PepsiCo boosts global H1 beverage volumes - results

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  • H1 global beverage volumes up 2%

  • Overall, snacks and beverages sales drop 3% to US$27.3bn

  • Operating profits drop by 2% to $4.6bn

  • Net profits down 8% to $2.9bn

  • Underlying sales and operating profits gains as currency effect stripped out

  • North American Beverages sales up 1% to $9.5bn

  • NAB operating profits climb 6% to $1.4bn

  • For just-drinks' results analysis, click here

PepsiCo's global beverage volumes climbed by 2% in the first half of the year, driven by gains in the Asia, Middle East and North Africa (AMENA) region.

PepsiCo saw its beverage volumes jump by 2% in the first half of the year

PepsiCo saw its beverage volumes jump by 2% in the first half of the year

The Pepsi owner said today that AMENA volumes jumped by 5% as sales were helped by lower raw material costs. Volumes for Europe Sub-Saharan Africa (ESSA) were also up, by 3%, however volumes remained flat in Latin America and in PepsiCo's North American Beverages (NAB) unit.

Despite NAB's flat volumes, sales in the unit were up by 1% to $9.5bn as operating profits climbed by 6% to $1.4bn. PepsiCo said the unit was boosted by productivity gains and lower raw material costs. The gains follow sales and profits increases in Q1.

PepsiCo's other global reporting regions do not issue a breakdown of the company's snacks and beverage sales and profits.

Overall, PepsiCo's net sales dropped 3% to US$27.3bn and operating profits fell by 2% as adverse currency fluctuations affected the top and bottom lines. On an organic basis, sales were up 6% and operating profits climbed by 8%. Reported net profits were down 8% to $2.9bn

CEO Indra Nooyi said: "In what continues to be an incredibly volatile global macro environment, we are pleased with our results for the second quarter. We delivered balanced volume growth and positive price/mix driven by relentless execution of our commercial agenda and leading to solid organic revenue growth."

Reported sales were affected by problems in Venezuela, where difficulties in acquiring US dollars have hit a number of beverage companies

In its last Q3, PepsiCo deconsolidated its Venezuelan operations and has not included results from the country in its financial reporting since the end of last year.

PepsiCo today said exchange restrictions have "significantly impacted our ability to effectively manage our businesses in Venezuela", adding that it did not receive any cash in US dollars from the country to date in 2016.

"We will continue to monitor the conditions in Venezuela and their impact on our accounting and disclosures," it said.

Looking ahead, PepsiCo said it expects full-year 4% organic sales growth.

In pre-market trading today, PepsiCo's share price was up almost 2%.

To read PepsiCo's official results statement, click here.

Sectors: Company results, Soft drinks, Water

Companies: PepsiCo

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