10-KPeriod: FY2020

PEPSICO INC Annual Report, Year Ended Dec 26, 2020

Filed February 11, 2021For Securities:PEP

Summary

PepsiCo, Inc. reported strong net revenue growth of 5% for the fiscal year ending December 26, 2020, reaching $70.4 billion. Despite the revenue increase, operating profit saw a slight decrease of 2% to $10.1 billion, 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 billion 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.

Financial Highlights

53 data points
Beta

Revenue

$70.37B

54.8% Gross Margin

Net Income

$7.12B

10.1% Net Margin

EPS (Diluted)

$5.12

Total Assets

$92.92B

Cash & Equivalents

$8.25B

Free Cash Flow

$10.61B

Financial Statements
Beta
Revenue$70.37B
Cost of Revenue$31.80B
Gross Profit$38.58B
R&D Expenses$719.00M
SG&A Expenses$28.45B
Operating Income$10.08B
Interest Expense$1.13B
Net Income$7.12B
EPS (Basic)$5.14
EPS (Diluted)$5.12
Shares Outstanding (Basic)1.39B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Net revenue increased by 5% to $70.4 billion in fiscal year 2020.
  • 2Operating profit decreased by 2% to $10.1 billion, impacted by COVID-19 related costs.
  • 3Completed significant acquisitions in 2020: Rockstar Energy Beverages, Pioneer Foods, and Be & Cheery.
  • 4Returned approximately $5.9 billion to shareholders in 2021 via dividends and share repurchases.
  • 5Continued to invest in e-commerce and digital capabilities to adapt to changing consumer behavior.
  • 6Frito-Lay North America (FLNA) and Quaker Foods North America (QFNA) showed strong performance, with net revenue growing 7% and 10% respectively.
  • 7PepsiCo Beverages North America (PBNA) experienced net revenue growth of 4% but a decrease in organic volume.

Frequently Asked Questions

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.

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.

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.

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.

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.