01—Abstract
Summary
Summary of the 10-K filed February 13, 2020. Cited figures are marked; the original filing is the authoritative source.
PepsiCo Inc. demonstrated resilience in its 2019 fiscal year, reporting a 4% increase in net revenue to $67.2 billiona.
The company's strategic focus on becoming "Faster, Stronger, and Better" through consumer-centricity, capability transformation, and sustainability initiatives continued to drive its performance. Despite facing challenges like shifting consumer preferences and a competitive landscape, PepsiCo maintained its global leadership in convenient foods and beverages. Financially, the company reported operating profit of $10.3 billionb, with a slight decrease in operating profit margin.
Key financial activities included significant returns to shareholders through dividends and share repurchases totaling $8.3 billionc in 2019, and continued investment in strategic acquisitions like SodaStream. The company also highlighted its ongoing productivity initiatives aimed at cost savings and reinvestment for topline growth. Looking ahead, PepsiCo expressed confidence in its ability to navigate market complexities and deliver sustainable growth.
02—Key points
Key Highlights
- PepsiCo reported a 4% increase in net revenue for fiscal year 2019, reaching $67.2 billion, driven by volume and effective net pricing across its divisions.
- Operating profit was $10.3 billion, with a slight decline in operating profit margin due to higher advertising and marketing expenses and commodity costs.
- The company returned approximately $8.3 billion to shareholders in 2019 through dividends and share repurchases, signaling a strong commitment to shareholder returns.
- PepsiCo completed the acquisition of SodaStream in late 2018, contributing to growth, and announced an agreement to acquire Pioneer Foods in South Africa, subject to regulatory approvals.
- The company continues to focus on its 'Winning with Purpose' strategy, emphasizing speed, strength, and becoming a better company through innovation, capability enhancement, and sustainability.
- Seven reportable segments (FLNA, QFNA, PBNA, LatAm, Europe, AMESA, APAC) were highlighted, with organizational realignments made to segments in Africa, the Middle East, and South Asia.
- PepsiCo continues to invest in digital capabilities and e-commerce to adapt to the evolving retail landscape.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Pepsico Inc kept $0.11.
- Revenue$67.16B100.0%
- Cost of revenue−$30.13B44.9%
- Gross profit$37.03B55.1%
- Operating costs−$26.74B39.8%
- Operating income$10.29B15.3%
- Interest, other & tax−$2.98B4.4%
- Net income$7.31B10.9%
Where FY2019 revenue went
$67.16B- Cost of revenue: $30.13B, 45% of revenue
- SG&A: $26.74B, 40% of revenue
- Net income: $7.31B, 11% of revenue
- R&D: $711.0M, 1.1% of revenue
- Interest, other & tax: $2.98B, 4.4% of revenue
Kept 11% as net incomeNet income $7.31B · 11%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 13, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $67.16B$64.66B | +3.9% |
| Cost of Revenue | $30.13B$29.38B | +2.6% |
| Gross Profit | $37.03B$35.28B | +5.0% |
| R&D Expenses | $711.00M$680.00M | +4.6% |
| SG&A Expenses | $26.74B$25.17B | +6.2% |
| Operating Income | $10.29B$10.11B | +1.8% |
| Interest Expense | $935.00M$1.22B | −23.3% |
| Net Income | $7.31B$12.52B | −41.6% |
| EPS (Basic) | $5.23$8.84 | −40.8% |
| EPS (Diluted) | $5.20$8.78 | −40.8% |
| Shares Outstanding (Basic) | 1.40B1.42B | −1.1% |
| Shares Outstanding (Diluted) | 1.41B1.43B | −1.3% |
05—Questions
Frequently Asked Questions
What were PepsiCo's key financial performance indicators in fiscal year 2019?
In fiscal year 2019, PepsiCo reported net revenue of $67.2 billion, a 4% increase from the prior year. Operating profit was $10.3 billion, with operating profit margin at 15.3%. The company returned approximately $8.3 billion to shareholders through dividends and share repurchases.
What major strategic initiatives or acquisitions did PepsiCo undertake or highlight in this filing?
PepsiCo highlighted its ongoing 'Winning with Purpose' strategy focused on becoming Faster, Stronger, and Better. The company completed the acquisition of SodaStream in late 2018, which contributed to its 2019 results, and announced its agreement to acquire Pioneer Foods in South Africa, pending regulatory approval. Investments in digitalization and e-commerce capabilities were also emphasized.
How did PepsiCo's various business segments perform in 2019?
All seven reportable segments showed growth in net revenue. Frito-Lay North America (FLNA) and Latin America (LatAm) showed strong operating profit growth. Europe's performance was boosted by the SodaStream acquisition, while other segments like Quaker Foods North America (QFNA) faced some operating cost pressures.
What are the main risks and challenges highlighted by PepsiCo for its business?
PepsiCo identified several key risks including changes in consumer preferences (especially towards health and wellness), intense competition, disruptions in the retail landscape (including e-commerce growth), macroeconomic and political volatility in global markets, and evolving regulatory environments concerning packaging, taxes, and product labeling.
06—Continue