01—Abstract
Summary
Summary of the 10-K filed February 11, 2021. Cited figures are marked; the original filing is the authoritative source.
PepsiCo, Inc. reported strong net revenue growth of 5% for the fiscal year ending December 26, 2020, reaching $70.4 billiona.
Despite the revenue increase, operating profit saw a slight decrease of 2% to $10.1 billionb, primarily impacted by costs associated with the COVID-19 pandemic, which reduced operating profit by 7 percentage points. The company successfully navigated a challenging year by focusing on its 'Winning with Purpose' strategy, emphasizing agility in its operations, and continuing investments in digital capabilities like e-commerce. Significant acquisitions in 2020, including Rockstar Energy Beverages, Pioneer Foods, and Be & Cheery, are expected to bolster future growth and market presence across key geographies.
PepsiCo demonstrated resilience by maintaining its dividend payments and repurchasing shares, returning approximately $5.9 billionc to shareholders in 2021 through dividends and buybacks. The company is committed to long-term sustainable growth through a strategy of becoming Faster, Stronger, and Better, focusing on innovation, cost management, and integrating purpose into its business. The company's diverse portfolio across beverages and convenient foods, coupled with its global reach and strong brand recognition, positions it well to address evolving consumer preferences and market dynamics, while managing the ongoing impacts of the global pandemic.
02—Key points
Key Highlights
- Net revenue increased by 5% to $70.4 billion in fiscal year 2020.
- Operating profit decreased by 2% to $10.1 billion, impacted by COVID-19 related costs.
- Completed significant acquisitions in 2020: Rockstar Energy Beverages, Pioneer Foods, and Be & Cheery.
- Returned approximately $5.9 billion to shareholders in 2021 via dividends and share repurchases.
- Continued to invest in e-commerce and digital capabilities to adapt to changing consumer behavior.
- Frito-Lay North America (FLNA) and Quaker Foods North America (QFNA) showed strong performance, with net revenue growing 7% and 10% respectively.
- PepsiCo Beverages North America (PBNA) experienced net revenue growth of 4% but a decrease in organic volume.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Pepsico Inc kept $0.10.
- Revenue$70.37B100.0%
- Cost of revenue−$31.80B45.2%
- Gross profit$38.58B54.8%
- Operating costs−$28.50B40.5%
- Operating income$10.08B14.3%
- Interest, other & tax−$2.96B4.2%
- Net income$7.12B10.1%
Where FY2020 revenue went
$70.37B- Cost of revenue: $31.80B, 45% of revenue
- SG&A: $28.45B, 40% of revenue
- Net income: $7.12B, 10% of revenue
- R&D: $719.0M, 1.0% of revenue
- Interest, other & tax: $2.96B, 4.2% of revenue
Kept 10% as net incomeNet income $7.12B · 10%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 11, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $70.37B$67.16B | +4.8% |
| Cost of Revenue | $31.80B$30.13B | +5.5% |
| Gross Profit | $38.58B$37.03B | +4.2% |
| R&D Expenses | $719.00M$711.00M | +1.1% |
| SG&A Expenses | $28.45B$26.74B | +6.4% |
| Operating Income | $10.08B$10.29B | −2.1% |
| Interest Expense | $1.13B$935.00M | +20.6% |
| Net Income | $7.12B$7.31B | −2.7% |
| EPS (Basic) | $5.14$5.23 | −1.7% |
| EPS (Diluted) | $5.12$5.20 | −1.5% |
| Shares Outstanding (Basic) | 1.39B1.40B | −1.0% |
| Shares Outstanding (Diluted) | 1.39B1.41B | −1.1% |
05—Questions
Frequently Asked Questions
What was PepsiCo's financial performance in the fiscal year ending December 26, 2020?
PepsiCo reported a 5% increase in net revenue to $70.4 billion. However, operating profit decreased by 2% to $10.1 billion, largely due to costs associated with the COVID-19 pandemic, which negatively impacted operating profit by approximately 7 percentage points.
How did the COVID-19 pandemic affect PepsiCo's operations and financial results?
The COVID-19 pandemic created challenging operating environments globally, impacting demand, increasing operating costs (related to employee benefits, protective equipment, and sanitation), and causing supply chain disruptions. The company incurred specific charges related to the pandemic, which negatively affected operating profit and net income.
What are the key strategic priorities for PepsiCo moving forward?
PepsiCo is focused on its 'Winning with Purpose' strategy, aiming to be Faster, Stronger, and Better. This involves sustaining growth in core businesses, improving profitability, accelerating international growth, investing in digital capabilities, driving holistic cost management, and integrating purpose into its strategy through sustainability, community investment, and social justice initiatives.
What significant acquisitions did PepsiCo make in 2020?
In 2020, PepsiCo made several key acquisitions: Rockstar Energy Beverages (US$3.85 billion upfront payment), Pioneer Foods (South Africa, approximately $1.2 billion), and Hangzhou Haomusi Food Co., Ltd. (Be & Cheery in China, approximately $0.7 billion). These acquisitions are expected to contribute to future growth and expand the company's market presence.
How does PepsiCo manage its financial commitments and shareholder returns?
PepsiCo expects to return approximately $5.9 billion to shareholders in 2021 through dividends ($5.8 billion) and share repurchases ($100 million). The company maintains a strong liquidity position and has significant long-term contractual commitments, including debt obligations and lease agreements, which it plans to manage through its cash generation capabilities and access to capital markets.
06—Continue