Strategy Review

Goals and priorities

2004 - 2007 Goals		2005 Priorities
Deliver superior shareowner performance		Deliver annual contract Extract Fuel for Growth and focus on Free Cash Flow
Profitably and significantly increase global confectionery share		Invest, innovate and execute Execute Smart Variety
Profitably secure and grow regional beverages share		Invest, innovate and execute Strengthen US non-carbonates and route to market
Ensure our capabilities are best in class		Roll-out Building Commercial Capabilities Refine Supply Chain disciplines
Reinforce reputation with employees and society		Motivate, develop & reward our people Continue high Corporate and Social Responsibility standards

In October 2003, we set our strategic goals for 2004 - 2007. Each goal has two priorities. Our goals are unlikely to change from year to year but the priorities will, according to our business needs and the market environment. The goals provide a small number of clear and achievable objectives for our senior managers against which they report and are incentivised.

We believe we can consistently deliver superior shareowner performance by profitably growing our competitively advantaged global confectionery and regional beverage businesses; by ensuring that our team and its capabilities are best in class; and by ensuring we have strong relationships with our employees and the communities in which we do business.

In 2004, our priorities were focused on: reducing our cost base; integrating Adams; and investing in innovation and systems capabilities. In 2005, the focus of our priorities moved firmly towards growth.

We are using cost savings from the Fuel for Growth programme, which currently stand at a cumulative £180 million, to invest in growth initiatives across the Group. We made significant investments to strengthen our innovation pipeline, our science and technology, commercial and salesforce capabilities, our information systems and our understanding of consumers.

These investments enhance our ability to execute in our markets. We have already seen benefits in 2005, with our confectionery and our beverages businesses both growing sales by 6%. In confectionery, we gained share in 16 out of our top 20 markets. In beverages, we grew our market share in US carbonates for the second year in a row, and improved the performance of our US non-carbonated beverages.

In the following pages we describe how we delivered against our goals in 2005 by investment in growth, increasingly systematic and successful innovation and outstanding execution in the marketplace.