Celsius at Goldman Sachs Forum: Strategic Growth and Integration

On Tuesday, 13 May 2025, Celsius Holdings Inc. (NASDAQ:CELH) participated in the Goldman Sachs Global Staples Forum, outlining its strategic direction amidst both opportunities and challenges. The company emphasized its growth ambitions through the integration of Elani New and international expansion, while addressing complexities like SKU management and tariff impacts.

Key Takeaways

• Celsius is focused on integrating Elani New to drive synergies in marketing and supply chain.
• The company is optimistic about growth through zero-sugar innovations and changing consumer preferences.
• Challenges include managing a complex SKU portfolio and mitigating tariff impacts.
• International expansion is a priority, with infrastructure development in core markets.
• A new marketing campaign and a winter-themed product launch aim to boost brand awareness.

Financial Results

• Q1 gross margins exceeded 52%, showing a year-over-year increase of 100 basis points.
• For Q2, strong gross margin delivery is anticipated, though the annual target is cautiously set at 50% due to potential tariffs and commodity price increases.
• The acquisition of Elani New is expected to generate $50 million in synergies, primarily from headcount reductions.
• Pricing adjustments made in Q4 of last year are being promoted back, with a recent shift in product mix.

Operational Updates

• Elani New is expanding its distribution points and overall ACV.
• A national, all-channel limited-time offer with a winter theme is planned.
• The company is rationalizing its SKU portfolio to focus on best-selling flavors, aiming to reduce complexity and improve margins.
• Distribution is projected to grow by 15% to 20% this year.
• The Big Bev facility is equipped for a second production line, offering potential capacity doubling.

Future Outlook

• Strategic focus on integrating Elani New and realizing synergies.
• Plans for organic growth through innovation, marketing, and expanded distribution.
• International expansion efforts are underway, with a new global operation planned in Dublin.
• Exploration of future acquisitions to enhance the product portfolio.

Q&A Highlights

• The company acknowledged that Q1 was affected by tough comparisons and promotional timing.
• Walmart sets are expected to expand, though timing remains uncertain.
• Celsius and Elani New will evaluate market opportunities together or separately, depending on suitability.

Celsius Holdings remains confident in its ability to achieve sustainable growth and expand its market presence. For more details, readers are encouraged to refer to the full transcript below.

Full transcript - Goldman Sachs Global Staples Forum:

Unidentified speaker, Moderator: Okay. Hi, everyone. Good afternoon. It’s a pleasure to introduce our next speakers and actually our last speakers for today. We have Eric Hansen, President and COO and Jern Lingen, CFO of Celsius Holdings.

So it’s certainly an exciting time for Celsius, having just recently closed on their acquisition of Elani New with an impressive 16% dollar share as of, I think, March 30 on a combined basis, while also just last quarter releasing some new exciting innovation all within the better for you functional beverage space. Celsius is really at a pivotal point in their journey, both in terms of navigating the complex macro and operating backdrop while also focusing on driving a reacceleration of growth and continuing to build upon their strong international momentum. So with that, I’d like to jump into things. So welcome both of Thank Good afternoon. All right.

So Eric, I want to kick some all of this off with you, and I believe this is your inaugural event. It is. Think you mentioned eight weeks, is it?

Eric Hansen, President and COO, Celsius Holdings: Week eight.

Unidentified speaker, Moderator: Yeah. So he’s very new here at Celsius. And you’re president and CEO, so curious and you came from Pepsi. So curious to hear from you really what led you to Celsius after such a long and successful career at Pepsi. I’d love to hear from your perspective what you see as some of the strengths at Celsius and then maybe some of the opportunities.

Eric Hansen, President and COO, Celsius Holdings: Yes. No, first, thank you for having us here today. And yes, it’s week eight, so I’ll preface that with my remarks. But I think having worked with these guys for a couple of years, obviously, as we brought the business into the PepsiCo system and then worked to build the partnership out and expand the business, you get to know a lot about the people and the culture and the brands and the way they operate. And so I would say, certainly had a head start coming over on things that I anticipated were or that knew were very good and then things that I had thought were going to be really nice fits for me and for the business overall.

The category is exciting. Energy is one of the best categories in the business, having worked across a lot of the different ones. These brands are fantastic in terms of the way they’ve grown rapidly and kind of still maintain their relevance with their core consumer. And so the business was really interesting to me. And so when John reached out and we started talking about it, it’s hard to contemplate leaving after twenty eight years to someplace that you’ve really enjoyed, but if you were going to make the step, this was the right opportunity for me and the right way to come in and help them grow their business in a way that’s sustainable and future forward and really exciting.

So I think to the second part of the question, I think there’s so many things that they do really well, particularly on the brand side and engaging consumers and media. We’ve got tremendous field selling organization. We’ve got tremendous supply chain that has done and dealt with a lot of complexity and mitigated a lot of that over the last few years. And I think the biggest opportunity is just kind of as they’ve gone through rapid growth, we’ve seen the org develop in a way that’s a bit more one brand focused versus portfolio, very U. S.-centric versus kind of global and international.

And so I think the things that I’m really focused on the short term is getting the right people and the organization org structure right and the tools and processes and capabilities in place so that we can expand into new brands and new territories much faster and much more efficiently, and then leverage that great winning culture that I think they already have and this challenger mindset. So it’s exciting. I’ve had a really, really enjoyable time in the last eight weeks and getting to know a lot more people than I knew before. It’s a fun business to be part of.

Unidentified speaker, Moderator: Like you said, you sort of knew the brand, you knew the business with your relationship. Did anything really surprise you,

Eric Hansen, President and COO, Celsius Holdings: either positive or? I will say, I think particularly on the integration with Aloni New, Aloni, the capability they have, particularly on the marketing side, that’s who we’re working most closely with, but obviously the founders have built a great business model with them. But the Aligny capabilities on the marketing side are excellent. And I would say, I think the strength of the Celsius marketing team and the strength of the Aligny team bring them together and then kind of extract the best of both of those and build out better teams that are very data driven and future forward and consumer focused. That’s what I’m most excited about and probably most surprised about.

Unidentified speaker, Moderator: Yes, sounds good. All right, so I want to switch gears a little bit and talk about demand trends, the category. Certainly, we’ve seen, at least in the scanner data, recent acceleration industry wide. So I say that because we haven’t quite hit the easy comps and then we’ve had some of the macro pressures and pressures on the consumer. So love to hear from your perspective what’s been driving some of the recent category growth and then maybe where it’s sourcing from this category?

Eric Hansen, President and COO, Celsius Holdings: Yes, and I’ll let Jared weigh in after, but I would also say a couple of things. One, I think there’s probably two or three things that jump out at me. There’s been a ton of innovation, right? And you think about where the category sits today, it’s 50 over 50% sugar free and zero sugar, whereas just a few years ago, it was a little bit more tilted the other way. So you’re seeing innovation and innovation into zero sugar, particularly from some of our large competitors, but the growth of Elani, Celsius has been able to push a path in Zero Sugar, better for you, functional.

I think consumers are looking for more function and we’ve also seen price gaps relative to other categories has closed over the last number of years. So the relative value of energy is very good to where it’s been in the past. And so I think it’s consumers kind of changing the way they think about functionality and beverage holistically is kind of helping keep the energy business much more growth oriented than retreating at all. Okay.

Unidentified speaker, Moderator: Any thoughts on where it’s sourcing from as I think about broader non alk subs?

Eric Hansen, President and COO, Celsius Holdings: I think we largely see it coming from I think CSD largely is the only one that’s kind of growing at some pace and mostly through pricing. We’re seeing softness in really all the other categories, tea and water and juice and coffee. So I think it’s sourcing from a number of different places.

Jern Lingen, CFO, Celsius Holdings: I agree. It’s sourcing from kind of the older categories. So a lot of the new age functional, that’s where you’ve seen the growth come in. And so it’s like you said, it’s the teas, it’s the dairy, it’s the juices, stuff that’s not necessarily considered as healthy or better for you these days that’s more packed with sugar is kind of where we’re getting the sourcing from.

Unidentified speaker, Moderator: And then in terms of your Q1 results top line, I know there’s a lot of moving parts and the timing structure of your main distribution partner incentive program, promotional allowances and then certainly lapping the launch of Essentials. So maybe unpack some of that for us and talk about from your perspective the underlying growth trends for your business in Q1.

Jern Lingen, CFO, Celsius Holdings: Yes. Mean there’s a lot of noise in Q1. We came out super strong with most of our innovation at the beginning of Q1 last year, and it happened more towards the end of Q1 this year, excluding the launch of Essentials, which happened last year and didn’t happen this year. There’s also some different promotional timing and activity that occurred during the quarter. So we saw a lot of noise driving that.

And it was a pretty tough comp if you look back to last year. We had, I think, something like 35%, thirty seven % growth in Q1 of last year. And then you kind of saw the category in the back half kind of soften a little bit before it’s picked back up this year. So that’s kind of some of the noise that you’ve seen within the category. If you look at some of the recent trends, we’ve had a couple of months of kind of week over week growth in dollars.

So we’re seeing the trends for this is Celsius not aligning, for Celsius growing and kind of working its way back. And as we look kind of into Q2 and especially into the back half of the year, we’ve got some softer comps. And then we’ve also got in terms of the timing of our innovation, we’ve got it more coming across throughout the year as opposed to all lined up in the front half. We’ve got an LTO we’re also launching in the back half of the year that will put some resources behind to really help drive up the brand and the awareness and drive sales as well. So and then that with layering Elani on top of that, you can see is currently a rocket ship and really keeping that engine going.

We’re set up to have a pretty good year.

Unidentified speaker, Moderator: The LTO, what flavor did you say? Didn’t say the flavor. Didn’t say where it’s going to be rolled out distribution wise or channel wise or is this

Eric Hansen, President and COO, Celsius Holdings: Everywhere. It will be a national all channel LTO with a winter theme.

Unidentified speaker, Moderator: Winter theme.

Jern Lingen, CFO, Celsius Holdings: All

Unidentified speaker, Moderator: right. And so like you mentioned, you’ve seen velocities trending better sort of heading into Q2 and so far. And you’re also seeing maybe accelerating strength for Aloni Nu as well, even since the acquisition. So you reported core dollar share for Celsius, I think it was just under 11%, ten point, I get that, Surcana. It’s down slightly year over year, but relatively stable when I think about it versus Q4.

So maybe talk through what’s weighing on some of the share gains a bit. Is there something you could do better to drive your core Celsius brand?

Eric Hansen, President and COO, Celsius Holdings: So I think a little bit of goes to what Jared talked about, I think in Q1, right? Obviously, so we had the essentials lap that we’ve been able to offset from an overall share perspective again quarter to quarter. But I think the timing of innovation has also been something that’s changing the way that the trajectory is moving. But I think the couple of things that we’re really focused on, we mentioned the LTL that will happen in the fall. So that’s different.

We’ve traditionally launched more SKUs at the forefront of the year versus kind of doing LTOs, and we’ll look to leverage that as a foundation for future. We’ve got a marketing campaign that will launch over the next thirty days or so that we think also is timed right to capture growth coming into the summer and really focus in on the Celsius core consumer and fitness and better for you and zero sugar. And then I think as we get towards the end of the year, we’ll start to see us kind of start to balance the flavor portfolio a little bit and get to get our sets right sized with the right SKUs in all the right places, make sure that our best hitters are in all the right places. And so I think that gives us a lot of confidence as we go forward that we’ll get that share momentum back.

Unidentified speaker, Moderator: That’s something I wanted to ask you about, because I’m hearing from our retailer contacts a lot more recently is that there just seems to maybe be too many flavors within the portfolio. So that’s something it sounds like you might consider rationalizing. And again, like you said, to make sure you have the right

Eric Hansen, President and COO, Celsius Holdings: Yes, I think for a couple of reasons. One, think if you think about our best seller in orange, it’s we’re 98 ACV and we’ve only got 84 on orange. And orange should be everywhere we need to be and our top 10 SKUs should be 90% plus, and today, they’re not. And so we need to make sure that we’ve got a sharp execution focus on our best flavors. And then I would also say it helps us with complexity, right?

We’re carrying a lot of SKUs in a lot of different packages and formats, whether it’s singles and fours and twelves or varieties. And so getting the right SKUs focused in the right places will help both, I think, on the top line, but also certainly from the bottom line and margin from a complexity perspective.

Unidentified speaker, Moderator: Okay. And then do you have I know at one point, I feel like you had a target for Celsius share of getting ultimately to that 15%. Is that still an achievable goal? And if so, by when?

Eric Hansen, President and COO, Celsius Holdings: I don’t know if I was talking about goals in particular, but I would say, I think collectively, our share is 17% And we’ve got a number of markets where we’re already over 20% and a number of channels or customers where we’re already over 20. And so we feel like there’s certainly runway on a total U. S. Basis to move that share higher.

Jern Lingen, CFO, Celsius Holdings: And if you look at food and retail, as a combined, we’re over 20.

Unidentified speaker, Moderator: Yes. Okay. Good point. And then on New share, certainly it seems like that’s continuing to do quite well. I think it’s a 5.3 share up more than 200 bps in Q1.

So maybe frame for us what you think Elani New might be doing better that’s kind of driving some of these share gains and how you can kind of leverage that

Eric Hansen, President and COO, Celsius Holdings: either whether it’s learnings, applying it to Celsius and or continuing to accelerate the growth of belonging new? Yes, think there’s two things right now that’s really working well for them. One is, obviously, they’re continuing to grow total points of distribution and ACV overall, but they’re also very sharp with their marketing and LTO strategy. And that’s what’s impressed me the most is how well they know their consumer and how focused they are on design and flavor and kind of the way they communicate to them, whether it’s through their social media platforms or through influencers. And so I think the marketing is working really effectively for them and getting their core shopper and their core consumer.

And then their strategy of every two to three months of rotating in a new SKU, creating news and excitement, creating some treasure hunt because they’re not available everywhere, doing drops in merchandise along with those has been really effective. And so the Elotti brand gets a big spike when they drop an innovation, and when they queue that out, they get a big social media spike, they get a big purchase spike. And so I think those are two things that we can really learn from and leverage, and then optimize for both brands. Well, it sounds like you are with the Celsius in the So

Unidentified speaker, Moderator: if that goes well, should we assume that you’re going to we’re going to see more of that in the future with Celsius or on the Celsius brand?

Eric Hansen, President and COO, Celsius Holdings: Yes, would think we would expect to do that.

Unidentified speaker, Moderator: Okay. And how do the two brands interact with each other? I understand the high level, but is there anything now that the deal is closed and you’re owning the brand, like are you noticing anything differently than what you thought prior to the acquisition?

Eric Hansen, President and COO, Celsius Holdings: I’d say probably still too early to tell. A lot of the plans that are executed in market today were done before we took full control over them. I would say, I think what it gives us is a lot of really good optionality on controlling where and how we do things, whether that’s our price pack strategy, it’s our promotional strategy. We can choose to merchandise together or apart. We can choose to promote similar packs or different packs.

So I think we can be more choiceful, whereas today, the retailers are deciding between the two brands, how and when they’re going to be put on shelf together. We’ll have a lot more influence on the way that goes. And so that allow us to take the best insights from each customer, each market and then leverage those to build the right commercial strategy.

Unidentified speaker, Moderator: Okay. And then just thinking about the impact from Elani New on the P and L, I know you’re going to do a call, I believe later this month or early next month. You haven’t set a date yet, have you?

Jern Lingen, CFO, Celsius Holdings: No. We’re looking for Memorial Day week, most likely.

Unidentified speaker, Moderator: Not too close to Memorial Day, but just curious not to kind of front run that call. Is there anything that you can share with us today just in terms of the initial synergies or opportunities that you see in the flow through of the P and L?

Jern Lingen, CFO, Celsius Holdings: Yes. We called out $50,000,000 of synergies and a significant portion of that is headcount because we’ve got the sales team built out, the supply chain team built out. So we’re on a transition service agreement at the moment. That’s a twelve month role. So we’ve got a good solid integration plan in place to slowly move everything over to the Celsius Group.

We did carve out a marketing team like Eric’s talking about. So there is a brand team to really create to keep that voice of Elani, but there’s things like supply chain and sales and merchandising and things like that, that we’ve got the workforce built out. And then there will be supply chain synergies that we’ll have. In terms of like what does the model look like, they’re a couple of years behind where we are today. So if you look back a couple of years to where we were, they have a similar profile.

We would fully expect them to have a profile more like ours once we get them fully integrated. So we’ve got kind of the integration plus the synergies that we’ll be able to drive through the system over, call it, the next eighteen months.

Unidentified speaker, Moderator: Okay. All right. We’ll look forward to that call then. That will be good to hear. Celsius Essentials, you launched it just over a year ago.

Hoping to hear how well that brand performed versus your internal expectations. Did that surprise the upside or not? And where I guess, yes, where things might have fallen short? And then where do things stand now in terms of distribution of Essentials? And do you see further runway for that brand?

And if so, where?

Eric Hansen, President and COO, Celsius Holdings: Yes, I think I would say largely in line with expectations. I think it came out of the gates pretty strong, maybe a little bit stronger than expected, and then now it’s kind of stabilized into a place where we thought it would be. I think that there’s still some distribution opportunity. I think it’s in the mid-60s, particularly like in the CNG channel. And as you think about performance energy, which is really where that’s targeted, that’s a channel where we need to expand a bit more to continue some momentum on that.

I do think there’s an opportunity to sharpen the messaging on the brand a little bit more, again, into that performance space. And we’re looking at ways to enhance the way we put that in front of consumers, both from how we recruit and then how we drive additional frequency on those over time. So I think it’s still it’s just over a year old and performing in line with that performance energy space. And so if we can continue to expand out the distribution and sharpen the message, I think we’ll continue to see it perform fairly well.

Unidentified speaker, Moderator: Switching to pricing, and I know you guys talked about this publicly, you took pricing in Q4 of last year, but you were pretty vocal that you really weren’t going to recognize too much of the benefits from that pricing, I. E, promoting a fair amount of that back. Can you update us on sort of your strategy as it relates to pricing today and how we should see that flow through for the rest of the year?

Jern Lingen, CFO, Celsius Holdings: Yes. So we have been doing a lot of it back. So when you’re looking at some of the data out there, there is a bit of a shift we’ve seen recently in mix. So we’ve seen singles really growing for us, outsized relative to the multipacks. So there’s a little bit of a mix shift there.

So it might look like it spiked up over the last few weeks, but it’s really just a mix impact. So it is something that we see as a longer term opportunity down the road, but we did take that headline price so that we could get it and then we have been really being promotional with it for now. And it’s something that we have optionality on in the future.

Unidentified speaker, Moderator: Fair, but I imagine too as I think about the peak summer selling, should we expect promos to kind of continue especially in this environment,

Jern Lingen, CFO, Celsius Holdings: I would

Unidentified speaker, Moderator: think, to drive, okay, top line or volume. So as it relates to some of this and thinking about margin, your Q1 gross margins were a bit over 52%. That was up 100 bps year over year, and that’s pretty impressive in this environment. Now you did discuss you expect strong gross margin delivery in Q2 as well, but I think you kind of pegged a 50% margin number for the year. So what’s causing you to be a bit more cautious in the second half?

Certainly, I assume tariffs, so maybe touch on that for us and the impact or how you’re impacted from that.

Jern Lingen, CFO, Celsius Holdings: I think it’s a bit of conservatism. We don’t really know where the tariffs are going to go. Knock on wood, they seem to be in better shape this So granted, they were probably at their peak a couple of weeks ago when we had the call, but we’re in pretty good shape. We’ve got a number of mitigation strategies we had put in place well in advance. So that’s where we were able to circle the $50,000,000 There’s a little bit of conservatism there, but also our commodity is going to go up as inflation going to happen.

So we wanted to just make sure that we set a realistic goal.

Unidentified speaker, Moderator: Okay. And then I assume it’s a lot of your exposure is aluminum. Can you give us a sense of what percentage your COGS is aluminum roughly, just so we have a

Jern Lingen, CFO, Celsius Holdings: Shoot, off the top of my head, I don’t have it, but it’s consistent with the beverage Okay.

Unidentified speaker, Moderator: Right. And then other mitigation efforts for I mean, like we just discussed potential pricing, it’s going to depend on the environment and what ends up sticking. But is that something that’s one opportunity, but what else can you do to mitigate some of these potential headwinds?

Jern Lingen, CFO, Celsius Holdings: I mean, we see opportunity to continue to leverage the business and expand margin. So if you look at the other public company that’s ahead of us, they’ve done a great job of really driving margin across The U. S. And we believe we can continue to do similar things they’ve done to drive margin, whether it be going direct from a raw material perspective, utilizing co packers differently or doing there’s a number of tools in toolbox that we can still utilize over the coming years to drive that margin.

Unidentified speaker, Moderator: And the combination of Loni New, accretive, no, to the combined as you think about scale advantages, further margin expansion?

Jern Lingen, CFO, Celsius Holdings: Yes, lot of similar ingredients. So as we add them onto the portfolio, we’ll have the opportunity to scale up and to get better pricing as well over the coming years. We’ve got the synergies we’ve talked about. So there’s another number of things we put in place, getting their margin profile more consistent with ours as well. So there’s a path to that as we integrate the business.

Unidentified speaker, Moderator: And on the same topic, I know I think last year you closed on your acquisition of big beverage contract manufacturing. So I did want to explore that a little bit. And I think the facility is now fully integrated. So how does that play a role in terms of margin lift as you bring potentially more volume in house?

Jern Lingen, CFO, Celsius Holdings: Yes. There’s some margin savings there. It’s kitted out for a second line as well. So we’ll look to add a second line. So as Elani grows, we’ll move Elani into there.

We’ll All of Elani? Not all of Elani. Once we get two lines in there, we’ll probably have somewhere in the 20% to 25% of our volumes as they are today. Obviously, we look to grow over the next eighteen months that it would take to get a line in. So it would probably be a little less than that at that point in time.

But it’s about 25% of the current capacity we have that we could put into that plan.

Unidentified speaker, Moderator: And that I’m just thinking about relative to the relationship with Pepsi and then being your distributors. That plays a role in this decision as you bring more volume in house? How do we

Jern Lingen, CFO, Celsius Holdings: No. I mean, we’re not in any Pepsi plants right now. So we have a of a six orbit model. So we’ve got kind of six primary plants that we utilize, Big Bev being one of them. And then we’ve got kind of another, call it, six or seven plants that we utilize as well within those orbits.

So there’s kind of a primary and a secondary. We could double capacity if we needed to with our current footprint. So we’re in good shape from that perspective. We have worked with Pepsi on potential opportunities down the road and utilizing them. One of the things is we are tunnel pasteurized.

So some of that is sourcing and where is their tunnel pasteurizing within the footprint.

Unidentified speaker, Moderator: That’s kind of what I was thinking too, just leveraging them in a different way. Potential in the future. And speaking of Pepsi, I don’t know if there’s an update as it relates to Elani Nu and whether or not they’ll consider distributing and how those conversations may or may not be progressing. Todd?

Jern Lingen, CFO, Celsius Holdings: Yes. Mean, I think for now, it’s really we’re going through recess. It’s about making sure we’ve got product on the shelf and that we’re servicing both the retailers and then the end consumer. So that’s really our focus at the moment. We do see opportunities with both distribution systems, but nothing to announce at the moment.

Unidentified speaker, Moderator: All right. Speaking of space and resets, I know they’re happening. I think a lot of it is done. I know it’s been a little bit extended in another strange year. But I believe you mentioned that you expect your distribution to expand, is it 15 to 20% this year with some of the resets?

Can you talk about maybe where some of that space is coming from?

Eric Hansen, President and COO, Celsius Holdings: Yes. I think the number it’s obviously, I think there’s growth across our sets and a number of the large customers. I think it also we’re incorporating there things like Subway and the expansion of 18,000 stores there and Home Depot and the footprint there, an additional 15,000 coolers that we’re putting out across the small format universe too. And so I think largely as you see space within energy space in energy expand as a part of total BEV, we’re seeing some growth from there as well as then really just kind of looking at our existing footprints and expanding where we can, whether it’s within our independent sets within Pepsi, we saw some increases in our independent footprint on some space there within their arrangements. But yes, broadly, think we’re seeing it both in terms of actual Cobalt set, but then also cooler placements and integration into other channels.

Unidentified speaker, Moderator: And to be clear, that increases for the combined portfolio, right, in terms of the space increases at both Aulani New as well as Celsius?

Eric Hansen, President and COO, Celsius Holdings: That’s Celsius. Yes, I think that

Unidentified speaker, Moderator: So there is potential also for additional space for, I assume, a lamp.

Eric Hansen, President and COO, Celsius Holdings: Think so, certainly for ’26, I think the plans are largely locked for ’25.

Unidentified speaker, Moderator: And one thing that I’ve been hearing from my contacts, and I’d love to hear your input on this, is that Walmart, I believe, was going to be expanding their energy drink space this year, but I’ve learned more recently that that’s no longer true. Is that something that you’re hearing from Walmart as well? Or what are your what are you hearing in terms of energy space at Walmart?

Eric Hansen, President and COO, Celsius Holdings: Not a lot, candidly. And I would say, I think we expected over time Walmart sets will continue to get bigger. I think the timing on all of that is TBD.

Unidentified speaker, Moderator: Okay, so you’re not necessarily okay, well, that’s encouraging that you’re not because I know they were expected to expand, but that might have changed just with all of what’s going on in the world and tariff situation and aligning their space. Let’s switch gears to international, because certainly there’s a long runway of growth, I think it sounds like it still remains a pretty big priority for Celsius. And I know you mentioned recently on your Q1 call that you’re focused on, I believe, the core markets you rolled out, I guess, last year in maybe Q4. So how are you driving daily consumption that you’re looking for internationally? And how might that look differently than what you’re seeing in The U.

S?

Eric Hansen, President and COO, Celsius Holdings: Yes, think the big opportunity for us internationally, and I think, as they mentioned on the call, is really focusing on the markets that we’ve already been in and continuing to build that. I don’t think we go in with a shotgun approach. So there’s a bit of a build mindset over time. And so I think we’re seeing initially good performance, at least in Target, in line with what we expect in a lot of those markets. But I think we’ve got to be very deliberate about how we build and engage consumers and kind of take a bit of a more U.

S.-centric message and bring it to the different parts of the world as we do that. And so I think as we go forward, continuing to focus the right resources and the right execution plans as we expand into future markets. I think you mentioned Monster is 40% international. I think we’re only about 5% when you include ALAANI. And so there’s a huge runway for us, but I think we want to be very deliberate about how we get there, but it will take time.

And we didn’t build Celsius overnight in The U. S. And so it’s going be one of those that both Celsius and Elani will assess opportunities across the different markets and either take them in together or take them in separately based on what the market makes sense.

Unidentified speaker, Moderator: As the performance internationally from internal expectations, has it surprised to the upside? As you talk about this measured approach, I’m just curious from your perspective, if things are working as you

Eric Hansen, President and COO, Celsius Holdings: think it’s probably a little bit of both, right? There’s a couple of markets that are probably doing a little better, a couple of markets where we’ve got some opportunity to get on track, but I think largely in line.

Jern Lingen, CFO, Celsius Holdings: Yes, largely in line and probably more to the upside.

Unidentified speaker, Moderator: And as I think about you trying to manage this growth internationally, but then yet still there’s such untapped growth opportunity here in The US, how do you balance that? And the complexity, making sure there’s no execution risk, that’s a consideration I would mention as well.

Jern Lingen, CFO, Celsius Holdings: Yes. So we’re building our resources across EMEA right now. So we’ve talked about setting up a global operation in Dublin. So we’re building out a team there, a pretty strong team to really help with the expansion and the global footprint. And so Eric’s really going to be focused that’s one of his focus areas.

But really taking that team and building it out to be able to bring on more businesses or more countries at a bit of a faster clip than we have. But really right now, I recall the last six months, it’s been building that infrastructure to be able to handle that kind of movement.

Unidentified speaker, Moderator: Going back to The U. S. And the competitive environment, when you look at the big two, Monster and Red Bull, they seem to both be doing quite well. I’d be curious to hear from your perspective what their competitive environment looks like, what do you think they’re doing well, Where do you still see further opportunities for you as you think about share?

Eric Hansen, President and COO, Celsius Holdings: Yeah, I think they’ve

Jern Lingen, CFO, Celsius Holdings: done

Eric Hansen, President and COO, Celsius Holdings: a really nice job recently on innovation, launching a lot of SKUs, but being very focused around regular and sugar free, being flavor forward. And so a lot of the things that we talk about in the Celsius portfolio of flavor and zero sugar and fitness focus, I think we’re seeing from certainly in our competitive set, I think very sharp execution in terms of leveraging those as anchors and building the portfolio around it. And so we expect that will continue. But I think as I mentioned earlier, category moves beyond 50% sugar free and zero sugar that, that creates more permissibility in the category and brings more consumers in. And I think we position ourselves really well with the two brands we have in that space.

Okay.

Unidentified speaker, Moderator: Maybe a question for you, Jared, as you think about a lot of new acquisitions, still relatively new, recognize, and early. But as a company, what are your thoughts on future potential acquisitions? Or is it now kind of just focused on integrating that recent deal and driving organic growth over the next years? Or are you going to continue to explore whether it’s acquisitions internationally, buying capabilities, etcetera?

Jern Lingen, CFO, Celsius Holdings: Yes. Mean, we’ve got plenty to keep us busy at the moment. Maybe not yet. But it’s right now it’s focused on getting the integration done, work on some paying the debt down. We’ve got a great back half of the year in summer plan for both Elania and Celsius, a bunch like you said, a bunch of opportunities for global expansion.

So some of that’s where Eric comes in is really to help drive some structure in that kind of portfolio mentality as opposed to kind of one brand, one focus. So really setting us up to be able to do more. And so that’s some of the structuring he’s working on at the moment. We’ll keep an eye on things. If something comes up that makes sense, we’ll take a look at it.

But we definitely see the opportunity to continue to build out the portfolio if the right thing comes along. But if not or until then, we’ve got a lot of opportunity ahead of us with the portfolio we have in place.

Unidentified speaker, Moderator: Okay. Maybe we just have a couple more minutes. And just since this is such an innovative category, and I know we talked about the LTO, we’ll see more or hear more in the fall about that. But what else in terms of innovation is planned for the combined portfolio? Also thinking about Elani New, maybe not just LTOs or products, but what about packaging?

Is there anything else that we can expect to see coming from Celsius?

Eric Hansen, President and COO, Celsius Holdings: Yes, I think we’re always going to look at different functionality over time and what that means either within the Celsius brand or Elani or something else. I do think in the acquisition of Elani, we’ve seen they’ve launched a smaller portion size can, so an 8.4 ounce mini can that delivers one hundred milligrams of caffeine, and so it shifts your daypart a little and allows you to maybe have a bit more consumption without as much caffeine. And so I think that’s an interesting packaging idea that we’re looking at and trying understand the fit across the portfolio. But I think it will continue to look at those types of things. I think on the multipacks, getting the right configuration and the right price pack architecture.

I think we’re at the very base level of revenue management capability, and we have a lot of room to grow on that. So I think as we put that capability in, you can think about different pack configurations, different pack sizes to also help drive frequency and occasions for us.

Unidentified speaker, Moderator: Okay. One more minute left. You sit here today. I know it’s still relatively new. But what are you most excited about as you look out over the next year plus as it relates to your new role, this company where you’re combining two brands, etcetera?

Eric Hansen, President and COO, Celsius Holdings: Yes, I think it’s just that. I’m excited about the Elani acquisition and the transition and the integration. I’m excited about the capability that they’re bringing to Celsius and that also the Celsius team can help the Elani brand do. I’m excited about having the portfolio and the optionality and building some of these revenue management capabilities and kind of building a future forward organization that could, to Jared’s point, if we find the right ones, more brands in and that we can execute in a really efficient way. So it’s really exciting.

I’m really enjoying it.

Unidentified speaker, Moderator: Yes. Anything from me, Jared? And maybe you’re happy once the acquisition is closed, we get the bottling call over behind you.

Jern Lingen, CFO, Celsius Holdings: I agree. I think there’s a lot of opportunity for us. A lot runway in The U. S, a ton of runway globally. And working with the portfolio strategy, we’ve got two brands that can play off each other now and support each other as we look to drive more share.

Unidentified speaker, Moderator: Okay. great. You so much for your time today. Appreciate it.

Eric Hansen, President and COO, Celsius Holdings: Thank you.

Unidentified speaker, Moderator: Thanks, everyone.

Eric Hansen, President and COO, Celsius Holdings: Appreciate it.

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