Pepsi 2013 Annual Report Download - page 3
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1
2013 ANNUAL REPORT
Dear Fellow Shareholders,
Last year I described the dual goals we have unwaveringly
pursued since we began our transformation back in 2007:
continue to deliver the strong, consistent financial results
our shareholders expect year after year, while at the same
time investing in and transforming the company to ensure it
is built for long-term, sustainable growth. In short, perform
while we transform.
Looking back, 2012 was an important year in PepsiCo’s
transformation journey. We took the necessary actions
to strengthen our company. We made significant invest-
ments behind our largest global brands. And we changed
our operating model — moving from a loose federation
of countries and regions to a more efficient and effective
model that leverages PepsiCo’s talent, capabilities and
resources globally.
In 2013, we continued to reinforce these actions and
began to realize the benefits. Despite a very challenging
operating environment that included economic instability
and uncertainty in many of our key markets around the
world, we delivered on, or exceeded, each and every one
of the financial goals we announced to shareholders at the
beginning of the year.
Our performance in 2013 was strong:
• Our organic revenue grew 4%.
• Core constant currency earnings per share (EPS) grew 9%.
• Core gross margins improved by 90 basis points and core
operating margins improved by 40 basis points, even
while we increased investments in the company.
• We captured more than $900 million of productivity,
exceeding our target and keeping us on track to deliver
our three-year $3 billion productivity target for 2012–
2014. This success gave us the confidence to extend our
goal of $1billion in annual productivity savings for five
years beyond the existing goal (2015–2019).
• Core net return on invested capital (ROIC) improved
110basis points, 60 points ahead of our target.
• Free cash flow excluding certain items was strong at
$8.2billion.
• PepsiCo increased its annual dividend for the 41st
consecutive year in 2013 and returned $6.4 billion to our
shareholders through share repurchases and dividends.
INDRA K. NOOYI
PepsiCo Chairman and
Chief Executive O cer
Organic, core and constant currency results, as well as free cash flow excluding certain items, are non-GAAP
financial measures. Please refer to “Reconciliation of GAAP and Non-GAAP Information” beginning on
page141 of this Annual Report for more information about these results, including a reconciliation to the
most directly comparable financial measures in accordance with GAAP.