View
1.748
Download
4
Category
Tags:
Preview:
DESCRIPTION
Presentation given by Pepsi at the 2013 Consumer Analyst of New York conference
Citation preview
Hugh Johnston Chief Financial Officer
Geared for Growth CAGNY – February 21, 2013
2
Safe Harbor Statement of Terms & Non-GAAP Information
Safe Harbor Statement
• Statements in this communication that are "forward-looking statements,” including our 2013 guidance, are based on currently available information, operating plans and projections
about future events and trends. Terminology such as “believe,” “expect,” “intend,” “estimate,” “project,” “anticipate,” “will” or similar statements or variations of such terms are intended
to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that
could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: changes in
demand for PepsiCo’s products, as a result of changes in consumer preferences and tastes or otherwise; changes in the legal and regulatory environment; PepsiCo’s ability to
compete effectively; PepsiCo’s ability to grow its business in emerging and developing markets or unstable political conditions, civil unrest or other developments and risks in the
countries where PepsiCo operates; unfavorable economic conditions in the countries in which PepsiCo operates; increased costs, disruption of supply or shortages of raw materials
and other supplies; failure to realize anticipated benefits from our productivity plan or global operating model; disruption of PepsiCo’s supply chain; damage to PepsiCo’s reputation;
failure to successfully complete or integrate acquisitions and joint ventures into PepsiCo’s existing operations; PepsiCo’s ability to hire or retain key employees or a highly skilled and
diverse workforce; trade consolidation or the loss of any key customer; any downgrade of our credit ratings; PepsiCo’s ability to build and sustain proper information technology
infrastructure, successfully implement its ongoing business transformation initiative or outsource certain functions effectively; fluctuations in foreign exchange rates; climate change,
or legal, regulatory or market measures to address climate change; failure to successfully renew collective bargaining agreements or strikes or work stoppages; any infringement of
or challenge to PepsiCo’s intellectual property rights; and potential liabilities and costs from litigation or legal proceedings.
• For additional information on these and other factors that could cause PepsiCo’s actual results to materially differ from those set forth herein, please see PepsiCo’s filings with the
SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-GAAP Information
• Please refer to the “Investors” section of PepsiCo’s web site at www.pepsico.com under the heading “Investor Presentations” to find disclosure and a reconciliation of any non-GAAP
financial measures contained herein.
Glossary
• Beginning in the second quarter of 2012, organic results exclude the impact of foreign exchange translation. In addition, 2012 fourth quarter and full year organic results exclude the
extra reporting week in 2011. Please refer to the Glossary and attachments to our February 14, 2013 earnings release, available at www.pepsico.com under the heading “Investor
Presentations”, for the definitions of core, constant currency, organic and certain other terms used herein.
3
PepsiCo Today
Certain of the above items are reflected on a core basis and represent Non-GAAP financial measures that exclude certain items. Please refer to the
“Reconciliation of GAAP and Non-GAAP Information” attachment posted on February 21, 2013 under the "Investors - Investor Presentations” section on
PepsiCo’s website at www.pepsico.com to find disclosure and a reconciliation of the above non-GAAP financial measures.
Revenue
Operating Margin
Net ROIC
Dividend Yield
Organic Revenue Growth
$65B
15%
15%
3%
5%
4
Positioned in Attractive Categories
• Projected 5% category growth for
snacks and beverages
• Highly complementary
• PepsiCo #1 globally
in salty snacks
• PepsiCo strong #2 globally
in beverages with leadership
in many important markets
Note: Snacks/Beverage/Nutrition data is based on 2012 net revenue
Beverages
49% Snacks
51%
Global
Nutrition
5
With a Broad Product Portfolio…
Products Have Broad Appeal
DAYPARTS
COHORTS
NEEDSTATES
OCCASIONS
6
Powerful Brands
22 $1Bn Brands
7
Over 40 $250M-$1Bn Brands
Powerful Brands
8
PepsiCo Has 9 of the Top 40 Trademarks at Retail
52 Weeks Ending Dec 30, 2012, SymphonyIRI Group - Total Store Advantage, Total US – MultiOutletC
1 15 29
2 16 30
3 17 31
4 18 32
5 19 33
6 20 34
7 21 35
8 22 36
9 23 37
10 24 38
11 25 39
12 26 40
13 27
14 28
9
Emerging & Developing Markets
Significant Developing and Emerging Markets Exposure
Balanced Geographic Footprint
Products / Territories
Both Snacks Only Beverages Only No Presence
We Have Products in More than 200 Countries and Territories
Emerging &
Developing
35% Developed
65%
Note: Developed and Emerging & Developing data is based on 2012 net revenue
10
Consumption Highly Correlated to GDP/Capita
Source: Euromonitor
GDP / Capita
Per
Cap
ita C
on
su
mp
tio
n
10K 20K
Emerging Developed
11
Lots of Growth Runway
Source: Euromonitor
Salty Snack Per Capita Consumption (Index to Mexico)
India
China
Russia
Brazil
Mexico
39
28
11
6
100
12
Recent Actions Have Strengthened Our Business
Stepped Up Innovation
Strengthened Execution
Increased Brand Investment
Productivity to Fund Margin Expansion & Future Investment
Cash Flow Productivity & Returns
13
2012 A&M Up 50bps to 5.7% of Sales
Increased Brand Investment: Focus on Mega Brands
14
Crash the Superbowl
ENGAGEMENT HUGE CONSUMER
2 OF TOP 10 SUPERBOWL SPOTS
22,000 ADS SUBMITTED OVER 7 YEAR HISTORY
14
15
Do Us a Flavor
19 MILLION SUBMISSIONS
GLOBALLY
INCLUDING POLAND, EGYPT & INDIA
UK TO 17 MARKETS LIFT & SHIFT FROM THE
15
16
PepsiCo Sports Properties
Leagues
Pro Teams
Colleges
17
Innovation Across the Portfolio
Stepped Up Innovation
18
Doritos Locos Tacos
325 SOLD MILLION UNITS
NEW PRODUCT IN MOST SUCCESSFUL
HISTORY TACO BELL
18
19
Quaker Real Medleys
2012 BREAKFAST
OF THE YEAR
DELICIOUS PREMIUM
WITH REAL FRUIT AND NUTS
OATMEAL PRODUCT
19
20
Pepsi Next
$150
60% LESS CALORIES
REAL COLA TASTE
RETAIL MILLION AT
20
21
Starbucks Refreshers
60 CALORIE SPARKLING BEVERAGE
DELICIOUS BOOST OF ENERGY FROM GREEN COFFEE EXTRACT
21
22
Trop 50
50% LESS CALORIES
FOLLOWING SUCCESS IN LAUNCHED IN THE UK
US & CANADA
22
23
Gatorade Energy Chews
PERFORMANCE TO FUEL ATHLETES CARB ENERGY
23
24
Frito Share of Salty Purchases with a CSD
Strengthened Execution
Source: IRI Household panel, 2012 is rolling 12 months ending December 16, 2012
PEP CSD Share of CSD Purchases with Salty
When
CSD is:
2011 2012
+2pts +4pts
Other PEP Other PEP
60% 62% 59%
63%
When
Salty is:
2011 2012
+2pts +3pts
Other PEP Other PEP
32% 34% 32% 35%
25
Sustainability
GTM Strategy
Procurement
Fleet Portfolio
Delivered Productivity of $1B in 2012
Automation & Technology
26
Cash Returns
Note - Certain of the above items represent Non‐GAAP financial measures that exclude certain items. Please refer to the “Reconciliation of GAAP and Non‐GAAP Information” attachment
posted on February 21, 2013 under the "Investors ‐ Investor Presentations” section on PepsiCo’s website at www.pepsico.com to find disclosure and a reconciliation of the above non‐GAAP
financial measures.
Strong 2012 Performance
• Delivered $7.4 billion Management Operating Cash Flow (MOCF) ex-items
• Cash conversion cycle improved by 9 days
• Cap ex managed to 4% of net revenue
• Returned $6.5 billion to shareholders
MOCF Ex-Items per Share 5 Year CAGR of 11%
$30 Billion Cash Returned to Shareholders in Last Five Years
27
Balanced Profile
Geographies
Significant Emerging and Developing Markets Exposure
Emerging &
Developing
35% Developed
65%
Products
Note: Data is based on 2012 net revenue
Beverages
49% Snacks
51%
Global
Nutrition
28
Emerging Developing Developed
Growth Driver Penetration Frequency Expansion
Role in Portfolio
Growth
Absolute Margin/ROIC
Margin Improvement
ROIC Improvement
Key Markets China, India Russia, Mexico, Brazil U.S., U.K., Canada
Portfolio Delivers Balanced Growth, ROIC and Margins
29
Category
51% ~2/3
49% ~1/3
How Revenue Growth Model Works
Geography
Growth Rate % of Growth % of Revenue
LSD-MSD
MSD
Beverages
Snacks
Assumes: 3-5 year timeframe, currency neutral, no structural change
35%
~2/3
65%
~1/3
Growth Rate % of Growth % of Revenue
LSD-MSD
HSD-LDD
Mid-Single Digit Revenue Growth
Developed
Emerging &
Developing
30
Long-Term Goals
Top Tier TSR
• EPS HSD
• Operating Margin
+30-50 bps / year
• ROIC 50+ bps / year
• Core MOCF growth
= Net Income growth
• Strong returns to shareholders
(dividends and share
repurchases)
• Revenue Growth MSD,
mostly Organic
• Balanced offerings between
FFY, BFY, GFY
• Increased Emerging &
Developing Market Footprint
Note - Certain of the above items represent Non‐GAAP financial measures that exclude certain items. Please refer to the “Reconciliation of GAAP and Non‐GAAP Information” attachment
posted on February 21, 2013 under the "Investors ‐ Investor Presentations” section on PepsiCo’s website at www.pepsico.com to find disclosure and a reconciliation of the above non‐GAAP
financial measures.
• World-Class Brand Building and Innovation
• Excellence in Execution
• Optimal Cost Structure and Capital Allocation
• Best Place to Work
Supporting
Fundamentals:
31
Core Constant Currency EPS Growth
Organic Revenue Growth
2013 Productivity Savings
Commodity Inflation
A&M
Core Tax Rate
MOCF (excluding certain items)
Net Capital Expenditures
Share Repurchases
Dividends
+7%1
+Mid-Single Digits
~$900M
+Low-Single Digits
At Least 5.7% of Net Revenue
~27%
More than $7B
~$3B (<5% of Net Revenue)
~$3.0B
~$3.4B (+5.6% Increase in Div/Share)
2013: Outlook
1. From PepsiCo’s fiscal 2012 core EPS of $4.10
Note – Certain of the above items represent Non-GAAP financial measures that exclude certain items. Please refer to the “Reconciliation of GAAP and Non‐GAAP Information” attachment
posted on February 21, 2013 under the "Investors ‐ Investor Presentations” section on PepsiCo’s website at www.pepsico.com to find disclosure and a reconciliation of the above non‐GAAP
financial measures.
32
• Scale Leverage
• Aggressive
Productivity
Program
• Mid-Single-Digit
Revenue Growth,
Mostly Organic
• Brand Building
• Innovation
• Go-to-Market
Capability
PEP Virtuous Circle
Recommended