PepsiCo Meets 2014 Financial Targets
PepsiCo achieved organic revenue growth of 4% for 2014 but on a reported basis net revenue was flat at $66.683 billion as foreign exchange factors had an adverse impact. Developing and emerging market organic revenue grew 9% even though it declined by 1% on a reported basis, reflecting unfavourable foreign exchange translation, in particular, significant currency volatility in the Russian ruble and Venezuelan bolivar.
The soft drink and snack group’s core constant currency operating profit increased 5% but reported operating profit fell 1% to $9.581 billion including the impact of restructuring and impairment charges and other exceptionals. Reported net income fell 3% to $ 6.558 billion.
PepsiCo delivered $1 billion of productivity savings in 2014 and returned a total of $8.7 billion to shareholders during the year through $3.7 billion in dividends and $5.0 billion in share repurchases.
“We are pleased to report that we met or exceeded each of our full-year 2014 financial targets. Our results are a reflection of our diverse global footprint, the strength of our integrated food and beverage product portfolio, successful innovation and exceptional market-place execution,” says Indra Nooyi, chairman and chief executive of PepsiCo. “As we look ahead to 2015, we expect to again deliver results consistent with our long-term financial objectives, despite the anticipated challenging and volatile global macro environment. Further, returning cash to shareholders remains a top priority, and we plan to return approximately $8.5 to $9 billion to shareholders through both higher dividends and share repurchases.”
PepsiCo’s European operations achieved organic revenue growth of 4.5% in 2014, reflecting 3 percentage points of effective net pricing, as well as volume growth of 2% in snacks and 1% in beverages. Reported net revenue declined 3% to $13.290 billion, reflecting an 8-percentage-point unfavorable foreign exchange translation impact, and operating profit rose by 3% to $ 1.331 billion.
Core constant currency operating profit increased 4% for the full year, reflecting organic revenue growth and productivity savings, as well as a gain related to the sale of agricultural assets and the lapping of incremental investments in the prior year. These impacts were partially offset by an impairment charge associated with a brand in Greece, in addition to operating and commodity cost inflation, and charges associated with efficiency initiatives.
