Celsius at 2025 dbAccess Conference: Strategic Growth Insights

On Tuesday, 03 June 2025, Celsius Holdings Inc (NASDAQ:CELH) presented its growth strategy at the 2025 dbAccess Global Consumer Conference. The company outlined its plans following the acquisition of Alani Nu, with a focus on capitalizing on the evolving energy drink market. While the outlook was optimistic, challenges remain in maintaining market share and integrating the new acquisition.

Key Takeaways

• Celsius aims for a 10% market share in international markets within three to five years.
• The company is focused on integrating Alani Nu while maintaining separate brand identities.
• $50 million in synergies are expected from the Alani acquisition, with a two-year integration plan.
• Celsius is targeting increased brand awareness through the "LIVE. FIT. GO." marketing campaign.
• The company is exploring new product opportunities in hydration and protein categories.

Financial Results

• Celsius is operating with a gross margin in the low fifties and SG&A in the low thirties.
• The company expects to replicate this financial profile for Alani Nu within two years.
• Gross profits for the last quarter were at a 52% margin, with an annual average target of 50%.
• The Alani acquisition is projected to generate $50 million in synergies, enhancing margins through supply chain and headcount efficiencies.

Operational Updates

• Celsius’ US market share declined from a peak of 12.3% to between 10.8% and 11%.
• International revenue has reached $100 million and continues to grow.
• The company aims to break even in international markets within three to five years.
• Alani Nu, the number four energy drink brand in the US, is undergoing a 12-month integration process with Celsius.

Future Outlook

• Celsius plans a balanced approach to innovation and partnerships, with the first Limited Time Offer (LTO) in the Celsius portfolio set for later this year.
• The "LIVE. FIT. GO." campaign is designed to boost brand awareness and consumer engagement.
• The company is focusing on SKU optimization and consistency, with new hydration products launched in the US.
• Strategic international partnerships, such as with Suntory, are key to expanding in markets like France and the UK.

Q&A Highlights

• Celsius operates through the PepsiCo (NASDAQ:PEP) system in the US and Canada, while Alani Nu is distributed by ABI.
• Discussions are ongoing about potentially moving Alani Nu into the Pepsi distribution system.
• A collaboration with Pepsi for subway marketing is in place to enhance brand visibility.

In conclusion, Celsius Holdings is poised to leverage its strategic initiatives and partnerships to drive growth and capture market share. For a deeper dive into the company’s strategies and financial plans, refer to the full transcript below.

Full transcript - 2025 dbAccess Global Consumer Conference:

Unidentified speaker, Moderator: Okay. Well, welcome back, everybody. Thanks for joining us. The next session, I’m very excited to welcome for the first time ever, the Celsius Holdings Company to our Paris conference.

I’m sure many of you in the room know, but Celsius is a global maker of premium lifestyle energy drinks, including the Celsius brand itself as well as now Aloni New. Aloni New is the number four energy drink brand in The US behind Celsius. So together, it’s quite a powerful combination. Pro form a last year, the business generated roughly $2,000,000,000 in revenue with sizable future growth expected both in The U. S.

Market and overseas. With us today, I’m very pleased to welcome John Fieldly, Chief Executive Officer of Celsius as well as Jared Langings, Chief Financial Officer. So we’re going to use the bulk of our time for Q and A, and I’m going to kick it off with John. The company is new to the conference and arguably newer and maybe less familiar to a lot of European investors. Although, I think ACV here in France has reached 88%.

So it’s it’s obviously an up and coming brand here in Europe. Maybe just kick us off on who is who is Celsius? Yeah.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: And we’ll go from there. Now, thank you for having us. Excited to be here. First time with you all in in Paris, and we’re really seeing a renaissance right now in the energy category. So Celsius was born in The US in fitness.

It’s a sugar free portfolio with functional vitamins, over seven essential vitamins. We just brought on did an acquisition with Aloni New, a female focused brand, but it’s really a renaissance that’s taking place in the energy category. More people consumer new consumers are coming into the category that are aligned with our modern energy portfolio of Celsius and Alani. You’re seeing more females enter the category for the first time. There was an Intel (NASDAQ:INTC) report talking about in The US that the the incrementality of the female shopper has been material and expected to continue to grow, also increasing consumption occasions as well.

We’re seeing the energy category. Really, lines are blurring. Historically, energy drinks have been consumed for a specific need state. And what you’re seeing today with the next generation coming into the category, and it’s evolving, you’re seeing energy drinks consumed throughout the day. You’re actually seeing it consumed with meals.

We’re seeing that in The US. We just launched into Subway locations up to 20,000. We’re in Jersey Mike’s. We partnered with Pepsi as our distribution partner in North America, and food service has been a big opportunity in the convenience channel. You’re seeing a lot of pairings and opportunities as you’re seeing meal deals and and those type of opportunities.

So really changing the way consumers are consuming energy drinks. We have some of the most refreshing energy drinks we feel on the market from peach vibe and orange and kiwi guava. So it’s a it’s really exciting time right now, and it’s a fitness lifestyle brand, health and wellness focused portfolio we have. K.

Unidentified speaker, Moderator: How do you how do you think the recent addition of Avani New sort of evolves the company’s identity, both internally and with respect to the marketplace?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. Well, internally, it’s great. We built a a really amazing infrastructure within the organization from our supply chains, procurement, sales, finance, really have a an amazing, capable, highly credible team. And adding another Alani, another brand onto the portfolio, just able to really drive those synergies, and I’ll have Jared talk about that later. Know?

So and then, also, if you look at the category, having one brand and competing at this this higher level does have challenges with pricing promotional strategies and those type of strategies that you’re you implement at retail. So now having a portfolio of multiple brands, we have our Celsius Essentials, which is a 16 ounce performance energy offering. We have our core Celsius offering, and then we have Aloni now. So allows us to have a a more of a portfolio approach and really be able to drive some additional credible and competitive advantages. In addition, these two brands together now represent approximately 16%, sixteen and a half share right now in the category.

So, really, also another great opportunities for strategic initiatives we’re able to implement and really continue to drive this category, bringing new consumers to it.

Unidentified speaker, Moderator: Great. How do you do you define the addressable market for the portfolio? You know, we all see the energy drink data, but your your brand is your brands at this point are both very, very different from traditional Monster, Red Bull and are arguably expanding what, you know, what what energy is. Yeah. So how do you guys think about the addressable market?

How do you size it?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. I mean, historically, energy drinks have been your heavy consumer is male, twenty five to 34. Right? And what you’re seeing now today, it’s gender balanced, age balanced. Health and wellness, sugar free is a bigger portion of the category.

For the first time last year, the category tipped where greater than 50% of the sales in the in the category now are sugar free in North America. So times are changing and evolving flavor profiles, so we’re really increasing the pie. You see the category continues to it’s back to category growth rates, really good growth rates. We expect consumers to continue to come into the category, and it’s our target is 18 to 34. But then we also age up.

We’re seeing some consumers age out of their traditional energy drinks and looking for healthier, better for you alternatives and options, and Celsius is a great alternative than your sugary energy drinks that are out there.

Unidentified speaker, Moderator: Yep. Jared, and I belated, bless you. You sneezed earlier. Just wanted to get that in there. Know, maybe you talked about this on the modeling call last week, but maybe for folks in the room, kind of level set us on the financial profile of the business, kind of pro form a as we go forward and and and the the synergies that John alluded to and and the kind of how those are gonna layer into the the the future the future of of the business.

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yeah. So if you look at where Celsius is today, the the profile we have with pre Elani, if you we believe Elani can get to the same profile. So we have a two year integration plan to get them there, and then we’ve got $50,000,000 of synergies on top of that. So that’ll drive further expansion. So right now, we’re running, low fifties from a gross margin perspective with Celsius, low thirties from a SG and A perspective.

So kind of take that profile, we’ll look to get aligning to that profile, and then you have the synergies on top and then further leverage that we see with both businesses going forward in addition to global expansion.

Unidentified speaker, Moderator: K. And those synergies seem set to ramp really in the first half of twenty six. What’s what’s kind of the the the the kind of magic timing of of that in terms of preparation for achievement and harvesting? And and what why is the synergy sort of kind of that that period of harvesting kinda limited to a couple quarters in the first part of twenty six?

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yeah. So bucket in two ways. You’ve got kind of the supply chain piece, and then you’ve got the the people piece. And we’ve got a twelve month TSA with the Congo brands. So that’s where the employee base was.

So we did carve out a separate marketing team, separate marketing head to really keep that brand identity with Aloni. So that’s already done. But then moving the supply chain into our orbit structure and into our model, and then also the TSA and the transition of the headcount will happen over the twelve months. So the supply chain and and headcount movement will be kind of two different work streams. And so getting really the supply chain fully baked in, that’s where you’ll see kind of the margin profile from a gross margin perspective come into play.

You know, we’ll try and get as much as we can as soon as we can, but that’s really put into kind of a a twenty four month period. Some of that stuff will come sooner than later. Some of it will kind of come in the back half of next year. The other piece is really the transition service agreement, just making sure that we dot our i’s and cross our t’s and make sure as we transition the headcount over that we do it right. So we’re we’re being very methodical with that.

So that’s kind of as that rolls off, you’ll see a lot of things come into play, finance, IT, Backshop, a lot of that stuff will come in the the tail end. From a sales and mark sales and commercial perspective, some of that timing will just depend on timing and sequences sequencing of different commercial strategies. So some of that we might be able to capture a little earlier. Right now, it’s kind of baked into this is this is what we believe makes the most sense and and kind of the lowest risk. If there’s opportunities to take on more and to capture synergies sooner, we’ll go ahead and do it.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Okay. Absolutely. Great.

Unidentified speaker, Moderator: You know, the category is growing. Let’s focus on The US First. The category is growing. It’s a bright spot within CPG. Celsius so far this year has lagged that growth.

But I know your intention is to get it back to growth as we go forward. So maybe talk a little bit about kind of the drivers of year to date performance and then kind of your expectations and the enablers of growth over the balance of the year.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yes. We’ve if you go back last year, we hit in The U. S, we peaked at about a 12.3 share in the category within energy and kind of balanced off right around 10.8 to 11 share currently where we sit. And we took some a lot of key learnings from last year. If you go last year, we front loaded a lot of our innovation in the beginning of the year, which we’re cycling.

And we took more of a balanced approach this year on our on our innovation strategy, new flavors, and partnerships, and collaborations with retailers. And then back half of this year, we have our first LTO within the Celsius portfolio, which we’re really excited about and have a lot of feedback coming and great support. Feedback from retailers have been really exciting. So we’re really excited about that. That should add additional growth.

And having more of a balanced approach should allow us to compete at that higher level. If you look at last year, both Red Bull and Monster had some of the most activity with innovation, especially within sugar free than than we’ve ever seen in the category. And we were due to our promotion and our innovation calendar. We weren’t as we didn’t have as much activity. So you saw the impacts of that.

We’re really excited where we are. We’re entering summer. We got a great portfolio. We just kicked off a new marketing program. It’s LIVE. FIT. GO., bringing the meaning of Celsius LIVE. FIT. GO. to more people and more places.

We’re working with some of the top agencies and really have done a lot of data, analytical research, and analysis to really be able to really capitalize on this. And so we’re excited. It’s the first time in company history to really create a holistic campaign Mhmm. Really creating Live Fit and making that be more aware to more consumers and creating that trial, creating that purchase consideration, and then ultimately loyalty. So we’re really excited about that.

And we feel like we have a we have a more balanced approach as we you know, we’re going through this year. So category is driving great growth. We need to continue to bring more consumers in. We have oh, we look at all the data around Celsius, and you look at the our seven essential vitamins and the sugar free. We have a lot to offer consumers in the category and capture more.

So we think we’re really well positioned. And then the addition of ALAANI as one of the most active it’s their largest innovation year that they’ve had had. We have witches brew coming out Yep. For Halloween. We have a winter edition.

Got some really great, exciting portfolios and flavor innovation coming in, which they’ve done a great job on their LTO strategies. We’re taking some of their strategies and key learnings and leveraging that with the Celsius portfolio. So I think the the combination of both this brand both these brands working together and the portfolio we have really allow us to to continue to drive new to category and take advantage in opportunities we see within the category that’s growing. So Yep. Puts us in a good place.

Unidentified speaker, Moderator: How do you think about the the aspirational kind of market share objectives of Celsius versus Amani new in the overall portfolio? You know, what what is what is Celsius’ kind of, like, you know, you know, right or, you know, aspirational market?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Mean, we’re we’re not right. Where we are right now, right around 11 share. You know, we’re not pleased with that. Obviously, we we wanna drive a greater share in The US. We think there’s a huge opportunity.

If you look at our share on Amazon (NASDAQ:AMZN), where the playing field is equal, you look at our share in South Florida and New York City and LA, we can compete at a higher level, and, you know, the those markets are roughly around, you know, getting close or beyond a 20 share. And the and so we know we’re capable of doing that. The biggest opportunity is closing the gap with inconvenience. Yep. So that’s where we’re under indexed, and we’re fairly new.

We’ve been in like, seven Eleven, we do very well in well in. And but there’s a lot of new regional retailers that we just entered. Right? So we need to continue to activate and build upon that, but that’s where we’re under indexing. And then if you look at Celsius and Alani and you look at, like, Moolo, large format in The US, those two brands represent almost 25% of the overall share in the category.

So Alani is not even an inconvenience, rarely, and then Celsius has that huge opportunity to close those gaps. We know we can compete in the convenience channel. We just need to continue to build that purchase intent, that purchase consideration, and that’s what we’ve been working on strategies on. As an example, food pairings is great. We launched at Casey’s.

We did a pizza in a Celsius. Right now in New York City, we’re running a deal with a Celsius and some of their food offerings and pairings, and we’re doing that with more retailers to get that trial. We know we have great flavors and great taste. No crash as well, and we just need to get the the liquid to lips. And that’s one thing we’re really working on, and that convenience shopper is very transactionally driven.

And so you only have about two seconds for someone to make a decision. You’re kinda like creatures of habit, so we need to get into their daily lifestyle, daily routine. And once we do that, we know we can drive loyalty. Great.

Unidentified speaker, Moderator: The other leg of growth, you know, international, which is, you know, been, you know, off some office kind of a zero base, small base, but but rapid and steady growth and expansion with the Celsius brand. Talk to us about sort of how you see that journey playing out and what level of prioritization you’re putting on it relative to opportunities at home, and then how you see Aloni itself layering into international aspirations going forward.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. So international is a huge opportunity. If you look at you know, Monster does great with international, so we know the opportunity is there. The same health and wellness trends we see in North America are global. Right?

And the world has gotten so small. It’s just a a post away, a click away. So the opportunity is there. Mainly, our revenue today, you look back several years, we have about a mid teen share in Sweden, gaining share in Finland, and just most recently, really launched in France, Australia, New Zealand, and then Benelux as well in The UK. And we partnered with Suntory as our partner in these markets.

As you mentioned, we have an 88% ACV in France, Just recently achieved that. The opportunity is there. It’s timing and sequencing. We’re not overinvesting in these markets. As we continue to gain trial and we start to build revenue, we’re investing more.

Our goal is to really breakeven right around three to five years, and we would love you know, aspire to be at you know, get to the same share level we are in The US. We can get to a 10 share in the next three to five years international. That could be that’s a huge, huge win. But it’s we’re focusing on a variety of tactics, bringing Celsius to more people and more places. Gotta build a loyal consumer base.

So we’re being very tactical on our approach and and expansion initiatives. But in The U in France, we have a mighty team of four, and he just started most recently. So, you know, it’s it’s gonna take a little bit of time, but it’s a hundred million dollar business right now this year. So and it’s just getting started. The success we’re seeing in some of these retailers, Carpool, seven Eleven in Australia has been great.

So we know it’s there. And we’ll add more staff. We’ll add more resources and continue to have our balanced approach and focused on profitability and, you know, continue to build these this portfolio. And when you look at ALAANI, we think there’s opportunities, but it’s timing and sequencing. Right?

As we’re rolling out Celsius, we don’t wanna roll out Alany at the same time. So we’re looking at potential opportunities to bring it to Sweden where we’re more established, and then we can go from there. I think there’s huge opportunities for Aulani on in international markets as well. Great.

Unidentified speaker, Moderator: So maybe a question for both of you, you know, kind of a little piggybacking on that a bit. Just Celsius and Aulani, how do you envision them working together? You know, what what are the the complements and the synergies between the two brands kinda in the marketplace?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah.

Unidentified speaker, Moderator: And on the on the flip side, are there any conflicts or complexities that managing two brands represents?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. Well, I think, you know, when you look at there’s a lot of opportunities. So when you look at the advantages of having a portfolio, your pricing promotional strategies is is number one. That’s a great driver to have as you’re going to market. The the category is is very promotionally driven, so it’s important that we’re able to you know, you can do high low strategies, timing and sequencing of them just allows you to have more tools in your tool belt.

We’re keeping the the marketing teams and the brand teams separate, so that that’s really important. So Jared talked about some of the synergies. We have a lot of synergies within a lot of the apartments, and some of our commercial marketing teams will be able to leverage some synergies. But we’re really keeping the brands, identities, and teams separate there because each one of these brands are a living, breathing you know, almost it’s a person. So you kinda you gotta continue to nurture these brands as we continue to grow and scale.

And then, you know, complementary, we’re attracting new new consumers to the category. So I think with Alani, with Celsius, we can be that key driver to bring more consumers, new consumers in, expand the usage occasion of consumption outside of that historical need state. I need an energy drink right now because I’m, you know, gonna do a a backflip on a half pipe or something along those lines. You’re you’re not having it throughout your day. You’re having it for your next meeting.

You’re having it for, you know, your before you go out to dinner or your night out. So and you’re having it paired with lunch to have a a really great afternoon to accomplish your goals. So I think we’re we can be a great contributor with these portfolios. And then, you know, some other opportunities within marketing initiatives could be, you know, like, cooler strategies. When you look at, you know, some of the sales and retailer support, having two brands, we can have more leverage and hopefully be able to get more availability for both of these brands and more share of the of the space.

It’s really important in the energy category that you’re six feet from a register. You need to you know, impulse purchasing is a huge port portion of this category. A lot of the consumers only buy, you know, one energy drink a week or a month. There’s a huge segment of that. So how do we how do we be part of that purchase, part of that basket?

And that’s really being you know, getting additional cooler placements and and taking advantage of those opportunities.

Unidentified speaker, Moderator: Yep. So, you know, in order to I guess, you know, in beverages, route to market matters a lot. And as you think about managing and optimizing the two brand strategy, you know, having having a distribution partner that’s that’s behind you to help with that is key. In the current setup, Celsius runs through the PepsiCo system in in in The US and Canada and Suntory overseas. And then Aloni obviously runs through ABI, which is which does a good good great job.

Yep. Yeah. Good job. So talk to me about sort of the the the the merits of the currents the current system versus, you what a lot of investors have top of mind, which I’m sure is not news to you, is the the opportunity or the the the option of moving Alana New into Pepsi and consolidating that into one system. What are the what are the puts and takes there, and how do you how do you, in general, just approach making the distribution decisions?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Well, first off, I’d just say both the systems are are highly capable. ABI system has a lot of great opportunities for brands. It’s they have a dedicated staff. They do a great job. And and the same with Pepsi.

Pepsi is a a great partner in our North America for the Celsius portfolio. We have priority periods. We’ve been able to tie into them and do suggested orders where we can place pallet orders. We’re getting more strategic with our with Pepsi. That’s where we’ve been focusing over the last, you know, two years now.

And a lot of our data connections and they’ve just been great partners getting us to more places. Does the subway collaboration and access wouldn’t be wouldn’t take place without Pepsi. And, also, college campuses and universities have been a great, great addition as well in getting that distribution. So there’s pros and cons to to all of them. Right now, we’re focused on the customer, continue to service.

Ramon spoke at the last his last earnings call that, you know, there was discussions taking place, but, really, it’s it’s too too early to say. No. You know, there’s been no decisions on Yeah. On the path forward. Right now, we’re focused on execution and driving share and really working on capturing these synergies that we’ve Jared’s put together and really has worked with the team identifying up to 50,000,000 synergies.

You’re seeing growth great revenue growth out of Aulani. It’s doing really well in the ABI system. We got great partnerships. We know the ABI’s network as well. That’s where Celsius was.

Mhmm. So we have great relationships with a lot of those those team members, and, you know, they’re looking to sell everyone’s looking to sell more cases, and that’s what we’re doing each and every day.

Unidentified speaker, Moderator: Yep. Jared, the the the synergy is therefore independent of any distribution consideration?

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yeah. So we’re comfortable with the 50,000,000 either way, whether it’s a dual distribution system or a single distribution system within North America. Okay.

Unidentified speaker, Moderator: And do you if it remains dual, does do you think you can get the ABI network and the Pepsi network to cooperate in market anywhere near the same way you could get a single a single system to kinda get behind your your portfolio?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. I think, you know, there’s there’s there’s pros and cons to both both networks. Both customers are amazing, routes to market. I kinda leave it at that. I think, you know, we continue to evaluate what is best for these brands.

We’re we’ll do what’s best in interest for the brands and our shareholders. And we’re focused on getting more share, bringing in more people, growing this category, selling more cans, and creating more loyalty. And at the end of the day, we’re looking for great partners, build great brands. I say that all the time. And these partners that we have and our suppliers have been phenomenal for us.

Everyone’s rooting for us. They’re working closely with us. And, you know, as we’re gonna capture these synergies with this acquisition, The acquisition financials are all based on existing partners and the distribution and and customers. So we’re gonna continue to push. We’ll do the best.

We’ll do what’s best for these brands at the end of the day.

Unidentified speaker, Moderator: Yep. Okay. So can we talk a little bit about about SKU assortment? Because I think, you know, both brands have grown through a lot of innovation, a lot of flavor innovation very effectively. At some point, that level of innovation becomes sort of complex to manage and complex for the consumer to shop and complex for the retailer and distributor to operationalize.

So when you think about either each brand independently or the total portfolio, what’s kind of the right number of SKUs? How do you think about that? And how does that play into your innovation plans? Yeah. So every year, we go through a

John Fieldly, Chief Executive Officer, Celsius Holdings Company: process, really reviewing the SKUs. And and that is a big opportunity for us that we have is is SKU consistency. If you go into a lot of retailers, you’ll have different flavors on shelf. So that’s something we’ve been working on, always been working on. SKU prioritization, progressions, we call it, trying to make sure when you go into a store, you have the same flow in every single store.

And that is with Eric Hancing coming on with his revenue management skills and also really knowing the Pepsi network and and really being able to push these initiatives. Consistency is really important to us as we continue to build these brands. And that’s that’s one key area. We’re gonna you know, you constantly kinda cut your tail, as you say, those lower you know, maybe a regional flavor, or we did a lot of lead launches in the past as well with certain retailers. We changed our strategy to do more national launches going forward.

So some of these lead launch SKUs will cut and, you know, constantly bringing in new flavors every year because retailers do like that. Consumers like the interest, so that won’t stop. But we’re gonna continue to optimize to make sure we have a highly efficient portfolio. We’re maximizing the synergies with our with our offerings. And and you you do bring you know, you always cut your tail.

And Aloni has a variety of flavors, new innovation. A lot of the flavors are LTOs. Yep. So you’re doing in and outs. Those are limited time offerings.

We’re starting that this year with Celsius in the fall. So, you know, that’s kinda you’re you’re kinda flushing the you know, putting those in, and then you’re also reviewing the portfolio every year. Yeah. You know, certain flavors work in in certain regions. And then if it works in a region, you know, we really want flavors that work nationally.

So constantly evolving and constantly reviewing the portfolio is something we do cons you know, every day. K.

Unidentified speaker, Moderator: The the but both portfolios today, you feel like are in the right level of overall overall overall SKUs, and,

John Fieldly, Chief Executive Officer, Celsius Holdings Company: you

Unidentified speaker, Moderator: know, there’s not,

John Fieldly, Chief Executive Officer, Celsius Holdings Company: like I mean, ultimately, you wanna ultimately, we would like to re know, constantly, we wanna be as efficient as possible. Right? So if you’d speak with anyone in the supply chain, they don’t want any more SKUs. Right? They want less They want less.

So it’s just it it’s a constant review process. Like, right now, we’re going through a process. We cut some four packs, putting in 12 packs because we’re seeing that as a huge opportunity. When you go into large format, you know, you saw, like, if you go back several years, about 70% of sales were inconvenience. It’s all impulse purchase.

But now that energy drinks are becoming part of a daily lifestyle, daily routine, and you’re seeing a lot of consumers buy larger pack sizes and large format because you’re being part of the pantry. Right? So we’re we’ve upsized some of our 12 two more 12 pack offerings, and we reduced some of our four packs that eliminate that eliminated some SKUs, drive more efficiencies. We’ll continue to do that as we roll. Okay.

Unidentified speaker, Moderator: On the limited time offer that you mentioned, what what’s the objective there? Is the objective to, you know, reengage with existing consumers and,

John Fieldly, Chief Executive Officer, Celsius Holdings Company: you know, create excitement in the in the in the base customer, or is the objective to attract new consumers? The strategy is to attract new consumers. Yep. It’s to get it’s to disrupt that path to purchase, to bring Celsius to more people, targeting new and, you know, consumers and with other brands that are, you know, established with other brands. And we wanted to get that trial.

We know we have great flavors. We have a reason to be and belong, and we wanna bring them into that Celsius family.

Unidentified speaker, Moderator: K. Just a little bit of a sidestep here. But when we think about the Aloni new growth, obviously, we’re seeing explosive growth in consumption data. There’s going to be lumpiness and timing differences between your reported results and and what we see in that. You talked a little bit about this again last week, but as we know, can maybe level set us on some of the drivers of those differences and any kind of known known known gaps that we should be kind of expecting as we as we look look over the balance of the year.

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yeah. And we’ll have to as over time, we’ll be able to get more and more data out there. But because of the LTO strategy, you’ve kinda seen at least on a quarterly basis where LTOs are launched through the Alani business. So you’ll see a launch, and then you’ll see about sixty days where it picks up and kinda trails off. And back to kinda the LTOs, the idea is to raise the base at the same time.

So you’re bringing in new trial. You’re bringing an increased consumption, but at the same time, you’re help you’re helping to elevate the base as well. So it’s the idea that the that the LTOs lifting the whole entire portfolio. So you’ll see that happen. And so there’s a lot of more kind of peaks and valleys for the Alani brand.

So it’s really tracking and making sure that, you know, we’re transparent with when these launches are gonna happen. So the consumer you’ll see you’ll do a little bit of a pipe fill, then you’ll see a couple week delay as it then goes through the system. So you’ll see the spike kind of we’ll record our spike, and then all of a sudden, you’ll see it hit the scanner the next couple weeks. And so just kinda making sure those are following the right cadence. So if it’s during the same quarter, you won’t notice it.

Yep. You’ll see the scanner data because some people watch it every week. But in terms of if it’s gonna cross over a month, that’s something where we’ll just need to make sure we’re we’re staying on top of with the the investors.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. The excitement in the energy category, I mean, it’s it’s bringing new consumers in. So the growth rate over the last month and, you know, we’re over 10% category growth expected to continue to grow in high single digits for the next several years. And, you know, it’s a it’s a great time. It’s a great category to be in, And, you know, it’s a it’s an exciting time.

When you look at, you know, the top five brands in the category and, you know, some of the innovation and new flavor profiles, and you’re seeing it to be a larger portion of LRB. And it’s it’s not just an energy drink for a specific need state. It’s it’s these these products are gonna continue to evolve. The next generation that’s coming in grew up on Starbucks (NASDAQ:SBUX) refreshers, and Mhmm. You know, it’s another opportunity we have at Celsius.

We have a a fizz free offering as well. We’re seeing a lot of new consumers coming in and something unique in the category versus a lot of the competition, and and we continue to innovate and continue to drive growth in this great category within consumer products. Okay.

Unidentified speaker, Moderator: So when we, you know, when we think of Celsius and Aloni, you know, we we think and talk as we have so far about canned beverages. Both businesses also have powder based experience. And Elani also has a lot of snack bars and shakes and other things. I guess, how do you think about those alternative businesses in conjunction with the the core ready to drink can? And how much of a focus do you see them being over over the course of time?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. I’ll talk about the powder. Jerry, you wanna

Unidentified speaker, Moderator: talk about some of the

John Fieldly, Chief Executive Officer, Celsius Holdings Company: other lines that we have. But within the powder offering, I mean, it’s a it’s a great business. You’re seeing on the go. That’s expanding the the occasions as well. Great to travel.

You’re seeing you know, if you look at the generation, everyone carries water bottles around. Right? So that’s a huge that’s gonna be a growing segment and a bigger piece of overall beverage for years to come. The on the go powder offerings, the way consumers are changing their consumption habits and their hydration habits, and really the environmental benefits of it as well, which we’re all very, very aware of. So I think that category is gonna continue.

It’s been a growth driver for us and and I think for years to come. We’ll talk about some of the other portfolio items that that have come in.

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yeah. So you you talked about the powders, the kind of pre workout, those kind of powders as well. We see great opportunity. A lot of the newer brands that have come up have really come through kind of that pre workout or from the the powder side of things. So if you’re thinking like the ghosts and the sea pores of the world.

So we see that as continuing to be an opportunity and a growth area as people continue to want more function and and a healthy lifestyle. Powders aside, if you look at the rest of their portfolio and kind of carve it into two pieces, you’ve got your RTD protein, which is about a $50,000,000 business, so it’s kinda gotten to scale now. We see that as a a good growth channel. It’s hitting kind of a the same kind of success that they had with the Alani brand, which is the female consumer. Given the female consumer kind of a better for you functional product with the protein that they may not have had or it may not have been kind of targeted towards them historically.

So that’s definitely a growth area we see for the product. Not quite the same margins. It gets closer as you scale it out more. So we do see opportunity with that. So that’s something that we’re taking a look at, and we’ll continue to monitor that over the next couple of years and see if that’s something we really want to put more focus behind and whether or not it makes sense to branch out beyond the the Elani product.

But there’s a couple public companies out there that you can see that protein is doing a great job from an RTD. It’s really got a renaissance where it’s not just kind of a, you know, that hardcore workout person that needs a protein. It’s really become more of a a a product that you’re you’re missing that function in your daily habit or you’re not gonna get enough protein day to day. You’ve got some of those other health type shots and pills and things like that that people are using. So getting that extra protein during your day is also very helpful.

So we see some some opportunity there. The other piece is very small for them, so protein bars, some of the supplements, and things like that. We’ll take a look at those, but those are probably, I would say, not as interesting as we see with the powders and the RTD protein.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yep. And I think with the GLP one and, you know, that’s mentioned, like, shots, and it’s now coming in other forms. You’re gonna get even broader acceptance, and I think that’s gonna really impact all consumer products. And when you look at Celsius, we are better for you. Energy drink really align with that consumer, and you need energy, and you need protein.

So if you look at that protein portfolio that Aulani has that brought came came with the acquisition and then Celsius and Aulani, I think that aligns us really, really well with the way consumers are, you know, consuming, what products they’re gonna be looking for. And, you know, Celsius born in the gyms and Aulani with health and wellness. You know, we that’s in our roots. That’s our core. So it’s naturally aligned for those consumers looking to live life to the fullest, live better, live healthier, and that’s the movement that’s taking place everywhere.

I mean, just we go into grocery stores. Just look at the advertising. It’s not you know, the the energy category is now part of a health and wellness regimen, a health and wellness routine to have you live better, and that’s what the in the DNA of these brands, which differentiates us versus the larger two players that have been around for over thirty years. And it’s a totally different DNA within those brands. And I think that unlocks done rightly with the right with our team and our strategies.

I think it unlocks a huge opportunity. Right.

Unidentified speaker, Moderator: And not necessarily so Celsius kind of conceptually, you know, flirting with protein, thinking about how that that’s that’s in the that’s in the the brand has the right to go that direction if you guys choose you choose to do it.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. And I think another area where I know we have a right is hydration. We just launched hydration on the go powders within The US. Just launched in Walmart (NYSE:WMT) and a variety of other retailers. So got a lot of interest from major retailers.

So Celsius does have a right to play in other categories and adjacencies, and the hydration product is offering is tastes really good. The team did a really great job on it, and that there’s opportunities to further expand there. People wanna drink more Celsius throughout the day. We do have caffeine, so you can’t drink it twenty four hours a day, but, you know, we do have those offerings, and now we have hydration that you can enjoy as well before workout, post workout.

Unidentified speaker, Moderator: Great. Okay. So, Jared, maybe talk about just the outlook Celsius has in terms of free cash flow generation pro form a for the two businesses and just go for go forward capital allocation priorities, including the potential add more brands to the portfolio.

Jared Langings, Chief Financial Officer, Celsius Holdings Company: Yes. So I mean, as you can see with our the last few years, we’re very cash generative business. So we’re we’re CapEx like. We did buy big beverage last year. That’s was was mostly a Celsius product in it, so it was easy to convert fully to Celsius.

We’ll look to put a second line in there. So that’ll probably drive, call it, 20 ish percent of our production between Elani and Celsius. If you look at kind of this year’s production, but it’ll take about fifteen to eighteen months to be in place. So not quite that much when you look a couple of years out as we continue to grow, but definitely an opportunity to drive some leverage through the system. Beyond that, really, it’s coolers, it’s some of our fleet as we replenish the fleet with the salespeople, so very low CapEx intensity.

We do have some debt we took out, so we’ll look to pay some of that down. We don’t need to pay it all down. It’s okay to have a little bit of debt on the books. So it’s we want to build some credit from that perspective. So we’ll look to pay it down.

We’ll have the opportunity to pay it all down if we want, or we can just leave some on the books to continue to build that credit. When we look at other opportunities, there is definitely we’ve got about $450,000,000 on the books. Even after paying about $450,000,000 towards the acquisition. So there is an optionality there. We’ll continue to invest globally.

And then also, is there anything else that we would add to the portfolio over time? So right now, our focus will be integrating Aloni, paying down some debt. But, again, we do have it’s nice to have that optionality on the the balance sheet for, you know, a rainy day.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: And even, you know, look at we’re talking about a lot of the synergies that we with Elani coming in and unlocking. But even within our core, we still continue to take advantage of our scale. You know, we’re been working with our our suppliers and looking at, you know, larger purchasing orders and just taking further advantage of opportunities we see out there. So last quarter, gross profits came in at 52% margin. On the call, we said probably an average of 50 for the year.

But there’s opportunities as we continue to build and leverage this business to continue to drive efficiencies, to generate more cash,

Unidentified speaker, Moderator: and continue to and also reinvest. Great. So on that note, if we’re back here in a year, how would you define success and and maybe kind of even getting more ambitious? What do you think the the the the five year vision of of Celsius is?

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Well, just expanding in a lot of new markets, so better established on our on our path towards 10 share, you know, on our our our goal of three to five years in international markets. And, you know, within The US, we said we have been flat the last several quarters on last, you know, several months within share. We’ve kinda held at 11 recently and continue to get back to share growth. Great strategies. We have a great program and campaign we’re kicking off this summer.

We’re really excited about that. Get back to growth and continue to drive new consumption, new occasions, and we’ll pay down the debt. We’ll be back here fully integrated and have a lot of new stuff to talk about. So it’s exciting times. It’s a renaissance in the energy category, and this the whole category is changing and evolving, and we couldn’t be better positioned to take advantage of it.

Unidentified speaker, Moderator: Alright. On that note, we are right at time. Thank you. Wanna thank John and and Jared, and thank you all for joining us.

John Fieldly, Chief Executive Officer, Celsius Holdings Company: Yeah. Thank you. We are ice cold Celsius out there. Grab a refreshing yes.

Unidentified speaker, Moderator: Thank you to Celsius for providing drinks all week.

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