Slide 1: The PepsiCo Way
THE PEPSICO WAY CAGNY 2023 RAMON LAGUARTA CHAIRMAN & CEO HUGH JOHNSTON VICE CHAIRMAN & CFO 0
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 long-term targets, are based on currently available information, operating plans and projections about future events and trends. Terminology such a
Slide 3: Who We Are
WHO WE ARE PERFORMING WHILE TRANSFORMING PRIORITIES AND VALUE CREATION 2
Slide 4: We Are a Global Beverage and Convenient Food Company with Large, Trusted Brands
WE ARE A GLOBAL BEVERAGE AND CONVENIENT FOOD COMPANY WITH LARGE, TRUSTED BRANDS NET REVENUE WINNING WITH CORE OPERATING PROFIT More than More than $86 billion $12 billion in 2022 in 2022 2022 reported operating profit was $11.5 billion. Core operating profit is a non-GAAP financial measure that excl
Slide 5: Scaled and Well-Positioned in Large, Fast-Growing Categories
WHICH ARE SCALED AND WELL-POSITIONED IN LARGE, FAST-GROWING CATEGORIES Strong Positions In Fast-Growing Categories • Leading • Competitive #2 position in position globally savory snacks • Strong positions in • Opportunities all LRB categories to target other • Opportunities to $50B macrosnacks expan
Slide 6: With a Diverse Geographic Presence
WITH A DIVERSE GEOGRAPHIC PRESENCE Balanced Geographic Revenue Mix Net Revenue By Division U.S.: 57% D&E Markets: 31% APAC: 6% $49 Billion $27 Billion AMESA: 7% FLNA: 27% Europe: 15% $52B $86 $34B billion LatAm: 11% QFNA: 4% PBNA: 30% PepsiCo data based on 2022 net revenue. 5
Slide 7: Performing While Transforming
WHO WE ARE PERFORMING WHILE TRANSFORMING PRIORITIES AND VALUE CREATION 6
Slide 8: In 2019 We Set an Agenda to Accelerate Growth and Deliver Sustainable Results
IN 2019 WE SET AN AGENDA TO ACCELERATE GROWTH AND DELIVER SUSTAINABLE RESULTS Accelerate Holistic cost investments management Long-Term Targets +4-6% GOOD Organic Consumer centricity TO Talent and culture Revenue Growth GREAT +HSD% Core Constant Integrate Build Currency EPS purpose into digital capa
Slide 9: We Increased Critical Investments to Fortify Our Brands and Businesses
WE INCREASED CRITICAL INVESTMENTS TO FORTIFY OUR BRANDS AND BUSINESSES Advertising and Marketing Spend Net Capital Spending Increased Manufacturing Digital Capacity Investments $5.2 B $5.0 B 24% Investments In 57% Go-To-Market Systems $4.2 B $3.1 B 2018 2022 2018 2022 8
Slide 10: Delivered on Our Agenda with Strong Results
AND HAVE DELIVERED ON OUR AGENDA WITH STRONG RESULTS Organic Revenue Growth & Long-Term Core Constant Currency EPS Growth Targets 11% +4-6% 9.4% 8% Organic Revenue 4.5% Ex-2020 Growth COVID costs (1%) +HSD% 2019 2020-2022 2020-2022 Core Constant Average Average Currency EPS Organic Revenue Growth Co
Slide 11: Broad-Based Growth Across Geographies and Categories
WITH BROAD-BASED GROWTH ACROSS OUR GEOGRAPHIES AND CATEGORIES North America & International Global Categories Organic Revenue Growth Organic Revenue Growth D&E 11.3% 9.4% D&E 7.4% 9.5% 6.6% 7.3% 6.2% 4.7% 1.5% 1.6% North America International Global Convenient Foods Global Beverages 2016 - 2018 Aver
Slide 12: Strong Marketplace Execution and Brand Performance
AIDED BY STRONG MARKETPLACE EXECUTION AND BRAND PERFORMANCE Global Brand Net Revenue Growth 2020 – 2022 CAGR +13% +11% +11% +9% +8% +7% 11
Slide 13: Breadth and Depth of Consumer-Centric Innovation
AND ENABLED BY THE BREADTH AND DEPTH OF OUR CONSUMER-CENTRIC INNOVATION Positive Choices Refresh & Extend Packaging Variety Beverages Convenient Foods 12
Slide 14: Expanded Omnichannel Presence and Enhanced Digital Capabilities
WITH AN EXPANDED OMNICHANNEL PRESENCE AND ENHANCED DIGITAL CAPABILITIES E-Commerce Away-From-Home Each Delivered Strong +DD% Net Revenue Growth in FY’22 FY’22 e-commerce growth based on net revenue growth of top 5 markets. FY’22 away-from-home growth based on net revenue growth of Frito-Lay North Am
Slide 15: Broadened Holistic Cost Management Agenda
WE ALSO BROADENED THE SCOPE OF OUR HOLISTIC COST MANAGEMENT AGENDA Optimize Labor Through Global Business Solutions Simplify & Harmonize Technology Systems Automate Plants & Manufacturing Redesign & Optimize Delivered at least Route Efficiencies $1 billion in annual productivity savings since 2019 1
Slide 16: Digital Capabilities to Make the Business More Agile, Precise and Leaner
AND HAVE ADDED DIGITAL CAPABILITIES TO MAKE THE BUSINESS MORE AGILE, PRECISE AND LEANER Digital Capabilities Outcomes • Front line sales capabilities: Improving retail execution and assortment precision at the store level • Driving sustainability: Analyzing and monitoring resource usage patterns and
Slide 17: Investing in Our People and Culture
WHILE ALSO INVESTING IN OUR PEOPLE AND CULTURE TO FOCUS ON AGILITY AND INTEGRITY Elevate Our Talent Evolve Our Culture Reorganized with more empowered local structures Delayered to enable connectivity THE and speed-to-market PEPSICO WAY Elevated diversity 16
Slide 18: Fortifying Our Business for the Long Term with Our Strategy
AND FORTIFYING OUR BUSINESS FOR THE LONG TERM WITH OUR STRATEGY POSITIVE AGRICULTURE POSITIVE VALUE CHAIN POSITIVE CHOICES 345K + acres adopted 100% of sectors 44% regenerative practices1 with beverage of women in portfolio launched managerial 100% rPET CSDs roles 18% 25% of beverage portfolio water
Slide 19: Priorities and Value Creation
WHO WE ARE PERFORMING WHILE TRANSFORMING PRIORITIES AND VALUE CREATION 18
Slide 20: A Long Runway for Growth Remains in Our Large and Global Categories
WE BELIEVE THAT A LONG RUNWAY FOR GROWTH REMAINS IN OUR LARGE AND GLOBAL CATEGORIES Global Convenient Foods Opportunity Global Beverages Opportunity 5-YR Estimated 5-YR Estimated CAGR: +5% 8% share CAGR: +5% 9% share $599 $626 Billion Billion PepsiCo defined convenient foods includes savory, sweet,
Slide 21: Executing Against Our Strategic Framework
AND REMAIN FOCUSED ON EXECUTING AGAINST OUR STRATEGIC FRAMEWORK MISSION Create more smiles with every sip and every bite Be the global leader in beverages and convenient foods VISION by winning with FASTER STRONGER BETTER Winning in the marketplace, Transforming our capabilities, cost, Creating grow
Slide 22: Clear Priorities Across Our Businesses to Capture Additional Growth
THAT INCLUDES CLEAR PRIORITIES ACROSS OUR BUSINESSES TO CAPTURE ADDITIONAL GROWTH FASTER STRONGER BETTER PepsiCo Foods PepsiCo Beverages North International North America America Broaden the portfolio to capture Win in the marketplace Increase per capita more consumer occasions consumption and build
Slide 23: Consumer-Centric Mindset to Broaden and Expand Our Portfolio
AND A CONSUMER-CENTRIC MINDSET TO FURTHER BROADEN AND EXPAND OUR PORTFOLIO Broaden Expand Into Accelerate Positive Choices Different Occasions Packaging Optionality Beverages Convenient Foods 22
Slide 24: Stakeholders at the Center of Our Strategy
WITH TO REMAIN AT THE CENTER OF OUR STRATEGY TO FORTIFY OUR BUSINESS PARTNERS COMMUNITIES EMPLOYEES CUSTOMERS CONSUMERS 23
Slide 25: Highly Disciplined in How We Allocate Capital
WHILE REMAINING HIGHLY DISCIPLINED IN HOW WE ALLOCATE CAPITAL Capital Allocation 2022 Capital Approach Allocation Breakdown 1 Invest appropriately in our business Capital Expenditures Capital spending to drive growth and productivity agenda 2 Pay and grow our dividend Increased dividend for 51 conse
Slide 26: Emphasis on Investing in Our Businesses
WITH AN EMPHASIS ON INVESTING IN OUR BUSINESSES Net Capital Spending 2022 Net Capital Spending As A % Of Net Revenue Breakdown Manufacturing IT Harmonization Capacity Automation Go-to-Market Logistics 6.0% 5.9% Systems Digitalization 5.6% 5.7% 4.9% 4.4% Maintenance Sustainability Agr
Slide 27: Ample Cash Returns to Shareholders with Dividends and Buybacks
AND PROVIDING AMPLE CASH RETURNS TO OUR SHAREHOLDERS WITH DIVIDENDS AND BUYBACKS Cash Dividends Paid Per Share 51 $4.95 $4.53 $4.02 $4.25 $3.59 $3.79 $3.17 $2.53 $2.76 $2.96 $1.89 $2.03 $2.13 $2.24 Consecutive years of dividend hikes 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2
Slide 28: Sustainable Growth and Long-Term Value Creation
AS WE AIM TO DELIVER SUSTAINABLE GROWTH AND LONG-TERM VALUE CREATION Long-Term Targets Income Organic Core Core Operating Current Revenue Constant Dividend Growth Margin Currency Expansion Yield EPS +4 – 6% +20-30 bps Growth annually 2.5% +HSD% Value Creation Organic revenue growth, core operating m