2pepsico 100412203039 Phpapp02

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.
COMPANY PROFILE
Headquarters: Purchase, NY Symbol: PEP Exchange: NYSE Stock Price: $62.23 Number of Employees: 198,000 Industry: Snacks and Beverages
COMPANY HISTORY
o
o o
o 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. 1976 - Pepsi-Cola becomes the single largest selling soft drink brand sold in U.S. supermarkets. 1984 - PepsiCo is restructured to focus on its three core businesses: soft drinks, snack foods and restaurants. Transportation and sporting goods businesses are sold. 1990 - PepsiCo profits exceed $1 billion for the first time. 2001 - PepsiCo merges with The Quaker Oats Company 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
Summary of Operations Total net revenue Core division operating profit Core total operating profit Core net income Core earnings per share Other Data Management operating cash flow Net cash provided by operating activities $ $ $ $ $ $ 4,651 6,999 2,446 4,720 2,541 7,858 $ $ $ $ $ $ 4,551 6,934 2,430 4,300 2,204 4,203 2% 1% 1% 10% 15% 87% $ $ $ $ $ 43,251 8,475 7,824 5,887 3.68 $ $ $ $ $ 39,474 8,025 7,253 5,587 3.37 10% 6% 8% 5% 9%
2007
Chg
Capital spending
Common share repurchases Dividends paid Long-term debt
INCOME STATEMENT
Period Ending 12/27/2008 $43,251,000 $20,351,000 12/29/2007 $39,474,000 $18,038,000 12/30/2006 $35,137,000 $15,762,000 12/31/2005 $32,562,000 $14,176,000
Total Revenue Cost of Revenue
Gross Profit Operating Expenses

Sales, General and Admin. Other Operating Items
$22,900,000
$21,436,000
$19,375,000
$18,386,000
$15,901,000 $64,000
$14,208,000 $58,000
$12,774,000 $162,000
$12,314,000 $150,000
Operating Income Add'l income/expense items Earnings Before Interest and Tax
Interest Expense
$6,935,000 $41,000 $7,350,000 $329,000
$7,170,000 $685,000 $7,855,000 $224,000
$6,439,000 $173,000 $7,228,000 $239,000
$5,922,000 $716,000 $6,638,000 $256,000
Earnings Before Tax

Income Tax
$7,021,000
$1,879,000
$7,631,000
$1,973,000
$6,989,000
$1,347,000
$6,382,000
$2,304,000
Equity Earnings Unconsolidated Subsidiary Net Income-Cont. Operations
$374,000 $5,142,000
$0 $5,658,000
$616,000 $5,642,000
$0 $4,078,000
Net Income
$5,142,000
$5,658,000
$5,642,000
$4,078,000
Net Income Applicable to Common Shareholders
$5,142,000
$5,658,000
$5,642,000
$4,078,000
STATEMENT OF CASH FLOWS

Period Ending: Net Income 12/27/2008 $5,142,000 12/29/2007 $5,658,000 12/30/2006 $5,642,000 12/31/2005 $4,078,000
Cash Flows-Operating Activities Depreciation Net Income Adjustments $1,543,000 $1,105,000 $1,426,000 ($46,000) $1,406,000 ($408,000) $1,308,000 $50,000
Changes in Operating Activities Accounts Receivable Inventory Other Operating Activities Liabilities Net Cash Flow-Operating ($549,000) ($345,000) ($435,000) $538,000 $6,999,000 ($405,000) ($204,000) ($123,000) $628,000 $6,934,000 ($330,000) ($186,000) $32,000 ($72,000) $6,084,000 ($272,000) ($132,000) $23,000 $797,000 $5,852,000
Cash Flows-Investing Activities Capital Expenditures Investments Other Investing Activities Net Cash Flows-Investing ($2,446,000) $1,282,000 ($1,503,000) ($2,667,000) ($2,430,000) ($356,000) ($958,000) ($3,744,000) ($2,068,000) $2,017,000 ($143,000) ($194,000) ($1,736,000) ($991,000) ($790,000) ($3,517,000)
Cash Flows-Financing Activities Dividends Paid Sale and Purchase of Stock Net Borrowings Other Financing Activities Net Cash Flows-Financing ($2,541,000) ($4,106,000) $3,515,000 $107,000 ($3,025,000) ($2,204,000) ($3,204,000) $1,194,000 $208,000 ($4,006,000) ($1,854,000) ($1,816,000) ($2,447,000) $134,000 ($5,983,000) ($1,642,000) ($1,932,000) $1,696,000 $0 ($1,878,000)
Effect of Exchange Rate Net Cash Flow
($153,000) $1,154,000
$75,000 ($741,000)
$28,000 ($65,000)
($21,000) $436,000
PERFORMANCE CHART
SWOT
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 Companys go-to-market systems like the direct store delivery gives an added bonus to the flexibility and power of the PepsiCos 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
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 market oCompetitors
FIVE FORCE MODEL

Threat of new Entrants: Weak, it is a cutthroat industry and mainly dominated by certain brand names.
Supplier Power: Strong, good relationships with distributors will make transaction easier
Degree of Rivalry: Fierce, it is a very competitive industry
Buyer power: Strong, unless consumers want product they will not sell
Threat of Substiutes: Strong. Anyone can take their product and tweak it to sell it for less.
STRATEGY
Power of One Alliance Development of Good-for-You and Better-for-You products Pepsi and Frito Lay brands hold large market share in both domestic and international markets
KEY SUCCESS FACTORS
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
WORKS CITED
www.finance.yahoo.com www.moneycentral.msn.com www.pepsico.com www.nyse.com www.coca-cola.com

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PepsiCo

Total Revenue Cost of Revenue

Gross Profit Operating Expenses

$6,935,000 $41,000 $7,350,000 $329,000

$7,170,000 $685,000 $7,855,000 $224,000

$6,439,000 $173,000 $7,228,000 $239,000

$5,922,000 $716,000 $6,638,000 $256,000

Earnings Before Tax

Equity Earnings Unconsolidated Subsidiary Net Income-Cont. Operations

Net Income Applicable to Common Shareholders

STATEMENT OF CASH FLOWS

Effect of Exchange Rate Net Cash Flow

FIVE FORCE MODEL

Degree of Rivalry: Fierce, it is a very competitive industry

KEY SUCCESS FACTORS

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