PepsiCo profits stable in face of global downturn

 PepsiCo has posted a slight fall of 1% in profit and sales respectively for the first quarter of the year, while beverage volumes grew by 7% in Europe.

Group net profit was $1.14bn (£78m) in the three months to the end of March compared to the same period last year. Net sales totalled $8.26bn (£5.68bn).

Operating profits, however, rose 2% to $1.59bn (£1.09bn) on a reported basis.

In Europe, beverage volumes grew 7%, which much of the rise attributed to PepsiCo’s acquisition of Russian juice company, Lebedyansky. However, volume growth in the UK and Germany was offset by falls in the Ukraine and Russia.

PepsiCo chairman and chief executive Indra Nooyi, says the breadth of its portfolio, geographic reach and “operating agility” helped to deliver a strong performance in the face of the global macroeconomic environment.

“In spite of the economic slowdown, all of our businesses are performing at or above expectations, which gives me confidence in reaffirming our full-year guidance,” Nooyi says.

The latest financial results comes as PepsiCo announced its $6bn (£4.09bn) bid to takeover its two largest bottlers, Pepsi Bottling Group and Pepsi Americas. It is part of a new strategy to overhaul how the company manufactures and distribute its products.

The company has also filed a lawsuit on behalf of its Gatorade product against Coca-Cola’s Powerade claiming false advertising, injury to business reputation and trademark dilution.

The action has come following a Powerade comparative ad campaign that depicts half a Gatorade bottle with the line “Don’t settle for an incomplete sports drink.”