Nooyi said she has been ‘blessed’ to have had the opportunity to lead the company, but revealed that she was stepping aside to spend more time with her family.
“Twelve years is a long time as a CEO,” she said. “And even though I have a lot of fuel still left in my tank, I wanted to do something different with my life, spend more time with my family and give the next generation in PepsiCo a chance to lead this great company.”
Nooyi was named as Fortune’s second most powerful woman in business last year, coming after chairman and CEO of General Motors, Mary Barra.
Balancing short term pressures and long term management
Nooyi ended her tenure with the release of PepsiCo’s Q3 2018 earnings. Over the quarter PepsiCo saw net revenue growth of 1.5% (2.6% in the year to date) and organic revenue growth of 4.9% in the quarter (3.4% in the year to date).
The release of the results also marked Nooyi’s 75th earnings call with analysts.
Reflecting on her last 12 years as CEO she said: “Throughout my tenure we've strived to achieve a difficult balance between attending to short-term pressures while managing for the long term. And I leave today proud of the work our team has done.
“We were pioneers in business sustainability and social responsibility and embedded a sense of purpose in everything PepsiCo does, guided by our Performance with Purpose philosophy. We've transformed our product portfolio by growing our Good-for-You and Better for You options from about 38% of revenue in 2006 to roughly 50% in 2017. We more than doubled our investment in research and development to expand our more nutritious offerings and minimize our environmental impact. We became an even more valued partner to our retail customers.
“We were selected as the #1 food and beverage supplier in the US in the most recent 2017 Advantage Report and named Best-in-Class Manufacturer by Kantar for the second year in a row. We made positive contributions to communities around the globe in which we operate through our support of access to clean drinking water, human rights, nutrition, agricultural programs and many more initiatives.
“And we invested significantly in new capabilities in areas like design and e-commerce to better position our company for a successful future. In the midst of managing the business for the long term, we also delivered strong and consistent financial performance."
Nooyi also outlined financial achievements for PepsiCo over the last decade. Over the period 2006 to 2017, PepsiCo net revenue has grown more than 80%, with the company adding a new billion-dollar brand nearly every other year. It returned $79bn to shareholders through dividends and share repurchases, and its market capitalization increased by $68bn. Dividends per share nearly tripled from $1.16 to $3.17, and the company generated total shareholder return of 162%.
“Finally and very importantly, we have been on Ethisphere's list of most ethical companies for the past 12 years," continued Nooyi. "For all of this, I'm grateful to my outstanding PepsiCo associates, who gave so much to PepsiCo and me over the past 12 years.”
Laguarta takes the lead
Nooyi will be succeeded by Barcelona native Ramon Laguarta. He was appointed president in 2017 and has served the company for 22 years. He will become the sixth CEO in PepsiCo’s 53 year history.
Laguarta became president of PepsiCo in September last year, overseeing global operations, corporate strategy, public policy and government affairs. Prior to this, he was CEO for the Europe Sub-Saharan Africa division, and his role before that was as president for the Eastern Europe Region.
Before joining PepsiCo, Laguarta worked for confectionery company Chupa Chups in Spain.
Nooyi described Laguarta as a ‘terrific executive’ with a ‘deep understanding’ of consumer preferences and critical global trends.
“I'm confident he will lead PepsiCo to new and greater heights in the years to come. The potential for PepsiCo is enormous,” she concluded.