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56 PepsiCo, Inc. 2009 Annual Report
Management’s Discussion and Analysis
2008
Snacks volume grew 6%, reflecting broad-based increases led by
double-digit growth in Russia. Additionally, Walkers in the United
Kingdom, as well as the Netherlands, grew at low-single-digit rates
and Spain increased slightly. Acquisitions contributed 2 percentage
points to the volume growth.
Beverage volume grew 15%, primarily reflecting the expansion
of the Pepsi Lipton Joint Venture and the Sandora and Lebedyansky
acquisitions, which contributed 14 percentage points to the
growth. CSDs increased slightly and non-carbonated beverages
grew at a double-digit rate.
Net revenue grew 17%, reflecting favorable effective net pricing
and volume growth. Acquisitions contributed 7 percentage points
and foreign currency contributed 2 percentage points to the net
revenue growth.
Operating profit grew 6%, driven by the net revenue growth,
partially offset by increased commodity costs. Acquisitions
contributed 5 percentage points and foreign currency contributed
3 percentage points to the operating profit growth. Operating
profit growth was negatively impacted by 5 percentage points,
resulting from higher fourth quarter restructuring and impairment
charges in 2008 related to our Productivity for Growth program.
Operating profit, excluding restructuring and impairment charges,
grew 11%.
Asia, Middle East & Africa
% Change
2009 2008 2007 2009 2008
Net revenue $5,578 $5,119 $4,170 923
Operating profit $÷«716 $÷«592 $÷«466 21 27
Impact of restructuring and
impairment charges 13 15 14
Operating profit, excluding
restructuring and
impairment charges $÷«729 $÷«607 $÷«480 20 26
2009
Snacks volume grew 9%, reflecting broad-based increases driven
by double-digit growth in India and the Middle East, partially
offset by a low-single-digit decline in China. Additionally, South
Africa grew volume at a low-single-digit rate and Australia grew
volume slightly. The net impact of acquisitions and divestitures
contributed 2 percentage points to the snacks volume growth.
Beverage volume grew 8%, reflecting broad-based increases
driven by double-digit growth in India and high-single-digit
growth in Pakistan. Additionally, the Middle East grew at a mid-
single-digit rate and China grew at a low-single-digit rate.
Acquisitions had a nominal impact on the beverage volume
growth rate.
Net revenue grew 9%, reflecting volume growth and favorable
effective net pricing. Foreign currency reduced net revenue
growth by over 3 percentage points. The net impact of acquisi-
tions and divestitures contributed 1 percentage point to the
net revenue growth.
Operating profit grew 21%, driven primarily by the net revenue
growth. The net impact of acquisitions and divestitures contributed
11 percentage points to the operating profit growth and included
a one-time gain associated with the contribution of our snacks
business in Japan to form a joint venture with Calbee, the snacks
market leader in Japan. Foreign currency reduced operating profit
growth by 3 percentage points.
2008
Snacks volume grew 11%, reflecting broad-based increases led
by double-digit growth in China, the Middle East and South Africa.
Additionally, Australia experienced low-single-digit growth and
India grew at a high-single-digit rate.
Beverage volume grew 12%, reflecting broad-based increases
driven by double-digit growth in China, the Middle East and India,
partially offset by low-single-digit declines in Thailand and the
Philippines. Acquisitions had a nominal impact on beverage volume
growth. CSDs grew at a high-single-digit rate and non-carbonated
beverages grew at a double-digit rate.
Net revenue grew 23%, reflecting volume growth and favorable
effective net pricing. Acquisitions contributed 2 percentage points
and foreign currency contributed 1 percentage point to the net
revenue growth.
Operating profit grew 27%, driven by the net revenue growth,
partially offset by increased commodity costs. Foreign currency and
acquisitions each contributed 2 percentage points to the operating
profit growth. The impact of the fourth quarter restructuring and
impairment charges in 2008 related to our Productivity for Growth
program was offset by prior year restructuring charges. Operating
profit, excluding restructuring and impairment charges, grew 26%.
88045_pepsico-09ar_33-59_R4.indd 56 3/10/10 1:08 AM