2 pepsi co
TRANSCRIPT
PepsiCo
MISSION
To be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
VISION
Focus on environmental stewardship, activities that benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
Headquarters: Purchase, NY Symbol: PEP Exchange: NYSE Stock Price: $62.23 Number of Employees: 198,000 Industry: Snacks and Beverages
COMPANY PROFILE
COMPANY HISTORY
o 1965 - PepsiCo, Inc. is founded by Donald M. Kendall President and Chief Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief Executive Officer of Frito-Lay, through the merger of the two companies.
o 1976 - Pepsi-Cola becomes the single largest selling soft drink brand sold in U.S. supermarkets.
o 1984 - PepsiCo is restructured to focus on its three core businesses: soft drinks, snack foods and restaurants. Transportation and sporting goods businesses are sold.
o 1990 - PepsiCo profits exceed $1 billion for the first time. o 2001 - PepsiCo merges with The Quaker Oats Companyo 2008 - PepsiCo announces plans to invest $1 billion in
China over next four years as part of the strategy to expand in emerging markets and broaden the portfolio of locally-relevant products
BRANDS
BRANDS
FINANCIAL HIGHLIGHTS
2008 2007 Chg
Summary of Operations
Total net revenue $ 43,251 $ 39,474 10%
Core division operating profit $ 8,475 $ 8,025 6%
Core total operating profit $ 7,824 $ 7,253 8%
Core net income $ 5,887 $ 5,587 5%
Core earnings per share $ 3.68 $ 3.37 9%
Other Data
Management operating cash flow $ 4,651 $ 4,551 2%
Net cash provided by operating activities $ 6,999 $ 6,934 1%
Capital spending $ 2,446 $ 2,430 1%
Common share repurchases $ 4,720 $ 4,300 10%
Dividends paid $ 2,541 $ 2,204 15%
Long-term debt $ 7,858 $ 4,203 87%
Period Ending 12/27/2008 12/29/2007 12/30/2006 12/31/2005
Total Revenue $43,251,000 $39,474,000 $35,137,000 $32,562,000
Cost of Revenue $20,351,000 $18,038,000 $15,762,000 $14,176,000
Gross Profit $22,900,000 $21,436,000 $19,375,000 $18,386,000
Operating Expenses
Sales, General and Admin. $15,901,000 $14,208,000 $12,774,000 $12,314,000
Other Operating Items $64,000 $58,000 $162,000 $150,000
Operating Income $6,935,000 $7,170,000 $6,439,000 $5,922,000
Add'l income/expense items $41,000 $685,000 $173,000 $716,000
Earnings Before Interest and Tax $7,350,000 $7,855,000 $7,228,000 $6,638,000
Interest Expense $329,000 $224,000 $239,000 $256,000
Earnings Before Tax $7,021,000 $7,631,000 $6,989,000 $6,382,000
Income Tax $1,879,000 $1,973,000 $1,347,000 $2,304,000
Equity Earnings Unconsolidated Subsidiary
$374,000 $0 $616,000 $0
Net Income-Cont. Operations $5,142,000 $5,658,000 $5,642,000 $4,078,000
Net Income $5,142,000 $5,658,000 $5,642,000 $4,078,000
Net Income Applicable toCommon Shareholders
$5,142,000 $5,658,000 $5,642,000 $4,078,000
INCOME STATEMENT
STATEMENT OF CASH FLOWS
Management Operating Cash Flow**
Period Ending: 12/27/2008 12/29/2007 12/30/2006 12/31/2005
Net Income $5,142,000 $5,658,000 $5,642,000 $4,078,000
Cash Flows-Operating Activities
Depreciation $1,543,000 $1,426,000 $1,406,000 $1,308,000
Net Income Adjustments $1,105,000 ($46,000) ($408,000) $50,000
Changes in Operating Activities
Accounts Receivable ($549,000) ($405,000) ($330,000) ($272,000)
Inventory ($345,000) ($204,000) ($186,000) ($132,000)
Other Operating Activities ($435,000) ($123,000) $32,000 $23,000
Liabilities $538,000 $628,000 ($72,000) $797,000
Net Cash Flow-Operating $6,999,000 $6,934,000 $6,084,000 $5,852,000
Cash Flows-Investing Activities
Capital Expenditures ($2,446,000) ($2,430,000) ($2,068,000) ($1,736,000)
Investments $1,282,000 ($356,000) $2,017,000 ($991,000)
Other Investing Activities ($1,503,000) ($958,000) ($143,000) ($790,000)
Net Cash Flows-Investing ($2,667,000) ($3,744,000) ($194,000) ($3,517,000)
Cash Flows-Financing Activities
Dividends Paid ($2,541,000) ($2,204,000) ($1,854,000) ($1,642,000)
Sale and Purchase of Stock ($4,106,000) ($3,204,000) ($1,816,000) ($1,932,000)
Net Borrowings $3,515,000 $1,194,000 ($2,447,000) $1,696,000
Other Financing Activities $107,000 $208,000 $134,000 $0
Net Cash Flows-Financing ($3,025,000) ($4,006,000) ($5,983,000) ($1,878,000)
Effect of Exchange Rate ($153,000) $75,000 $28,000 ($21,000)
Net Cash Flow $1,154,000 ($741,000) ($65,000) $436,000
PERFORMANCE CHART
Strengths
oThe company has its strong point in the 18 brands it owns, with sales over $1 billion each. These brands are leaders in their respective categories, second only, once again, to Coca-Cola.
oDistribution network - The Company’s go-to-market systems like the direct store delivery gives an added bonus to the flexibility and power of the PepsiCo’s distribution network.
oThe almost non-stop ability to innovate and diversify, gives PepsiCo the cutting edge it most definitely needs in a company of its size and calibre.
Weaknesses
o PepsiCo is far away from leader Coca-cola in the international market.
oAll PepsiCo products bear the company name
SWOT
SWOT
Opportunities
oThere are increasing trend toward healthy foods
oNoncarbonated drinks are the fastest-growing part of the industry
oFood division should expand internationally
Threats
oPepsi is blamed for pesticide residues in their products in one of their most promising emerging marketoCompetitors
FIVE FORCE MODEL
STRATEGY
“Power of One Alliance”
Development of Good-for-You and Better-for-You products
o Pepsi and Frito Lay brands hold large market share in both domestic and international markets
PepsiCo, Inc. has 18 mega-brands that generate $1 billion or more each in annual retail sales
$43 billion in revenues 185,000 employees Product innovation Acquisitions and partnerships Environmentally, socially and economically
responsible company
KEY SUCCESS FACTORS
WORKS CITED
www.finance.yahoo.com www.moneycentral.msn.com www.pepsico.com www.nyse.com www.coca-cola.com