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Keurig Dr Pepper Inc. (NASDAQ:KDP)

This company has been moved to the archive! The financial data has not been updated since July 28, 2022.

Common-Size Income Statement

Keurig Dr Pepper Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net sales 100.00 100.00 100.00 100.00
Cost of sales -44.99 -44.17 -42.97 -47.84
Gross profit 55.01% 55.83% 57.03% 52.16%
Selling, general and administrative expenses -32.74 -34.24 -35.63 -35.41
Impairment of intangible assets 0.00 -0.58 0.00 0.00
Other operating income (expense), net 0.55 0.34 -0.02 -0.13
Income from operations 22.82% 21.35% 21.38% 16.62%
Interest expense -3.94 -5.20 -5.88 -6.07
Loss on early extinguishment of debt -0.83 -0.03 -0.10 -0.17
Gain on sale of equity method investment 4.13 0.00 0.00 0.00
Impairment of investments and note receivable -0.13 -0.88 0.00 0.00
Other income (expense), net 0.02 -0.15 -0.17 0.26
Income before provision for income taxes 22.06% 15.09% 15.23% 10.63%
Provision for income taxes -5.15 -3.68 -3.96 -2.71
Net income including non-controlling interest 16.91% 11.40% 11.28% 7.91%
Net (income) loss attributable to non-controlling interest 0.01 0.00 0.00 -0.04
Net income attributable to KDP 16.92% 11.40% 11.28% 7.87%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The company experienced a consistent expansion in overall profitability from 2018 to 2021, with net income attributable to the parent company increasing from 7.87% of net sales to 16.92%. This growth was driven by a combination of improved gross margins, disciplined operating expense management, and a reduction in the relative burden of interest payments.

Gross Profitability and Cost Structure
Gross profit margins showed a marked improvement starting in 2019, rising from 52.16% in 2018 to a peak of 57.03% in 2019, before stabilizing around 55% in 2020 and 2021. This was primarily achieved through a reduction in the cost of sales, which dropped from 47.84% in 2018 to 44.99% by 2021.
Operating Efficiency
Operating income as a percentage of net sales trended upward throughout the period, moving from 16.62% in 2018 to 22.82% in 2021. This expansion was supported by a steady decline in selling, general and administrative expenses, which decreased from 35.41% in 2018 to 32.74% in 2021, indicating improved operational leverage.
Financial Obligations and Non-Operating Items
Interest expense demonstrated a consistent downward trend, falling from 6.07% of net sales in 2018 to 3.94% in 2021, which significantly reduced the drag on pre-tax earnings. The 2021 fiscal year was particularly influenced by a non-recurring gain on the sale of an equity method investment, which added 4.13% to the net sales ratio.
Bottom-Line Performance
The pre-tax income margin grew from 10.63% in 2018 to 22.06% in 2021. Despite an increase in the provision for income taxes as a percentage of sales in 2021 (5.15% compared to 2.71% in 2018), the net income attributable to the company more than doubled over the four-year period, reaching 16.92% of net sales.

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