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• PepsiCo, Inc. is a global food, snack and beverage company
founded in 1919.
• The Company's brands include Quaker Oats, Tropicana,
Gatorade, Lay's, Pepsi, Walkers, Gamesa and Sabritas.
• Market capitalisation: $100.68bn
• Approximately around 294,000 employees worldwide.
• December 5th
2011 closing price: $64.40
• 52-week range: $58.50-$71.89
Introduction
Macroeconomic Analysis
Consumer spending:
• IBIS World estimates 2.6% compound growth in
consumer spending from 2011 to 2016
http://clients.ibisworld.com/bed/default.aspx?bedid=363 Image: http://clients.ibisworld.com/charts/bed/1_1_363_BEDScores.png
2010 Revenue Breakdown
Source: Annual Report, Dec 2010
Global Markets Exposure
• About $20 billion or 31% of Revenue from emerging markets in 2010
• Focus on growth in Central Asia and Eastern Europe
• 70% growth of sales in Russia over last 2 years
• Robust economic indicators, low debt ratios, good foreign exchange
reserves
• Wimm-Bill-Dann acquisition
 66% at $3.8 B total ownership to 77%
 15 Aug 2011, ‘squeeze-out demand’ for other 23%
 3,883.70 Russian rubles per share
Source: Q3 Earnings Release, Oct 2011
Savory Snacks
 Frito Lay’s World’s largest Food Brand $9.4bn
 Doritos $4 B, Cheetos $3.1 B, Ruffles $2.6bn,
Tositos $1.7bn, Fritos $1.3bn
• Transnational expansion strategy
through balance between:
 Localization
 Maintaining consistent quality standards and
cooking processes
• 5-year CAGR:
 3% Volume
 8% Revenue
 8% NOPBT
Source: Q3 Earnings Release, Oct 2011
Beverages
Source: Barclays “BTS” Consumer Conference, Sep 2011
http://www.pepsico.com/Download/Barclays_BTS_Presentation.pdf
Carbonated Soft Drinks
• Sustain powerhouse brands
Sierra Mist, +7% in volume
Mountain Dew, +2.5% in volume
Pepsi Max, +93% in volume
• Focused advertising & marketing campaigns
Pepsi Max
Diet Pepsi
Pepsi
Social media exposure
• Continue innovating products
Pepsi Next
• Develop Occasion-based marketing
On-the-Go Refreshment
Special Occasion and Celebrations
Meal-time and Snacking
Source: Q3 Earnings Release, Oct 2011
Nutrition
• Top 3 globally in Nutrition, aiming to be $30B business by 2020
• Huge growth potential, 5-year double-digit revenue CAGR
• Strong demographic and consumer interest in health and wellness
• Aging population seeking healthy and tasty foods
• On-the-Go consumers and their demand for convenience
Source: Q3 Earnings Release, Oct 2011
Barclays “BTS” Consumer Conference, Sep 2011
http://www.pepsico.com/Download/Barclays_BTS_Presentation.pdf
Recent Challenges and Concerns
• 2012 Pricing Strategy
• Commodity inflation and Demand elasticity
• Margins & Cost cutting measures
• Currency exposure
• Investors appealing for a split of Snacks and Beverages
• Strong growth in snacks business
• Strong growth with Tropicana and Gatorade
• Weak CSD strategy and culture has impacted PepsiCo’s overall stock
performance
• While Coke has increased by about 50%
• Over-spending in marketing and advertising
• Kraft and Sara Lee example
Source: “Don’t Rule Out a Pepsi Breakup Yet”, Barron’s, 11/19/2011
Q3 Earnings Release, Oct 2011

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pepsico presentation

  • 1.
  • 2. • PepsiCo, Inc. is a global food, snack and beverage company founded in 1919. • The Company's brands include Quaker Oats, Tropicana, Gatorade, Lay's, Pepsi, Walkers, Gamesa and Sabritas. • Market capitalisation: $100.68bn • Approximately around 294,000 employees worldwide. • December 5th 2011 closing price: $64.40 • 52-week range: $58.50-$71.89 Introduction
  • 3. Macroeconomic Analysis Consumer spending: • IBIS World estimates 2.6% compound growth in consumer spending from 2011 to 2016 http://clients.ibisworld.com/bed/default.aspx?bedid=363 Image: http://clients.ibisworld.com/charts/bed/1_1_363_BEDScores.png
  • 4. 2010 Revenue Breakdown Source: Annual Report, Dec 2010
  • 5. Global Markets Exposure • About $20 billion or 31% of Revenue from emerging markets in 2010 • Focus on growth in Central Asia and Eastern Europe • 70% growth of sales in Russia over last 2 years • Robust economic indicators, low debt ratios, good foreign exchange reserves • Wimm-Bill-Dann acquisition  66% at $3.8 B total ownership to 77%  15 Aug 2011, ‘squeeze-out demand’ for other 23%  3,883.70 Russian rubles per share Source: Q3 Earnings Release, Oct 2011
  • 6. Savory Snacks  Frito Lay’s World’s largest Food Brand $9.4bn  Doritos $4 B, Cheetos $3.1 B, Ruffles $2.6bn, Tositos $1.7bn, Fritos $1.3bn • Transnational expansion strategy through balance between:  Localization  Maintaining consistent quality standards and cooking processes • 5-year CAGR:  3% Volume  8% Revenue  8% NOPBT Source: Q3 Earnings Release, Oct 2011
  • 7. Beverages Source: Barclays “BTS” Consumer Conference, Sep 2011 http://www.pepsico.com/Download/Barclays_BTS_Presentation.pdf
  • 8. Carbonated Soft Drinks • Sustain powerhouse brands Sierra Mist, +7% in volume Mountain Dew, +2.5% in volume Pepsi Max, +93% in volume • Focused advertising & marketing campaigns Pepsi Max Diet Pepsi Pepsi Social media exposure • Continue innovating products Pepsi Next • Develop Occasion-based marketing On-the-Go Refreshment Special Occasion and Celebrations Meal-time and Snacking Source: Q3 Earnings Release, Oct 2011
  • 9. Nutrition • Top 3 globally in Nutrition, aiming to be $30B business by 2020 • Huge growth potential, 5-year double-digit revenue CAGR • Strong demographic and consumer interest in health and wellness • Aging population seeking healthy and tasty foods • On-the-Go consumers and their demand for convenience Source: Q3 Earnings Release, Oct 2011 Barclays “BTS” Consumer Conference, Sep 2011 http://www.pepsico.com/Download/Barclays_BTS_Presentation.pdf
  • 10. Recent Challenges and Concerns • 2012 Pricing Strategy • Commodity inflation and Demand elasticity • Margins & Cost cutting measures • Currency exposure • Investors appealing for a split of Snacks and Beverages • Strong growth in snacks business • Strong growth with Tropicana and Gatorade • Weak CSD strategy and culture has impacted PepsiCo’s overall stock performance • While Coke has increased by about 50% • Over-spending in marketing and advertising • Kraft and Sara Lee example Source: “Don’t Rule Out a Pepsi Breakup Yet”, Barron’s, 11/19/2011 Q3 Earnings Release, Oct 2011