PepsiCo Achieves 2013 Financial Targets
PepsiCo has reported a 1.4% increase in net revenue to $66.4 billion and a 9.2% improvement in net income to $6.8 billion for 2013. Organic revenue grew 4% primarily reflecting effective net pricing. Structural changes, principally the refranchising of certain beverage operations, negatively impacted reported net revenue performance by 1 percentage point and foreign exchange translation had a 2-percentage-point unfavorable impact on reported net revenue for the full year.
Core constant currency operating profit rose 6% reflecting the impacts of revenue growth and productivity savings, offset partially by operating cost inflation, negative geographic mix and incremental advertising and marketing expenses. Core operating margin expanded 40 basis points and reported operating margin expanded 70 basis points.
“We are pleased to report that PepsiCo achieved its financial goals for 2013, despite continued challenging and volatile macroeconomic conditions around the globe. We met or exceeded our organic revenue, cash flow, productivity, and core operating margin, constant currency EPS, and net ROIC targets and, at the same time, continued to invest in our brands, innovation and execution to strengthen the long-term health of our business,” says Indra Nooyi, chairman and chief executive of PepsiCo. “We look ahead to 2014 with confidence that our business is positioned to continue to perform well and to generate attractive returns for our shareholders. We have a well-balanced geographic profile, a complementary portfolio of food and beverage products grounded in taste and convenience that are leaders in their respective categories, and iconic brands that are loved by consumers the world over.”
PepsiCo has announced a new 5-year, $5 billion productivity program (2015-2019). The savings are expected to come from accelerating investment in manufacturing automation, further optimizing the company’s global manufacturing footprint, including closing of certain manufacturing facilities, re-engineering go-to-market systems in developed markets, expanding shared services and implementing simplified organization structures to drive efficiency. As a result of these actions, PepsiCo expects to sustain approximately $1 billion in annual productivity savings through 2019. The extended targets reflect a continuation of the benefits of the investments made and actions taken in recent years by the company to harmonize processes and systems and to drive greater global coordination across its businesses.
PepsiCo remains on track to achieve its previously announced 3-year, $3 billion productivity target for 2012-2014, with approximately $2 billion in savings realized through the end of 2013 and approximately $1 billion in productivity savings expected for 2014.
