US: Pepsi Bottling Group sees Russia lift Q3
Pepsi Bottling Group has posted a rise in both sales and operating income for its third quarter.
The manufacturer, seller and distributor of Pepsi products said yesterday (2 October) that operating profit for the three months to 8 September reached US$433m from $383m a year earlier. Net sales rose by 8% to $3.73bn from $3.46bn. Net profit performed equally well, up to $260m from $207m.
For the nine-month period to 8 September, operating profit increased to $891m from $819m, with net sales up to $9.55bn from $8.96bn. Net profit rose to $451m from $389m.
In volume terms, the company posted a lift of only 1% on the same quarter a year earlier. While volumes in the US were flat, European volumes rose by 4%, driven by a 16% lift in Russia. In Mexico, volume slid by 1%.
"In the third quarter, we delivered record sales and comparable operating income driven by outstanding performance in the US and Canada and in Europe, led by Russia," said PBG president and CEO Eric Foss. "Our strong top-line growth, gross profit per case improvement and disciplined cost management led to solid profit and cash flow increases."
Foss continued, "The successful execution of our key priorities produced double-digit EPS growth for the quarter prompting us to raise our earnings outlook for the year. Our strategic initiatives, our people and our geographic portfolio position us well to capture growth opportunities and create value for our shareholders."
Looking forward, PBG said it has high hopes for Russia, following the creation in the country earlier this year of PR Beverages, a joint venture between PBG and PepsiCo. The unit "will enable the company to strategically invest in Russia to accelerate its growth", PBG said.
PBG also raised its full-year adjusted diluted EPS guidance to between $2.15 and $2.18 from the previous $2.02 to $2.07 range. At the same time, the company warned that it will take pre-tax charge of between $40m and $50m from the disposal of some of its full service vending equipment. Between $20m and $30m will be recorded in Q4, with the programme set to be completed by Q2 of next year.
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