Pepsi presentation financial management


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would you buy pepsi co?

this is for financial management class

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Pepsi presentation financial management

  1. 1. Pepsi Co. Stock Symbol PEP. Group Members- Joseph Bayer, Benish Khan, Jordan Roberts 1
  2. 2. What Brands does Pepsi own? 2
  3. 3. What do we do? • Pepsi is a multinational food and beverage company • Pepsi manufacturers, markets and distributes grain based snack foods, beverages and other products 3
  4. 4. Pepsi Mission & Goals • Our mission is 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. • Human- Continue to refine our food and beverage choices to meet changing consumer needs by reducing sodium, added sugars and saturated fat, and developing a broader portfolio of product choices. • Environment- Help protect and conserve global water supplies, especially in water-stressed areas, and provide access to safe water. • Performance- Strive to deliver superior long-term financial performance and sustained shareholder value. 4
  5. 5. Company History • Pepsi-Cola was founded in 1898 • 1965 Pepsi-Cola and Frito-Lay merge creating PepsiCO, inc. • 1970 Pepsi is first company to respond to customer preference making lightweight, recyclable plastic bottles. Also introduces industry’s first two liter bottles. • 1971 Pepsi creates new logo still featuring red, white, and blue • 1973 Pepsi becomes number one cola drink in super markets. PFI established to market food snacks around the world. Pepsi Light is introduced as alternative to diet colas. • 1985 Pepsi is largest company in the beverage industry having products in nearly 150 countries. Pepsi distributes products in China. Pepsi “space can” is successfully tested aboard space shuttle. 5
  6. 6. History • 1989 Pepsi enters top 25 of Fortune 500 ranking. Pepsi acquires Walkers Crisps and Smith Crisps. • 1994 Pepsi is first major soft drink maker to begin producing and distributing in Vietnam. Pepsi and Starbucks form North American Coffee Partnership to develop ready-to-drink coffee beverages. • 1997 Pepsi announces buying Cracker Jack. Pepsi spins off KFC, Pizza Hut, and Taco Bell as a new company, YUM Brands . • 1998 Pepsi acquires Tropicana Products (biggest acquisition ever undertaken by company). • 2001 Pepsi merges with Quaker Oats. • 2003 Pepsi launches Sierra Mist in U.S. Pepsi-Cola trademark 100 years. 6
  7. 7. Pepsi Work Code • -Care for our customers, our consumers and the world we live in. • -Sell only products we can be proud of • -Speak with truth and candor. • -Win with diversity and inclusion. • -Balance short term and long term. • -Respect others and succeed together. 7
  8. 8. Is Pepsi the industry leader? •No - The Industry leader is Coca-Cola, (stock symbol KO) 8
  9. 9. About our Competition • Coca Cola, coke, has roughly 43% of the beverage market. Pepsi only has 31% • Coke was established in 1886. • Coke brands include • Coke • Sprite • Fanta • Smartwater - Coke is only a beverage company, while Pepsi has a more diversified company 9
  10. 10. Stengths and Weaknesses of Pepsi vs competition • Strengths: • Product diversity • Successful marketing and advertising campaigns with celebrities • Extensive distribution channel • Competency in mergers and acquisitions • 22 brands earning more than $1 billion a year (Pepsi has 22 brands serving different industries and satisfying various consumer tastes) • In less debt than Coca Cola (Pepsi has a debt of $28.36 billion and Coca cola has debt of $32.61 billion • Weaknesses: • Low pricing • Weaker brand awareness, market share, and market value in the world beverage market compared to Coca Cola • Only targets young people • Low net profit margin • Legal requirements to disclose negative information of product labels • Increased competition from Snyder’s snacks and Dr. Pepper/Snapple Group 10
  11. 11. The Matchup Pepsi vs Coke, forbes 2013 Brand Rank Company Name Sales Profits Assets Market Value 79 Coke $ 48 b $ 9 B $ 86.2 B $ 173.1 B 88 Pepsi $ 65.5 B $ 6.2 B $ 74.6 B $ 118.9 B 11
  12. 12. Industry Analysis – carbonated soda • Total market size about $66B • 74% of the market is in 2 companies, coke and pepsi • Ave person drinks 23 gallons of carbonated soft drinks a year • Cost of doing business is low. Suppliers have little bargaining power • Major customers are the fast food industry, usually comes with an exclusive agreement • Threat of entry is low- too high to invest • Threats include – beer, coffee, tea, powdered drinks, energy drinks • No cost to switch for consumer 12
  13. 13. Key Stock Analysis • Sock Symbol PEP • Current Price – 82.80/share • 52 week range- 77.01- 87.06 • Market Cap-- 127.22 B • P/E- 19.17 • Div/yield - .57/2.74 • EPS- 4.32 • Shares available- 1.54 B • Margin of Safety- 0 • Estimated Growth Rate 5% 13
  14. 14. Should I Buy? • While the margin of safety is o, we think that you should buy this stock for the following reasons: • The demographic they target is Millennials. This is one of the biggest growth market • They are diversified. They have many brands in food, soda beverages, and healthy beverages • Pepsi Sales are growing. Since 2009, sales have gone from $43.23B to $66.42B in 2013 • They have a Dividend Yield that is bigger then banks. • They have a great history of buying other companies that have become name brands. • Pepsi is a big international play. They are investing $30B in the next 5 years 14