PepsiCo: Largest F & B business in US World’s largest snack company Second largest soft drink company Employed over 2,00,000 worldwide 2009 sales: $43.2 Billion Owns 19 Brands Competitive edge- Product differentiation & Innovation Goal- Single largest driver of Cash flow for retailers Strength- Large, sophisticated and flexible distribution & merchandising system Distribution logistics, Cross Docking Direct Store Delivery (DSD)

1. Cash Flow Productivity at
PepsiCo: Communicating
Value to Retailers
Analysis by-
Akash PATIL
Bhumit KOTHARI
Case Blazer II

2. Contents
 Case Synopsis
 Problem Definition
 Case Inferences
 Case Recommendations
 Conclusion

3. Synopsis of a Case
 PepsiCo: Largest F & B business in US
 World’s largest snack company
 Second largest soft drink company
 Employed over 2,00,000 worldwide
 2009 sales: $43.2 Billion
 Owns 19 Brands

4. Synopsis of a Case
 Competitive edge- Product differentiation &
Innovation
 Goal- Single largest driver of Cash flow for retailers
 Strength- Large, sophisticated and flexible distribution
& merchandising system
 Distribution logistics, Cross Docking
 Direct Store Delivery (DSD)

5. Synopsis of a Case
 Retailer Relationship Management- Team
Leaders
 Merchandising decisions
 Cash Flow productivity
 Convincing Mercatco

6. Contents
 Case Synopsis
 Problem Definition
 Case Inferences
 Case Recommendations
 Conclusion

7. Problems in a Case
 Convince MercatCo and other retail
customers to use Cash flow productivity &
ROIC to make merchandising decisions
 Prepare for a meeting next month with
MercatCo- create effective plan.

8. Contents
 Case Synopsis
 Problem Definition
 Case Inferences
 Case Recommendations
 Conclusion

9. Change Change
2009 2008 2007 2009 2008
Total net revenue $43232 $43251 $39474 -% 10%
Operating Profit
FLNA- Frito lay $3258 $2959 $2845 10% 4%
QFNA- Quaker foods
America
628 582 568 8% 2.5%
LAF- Latin American
food
904 897 714 1% 26%
PAB- Pepsi American
beverages
2172 2026 2487 7% (19%)
EUROPE 932 910 855 2% 6%
AMEA- Asia middle east
and Africa
716 592 466 21% 27%
Net impact on mark to
market
274 (346) 19 - -
PBG/PAS merger cost (49) - - - -
Restructuring - (10) - - -
other (791) (651) (772) 21% (16%)
Total Operating Profit $8044 $6959 $7182 16% (3%)
Total operating profit
margin
18.6% 16.1% 18.2% 2.5 (2.1)

10. 2009
Total operating profit increased by 16% and margin by 2.5 points.
Foreign currency reduced operating growth
By 6%. Other corporate unallocated expenses increased by 21%
reflecting to losses, compared to previous year.
2008
Total operating profit decreased by 3% and margin
decreased by 2.1 points. Other corporate unallocated
expenses decreased by 16%

11. 36%
38%
16%
10%
Revenue % by segment 2009
PespiCo Americas foods PespiCo Americas Beverages
PepsiCo International Europe PespiCo nternational AMEA

12. 48%
23%
16%
13%
Net Revenue 2009
PespiCoamerican foods PespiCOamerican Beverage
PepsiCo International Europe PepsiCo international AMEA

13. Contents
 Case Synopsis
 Problem Definition
 Case Inferences
 Case Recommendations
 Conclusion

14. Case Recommendations
 PepsiCo showing slight decrease in current
liabilities. PepsiCo needs to increase the
revenue. The total debt of PepsiCo is also
decreasing which is very good signal for the
company. Financially PepsiCo is doing
good.

15. Case Recommendations
 It will help you to obtain funding if you need it.
 It will set out clearly the money that you need to
put together to start the business and then to run
it for a period.
 It will help prevent you from going into a
business that will not be successful.
 It will highlight periods where your business may
need extra financial help.

16. Contents
 Case Synopsis
 Problem Definition
 Case Inferences
 Case Recommendations
 Conclusion

17. Conclusion
 Company is doing good, decreasing in
trend for revenue is mainly due to the
current global economic crises which has
affected the profit margin. PepsiCo will
continue to generate solid value for our
shareholders.

18. Thank you!