Slide 1: Emerging Stronger
CAGNY 2021 EMERGING STRONGER HUGH JOHNSTON VICE CHAIRMAN & CHIEF FINANCIAL OFFICER
Slide 2: Safe Harbor Statement & Non-GAAP Information
SAFE HARBOR STATEMENT & NON-GAAP INFORMATION Safe Harbor Statement Statements in this communication that are “forward-looking statements,” including our 2021 guidance and long term targets, are based on currently available information, operating plans and projections about future events and trends.
Slide 3: Today's Discussion
TODAY’S DISCUSSION 01 Who We Are 02 Our Value Creation Proposition 03 Our Financial Outlook 2
Slide 4: Who We Are
WHO WE ARE 23 PepsiCo has a portfolio that includes BILLION- Products sold in More than More than More than 200+ 290,000 $70 BILLION $10 BILLION DOLLAR BRANDS that generated more than countries and territories employees in net revenue in 2020 in operating profit in 2020 $1 billion each in estimated
Slide 5: Our Mission
OUR MISSION MISSION Create more smiles with every sip and every bite Be the global leader in convenient foods and beverages VISION by winning with purpose FA S T E R STRONGER BETTER Winning in the marketplace, being Transforming our capabilities, cost, and Integrating purpose into our business more
Slide 6: Geographic Mix and Category Positions
GEOGRAPHIC MIX AND CATEGORY POSITIONS Balanced Geographic Mix Balanced Mix in Attractive Categories International Top 5 Markets Snacks Beverages comprise % of Net Market Revenue ~75% of Net Revenue Mexico 6 • #1 position • Strong #2 position with Russia 4 • Leadership in 38% salty snacks Snacks lead
Slide 7: Our Divisions
OUR DIVISIONS Net Revenue By Division Core Division Operating Profit APAC: 5% APAC: 5% AMESA: 6% AMESA: 7% PBNA: 17% Europe: 12% PBNA: 32% Europe: 17% $70.4 $12.0 Billion LatAm: 9% Billion LatAm: 10% FLNA: 45% QFNA: 6% QFNA: 4% FLNA: 26% Note: Full-Year 2020 reported operating profit was $10.1 billi
Slide 8: Our North America Divisions
OUR NORTH AMERICA DIVISIONS PepsiCo Beverages Frito-Lay Quaker Foods North North America North America America Top 5 Brands: Top 5 Brands: Top 5 Categories: >65% ~60% >80% of net revenue of net revenue of net revenue Geographic Mix: : 94% / : 6% Geographic Mix: Geographic Mix: LRB Mix: CSD: 43% / NC
Slide 9: Our International Divisions
OUR INTERNATIONAL DIVISIONS Latin America Europe AMESA APAC Top 5 Countries: Top 5 Countries: Top 5 Countries: Top 5 Countries: ~85% >60% >85% >85% of net revenue of net revenue of net revenue of net revenue Mexico Egypt South Vietnam Chile Russia Germany China Africa Brazil Guatemala U.K. Turkey Sa
Slide 10: Our Culture and Values
OUR CULTURE AND VALUES be consumer act as focus and get centric owners things done fast voice opinions raise the bar celebrate act with fearlessly on talent and success integrity diversity 9
Slide 11: Winning with Purpose
WINNING WITH PURPOSE E nvironmental S ocial G overnance GENDER FEMALE BOARD PACKAGING AGRICULTURE PARITY EMPOWERMENT DIVERSITY RACIAL PORTFOLIO INDEPENDENT WATER CLIMATE EQUALITY DIVERSIFICATION BOARD 10
Slide 12: Today's Discussion
TODAY’S DISCUSSION 01 Who We Are 02 Our Value Creation Proposition 03 Our Financial Outlook 11
Slide 13: We Have Delivered Consistent Organic Revenue Growth Over the Long Term
WE HAVE DELIVERED CONSISTENT ORGANIC REVENUE GROWTH OVER THE LONG TERM Our Long Term Organic Revenue Growth Target Remains Intact 5.0% +4-6% 4.5% 4.3% 4.0% 4.0% 3.7% 3.7% 2.3% 2013 2014 2015 2016 2017 2018 2019 2020 LT Target Average: ~4% Note: PepsiCo provides guidance on a non-GAAP basis as the Co
Slide 14: By Evolving Our Portfolio to Meet Changing Consumer Needs
BY EVOLVING OUR PORTFOLIO TO MEET THE CHANGING NEEDS OF OUR CONSUMERS Grow The Core Consumer-Centric Address Strategic Gaps Innovation 13
Slide 15: Significant Runway for Growth in Our Key Categories
AND BELIEVE THERE IS STILL A SIGNIFICANT RUNWAY FOR GROWTH IN OUR KEY CATEGORIES Global Beverages Opportunity Global Snacks Opportunity 5-YR Estimated 5-YR Estimated CAGR: +4-5% 9% share CAGR: +4-5% 7% share ~$570 ~$550 Billion Billion Note: PepsiCo defined global snacks include total savory, sweet,
Slide 16: Clear Priorities in North America
WITH CLEAR PRIORITIES IN NORTH AMERICA NA Market Leadership Key Priorities • Accelerate growth by capturing FLNA + new needs and occasions, QFNA NA Position Market Share Market Size innovation, advanced digital capabilities, and precision Macrosnacks #1 ~$120B execution • Outpace category growth, To
Slide 17: And International Markets
AND INTERNATIONAL MARKETS International Leadership In Food & Beverages Key Priorities in Key Growth Markets • Broaden foods portfolio, Int’l Position Market Share Market Size expanding to new categories, needs and occasions Snacks China #6 ~$170B • Build scale by driving affinity, availability, freq
Slide 18: A Profitable Growth Equation
THAT TRANSLATES INTO A PROFITABLE GROWTH EQUATION Components Of Our Operating Leverage Tailwinds Headwinds Long-Term Core Long-Term Operating Organic Operating Geographic Margin Annual Capability Expansion Revenue Expense & Productivity Investments Growth Inflation Channel mix +4-6% ~$1 billion +20-
Slide 19: Will Vary by Business Mix and Priorities
BUT WILL VARY BY BUSINESS MIX AND PRIORITIES Significant variation across Sectors Total PepsiCo FLNA + QFNA PBNA International Core Division Operating Core Division Core Division Core Operating Margin Margin Operating Margin Operating Margin 29.3% 15.0% 14.3% 9.1% 2020 2020 2020 2020 Note: Full-year
Slide 20: FLNA+QFNA: Invest to Sustain/Accelerate Growth
FLNA+QFNA: INVEST TO SUSTAIN / ACCELERATE GROWTH AND ENHANCE COMPETITIVE ADVANTAGES Today1 Future Key Drivers Sustain/Increase Capture new occasions and expand into 29.3% adjacencies Increased marketing and Productivity breakthrough gains from innovation automation and digitization Investments in po
Slide 21: PBNA: Evolve Portfolio and Improve Profit and Returns
PBNA: EVOLVE PORTFOLIO AND IMPROVE PROFIT AND RETURNS Today1 Future Key Drivers Increase Improved portfolio mix to drive growth and margin gains 9.1% Invest in advanced revenue management capability Enhance marketing ROI Modernize supply chain and digital foundation to accelerate productivit
Slide 22: International: Grow Snacks Scale and Invest Strategically in Beverages
INTERNATIONAL: GROW SCALE FOR OUR SNACKS BUSINESS AND INVEST STRATEGICALLY IN BEVERAGES Today1 Future Key Drivers Snacks Beverage Sustain/Increase 14.3% • Focus on building scale • Strategically invest to via per capita balance growth and consumption to drive returns, focusing on core efficiencies b
Slide 23: Capital Allocation Priorities Unchanged
OUR DIVISIONAL PRIORITIES KEEP OUR LONG-TERM CAPITAL ALLOCATION PRIORITIES UNCHANGED 1 Invest in the Business Capital spending to drive growth and productivity agenda 2 Pay / Grow Dividends Increased dividend for 49 consecutive years 3 Strengthen Portfolio Bolt-On M&A Through M&A 4 Share Repurchases
Slide 24: Prioritizing Higher Capital Investments for Growth and Productivity
WE ARE PRIORITIZING HIGHER CAPITAL INVESTMENTS FOR GROWTH AND PRODUCTIVITY INITIATIVES Net Capital Spending Where Are We Investing? (as % of Net Revenue) ESG Digitizing end-to-end Growth Productivity supply chain Increase Manufacturing Capacity 23
Slide 25: Free Cash Flow Conversion Moderated But Remains Strong
WHICH IS WHY OUR FREE CASH FLOW CONVERSION HAS MODERATED BUT REMAINS STRONG Free Cash Flow Conversion 121% 113% 110% 106% 96% 84% 78% 72% 2013 2014 2015 2016 2017 2018 2019 2020 Note: Free Cash Flow conversion is calculated by dividing Free Cash Flow by total Core Net Income attributable to PepsiCo.
Slide 26: Prioritizing Dividend Growth
WE ARE ALSO PRIORITIZING DIVIDEND GROWTH Dividends Per Share Current Dividend Yield: ~3% Effective June 2021 $4.30 $4.02 49 $3.79 $3.59 $3.17 $2.96 $2.76 $2.53 $2.24 Consecutive years of dividend hikes 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note: 2021 dividend increase effective with the divid
Slide 27: Addressed Key Portfolio Gaps with Recent Acquisitions
AS WE BELIEVE WE HAVE ADDRESSED KEY PORTFOLIO GAPS WITH RECENT ACQUISITIONS M&A Spend (in millions) Recent M&A $10,585 $556 2013 to 2017 2018 to 2020 Very Pleased With Our Current Portfolio 26
Slide 28: Focus on Improving Return on Investments
AND MUST NOW FOCUS ON IMPROVING THE RETURN ON OUR INVESTMENTS Core Net ROIC 24.8% 22.9% 22.3% 21.5% 19.6% 19.9% 17.5% 16.4% 2013 2014 2015 2016 2017 2018 2019 2020 Note: Full-year 2020 reported net income attributable to PepsiCo was $7.1 billion. Core Net ROIC is a non-GAAP measure. Please refer to
Slide 29: Preserving Balance Sheet Strength and Liquidity
WHILE PRESERVING OUR BALANCE SHEET STRENGTH AND LIQUIDITY Use of Cash / Liquidity Principles Committed To Maintaining Investment Grade Rating + Access to Tier-1 Commercial Paper Investing In Our Business Returning Cash To Shareholders 2021 Priorities 1 2 Fund capital spending to preserve day-to-day
Slide 30: Sustainable Growth, Income and Value Creation
AS WE ASPIRE TO DELIVER SUSTAINABLE GROWTH, INCOME AND VALUE CREATION Long-Term Targets Income Core Core Current Organic Operating Constant Dividend Revenue Margin Currency EPS Yield Growth Expansion Growth +4-6% +20-30 bps +HSD% ~3% annually Value Creation Note: PepsiCo provides guidance on a non-G
Slide 31: Today's Discussion
TODAY’S DISCUSSION 01 Who We Are 02 Our Value Creation Proposition 03 Our Financial Outlook 30
Slide 32: 2021 Outlook
2021 OUTLOOK +MSD +HSD $5.9B 1 2 3 Organic Revenue Core Constant Cash Return to Growth Currency EPS Growth Shareholders Note: 1: +MSD is defined as mid-single digit. 2: +HSD is defined as high-single digit. 3: Comprised of $5.8 billion in dividends and $0.1 billion in share repurchases. As of Februa
Slide 33: PepsiCo
2 PEPSICO