These decisions are based on a comprehensive review by the company’s management of its portfolio, brands, costs, organisation and capital structure. As a result of its review, the company reaffirmed its commitment to an integrated food and beverage portfolio through a one-company platform.
PepsiCo chairman and CEO Indra Nooyi, said: “In a volatile global environment over the past five years, PepsiCo has delivered double-digit compound annual growth in core net revenue, 8% compound annual growth in core EPS, and returned about $30bn to shareholders in the form of dividends and share repurchases. Our goal is to continue on that earnings trajectory over the next 5-10 years, fully recognising that we need to make changes in how we operate to address the challenges we identified in the review process. 2012 will be a transition year, in which we will be taking the appropriate steps to build a stronger, more successful company going forward.”
James Schiro, PepsiCo’s presiding director, said: “We are fully aligned with and supportive of management with respect to both the strategic direction of the Company and also the initiatives being announced today.”
Key Initiatives include:
The Company said it plans to:
“As we implement our strategic priorities in 2012, we’ve had to make some tough decisions,” said chief financial officer, Hugh Johnston. “As a result, 2012 will be a year of transition, one in which we will make the right investments to position PepsiCo properly to achieve long-term high-single-digit core constant currency EPS growth.”
For 2012, the company is targeting mid-single-digit core constant currency net revenue growth, in-line with its long-term target. It expects a decline in core constant currency EPS of approximately 5% from its fiscal 2011 core EPS of $4.40, reflecting a combination of strategic and macroeconomic factors, primarily:
The company is targeting about $8bn in cash flow from operating activities and more than $6bn in management operating cash flow (excluding certain items) in 2012, which will include the favourable impacts of a 10% reduction in capital expenditures and incremental working capital efficiency. The company also expects to make a pre-tax discretionary pension and retiree medical contribution of $1 billion in 2012.
Source: PepsiCo
© FoodBev Media Ltd 2024