Financial Performance of Coke & Pepsi from 2012 to 2016

Performance of the  biggest Global players in CSD ( Carbonated Soft Drinks ) , Juices & Mineral Water & Packaged Snacks Business in the world in terms

Financial Growth in Turnover , Gross Margin & EBIDTA 

Consistency in Growth Pattern ,

Improvement in Gross Margin as a percentage of Sales and it's pattern

Improvement in EBIDTA Margin as a percentage of Sales and it's pattern

GROSS REVENUE

The market for Carbonated Soft Drinks is shrinking as a result of which the volumes of both Coke and Pepsi has fallen even though both of them have diversied into heathier options of juices and other Non CSD drinks.

Pepsi has diverside into ready to eat wafers and other snacks business under Fritolays division which does not provides healthy food but is growing at a good rate because of which the fall in revenue of PEPSI has been only 4% as compared to 12 % of COKE.

GROSS MARGIN

The Gross Margin of Coke has reduced by 12.3 % as compared to the reduction in Revenue by 12.82 % over the period from 2012 to 2016 which means that the company has been able to maintain its margin , the overall numbers being USD 28964 Million in 2012 and 25398 in 2015

Pepsi however has been able to improve the overall Gross Margin by 1.14 % even after reduction of it's revenue by 4.11 % which means that there is an overall reduction in cost of goods sold by almost 3 %. The Gross Margin in percentage terms for Pepsi has grown from 52.22 % to 55.08%

SG&;A

One of the biggest spend of Coke and Pesdi is their SG&A expense and in this expense management Coke has been a clear leader where they have reduced their expense by  without any extra ordinary impact on their sales as a result of whicvh the margins have improved substantially

Net Profit

The Turnover of Coke has fallen from USD 65 Billion to USD 63 Billion and if we compare it with PEPSICO it was at 73 % of PEPSICO in 2012 and got reduced to 67 % in 2016.

But the Net Profit has been maintained at Pepsico levels at USD 6 Billion though Coke was earlier reporting Net Profit of USD 9 Billion in 2012.

Market Capitalization 

Bothe the companies have been able to improve their market cap in a market which has been not very favoravle .

While the Market of Coke has improved to 179 Billion from 163 Billion which is 10 % , Pepsi's Market cap has improved substantially from USD 107 billion to USD 151 N i.e. 40 %.

If we look at Mcap in terms of times to sales and Net Profit Coke has a higher multiple of 4.28 and 28.48 as compared to 2.4 and 24.2 times for PEPSI respectively which shows that COKE enjoys better valuation as compared to Pepsi .

So on an overall basis if we see

1. Both Coke and Pepsi are losing turover in CSD but Pepsi has been able to arrest the downtrned by diversifaction.

Result : The major outcome is reduction in turnover by only 4 % of PEPSI as compared to 12 % of COKE

2. Gross Margin : Coke has maintained its margin of 60 % . Pepsi however has done well in improving its margin from 50 % to 55 % over a period of 5 years.

Result : The gap between the margin of Coke and Pepsi which was 10 % is 2012 has narrowed down to 5 % only

3. Net Profit

In terms of overall profit bothe the companies have made profits of USD 6 Billion each but Coke's Net Profit has reduced from USD 9 Billion in 2012 to USD 6 Billion whereas PEPSI profit have improved from USD 6 Billion to USD 6.2 Billion.

Result : PEPSI has improved its position even with introducing new prodcuts and investing in them.