How Has PepsiCo’s Revenue And EBITDA Composition Changed Over 2013-2017E?
PepsiCo‘s (NYSE:PEP) Frito-Lay North America division contributes the most to the company’s revenue, and is also the most profitable division, according to our estimates. FLNA’s operating margin is more than double that of the other divisions, and it also benefits from America’s snacking habit, which is why the North American savory snacks market is growing at 3-4% annually. In addition, this division is also somewhat resistant to the unfavorable impact of negative currency translations. On the other hand, customers continue to move away from the carbonated soft drinks (CSD) category due to the unhealthy perception of these soft drinks. Although volume growth has subsided somewhat in CSDs, PepsiCo and its peers have benefited from emphasis on sales of smaller packages, which carry higher revenue per unit volume, and thus offset the decline in volume with the growth in revenue per unit volume to maintain revenue growth.
Have more questions on PepsiCo? See the links below.
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