Driven by gains across its worldwide snacks and beverage businesses, and from the acquisitions of its anchor bottlers earlier in the year, PepsiCo has reported a 34% surge in net revenue to $57.84b for 2010 with net income up 6% to $6.34b and ahead by 15% on a constant currency basis.
The successful integration of its two anchor bottlers to create more-efficient and effective beverage businesses in its key North American market and in Europe, allowed PepsiCo to deliver more than $150m in synergies from the acquisitions in 2010, above target for the year. The strong pace of synergy realisation and the identification of additional synergies have led PepsiCo to increase expectations for total synergies through 2012 to more than $550m.
During the year, the US-based soft drinks and snacks group acquired Wimm-Bill-Dann, Russia’s preeminent food and beverage company, to significantly strengthen its competitive position in Russia and Eastern Europe, while also providing a strong foothold in the attractive dairy category.
“The underlying performance of our businesses remained solid despite a challenging macroeconomic environment,” says Indra Nooyi, chairman and chief executive of PepsiCo. “We posted broad-based worldwide gains in both snacks and beverages, our businesses deftly balanced a delicate price-value consumer equation, and we aggressively managed costs and productivity to deliver top-tier financial results.”
She continues: “Importantly, we are entering 2011 an even-stronger, more-capable organisation. Our core global snacks and beverage businesses benefit from strong brands, world class go-to-market systems, and innovative and differentiated products and we strengthened these advantages in 2010 through targeted investments.”
While encouraged by the momentum of the businesses entering 2011, she is mindful of a weak consumer landscape given the poor macroeconomic picture, especially in key developed markets, the high levels of cost inflation for the coming year, driven by broad and pronounced commodity inflation, and a potentially difficult competitive pricing environment, particularly in beverages.