afterwards

Copies of the Circular and the Investor Presentation are also available on
Cadbury's website.

High resolution images to accompany this announcement are available for the
media to view and download free of charge from

For Further Information:                                                       
Cadbury plc                                      +44 1895 615000               
Capital Market Enquiries                         +44 1895 615124               
John Dawson, Michelle Rees and Basak Kotler                                    
Media Enquiries                                                                
Cadbury                                          +44 1895 615011               
Trevor Datson                                                                  
Finsbury                                         +44 20 7251 3801              
Rollo Head                                                                     
Finsbury US                                      +1 212 303 7600               
Andy Merrill and Jeremy Fielding                                               

About Cadbury

Cadbury is one of the world's largest confectionery businesses with number one
or number two positions in over 20 of the world's 50 biggest confectionery
markets. It also has the largest and most broadly spread emerging markets
business of any confectionery company. With origins stretching back nearly 200
years, Cadbury's brands include many global, regional and local favourites
including Cadbury Dairy Milk, Flake, Creme Egg and Green & Black's in
chocolate; Trident, Dentyne, Hollywood and Bubbaloo in gum; and Halls, Cadbury
Eclairs, Bassett's and The Natural Confectionery Co. in candy.

Forward Looking Statements

Except for historical information and discussions contained herein, statements
contained in these materials may constitute "forward looking statements"
including within the meaning of Section 27A of the US Securities Act of 1933,
as amended, and Section 21E of the US Securities Exchange Act of 1934, as
amended. Forward looking statements are generally identifiable by the fact that
they do not relate only to historical or current facts or by the use of the
words "may", "will", "should", "plan", "expect", "anticipate", "estimate",
"believe", "intend", "project", "goal" or "target" or the negative of these
words or other variations on these words or comparable terminology. Forward
looking statements involve a number of known and unknown risks, uncertainties
and other factors that could cause our or our industry's actual results, levels
of activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by such forward looking statements. These forward looking statements
are based on numerous assumptions regarding the present and future strategies
of each business and the environment in which they will operate in the future.
In evaluating forward looking statements, you should consider general economic
conditions in the markets in which we operate, as well as the risk factors
outlined in our most recent Form 20-F filed with the US Securities and Exchange
Commission ("SEC") and posted on Cadbury plc's website These
materials should be viewed in conjunction with our periodic half yearly and
annual reports and other filings filed with or furnished to the SEC, copies of
which are available from Cadbury plc, Cadbury House, Uxbridge Business Park,
Sanderson Road, Uxbridge UB8 1DH, UK and from the SEC's website at
Cadbury plc does not undertake publicly to update or revise any forward looking
statement that may be made in these materials, whether as a result of new
information, future events or otherwise. All subsequent oral or written
forward-looking statements attributable to Cadbury plc or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statements above.

Sources and Bases

For sources of information and bases of calculation please refer to the

Further Information

Each of Goldman Sachs International, Morgan Stanley & Co. Limited and UBS
Limited is acting exclusively for Cadbury and for no-one else in connection
with the matters referred to in this announcement and will not be responsible
to anyone other than Cadbury for providing the protections afforded to their
respective clients or for providing advice in relation to such matters.

In response to the Offer, Cadbury will file a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC. Holders of Cadbury Shares and Cadbury
ADSs are advised to read the Solicitation/Recommendation Statement on Schedule
14D-9 because it contains important information. Copies of the Schedule 14D-9
and other related documents filed by Cadbury are available free of charge on
the SEC's website at In addition, documents filed with the SEC by
Cadbury may be obtained free of charge by contacting Cadbury's media or
investor relations departments at Cadbury House, Uxbridge Business Park,
Sanderson Road, Uxbridge UB8 1DH, United Kingdom or on Cadbury's website at

Publication on Cadbury Website

A copy of this announcement will be made available for inspection on Cadbury's
website ( free of charge.