Pepsi to return $9 billion to shareholders

PepsiCo announced plans to return up to $9 billion to shareholders this year, through a mix of dividends and share buybacks, as the snacks and beverage group reported a 25 per cent drop in fourth-quarter profits.

The company, which also makes Doritos crisps and Naked juice, said it expects constant currency earnings per share to grow 7 per cent in 2015, while the strong dollar will hit earnings per share and revenues by about the same amount.

Flat fizz

Indra Nooyi

, chief executive, said

Pepsi

was the largest contributor to US retail sales growth among all food and beverage manufacturers in 2014.

Meanwhile Mondelez, a major snacks rival, warned yesterday that it could see revenue growth drop by around 11 per cent on the strong dollar, while a day earlier Coca-Cola cautioned that currency fluctuations would also hit its 2015 profits and revenues. Coke, the world’s largest beverage group – which does not have a snacks business to help offset weakness in fizzy drinks – reported a 55 per cent drop in fourth-quarter earnings.

Both companies have been coping with dwindling demand for carbonated drinks in the developed world, as consumers grow more health-conscious. The companies have responded by building up their still drinks businesses, including juice and water.

– Copyright The Financial Times Limited 2015