PepsiCo, Inc.

Good morning and welcome to PepsiCo's first quarter 2019 earnings conference call. Your lines have been placed on listen only until the question and answer session. In order to ask a question or make a comment, please press star followed by one on your touchtone phone at any time. You may remove yourself from the queue by pressing the pound key. Today's call is being recorded and will be archived at www.pepsico.com. It is now my pleasure to introduce Mr. Jamie Caulfield, Senior Vice President of Investor Relations. Mr. Caulfield, you may begin.

Thank you, Operator, and good morning, everyone. I'm joined this morning by PepsiCo's Chairman and CEO, Ramon LaGuardia, and PepsiCo's Vice Chairman and CFO, Hugh Johnston. We'll begin today's call with some brief prepared comments from Ramon and Hugh, and then we'll open the call up to your questions. Before we begin, please take note of our cautionary statement. This conference call includes forward-looking statements, including statements regarding 2019 guidance based on currently available information. Forward-looking statements inherently involve risks and uncertainties that could cause our actual results to differ materially from those predicted. Statements made on this conference call should be considered together with cautionary statements and other information contained in today's earnings release and in our most recent periodic reports filed with the SEC. When discussing our financial results on today's call, we will refer to certain non-GAAP measures which exclude certain items from our reported results. Such items include the impacts of certain tax-related matters, foreign exchange translation, acquisitions, divestitures, structural and other changes, and restructuring charges. You should refer to the glossary and other attachments to this morning's earnings release and to the investors section of PepsiCo's website under the earnings information tab to find full explanations and reconciliations of these non-GAAP measures. And now it's my pleasure to introduce Ramon Laguardo. Ramon Laguardo Thank you, Jamie.

Good morning, everyone. About two months ago, we shared with you in some detail our priorities for the business and our financial goals for 2019. So today we're keeping our prepared comments short. Just touching on the highlights for the quarter, and then we will leave enough time to get to all your questions. I'll start by simply saying that we're very pleased with our results for the first quarter. Our rate of organic revenue growth accelerated to 5.2%, our highest rate of quarterly growth in more than three years. This top line performance was broad-based, with particularly strong organic revenue growth at Frito-Lay North America. which grew 6%, and our international divisions, while negatively affected on a reported basis by Forex and re-franchising, delivered organic revenue growth of 8% in ESSA and 10% in both Latin America and Amina. We also had solid growth and continued progress at PepsiCo Beverages North America, where organic revenue was up 2%, 2.5% in the quarter. We invested as planned across our businesses, and this included a double digit increase in advertising and marketing. And our productivity and restructuring actions were implemented according to plan. Our strong performance in the quarter is emblematic of a number of key strengths in the business. Amongst them, the health and resilience of our categories, our leading brands, a broad-based portfolio capable of evolving to satisfy consumer tastes, a well-developed geographic footprint with strong positions in our largest markets, a suite of strong and relevant capabilities across the value chain, scale that allows us to run our operations very efficiently, and of course, our highly engaged and motivated associates who execute every day in a way that enables us to win in the marketplace. So with a strong start to the year and one quarter under our belt, remain confident in achieving the 2019 financial goals we shared with you two months ago. Looking ahead, we're staying focused on the priorities we shared with you in February, namely to accelerate our top-line growth in a sustainable way, to compete more effectively to win in most of our markets, and more rapidly evolve our capabilities to widen our advantages versus the competition. To achieve these objectives, we're focused on becoming faster, stronger, and better. We'll become faster by being more consumer-centric and accelerating investment for job-line growth and winning in the marketplace. This means broadening our portfolio and packaging formats to win locally, Fortifying our North American businesses by investing in Frito-Lay North America and PepsiCo beverages North America. And accelerating our international expansion with a disciplined focus on right to win markets. We'll become stronger by transforming our capabilities and our culture. This means driving savings through holistic cost management to reinvest in the marketplace. developing and scaling the core capabilities necessary to better understand and meet new consumer trends, strengthen our brands, and improve customer service, and building a differentiated organization, talent base, and culture. And finally, we'll become better by integrating our purpose agenda into our business strategy with a particular focus on four critical initiatives. First, Advancing farming practices to optimize crop yields, protect human rights, improve farmer livelihoods, and secure supply. Second, replenishing more water than we use in water-stressed areas. Third, creating a circular economy for plastics. And fourth, increasing the appeal of our products by reducing added sugars, sodium and saturated fats, and adding more positive ingredients. The entire organization, from the board to our front line, is moving forward with urgency, and we look forward to updating you on our progress as the year progresses. And now, let me hand it off to Hugh.