AMESA – Multinational food and beverage corporation, PepsiCo, has reported a Full Year 2022 net revenue rise of 8.7% to US$86.39 billion with the AMESA division having a net revenue surge of 5.7% to US$6.43 billion from US$6.07 billion last year, primarily reflecting effective net pricing and organic volume growth.

The AMESA division comprises Africa, the Middle East, and South Asia. The division “delivered more than 20 percent organic revenue growth for the full year” with Saudi Arabia, India, Egypt, South Africa, and Pakistan “all delivering double-digit organic revenue growth,” Pepsico said.

PepsiCo’s beverage unit volume grew 14 percent in AMESA, mainly reflecting double-digit growth in India, while convenient foods unit volume grew 2 percent, primarily reflecting double-digit growth in the Middle East and Pakistan and high-single-digit growth in India.

However, the division had an operating profit decrease of 22 percent, primarily reflecting a 19-percentage point impact of impairment and other charges.

Operating profit performance was also negatively impacted by a 74-percentage point impact of higher commodity costs, primarily packaging materials, grains, and cooking oil, certain operating cost increases, and higher advertising and marketing expenses.

For the fourth quarter that ended December 31, 2022, the AMESA division’s net revenue was up 4.35 percent to US$2.01 billion as compared to US$1.92 billion in the corresponding previous year’s quarter.

Operating profit in the quarter decreased by 148 percent in the AMESA on account of impairment and the “impact of higher commodity costs”.

Generally, the owner of Mirinda, 7UP, and Gatorade brands reported full-year net revenue growth of 8.7% and growth of 10.9% to US$28 billion in the fourth quarter.

As much as the company saw volume fall 2% across its food business worldwide as those price hikes hurt consumer demand, still, PepsiCo plans to sharpen its “revenue management,” which typically means raising prices, based on projections that inflationary pressure will persist in 2023.

The executives have high hopes for Pepsi Zero Sugar, which saw its volume climb 26% and had a revamp in its formula to match the Western Europe version more closely, roughly a year after rival Coca-Cola also updated Coke Zero’s recipe.

Chairman and CEO Ramon Laguarta said: We are pleased with our results for the fourth quarter and the full year as our business remained resilient and delivered another strong year of growth….”

“Moving forward, we will continue to focus on driving growth and winning in the marketplace while developing advantaged capabilities to fortify our businesses for the long term. This includes embedding pep+ at the center of our business in how we innovate, operate, run our teams, and build our brands.”

Looking ahead to 2023, PepsiCo is projecting a 6% increase in organic revenue and 8% growth in its core constant currency earnings per share. Wall Street is anticipating net sales growth of 3.5% and earnings per share growth of 7.3%.

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