01—Abstract
Summary
Summary of the 10-K filed February 12, 2015. Cited figures are marked; the original filing is the authoritative source.
PepsiCo, Inc. reported steady performance in its 2014 10-K filing, with net revenue largely flat year-over-year at $66.7 billiona.
The company operates across six reportable segments, including Frito-Lay North America (FLNA) and PepsiCo Americas Beverages (PAB), which are its largest segments by revenue. Despite facing global economic volatility and currency fluctuations, particularly in Venezuela and Russia, PepsiCo demonstrated resilience through strong brand recognition, productivity initiatives, and a focus on innovation.
Key strategic priorities for the company include global expansion, broadening its product portfolio with a focus on healthier options, adapting to changing customer channels like e-commerce, and maintaining productivity savings. The company returned significant value to shareholders through dividends and share repurchases, signaling a commitment to shareholder returns while navigating a dynamic market landscape.
02—Key points
Key Highlights
- PepsiCo generated $66.7 billion in net revenue for the fiscal year ended December 27, 2014, showing slight growth compared to the previous year.
- The company operates through six distinct segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), PepsiCo Europe, and PepsiCo Asia, Middle East and Africa (AMEA).
- Strategic focus remains on global expansion, product portfolio diversification (including healthier options), adapting to e-commerce, and productivity initiatives, with a target of $5 billion in productivity savings over five years.
- The company returned approximately $8.7 billion to shareholders in 2014 through dividends and share repurchases, highlighting a commitment to shareholder value.
- Significant risks include evolving consumer preferences towards healthier products, competition, commodity price volatility, foreign exchange fluctuations (notably in Venezuela and Russia), and regulatory changes.
- PepsiCo's R&D investment increased in 2014, with innovation contributing 9% of net revenue, indicating a focus on new product development and adaptation to consumer demands.
- The company's financial health remains robust, supported by strong cash flow generation and substantial liquidity, allowing for continued investment in growth initiatives and shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Pepsico Inc kept $0.10.
- Revenue$66.68B100.0%
- Cost of revenue−$31.24B46.8%
- Gross profit$35.45B53.2%
- Operating costs−$25.86B38.8%
- Operating income$9.58B14.4%
- Interest, other & tax−$3.07B4.6%
- Net income$6.51B9.8%
Where FY2014 revenue went
$66.68B- Cost of revenue: $31.24B, 47% of revenue
- SG&A: $25.77B, 39% of revenue
- Net income: $6.51B, 9.8% of revenue
- R&D: $718.0M, 1.1% of revenue
- Interest, other & tax: $3.07B, 4.6% of revenue
Kept 9.8% as net incomeNet income $6.51B · 9.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 12, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $66.68B$66.42B | +0.4% |
| Cost of Revenue | $31.24B$31.24B | 0.0% |
| Gross Profit | $35.45B$35.17B | +0.8% |
| R&D Expenses | $718.00M$665.00M | +8.0% |
| SG&A Expenses | $25.77B$25.36B | +1.6% |
| Operating Income | $9.58B$9.71B | −1.3% |
| Interest Expense | $909.00M$911.00M | −0.2% |
| Net Income | $6.51B$6.74B | −3.4% |
| EPS (Basic) | $4.31$4.37 | −1.4% |
| EPS (Diluted) | $4.27$4.32 | −1.2% |
| Shares Outstanding (Basic) | 1.51B1.54B | −2.1% |
| Shares Outstanding (Diluted) | 1.53B1.56B | −2.1% |
05—Questions
Frequently Asked Questions
What were PepsiCo's key financial results for fiscal year 2014?
For the fiscal year ended December 27, 2014, PepsiCo reported net revenue of $66.7 billion, a slight increase from the previous year. Operating profit was $9.6 billion, a slight decrease from 2013. The company generated $10.5 billion in net cash from operating activities.
What are PepsiCo's main strategic priorities moving forward?
PepsiCo's strategic priorities include strengthening its global presence, broadening its product portfolio to include more nutritious options, adapting to evolving customer channels like e-commerce, focusing on productivity to reduce costs, embracing sustainable business practices, building and retaining top talent, and delivering on its 'Performance with Purpose' goal.
What are the primary risks and challenges highlighted in the filing?
Key risks identified include changes in consumer preferences (especially towards healthier options), inability to innovate or market effectively, intense competition, increased commodity and energy costs, supply chain disruptions, unfavorable economic and political conditions in emerging markets, foreign exchange rate fluctuations, and changes in the legal and regulatory environment, including potential new taxes on certain products.
How did PepsiCo return value to shareholders in 2014?
In 2014, PepsiCo returned approximately $8.7 billion to shareholders through dividends and share repurchases. The company declared a quarterly dividend of $0.655 per share and announced a new $12 billion share repurchase program, along with a 7% increase in its annualized dividend for 2015.
06—Continue