PepsiCo reports 1.6% growth in Q1 net revenue

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PepsiCo, the arch rival to CocaCola Company said its net revenue for the first quarter of the year grew by 1.6% on a year on year basis.

Commenting on the result, Chairman and CEO Indra Nooyi said “We achieved solid revenue growth in the first quarter underpinned by global volume growth and positive net price realization, despite challenging food and beverage industry trading conditions in North America and continued volatility in a number of developing and emerging markets.”

She added that “Our first quarter results were in line with our expectations, and we are on track to achieve our financial objectives for 2017.”

As regards its operations in Europe Sub-Saharan Africa (ESSA), PepsiCo said its business was positively impacted by productivity gains.

However, there were the impacts of higher prior-year restructuring charges and a prior-year impairment charge associated with certain production assets in Russia contributed 29 percentage points and 13 percentage points to operating profit growth, respectively.

The company explained that these impacts were partially offset by higher raw material costs, operating cost inflation and higher advertising and marketing expenses. Unfavorable foreign exchange reduced operating profit growth by 3.5 percentage points.

As a guidance for the full year, the company said it expects approximately $10 billion in cash flow from operating activities and approximately $7 billion in free cash flow (excluding certain items), Net capital spending of approximately $3 billion, dividend payments of approximately $4.5 billion; and a share repurchases of approximately $2 billion.

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