10-QPeriod: Q2 FY2013

PEPSICO INC Quarterly Report for Q2 Ended Jun 15, 2013

Filed July 24, 2013For Securities:PEP

Summary

PepsiCo, Inc. reported solid financial results for the second quarter of 2013, showcasing an increase in net revenue and operating profit. For the 24 weeks ended June 15, 2013, net revenue grew by 2% to $29.39 billion, and operating profit saw a significant increase of 10% to $4.53 billion. This growth was driven by a combination of effective net pricing, planned cost reductions, and volume increases across several segments. Key factors contributing to the positive performance include strong results from Frito-Lay North America (FLNA) and Latin America Foods (LAF), which demonstrated robust revenue and profit growth. The company also saw positive impacts from strategic initiatives and productivity plans aimed at enhancing cost competitiveness. While the company faced some headwinds, such as unfavorable foreign currency movements impacting international segments like Europe and AMEA, overall performance remained strong, supported by a 4% increase in total servings. PepsiCo also continued its commitment to shareholder returns, announcing a dividend increase and a new share repurchase program.

Financial Highlights

50 data points
Beta

Revenue

$16.81B

53.0% Gross Margin

Net Income

$2.01B

12.0% Net Margin

EPS (Diluted)

$1.28

Total Assets

$76.65B

Cash & Equivalents

$7.79B

Free Cash Flow

$2.31B

Financial Statements
Beta
Revenue$16.81B
Cost of Revenue$7.90B
Gross Profit$8.91B
SG&A Expenses$6.01B
Operating Income$2.87B
Interest Expense$208.00M
Net Income$2.01B
EPS (Basic)$1.30
EPS (Diluted)$1.28
Shares Outstanding (Basic)1.55B
Shares Outstanding (Diluted)1.57B

Key Highlights

  • 1Net revenue for the 24 weeks ended June 15, 2013, increased by 2% to $29.39 billion, compared to $28.89 billion in the prior year period.
  • 2Operating profit for the 24 weeks increased by 10% to $4.53 billion, up from $4.10 billion in the prior year.
  • 3Frito-Lay North America (FLNA) and Latin America Foods (LAF) showed strong performance, with net revenue growth of 4% and 9% respectively for the 24-week period.
  • 4Total servings increased by 4% for the 12 and 24 weeks ended June 15, 2013, indicating growing consumer demand.
  • 5The company announced a 5.6% increase in its annualized dividend and a new $10 billion share repurchase program, demonstrating a commitment to shareholder returns.
  • 6Negative foreign currency translation impacted net revenue and operating profit in international segments such as Europe and Asia, Middle East & Africa (AMEA).

Frequently Asked Questions

For the 24 weeks ended June 15, 2013, PepsiCo reported a 2% increase in net revenue to $29.39 billion and a 10% increase in operating profit to $4.53 billion. This growth was driven by effective net pricing, cost reductions, and volume increases.

Frito-Lay North America (FLNA) and Latin America Foods (LAF) showed strong growth in net revenue. PepsiCo Americas Beverages (PAB) experienced a slight decline in net revenue due to volume declines, while Europe saw modest revenue growth impacted by unfavorable foreign exchange. Asia, Middle East & Africa (AMEA) had mixed results, with revenue declining slightly overall but showing strong growth in snacks and beverages on a constant currency basis.

PepsiCo demonstrated its commitment to shareholder returns by announcing a 5.6% increase in its annualized dividend to $2.27 per share and initiating a new $10 billion share repurchase program. The company expects to return a total of $6.4 billion to shareholders in 2013 through dividends and share repurchases.

Yes, several items affected comparability. These included gains from beverage refranchising in Vietnam, restructuring and impairment charges related to a productivity plan, and charges associated with the devaluation of the Venezuelan currency. The company also recorded a gain from the sale of a controlling interest in its Vietnam bottling operations.