Dr Pepper Snapple Group saw net sales grow more than 3.8% to $6.69 billion last year – its final set of full-year figures before it’s expected to finalise a takeover from coffee giant Keurig Green Mountain.
The group’s operating profit fell 3.1% to reach $1.4 billion, while net income stood 27% higher at $1.08 billion.
Volume of branded carbonated soft drinks was 1% higher, while non-carbonated beverages saw a 4% improvement on the prior-year period following the group’s acquisition of Bai Brands in 2016.
In January, Keurig Green Mountain agreed to acquire Dr Pepper Snapple for $103.75 per share, amounting to a total cash consideration of $18.7 billion. That alone makes it the largest food and drink acquisition since Dow Chemical completed its $130 billion merger with DuPont in August, though the true value of Keurig and Dr Pepper’s merger is likely to be as high as $25-27 billion.
The transaction could complete in the second quarter of the year, subject to approval and anti-trust clearance.
The move that will create a drinks conglomerate with $11 billion in annual revenue. It means that Keurig owner JAB will compete directly with Coca-Cola and PepsiCo in the soft drinks sector, and, according to some analysts, increases the likelihood of Pepsi and Coke being bought.
Dr Pepper Snapple’s positive full-year results were underlined by a 1% increase in beverage concentrate volume compared with the year before. In the US and Canada, volume was 1% higher, and in Mexico and the Caribbean volume increased 3% compared with 2016.
All three of its operating segments saw sales increase during 2017. Beverage Concentrates accounted for $1.33 billion of the $6.69 billion total with Packaged Beverages accounting for $4.87 billion and Latin America Beverages making up the remaining $487 million.
It means that the two largest segments – Beverage Concentrates and Packaged Beverages – now represent nominally lower percentages of the group’s overall sales mix, while Latin America Beverages now accounts for 0.15% more of the company’s overall sales mix than it did in 2016.
© Oren Rozen
Analysis: How big is a combined Keurig Dr Pepper going to be?
In January FoodBev reported that Keurig Green Mountain would acquire Dr Pepper Snapple in a move that will create a giant soft drinks and coffee conglomerate. But just how big is the combined entity – named Keurig Dr Pepper – going to be? [Read more…]
© FoodBev Media Ltd 2019
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