Pepsi 2015 Annual Report Download - page 79
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Table of Contents
62
Quaker Foods North America
% Change
2015 2014 2013 2015 2014
Net revenue $ 2,543 $ 2,568 $ 2,612 (1) (2)
Impact of foreign exchange translation 21
Net revenue growth, on a constant currency
basis(a) 1(1)
Operating profit $ 560 $ 621 $ 617 (10) 1
Restructuring and impairment charges 314 4
Operating profit excluding above item(a) $ 563 $ 635 $ 621 (11) 2
Impact of foreign exchange translation 11
Operating profit growth excluding above item, on a
constant currency basis(a) (10) 3
(a) See “Non-GAAP Measures.”
2015
Net revenue declined 1% and volume grew slightly. The net revenue decline reflects unfavorable foreign
exchange, which negatively impacted net revenue performance by 2 percentage points, partially offset by
the volume growth. The volume growth reflects mid-single digit growth in ready-to-eat cereals and Aunt
Jemima syrup and mix, partially offset by a double-digit decline in MQD products and mid-single digit
declines in both grits and bars.
Operating profit decreased 10%, reflecting MQD impairment charges, which included a fourth quarter charge
related to ceasing operations of our joint venture as well as the lapping of the gain associated with the
divestiture of a cereal business in the prior year, each negatively impacting operating profit performance by
12 and 3 percentage points, respectively. In addition, operating profit performance was also negatively
impacted by certain operating cost increases and higher advertising and marketing expenses. These impacts
were partially offset by planned cost reductions across a number of expense categories, favorable mix and
the volume growth, as well as lower commodity costs, which positively contributed 3 percentage points to
operating profit performance.
2014
Net revenue declined 2% and volume was even with the prior year. The net revenue decline primarily reflects
unfavorable net pricing and unfavorable foreign exchange, which negatively impacted net revenue
performance by 1 percentage point. The volume performance reflects low-single-digit declines in Aunt
Jemima syrup and mix and ready-to-eat cereals, a mid-single-digit decline in regional grains, as well as a
double-digit decline in cookies, offset by low-single-digit growth in Oatmeal.
Operating profit increased 1%, primarily driven by planned cost reductions across a number of expense
categories, improvement in our share of the operating results of our MQD joint venture, which reflected
start-up costs in the prior year, and lower advertising and marketing expenses. Additionally, the net gain on
the divestiture of a cereal business contributed 3 percentage points to operating profit growth. These impacts
were partially offset by the unfavorable net pricing and mix, as well as certain operating cost increases.