Pepsi 2014 Annual Report Download - page 81

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61
volume decline primarily reflected a high-single-digit decline in our overall water portfolio. The Latin
America volume performance primarily reflected a double-digit decrease in Brazil and a low-single-digit
decrease in Argentina, offset by a double-digit increase in Venezuela and a low-single-digit increase in
Mexico.
Reported operating profit increased 1%. Excluding the items affecting comparability in the above table (see
“Items Affecting Comparability”), operating profit declined 2%, primarily reflecting the volume declines
and certain operating cost increases. These impacts were partially offset by the favorable effective net pricing
and planned cost reductions across a number of expense categories, as well as lower commodity costs, which
increased reported operating profit by 6 percentage points. Unfavorable foreign exchange reduced operating
profit growth by 3 percentage points.
PepsiCo Europe
% Change
2014 2013 2012 2014 2013
Net revenue $13,290 $13,752 $13,441 (3) 2
Impact of foreign exchange translation 81
Net revenue growth on a constant currency
basis(a) 4.5 (b) 3.5 (b)
Operating profit $ 1,331 $ 1,293 $ 1,330 3(3)
Merger and integration charges —10 11
Restructuring and impairment charges 71 60 42
Operating profit excluding above items(a) $ 1,402 $ 1,363 $ 1,383 3(1.5)
Impact of foreign exchange translation 11
Operating profit growth excluding above
items, on a constant currency basis(a) 4—(b)
(a) See “Non-GAAP Measures.”
(b) Does not sum due to rounding.
2014
Net revenue decreased 3%, primarily reflecting unfavorable foreign exchange, which negatively impacted
net revenue performance by 8 percentage points, partially offset by effective net pricing and volume growth.
Snacks volume grew 2%, primarily reflecting high-single-digit growth in South Africa and mid-single-digit
growth in Turkey, partially offset by a slight decline in Russia. Additionally, the Netherlands experienced
slight growth and the United Kingdom grew low-single-digits.
Beverage volume grew 1%, primarily reflecting mid-single-digit growth in Germany and low-single-digit
growth in the United Kingdom and Turkey, partially offset by a mid-single-digit decline in Russia.
Operating profit increased 3%, primarily reflecting the effective net pricing and planned cost reductions
across a number of expense categories. These impacts were partially offset by certain operating cost increases
including strategic initiatives, as well as higher commodity costs, primarily reflecting milk prices and foreign
exchange transaction losses, which reduced operating profit growth by 21 percentage points. The impacts
of a one-time gain associated with the sale of agricultural assets in Russia and the lapping of incremental
investments into our business in the prior year each contributed 2 percentage points to operating profit growth.
These impacts were partially offset by an impairment charge associated with a brand in Greece and certain
charges associated with productivity initiatives outside the scope of the 2014 and 2012 Productivity Plans,