PepsiCo Inc (NASDAQ:PEP) Q3 2020 Earnings Conference Call - Final Transcript

Oct 01, 2020 • 08:15 am ET

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PepsiCo Inc (NASDAQ:PEP) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Ravi Pamnani

Good morning, everyone, and welcome to this pre-recorded management discussion of PepsiCo's Third Quarter Earnings Results. My name is Ravi Pamnani, and I am the Senior Vice President of Investor Relations at PepsiCo. Joining me today are PepsiCo's Chairman and CEO, Ramon Laguarta; and PepsiCo's Vice Chairman and CFO, Hugh Johnston.

Before we begin, please take note of our cautionary statement. We will make forward-looking statements on today's call, including about our business plans and 2020 guidance and the potential impact of the COVID-19 pandemic on our business. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, October 1, and we are under no obligation to update.

When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release and 10-Q, available on pepsico.com, for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements.

As a reminder, our financial results in the United States and Canada, or North America, are reported on a 12-week basis, while substantially all of our international operations report on a monthly calendar basis, for which the months of June, July and August are reflected in our results for the 12 weeks ended September 5, 2020.

And now, it's my pleasure to introduce our Chairman and CEO, Ramon Laguarta.

Executive
Ramon L. Laguarta

Thank you, Ravi, and good morning, everyone. My agenda today will include a detailed discussion of our business performance and a reiteration of the guiding principles and priorities on becoming a faster, stronger and better Company. I will then turn it over to Hugh for additional perspectives on our financial results and 2020 outlook.

But before I start the business review, I would like to note that I am very pleased with how our people and businesses have performed in what continues to be a complex and volatile environment. As this environment continues to evolve, we remain very focused on controlling what we can with an unwavering commitment to: keeping our employees safe; servicing our customers to the very best of our ability; and supporting our communities in both good and difficult times. The dedication and resilience of our employees have been nothing short of exemplary during these times and I want to thank them for everything they do.

Now, with respect to our business performance, our organic revenue growth accelerated in the third quarter. Our global snacks and food business remained resilient, while our global beverage business returned to growth. Specifically, our Q3 organic revenue growth accelerated to 4.2%, with both our North America and International businesses delivering mid-single-digit growth. Our global snacks and food businesses delivered 6% organic revenue growth, while our global beverage business delivered 3% organic revenue growth. The global beverage business meaningfully improved versus the previous quarter with especially encouraging results in our PepsiCo Beverages North America division.

Core constant currency operating profit increased 5% and reflected an