PepsiCo : Q2 2022 Press Release

PepsiCo Reports Second-Quarter 2022 Results; Updates Full-

Year Outlook

Reported (GAAP) Second-Quarter and Year-to-Date 2022 Results

	Second-Quarter	Year-to-Date
Net revenue growth	5.2%	7.0%
Foreign exchange impact on net revenue	(3)%	(2)%
Earnings per share (EPS)	$1.03	$4.09
EPS change	(39)%	39%
Foreign exchange impact on EPS	(2)%	(2)%
Organic/Core (non-GAAP)1 Second-Quarter and Year-to-Date 2022 Results
	Second-Quarter	Year-to-Date
Organic revenue growth	13.0%	13.3%
Core EPS	$1.86	$3.15
Core constant currency EPS change	10%	9%

PURCHASE, N.Y. - July 12, 2022 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the second quarter 2022.

"We are pleased with our results for the second quarter as our business momentum continued despite ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets," said Chairman and CEO Ramon Laguarta.

Laguarta continued, "Our results are indicative of our highly dedicated employees, the strength and resilience of our categories, agile supply chain and go-to-market systems and strong marketplace execution. Our performance also gives us confidence that our investments to become an even Faster, even Stronger, and even Better organization by winning with pep+ are working. Given our year-to-date performance, we now expect our full-year organic revenue to increase 10 percent (previously 8 percent) and we continue to expect core constant currency earnings per share to increase 8 percent."

1Please refer to the Glossary for the definitions of non-GAAP financial measures, including "Organic Revenue Growth," "Core" and "Constant Currency," and to "Guidance and Outlook" for additional information regarding PepsiCo's full-year 2022 financial guidance. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market net impacts. Please refer to PepsiCo's Quarterly Report on Form 10-Q for the 12 and 24 weeks ended June 11, 2022 (Q2 2022 Form 10-Q) filed with the SEC for additional information regarding PepsiCo's financial results.

1

Summary Second-Quarter 2022 Performance
		Revenue			Volume(a)
		Percentage Point Impact			% Change
			Acquisitions,
	GAAP	Foreign	Divestitures,
	and Other	Organic		Convenient
	Reported	Exchange	Structural		Beverages
	% Change	Translation	Changes	% Change		Foods
Frito-Lay North America	14	-	-	14		(2)
Quaker Foods North America	17	-	-	18		2
PepsiCo Beverages North	(1)	-	9	9			(1)
America
Latin America	23	(2)	1	22		6	9
Europe	(8)	12	5	9		(7)	(8)
Africa, Middle East and South	6	7	10	23		10	28
Asia
Asia Pacific, Australia and New	3	2	7	13		12	6
Zealand and China Region
Total	5	3	5	13		3	6

Operating Profit and EPS

		Percentage Point Impact
	GAAP Reported	Items Affecting	Foreign	Core Constant
	Exchange	Currency
	% Change	Comparability	Translation	% Change
Frito-Lay North America	5	-	-	5
Quaker Foods North America	5	-	-	6
PepsiCo Beverages North America	(20)	16	-	(3)
Latin America	18	23	(2)	39
Europe	(297)	288	11	2
Africa, Middle East and South Asia	14	(3)	7	18
Asia Pacific, Australia and New Zealand and	7	(1)	4	10
China Region
Corporate unallocated expenses	(31)	20	-	(10)
Total	(34)	41	2	10
EPS	(39)	47	2	10

1. Excludes the impact of acquisitions, divestitures and other structural changes. In certain instances, the impact of organic volume growth on net revenue growth differs from the unit volume change due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between bottler case sales (BCS) and concentrate shipments and equivalents (CSE). We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic Revenue Growth," "Core" and "Constant Currency."

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Summary Year-to-Date 2022 Performance

Revenue

		Percentage Point Impact
			Acquisitions,
	GAAP	Foreign	Divestitures,
	and Other	Organic
	Reported	Exchange	Structural
	% Change	Translation	Changes	% Change
Frito-Lay North America	14	-	-	14
Quaker Foods North America	14	-	-	14
PepsiCo Beverages North	2	-	8	10
America
Latin America	21	-	1	22
Europe	(5)	11	4	9
Africa, Middle East and South	9	6	7	21
Asia
Asia Pacific, Australia and New	5.5	2	4	11
Zealand and China Region
Total	7	2	4	13

Volume(a)

% Change

Convenient

Foods Beverages

(1)

-

1

• 8

1. (5)

1021

5.510

36

Operating Profit and EPS

		Percentage Point Impact
	GAAP Reported	Items Affecting	Foreign	Core Constant
	Exchange	Currency
	% Change	Comparability	Translation	% Change
Frito-Lay North America	5	(0.5)	-	4
Quaker Foods North America	6	-	-	6
PepsiCo Beverages North America	248	(243)	-	4.5
Latin America	29	15	-	44
Europe	(274)	254	9	(11)
Africa, Middle East and South Asia	19	(2)	5	23
Asia Pacific, Australia and New Zealand and	5	-	2	8
China Region
Corporate unallocated expenses	(11)	18	-	7
Total	35	(28)	2	8
EPS	39	(32)	2	9

1. Excludes the impact of acquisitions, divestitures and other structural changes. In certain instances, the impact of organic volume growth on net revenue growth differs from the unit volume change due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of "Organic," "Core" and "Constant Currency."

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Guidance and Outlook

The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.

The Company now expects to deliver 10 percent organic revenue growth (versus our previous guidance of 8 percent) for fiscal year 2022.

Consistent with its previous guidance for 2022, the Company continues to expect:

• An 8 percent increase in core constant currency EPS;
• A core annual effective tax rate of 20 percent; and
• Total cash returns to shareholders of approximately $7.7 billion, comprised of dividends of $6.2 billion and share repurchases of $1.5 billion.

In addition, the Company continues to expect a 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates.

This assumption and the guidance above imply 2022 core EPS of $6.63, a 6 percent increase compared to 2021 core EPS of $6.26.

Prepared Management Remarks and Live Question and Answer Webcast

At approximately 6:30 a.m. (Eastern time) on July 12, 2022, the Company will post prepared management remarks (in pdf format) of its second quarter 2022 results and business update, including its outlook for 2022, at www.pepsico.com/investors. At 8:15 a.m. (Eastern time) on July 12, 2022, the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company's website at www.pepsico.com/investors.

Contacts: Investor Relations	Communications
[e-mail]	[e-mail]

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PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Statement of Income (in millions except per share amounts, unaudited)

		12 Weeks Ended			24 Weeks Ended
		6/11/2022			6/12/2021			6/11/2022			6/12/2021
Net Revenue	$	20,225	$	19,217	$	36,425	$	34,037
Cost of sales		9,415			8,880			16,848			15,551
Gross profit		10,810			10,337			19,577			18,486
Selling, general and administrative expenses (a)		7,387			7,208			13,967			13,045
Gain associated with the Juice Transaction (b)		(13)			-			(3,335)			-
Impairment of intangible assets (c)		1,359			-			1,601			-
Operating Profit		2,077			3,129			7,344			5,441
Other pension and retiree medical benefits (expense)/income		(2)			126			132			246
Net interest expense and other		(236)			(241)			(476)			(499)
Income before income taxes		1,839			3,014			7,000			5,188
Provision for income taxes		393			642			1,281			1,093
Net income		1,446			2,372			5,719			4,095
Less: Net income attributable to noncontrolling interests		17			14			29			23
Net Income Attributable to PepsiCo	$	1,429	$	2,358	$	5,690	$	4,072
Diluted
Net income attributable to PepsiCo per common share	$	1.03	$	1.70	$	4.09	$	2.94
Weighted-average common shares outstanding		1,389			1,388			1,390			1,387

1. The increase in selling, general and administrative expenses for the 12 and 24 weeks ended June 11, 2022, as compared to the 12 and 24 weeks ended June 12, 2021, primarily reflects higher selling and distribution costs.
2. In the 24 weeks ended June 11, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash and a 39% noncontrolling interest in a newly formed joint venture operating across North America and Europe (Juice Transaction).
3. In the 12 and 24 weeks ended June 11, 2022, we recorded pre-tax impairment charges of $1.4 billion and $1.6 billion, respectively, primarily related to the decrease in fair value of our indefinite-lived intangibles as a result of the Russia-Ukraine conflict.

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