Eric Foss Chairman & CEO. Al Drewes SVP & CFO

Transcription

1 Eric Foss Chairman & CEO Al Drewes SVP & CFO

2 Cautionary Statement Statements made in this presentation that relate to future performance or financial results of PBG are forward-looking statements, which inv olv e uncertainties that could cause actual performance or results to materially differ. We undertake no obligation to update any of these statements. Listeners are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in PBG s annual report on Form 10-K for the year ended December 29, We have disclosed certain non-gaap measures within this presentation. Our 2009 financial outlook also contains non-gaap measures. Non-GAAP measures include those designated as Comparable as well as Operating Free Cash Flow (OFCF). Please see reconciliations to their respectiv e measures prescribed by accounting principles generally accepted in the U.S. included on our website at under Investor Relations.

3 REFRESH RETHINK REDEFINE

4 AGENDA SNAPSHOT OF PBG THE EVOLVING LANDSCAPE STRATEGIC PRIORITIES TO DRIVE SHAREHOLDER VALUE 2009 PRIORITIES & FINANCIAL OUTLOOK

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6 67,000 EMPLOYEES 1.5 MILLION DELIVERIES PER WEEK 2 MILLION PIECES OF COLD DRINK EQUIPMENT 3.5 MILLION POINTS OF INTERRUPTION 85 BILLION SERVINGS SOLD ANNUALLY

7 Snapshot of PBG Successful Portfolio Repositioning With Clear Opportunities Geographies Operating Profit Shifts Brands U.S. Category Shifts > < F F U.S. International CSDs Non-Carbs Operating profit is on a comparable basis

8 Snapshot of PBG Great Portfolio of Brands Strong #1 or #2 Colas Flavors Water Non-Carbs Invigoration & Energy

9 Snapshot of PBG Capable, Motivated, Experienced Workforce Capability Culture Financial Literacy Metric Based Granular Focus Tools, Training & Technology Results Oriented Continuity of Management Appreciation & Recognition

10 Snapshot of PBG Best-In-Class Execution Operational Excellence Service Excellence Selling Excellence Revenue / Margin Management Excellence Executional Excellence We Sell Soda & Beyond

11 Snapshot of PBG Proven Financial Track Record $11.7 Topline Growth (in billions) CAGR +6% $13.8 $1.0 Operating Profit (in billions) CAGR +6% $ $1.68 EPS Growth (in dollars) CAGR +11% $2.27 $504 Cash Flow (in millions) Total Payout +110% $ All figures are on a comparable basis

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13 The Evolving Landscape Consumer Relevance Craving Humanity, Optimism & Energy Embracing Modern, Simple & Iconic Designs Variety Purchasing Broader Repertoire of Products Adopting New and Unique Brands & Flavors Health & Wellness Searching for Better for You and Functional Products Continuing to Focus on Better Tasting Hydration Value Shopping Across Channels in Search of Value Seeking Key Price Points

14 Evolving Landscape Channel & Customer Big Getting Bigger Continued Channel Migration Value Rules the Day Escalating Labor Costs

15 Evolving Landscape Category Big, Growing and Powerful Category US Retail LRB Sales Retail Sales Growth Household Penetration Purchase Frequency $110B 4% 4% 98% 63 $98B 73% LRB Top 10 LRB Top 10 LRB Top 10 Top Retail Sales Category Annual Growth of 4% Innovation Fueling Growth 110 Million Households Buying Top Destination Category Highest Grocery Purchase Frequency

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17 Strategic Priorities to Drive Shareholder Value REFRESH RETHINK REDEFINE Reposition and Strengthen Global Brand Portfolio Transform Performance Through Operating Excellence Capitalize on Geographic Growth Opportunities

18 REFRESH Reposition and Strengthen Global Brand Portfolio INVEST IN CORE FILL PORTFOLIO GAPS: GOAL #1 OR #2 POSITION ENTER WHITE PURSUE SCALE OPPORTUNITIES BRANDS SPACE

19 REFRESH Transformational Re-Launch of Pepsi

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21 REFRESH Invest in Core Brands

22 REFRESH Aligns Portfolio Across U.S. and Canada Strengthens Flavor CSD Brand Line-Up Significant Volume Potential

23 REFRESH Expand Energy Portfolio

24 REFRESH Muscle Milk Expands PBG s Portfolio into White Space Leading Brand in High Growth Segment Strong Platform for Health & Wellness

25 REFRESH Lebedyansky Acquisition Largest Juice Producer; #1 Share Position Growth Category within LRB Juice Drinks Introduction in 2009 Scale Business with Attractive Margins 75/25 Joint Venture with PepsiCo Integration Opportunities and Synergies

26 RETHINK Transform Performance Through Operating Excellence Re-Conceptualize Consumer Value Architecture Step Change in Cost Structure and Productivity

27 RETHINK Transform Performance Through Operating Excellence Re-Conceptualize Consumer Value Architecture Weeks in Value Well-Defined Value Architecture Best-in-Class Planning Tools Price / Package Architecture Long-Range Value Migration Planning Delivers Value Volume & Margin Runway Price Gap Management Deep Insights & Experience Understand Private Label Limitations Innovation & Limited Time Offer Packages Pulse Value at Key Price Points Big Brands & Big Packs, In & Out

28 RETHINK Transform Performance Through Operating Excellence Step Change in Cost Structure and Productivity Optimize Manufacturing Cost Transform Warehouse Capabilities Maximize Go-To-Market Effectiveness 2009 Cost Savings of $250 Million

29 REDEFINE Capitalize on Geographic Growth Opportunities Organic Growth Domestic New/Emerging Segments Geographies Independent Bottlers 3 TO 5% RETAIL CATEGORY GROWTH Consumer Value Executional Excellence Leverage Innovation $1 BILLION IN RETAIL SALES PepsiCo Partnership Distribution Agreements Learning Labs Other Anchors OVER 100 INDEPENDENT BOTTLERS Enhanced Speed to Market Cost Rationalization Financially Accretive

30 REDEFINE Capitalize on Geographic Growth Opportunities International Markets Positive Long-Term Potential Russia Low LRB Per Capita Consumption Strong Brand Portfolio Power of One with Frito Capability as a Competitive Advantage Mexico Large Population Base Capitalize on Channel Shifts Strengthened Management Team Restructuring Plans Being Executed

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32 Agenda PBG S APPROACH TO CREATING SHAREHOLDER VALUE MANAGING IN THE CURRENT ENVIRONMENT 2009 FINANCIAL OUTLOOK

33 PBG s Approach to Creating Shareholder Value Sustainable Topline and Bottomline Growth Focused Cash Flow Priorities Investments Increase ROIC WACC Spread Grow Operating Free Cash Flow Effectively Return Cash to Shareholders

34 PBG s Approach to Creating Shareholder Value Sustainable Topline and Bottomline Growth Revenue (in billions) Operating Profit (in billions) EPS (in dollars) $13.6 $13.8 ~$1.1 ~$1.2 $2.20 $2.27 $ % $.9 +2% $ % CAGR +7% CAGR +5% CAGR +12% Operating profit and EPS are on a comparable basis

35 PBG s Approach to Creating Shareholder Value Focused Cash Flow Priorities Reinvest in the Business $2.3 Billion $4.4 Billion Acquisitions $1.3 Billion $1.1 Billion Share Buybacks & Dividends $700 Million $3.5 Billion

36 PBG s Approach to Creating Shareholder Value Focused Cash Flow Priorities OFCF ROIC $440 $ % 7.8% CAGR +4% WACC Non-GAAP

37 Managing in the Current Environment Environment Global GDP Pressure = LRB Category Pressure Double-Digit Foreign Currency Devaluation Tight Credit Markets Commodity Costs Improving Priorities Ensure Strong Liquidity Enhance Risk Management Capability Accelerate Productivity Strengthen Cash Flow and Working Capital Goal: Solid Near-Term Results an Even Stronger PBG Post-Recession

38 Managing in the Current Environment Liquidity Bond Maturity Ladder (in billions) Reaffirmed A/A2 Credit Rating $1.3 Guarantee Liquidity $1.1B Committed Bank Lines Through 2012 $1.0 $0.8 $0.75 $1.0 $1.3B 5 Year Offering in Oct $ Year Offering in Jan $0 $0.4 $

39 Managing in the Current Environment Risk Management Liquidity / Refinancing Balanced Maturity ladder Committed Bank Lines in Place $1.1 Billion Through 2012 Working Capital Rigorous Cash Conversion Cycle Management Global Receivable & Inventory Controls Counter Party Minimum Criteria for Financial Institutions & Global Suppliers Quarterly Review of Exposure Rigorous Assessment of Suppliers Hedging Smooth Volatility and Manage Risks Hedges Matched to Future Needs No Speculation Rolling Average Hedge Positions & Centralized Control

40 Managing in the Current Environment New Approach to Planning Real-Time Decision Making Multiple Scenario Plans Heightened Focus on Productivity New Working Capital / Capital Spending Approach Local Currency Profit Targets Balancing the Near-Term Pressures with the Long-Term Attractiveness of PBG

41 Managing in the Current Environment Productivity Initiatives Structured to Succeed Productivity Savings (in millions) $250 Self M anufacturing and Light Weighting $100 $170 Transform Warehouse Operations F Optimize Route-To-M arket

42 Managing in the Current Environment $869 Capital Spending (in millions) $693 $550 - $600 Working Capital Accounts Receivable and Credit M onitoring Enhanced Cash Conversion Scorecards and Targets by Country F 6.4% 5.0% 4.0% Capex as % of Revenues US Best Practices to International M arkets

43 2009 Guidance Currency Neutral U.S. Dollar Top-Line Growth + Low-Single Digits Down Low to Mid-Single Digits Operating Profit Growth* + Low-Single Digits Down Low to Mid-Single Digits Earnings Per Share* ~ $(0.18) ForEx Impact $2.15 to $2.25 Operating Free Cash Flow ~ $450 Million *Comparable

44 Financial Outlook Summary Strong Track Record of Results Clear Priorities for 2009 Financial Flexibility due to Strong Balance Sheet Bright Future as Macros Rebound

45 Summary STRENGTHENING BRAND PORTFOLIO BEST-IN-CLASS OPERATING CAPABILITY STRATEGIC REPOSITIONING OF GEOGRAPHIC PORTFOLIO

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