Pepsi 2013 Annual Report Download - page 76
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58
Latin America Foods
% Change
2013 2012 2011 2013 2012
Net revenue $ 8,350 $ 7,780 $ 7,156 79
Impact of foreign exchange translation 67
Net revenue growth, on a constant currency basis(a) 13 16
Operating profit $ 1,242 $ 1,059 $ 1,078 17 (2)
Restructuring and impairment charges 12 50 48
Operating profit excluding above item(a) $ 1,254 $ 1,109 $ 1,126 13 (1.5)
Impact of foreign exchange translation 55.5
Operating profit growth excluding above item, on a
constant currency basis(a) 18 4
(a) See “Non-GAAP Measures.”
2013
Net revenue increased 7%, primarily reflecting favorable effective net pricing. Unfavorable foreign exchange
reduced net revenue growth by 6 percentage points.
Volume increased 2%, reflecting a mid-single-digit increase in Brazil and low-single-digit growth in Mexico.
Operating profit increased 17%, reflecting the net revenue growth and planned cost reductions across a
number of expense categories, partially offset by certain operating cost increases and higher advertising and
marketing expenses, as well as higher commodity costs, which reduced operating profit growth by 15
percentage points. Lower restructuring and impairment charges increased operating profit growth by 4
percentage points. Unfavorable foreign exchange reduced operating profit growth by 5 percentage points.
Mexico recently imposed a tax on certain foods that exceed specified caloric content. These taxes may
adversely affect LAF’s future financial performance. See also “Imposition of new taxes, disagreements with
tax authorities or additional tax liabilities could adversely affect our financial performance.” in “Risk Factors”
in Item 1A.
2012
Net revenue increased 9%, primarily reflecting effective net pricing and volume growth. Acquisitions and
divestitures in Argentina and Brazil in the prior year contributed 2 percentage points to net revenue growth.
Unfavorable foreign exchange reduced net revenue growth by 7 percentage points.
Volume increased 13%, primarily reflecting a mid-single-digit increase in Mexico and a slight increase in
Brazil (excluding the impact of an acquisition). Acquisitions contributed 9 percentage points to the volume
growth.
Operating profit decreased 2%, driven by higher commodity costs, which negatively impacted operating
profit performance by 17 percentage points, as well as certain operating cost increases reflecting strategic
initiatives. These impacts were partially offset by the net revenue growth and planned cost reductions across
a number of expense categories. The net impact of acquisitions and divestitures reduced operating profit
growth by 3.5 percentage points, primarily as a result of a gain in the prior year associated with the sale of
a fish business in Brazil. Unfavorable foreign exchange reduced operating profit growth by 5.5 percentage
points.