01—Abstract
Summary
Summary of the 10-K filed February 9, 2024. Cited figures are marked; the original filing is the authoritative source.
PepsiCo, Inc. demonstrated resilience in its 2023 fiscal year, navigating global economic uncertainties and geopolitical challenges.
The company reported a net revenue increase of 6% to $91.5 billiona and a 4% rise in operating profit to $12.0 billion. This growth was driven by effective net pricing across its diverse portfolio of beverages and convenient foods, alongside productivity savings. Despite facing increased commodity, transportation, and labor costs, PepsiCo's "pep+" strategy continues to guide its end-to-end business transformation with a focus on sustainability.
Key financial actions included a 7% increase in the annualized dividend and a planned return of approximately $8.2 billionb to shareholders in 2024 through dividends and share repurchases. The company also managed its capital structure effectively, with a strong cash generation capability and a robust liquidity position. While facing headwinds such as the conflict in Ukraine and inflationary pressures, PepsiCo's diversified global presence and brand strength position it to manage these challenges and continue delivering value to its shareholders.
02—Key points
Key Highlights
- Net revenue increased by 6% to $91.5 billion in fiscal year 2023.
- Operating profit grew by 4% to $12.0 billion, with an operating margin of 13.1%.
- Announced a 7% increase in annualized dividend to $5.42 per share, with plans to return $8.2 billion to shareholders in 2024.
- Free cash flow increased by 39% to $8.1 billion.
- The company's 'pep+' strategy continues to drive business transformation with a focus on sustainability across agriculture and value chain.
- Frito-Lay North America (FLNA) and Latin America (LatAm) divisions showed strong net revenue growth.
- PepsiCo Beverages North America (PBNA) saw its operating profit significantly impacted by a prior-year gain from the Juice Transaction and current-year impairment charges.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Pepsico Inc kept $0.10.
- Revenue$91.47B100.0%
- Cost of revenue−$41.88B45.8%
- Gross profit$49.59B54.2%
- Operating costs−$37.60B41.1%
- Operating income$11.99B13.1%
- Interest, other & tax−$2.91B3.2%
- Net income$9.07B9.9%
Where FY2023 revenue went
$91.47B- Cost of revenue: $41.88B, 46% of revenue
- SG&A: $36.68B, 40% of revenue
- Net income: $9.07B, 9.9% of revenue
- R&D: $804.0M, 0.9% of revenue
- Interest, other & tax: $2.91B, 3.2% of revenue
Kept 9.9% as net incomeNet income $9.07B · 9.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 9, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $91.47B$86.39B | +5.9% |
| Cost of Revenue | $41.88B$40.58B | +3.2% |
| Gross Profit | $49.59B$45.82B | +8.2% |
| R&D Expenses | $804.00M$771.00M | +4.3% |
| SG&A Expenses | $36.68B$34.46B | +6.4% |
| Operating Income | $11.99B$11.51B | +4.1% |
| Interest Expense | $819.00M$939.00M | −12.8% |
| Net Income | $9.07B$8.91B | +1.8% |
| EPS (Basic) | $6.59$6.45 | +2.2% |
| EPS (Diluted) | $6.56$6.42 | +2.2% |
| Shares Outstanding (Basic) | 1.38B1.38B | −0.3% |
| Shares Outstanding (Diluted) | 1.38B1.39B | −0.3% |
05—Questions
Frequently Asked Questions
How did PepsiCo perform financially in fiscal year 2023?
PepsiCo reported a 6% increase in net revenue to $91.5 billion and a 4% increase in operating profit to $12.0 billion for fiscal year 2023. This growth was supported by effective net pricing and productivity savings, despite facing increased operating costs.
What is PepsiCo's strategy for returning capital to shareholders?
PepsiCo announced a 7% increase in its annualized dividend, bringing it to $5.42 per share. The company plans to return approximately $8.2 billion to shareholders in 2024 through a combination of dividends ($7.2 billion) and share repurchases ($1.0 billion).
What are the key risks and challenges facing PepsiCo?
Key risks include geopolitical instability, particularly the conflict in Ukraine, inflationary pressures on commodity, transportation, and labor costs, supply chain disruptions, evolving consumer preferences, and the competitive landscape. The company also highlighted risks related to climate change, international operations, and cybersecurity.
How is PepsiCo addressing sustainability with its 'pep+' strategy?
The 'pep+' strategy is PepsiCo's comprehensive approach to business transformation with sustainability at its core. It focuses on three pillars: Positive Agriculture (expanding regenerative practices), Positive Value Chain (achieving net-zero emissions by 2040, becoming net water positive by 2030, and scaling sustainable packaging), and Positive Choices (evolving the product portfolio towards healthier and more sustainable ingredients).
06—Continue