New CEO Ramon Laguarta will inherit a PepsiCo in typically good financial shape, after the business reported a 2% increase in net revenue.
PepsiCo turned over $64.66 billion in 2018, with steady growth in its Frito-Lay North America and ESSA (Europe and sub-Saharan Africa) segments offsetting smaller declines in Quaker Foods North America and AMENA (Asia, Middle East and North Africa).
For the final three months of the year – Laguarta’s first quarter as CEO – net revenue remained constant at $19.52 billion.
But despite the positive topline performance, operating profit fell by 2% across the whole of the business.
Laguarta replaced Indra Nooyi in October, 15 months after being appointed president of the company. He had previously been CEO of the (ESSA) division – the company’s third largest segment.
Its biggest business unit, North America Beverages, returned 1% revenue growth but endured a 16% contraction in operating profit – partly a result of higher transportation and commodity costs – in the results released today.
Ramon Laguarta said: “We are pleased with our results for the fourth quarter and the full year 2018. For the year we met or exceeded each of the financial objectives we set out at the beginning of the year. Frito-Lay North America and each of our international sectors performed very well, and our North America Beverages sector made progress throughout the year.
“While adverse foreign exchange translation negatively impacted reported net revenue performance, our underlying organic revenue growth accelerated in the second half, and we ended the year with 4.6% organic revenue growth in the fourth quarter. Furthermore, we are excited about the outlook for our business. We are well positioned in large, growing categories and have developed strong and relevant capabilities over the years. In 2019, we aim to capitalise on the momentum we have as we enter the year, and to continue to invest in the capabilities that will better position us for success for years to come.”