Overseas Sales Key to Strong PepsiCo. Performance

27/04/06 PepsiCo has reported a 13% increase in first-quarter earnings per share to $0.60, fueled by a 9% increase in net revenue, with each of the Company's operating Divisions contributing to both top- and bottom-line growth.

Frito-Lay North America generated 6% revenue growth on strong Sun Chips and Tostitos performance and growth in other macro snacks. Net revenue grew 6%, reflecting volume growth of 2%, positive effective net pricing and favorable mix, and despite the unfavorable impact from a shift in the timing of the New Year's and Easter holidays.

FLNA's revenue growth was led by strong double-digit growth in Sun Chips multigrain snacks and Quaker Chewy granola bars and rice cakes, high-single- digit growth of Tostitos tortilla chips, and mid-single-digit growth of Cheetos cheese snacks. Revenue growth was offset somewhat by a mid-single- digit decline in trademark Doritos. Trademark Lay's revenue increased low- single digits. Operating profit grew in line with revenue growth reflecting the revenue gains and the impact of increased labor and benefits charges and higher costs for cooking oil.

PepsiCo. Beverages North America volume increased 5% on continued strength in non-carbonated beverage performance. Volume grew 5% in the quarter, with the division's non-carbonated beverage portfolio increasing 18% and carbonated soft drinks (CSDs) declining 1%. The results for the quarter also reflect a slightly unfavorable impact from a shift in the timing of the Easter holiday. Non-carbonated beverage performance was driven by double-digit growth in Gatorade thirst quencher, trademark Aquafina, Lipton ready-to-drink teas and Propel fitness water. The decline in CSD volume reflects a low-single-digit decline in trademark Pepsi offset somewhat by a low-single-digit increase in trademark Mountain Dew and a slight increase in trademark Sierra Mist. Across the brands, both regular and diet CSDs experienced low single-digit declines.

Net revenue reflected volume growth, a positive mix impact from the strong performance of the non-carbonated beverage portfolio, increased pricing, and the timing of concentrate shipments to bottlers. This growth was offset partially by higher trade spending. Operating profit growth lagged revenue growth in the quarter principally reflecting higher orange and energy-related costs, the favorable resolution in 2005 of estimated marketing accruals, and higher selling, general and administrative costs.

PepsiCo. International profits increased 21% on solid beverage and snacks growth. Snacks volume growth of 7% was driven by high-single-digit growth in the United Kingdom, strong double-digit growth in Turkey, Russia and Australia, and low-single-digit growth at Sabritas in Mexico. This growth was partially offset by a low-single-digit decline at Gamesa in Mexico. Acquisitions contributed one point of growth. Outstanding beverage volume growth of 16% was led by double-digit gains in China, the Middle East, Argentina, India and Venezuela. Carbonated soft drink volume increased in the mid-teens, with each of the division's four largest CSD trademarks -- Pepsi, 7-Up, Mirinda and Mountain Dew -- experiencing double-digit growth. Non-carbonated beverages grew over 30%, with solid growth across the non-carbonated portfolio. Acquisitions contributed one point of growth.

Chairman and CEO Steve Reinemund said, "We continue to see solid top-line momentum across our businesses, driven by product innovation and strong marketplace execution. Importantly, we're also seeing good profit performance despite continued pressure from inflation in some of our key input costs. Overall, we're very pleased with the results in the quarter, and remain confident in the outlook for 2006."