Celsius at UBS Conference: Strategic Moves Amid Market Challenges

On Wednesday, 12 March 2025, Celsius Holdings Inc (NASDAQ: CELH) participated in the UBS Global Consumer and Retail Conference 2025. The company discussed its performance and strategic plans, highlighting both challenges and opportunities. Despite a slowdown in market share growth last year, Celsius remains optimistic about future prospects, focusing on brand recognition and innovative strategies.

Key Takeaways

• Celsius experienced a 22% growth in retail sales in 2024, reaching $2.7 billion.
• The company aims to increase its market share to 15% in the energy drink category.
• Strategic partnership with PepsiCo is key for distribution and supply chain optimization.
• The acquisition of Alani Nu targets female and Gen Z consumers, expected to boost revenue.
• International expansion is underway in markets like the UK, Australia, and France.

Financial Results

• Retail Sales: Celsius ranked as the ninth beverage brand, with $2.7 billion in sales, marking a 22% increase in 2024.
• Market Share: The company achieved nearly a 12% share in the energy category and aims for 15%.
• Gross Margin: Maintained above 50% for the year, with a similar target moving forward.
• Sales and Marketing Expenses: Accounted for 26% of revenue, slightly higher than the historical 22-23%.

Operational Updates

• Innovation: Focus on flavor innovations like Mango Lemonade and Grape Slush, with a limited-time offer planned.
• Distribution: Gained 15-20% more shelf space and expanded into Subway, Kroger, and Walmart.
• Partnership with PepsiCo: Enhanced integration with PepsiCo’s sales and supply chain systems.
• International Expansion: Launched in the UK, Ireland, Australia, New Zealand, and France, partnering with Suntory.

Future Outlook

• Category Growth: Anticipates mid-to-high single-digit growth rates.
• Market Share: Focused on reaching a 15% share, with opportunities in the summer beverage season.
• Innovation and Expansion: More product launches expected in mid-April, with a 15-20% expansion planned.

Q&A Highlights

• Slowdown in 2024: Acknowledged a Q2 slowdown in category growth.
• Distribution Strategy: Emphasis on expanding through food, gyms, health clubs, and Amazon.
• Consumer Base: Strong loyalty with a high repurchase rate.
• Alani Nu Acquisition: Aimed at expanding reach among female and Gen Z consumers.

Readers are encouraged to refer to the full transcript for a detailed insight into Celsius’s strategic plans and market positioning.

Full transcript - UBS Global Consumer and Retail Conference 2025:

Peter Grom, U. S. Consumer Staples Analyst, UBS: Good morning, everyone. Welcome to the UBS Global Consumer and Retail Conference here in New York City. My name is Peter Grom. I’m the U. S.

Consumer Staples Analyst here at UBS, and we are very excited to have joining us this morning from Celsius, Chairman and CEO, John Fieldly and CFO, Jared Langans. So over the past few years, we’ve seen a pretty big shift in consumer preference towards functional zero sugar energy drinks, which now comprise the majority of the category. Celsius has been a clear leader in that shift. And first, with that shift into the category growth in general. So even though velocities have slowed of late, the company has still positioned itself as a strong number three in The U.

S. Energy drink category. So I have a number of questions that I plan to run through with the team, a lot of ground to cover today. So but I think you guys all have instructions out there in terms of how to submit a question. That question will then appear on this iPad.

And so maybe for the last ten minutes or so of the presentation, we can kind of open up to audience Q and A if there are in fact questions. So yes, please don’t be shy. Before we start, I’m required to read a legal disclaimer. As a research analyst, I’m required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view on this call today. These disclosures are available at www.ubs.com/disclosures.

Alternatively, please reach out to me and I can provide them to you after this fireside chat here. So with that, why don’t we get started? Look, I kind of wanted to start maybe just looking back and maybe just, John, I think it would be helpful to just kind of get your perspective on kind of what’s happened over the last year. And look, you weren’t entered drinks weren’t alone in this, but I think if we were sitting on this stage last year, I think many of us weren’t really anticipating like this big slowdown. So as time has gone by, I’m sure you have a better perspective in terms of what’s actually happening.

So can you maybe just understand why you think the category slowed the way it did last year?

John Fieldly, Chairman and CEO, Celsius: Yes. I mean, thanks for having us. And I think when you sit if we were sitting here last year, we were all in a really good position looking at March, the year was off to a great start for the whole category and Celsius and we were gaining some of the largest distribution gains we’ve seen in company history. And there was you saw this kind of wave into Q2 and then we started to see some category slowdown for the first time. So the category went negative for the first time in the third quarter.

So some macroeconomic challenges, we saw convenience store traffic slow. There was some shifting in consumer purchasing habits, frequencies, and we felt that we were impacted by that. We were we got up, I think it was the end of Q1 to beginning of Q2. We had the highest share we’ve ever received. It was almost a 12 share in the energy category.

Now roughly around 11 if you exclude coffees and teas out of that energy category. We’ve been hovering right around that number, but off the highs. And we woke up the two largest players in the category. We woke them up and believe in sugar free, launched a ton of innovation, some of them largest innovation coming from the competition that we’ve ever seen. The good news is, is the category for the first time shifted to greater sales coming from sugar free.

So that sugar free movement that Celsius has been talking about and we are the clear our whole portfolio is sugar free. We continue to see those trends in the health and wellness trends. And we had some our innovation came in the beginning of the year. We had some lighter innovation in the back half of the year. And so that impacted some of our numbers and we’ve seen that impacted in the first quarter as well.

We have some timing of innovation and timing of promotional advertising programs within some of the top retailers that are recycling from the first quarter. So that’s if you look at the scan data, we’re a little bit soft in the last twelve weeks and four week reads. But we do expect that to continue to improve in opportunities as we’re leading into the summer beverage season. So I think those are some of the trends that we’re seeing. We’re confident in the Celsius portfolio.

We made it into in 2024, we made it into the top 10 of all trademarks in beverage. Celsius is ranked as the number nine beverage brand. In all of beverage, it’s $2,700,000,000 retail sales, 22% growth in retail sales in 2024. So there’s a lot of great tailwinds, a lot of momentum. We got a lot of great innovation coming.

And we’re excited what 2025 is going to offer to us as we continue to build this base. And then we have additional the Alani transaction we’re working, we’re on closing that and that’s going to open up tons of opportunities for us as well. But the Celsius portfolio, we’re super bullish on and we think we’re well positioned. Super helpful. Maybe just pivoting back to

Peter Grom, U. S. Consumer Staples Analyst, UBS: kind of the evolution of market share, right? And you kind of alluded to it in your response just there, but you’re at the 12% share and it kind of moved lower. But if we were kind of sitting here a year ago, I think there was a lot of hope out there from you guys, from investors that as some of the shelf resets took place, particularly in convenience, that you would see that market share really tick up. So I know hindsight is twenty twenty, but I guess what do you think ultimately what didn’t play out, I guess, as planned? And I think another question would be, what could you have actually done differently?

John Fieldly, Chairman and CEO, Celsius: Yes. I mean, we’re not happy where we ended 2024 out in share. I think we were this time last year, we expected to be at a much higher share number than we are. The competition has leaned in, it could have timed our innovation better. And I think we’ve improved that with some of those strategies for 2025.

Hence, you see a little bit slower start this year with if you look at the scan data, because we made some strategic shifts to better time our innovation throughout the year. So that’s a step change that we’re making from 2025 to 2020 or sorry, 2024 to 2025, but you’re seeing some initial impact earlier in the beginning of the year. And we need to continue to execute better as an organization. So we’ve built out this growth department internally to really further synergize the marketing and sales team. We got to get better with retail execution.

Teams have done a great job, but we need to continue to get better. We need great household awareness in certain markets. We’ve done a lot of research and analytics on that. And the household penetration is good. There’s awareness, but we need to convince consumers on what is that inflection point to buy to try?

What’s that how do we further increase purchase consideration and expand consumption throughout our consumers that we do have? So those are some strategies that we have built in for 2025 to leverage and to work on that. So those are some things differently we’re doing from 2024 to 2025, which are going to be a step change

Peter Grom, U. S. Consumer Staples Analyst, UBS: for us. Okay. Maybe picking up on that, I mean, one of the things that we’ve seen from a category perspective exiting ’24 and ’25 has kind of been this nice improvement just in terms of trends. So kind of curious, what do you think is kind of driven that improvement? Obviously, one of your largest competitors took a price increase, so that helps.

But I’ll be curious how volumes also improved as well, right? So I’ll be curious what’s really driving that? And I guess maybe a question for both of you. Look, you’re going to start to cycle that weaker summer, right, low single digit growth. So would you anticipate category growth continuing to accelerate from here or is this kind of mid to high single digit range kind of a fair run rate as you think about 2025?

John Fieldly, Chairman and CEO, Celsius: I mean, we anticipate mid to high single digit growth rates through the year. That’s what Mintel is saying. That’s kind of in our internal numbers as well. So we’re hoping for more than that, but we want to be cautiously optimistic within the category. I think consumers are coming back.

Q3 was a tough time for a lot of folks. There’s a lot going on. You saw some of the stimulus kind of coming off that as well and some of the shock factors to consumers, interest rates and there’s been a lot of pressure. So, I think what you’re seeing also, which is really exciting when you look at what’s happening in the energy category is it’s evolving from an impulse purchase. And you’re seeing a lot more, especially large format and mass and food, and they’re adding more space to energy drinks.

As energy drinks is becoming a greater portion of total liquid LRB or total beverages, Everyone’s adding more shelf space. You’re seeing more sales for multi packs. So that really shows you where consumers are going because if you look historically, energy drinks have been an impulse purchase for a specific needs state. Now they’re being purchased at an off warm shelf in larger pack sizes and part of the pantry. They’re coming home as part of the pantry.

What that means is that once you’re part of the pantry, you’re part of a daily lifestyle, a daily routine, you’re part of the family, part of the household. So I think that’s a huge opportunity when you start to think of like share of liquids throughout the day. And that’s another strategy we have is increasing that consumption and usage occasion. And you’re seeing energy drinks replace coffees. You’re seeing them drink as a morning pickup.

Our lunch pickups is huge. We just expanded into Subway up to 18,000 locations. We’ve been Jersey Mike’s. We’re partnering with Pepsi within their food service division. So you’re seeing usage occasions expand.

So that’s another tailwind that we think is a huge opportunity for the Celsius portfolio.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Well, that makes a ton of sense. I mean, and then as you think about that moving forward, and you kind of alluded to this a little bit, right, just in terms of timing of innovation. So do you anticipate kind of the core Celsius portfolio as we move through the summer here? And then I guess you kind of put this on call a couple of weeks ago, but you mentioned that you expected a gain, I think it was 15% to 20% of more shelf space during the spring resets. Can you maybe just elaborate on that and add a bit more details at broad base with this channels?

Yes. And then like not to be sarcastic sell side three part question. Please, please. But I just the velocity numbers in the kind of the core brand have been a bit more challenged. So are you seeing any retailer pull back on shelf space in any location?

John Fieldly, Chairman and CEO, Celsius: So I think when you are we happy with our share number where we stand? Are we going to no, absolutely not. I mean, we’re here to win. We have almost 1,000 team members, dedicated field sales team, marketing sales team. We’re here to win.

We got an amazing Celsius is an amazing portfolio that’s aligned with today’s health minded consumer. We got great innovation coming. We got great strategies, great partners and collaborators. So you talk to any of our team members, we’re super bullish on where this brand can go. We’ve made it into a solid number three player and something that hasn’t been done in over the last decade.

We’ve crossed the 10 share mark. How do we get to that 15? That’s our next hurdle. And that’s what we’re working with. And you see some of the indicators there, like look at the share numbers in South Florida.

We’ve talked about that prior over 20% share. Look at New York City here. We’re very close to a 20 share here as well, an 18 share. You go Baltimore, high double digits. Buffalo, New York, LA, Chicago, there’s some really good markets around the country where we’re north of that 15 share.

So it is possible and it is probable and the trends are there. We just got to continue to drive purchase consideration, loyalty and we can do it with a lot of the strategies that we have. So, and look at Amazon. I mean, Amazon, strong number one to number two player depending on the day or the week that we’re pulling through. So this brand can do it.

We just gained massive distribution across the country. So we’re in a lot of pockets in the country that we have low awareness, low purchase consideration. So we need to build on that and that’s opportunities for us. So we are committed, we are focused and I think there’s a huge opportunity to drive share growth and revenue growth within the Celsius portfolio. When you talk about what was the other question?

Yes, there’s three of them there. There’s a few of them there. Shelving, right?

Peter Grom, U. S. Consumer Staples Analyst, UBS: So, 15 to 20, if we

John Fieldly, Chairman and CEO, Celsius: can’t grow share and and we come up to buyer meetings, if we can’t grow not share, if we can’t grow revenue and we get into meetings at the end of the year, there’s going to be hard decisions, right? And retailers are going to put the best SKUs on shelf that turn. And so we’re going to have we have to get back to share growth and not share revenue growth. Coming out of the year right now, if you look at the last four weeks and twelve weeks, we’re down. And that’s because we’re cycling with some of the strategies that we did some step changes for in 2025.

But we’re convinced our strategies are going to work and continue to overcome those as we start to roll through the year here. So, we don’t anticipate those conversations. We got great relationships with retailers And we don’t think we think we’re in a good place right now as the year plays out. We got to get through the next couple of months here. And then things will start we feel things will start normalizing and then we’ll start getting back into a continual cycle.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Okay. So just maybe following up on that. So the 15% to 20% more, that’s coming despite kind of more of the recent trends, is that fair?

John Fieldly, Chairman and CEO, Celsius: Exactly. That was really what was sold in last year. So these are the resets that are coming in. So when you look at those, I mean, you look at the expansion and we’re at 15% to 20% share. Look at Subway, that’s a new customer, right?

You have 18,000. Look at Home Depot is a new customer for us. We’ve been in Lowe’s. You go to expansion into Kroger. So if you go to a Kroger right now, you’re going to find Celsius at multiple front checkout coolers.

Same with Walmart now, you’ll start to see us in a variety of front checkout coolers. So it’s not only number of stores and distribution expansion, it’s also the breadth of distribution in a lot of these outlets and retailers. So those are just some examples of where that 15% to 20% is coming from. And then there’s more opportunities. We’re dropping coolers.

We have a target of over 15,000 coolers of incremental to place. We want to be within six feet of every checkout cooler. Got great distribution here in New York City, variety of stores we went through and continue to check on. I mean, we’ve got to be in that path to purchase.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Okay. Maybe just sticking with the distribution question, but just focusing on C stores, I know the channel has been more challenged, probably speaking, I guess, but it’s very important to the energy drink category. And kind of similar to the broader market share discussion, shares are also kind of ticking a bit lower here sequentially off the peak last year. But what’s interesting, there’s a gap between kind of your total company share and kind of C store, it’s a lower market share.

John Fieldly, Chairman and CEO, Celsius: So

Peter Grom, U. S. Consumer Staples Analyst, UBS: how are you thinking about closing the gap now, particularly as you expand TDPs in that channel?

John Fieldly, Chairman and CEO, Celsius: Yes, I mean, that was really the last channel Celsius has gone into. So when we look at how Celsius portfolio was built, it was really in food and it was in gyms and health clubs, it was in the food channel, it was in Amazon, then we went to large format and drug, and then really gained most recently broader distribution and convenience. So there’s a lot of work to do in a variety of regional chains around the country. We’re partnering and collaborating with all the major retailers and convenience. Casey’s, we just did a partnership and collaboration with some of their food pairing opportunities, same with AMPM and there’s just a seven Eleven has been a great partner in collaborations with them.

We got more collaborations coming on. So that is a very important channel in the energy drink category and we need to win there. When we are winning in there in certain markets and other markets, we just have a lower we’re not there yet. It’s a very loyal shopper that’s in there. We need to continue to build this awareness that purchase consideration and trial.

And we’re doing that with a variety of different strategies and tactics and continue to activate consumers. And that is a channel we’re committed to win on. And we know the Celsius portfolio warrants shelf space inconvenience, warrants has a reason to be there and has a reason to be a major player there. When you look at what coming out of NAAQS as well, when you look at all the trends at NAAQS, listening to all the buyers, they’re adding more space to energy, talking about the importance of pairing with food and some of their strategies that they have, which is really important and energy is key to them. It’s a large profit center for them.

And one opportunity is this pairing with food and that’s something that we know at Celsius with some of the great flavor profiles we have from lemon lime, cherry cola. We got a mango lemonade that we’re launching this summer, which is super refreshing, some great flavor profiles that you compare with food. So it’s a really good alignment there to further drive increased basket ring and more profits.

Jared Langans, CFO, Celsius: Okay. Seven Eleven is actually a good example where we’ve been there longer, right? So we only got into Circle K in the middle of twenty twenty two. So we’ve only been in for anywhere from four months seven point one one we’ve been in longer. And we’re actually the share we have at seven point one one is greater than our kind of eleven point one one share, right?

So that’s an example of where we can win in a national convenience chain that we just it’s timing and sequence. So it’s really getting in there, having that billboard effect, building that brand awareness and seven Eleven has really helped us do it in their stores. And so it’s really taken that model to across The U. S. Into all the other channels with inconvenience.

Peter Grom, U. S. Consumer Staples Analyst, UBS: No, that’s super helpful. I think that’s a really good point, Jared.

John Fieldly, Chairman and CEO, Celsius: I feel like the AMP and Maverick and a lot of these super regionals, we’re just we’ve only been in a short period of time, really the early days. We haven’t the brand hasn’t been around for twenty years, like two of the largest players were being compared with. Just think of all the brand investment behind those two major brands. And so I think the Celsius portfolio and trademark is super strong. It’s I think we all I guess, you look at last year, we all wanted to be a 30 share ending the year, but it’s going to take time.

But the brand is strong, the DNA is strong, just walking around here, we have Celsius gear on, we’re walking around, I mean, people give you high fives. I mean, people are really connecting with the brand and resonating for the much broader consumer. So, it’s cool.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Not attempted to give you a high five here.

John Fieldly, Chairman and CEO, Celsius: There you go.

Peter Grom, U. S. Consumer Staples Analyst, UBS: But maybe I have a bigger picture question and I John, I would just love some perspective on your core consumer and maybe just comparing, contrasting kind of the consumer preferences for functional beverages today versus maybe the legacy energy drink category. And I guess maybe just describe the Celsius consumer in relation to that legacy energy drink category and how they fit within kind of broader LRP. And I guess what I’m really trying to understand is what’s unique about the Celsius consumer in terms of usage occasions, frequency, brand loyalty and brand switching, right? And I guess is today’s consumer really a different audience? And I guess, does that alter the consistency of growth?

And I guess, has the consumer become more discretionary in any way versus maybe what is thought of traditional energy or legacy energy as more kind of daily use occasions?

John Fieldly, Chairman and CEO, Celsius: Yes. I think when you look at the Celsius consumer, it’s really the core consumer. It’s revolving around a daily routine and daily lifestyle. It’s there’s a variety of different attributes there. Our consumer wants more out of their energy drink.

They want more out of life. They want more out of their food. And you’re seeing that as a major trend with all health with all consumers. We want hydration, but we want more. With Celsius, it is it offers that great energy with no crash, no jitters with great flavor, because flavor is super important for our consumers.

But also they enhance vitamins. It’s they we do have a variety of our consumers that do read labels. And when you look at the Celsius portfolio and look at the ingredients, it’s a multivitamin in a can. It’s got two point eight grams of vitamins in it. It’s got your B complexes, it’s got biotin and chromium and green tea.

And So there’s a lot of attributes there that resonates with that consumer base on wanting more out of what they’re consuming, want their food and beverages to do more. Fitness is a lifestyle, is a line for today’s consumer. Big portion of our consumers are are fitness advocates and athletes and really see themselves as more of a health and wellness within the DNA of the consumer base. And those trends are going to continue to evolve and continue to grow. Daily consumption is really core.

We see a high repurchase rate within our consumers. And then our consumers historically have been are loyal. They’re loyal to the Celsius portfolio. We do according to Mintel and Surcona, we do see some of our consumers move from Red Bull to Monster and there is a good portion of the energy drink, just general consumers that do flow around between brands and it could be based on promotion, pricing, flavor or what’s taking what that retailer promotion that’s taking place. But we do have an extremely loyal following and consumer segment and that’s historically true to all energy drink brands.

So, what how does the category evolve? How do consumers evolve as energy goes mainstream? It could eventually move into more of a CSD kind of category. As it’s be coming move beyond that specific needs state, I need an energy drink to accomplish this. It’s more becoming that daily household item.

And that’s the evolution of the beverage category that we’re going to see over the next five to ten, twenty years.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Yes, it makes sense. And maybe shifting to kind of Pepsi, a big part of the company’s success has been kind of the distribution partnership there. Can you maybe just discuss how you’re working to strengthen that relationship? Last year, you had some changes in the incentive structure. There were some unexpected inventory dynamic.

John Fieldly, Chairman and CEO, Celsius: So if

Peter Grom, U. S. Consumer Staples Analyst, UBS: just any thoughts on the high level on the partnership and then maybe, Jared, any color on kind of the inventory optimization going forward, anything that we need to kind of be aware of?

John Fieldly, Chairman and CEO, Celsius: Yes. I’ll just talk about the partnership in general and getting details on the inventory movements and also some of the way we tied in with IT and some of the synergies within our data analytics. But we have great relationships with Pepsi. I was with Ramon two weeks ago at CAGNY. Ram, we have great relationships with him.

We were in the field. We’re working with her. We’re tied in with their priority periods. We’re tied into their strategic planning. We go to the same process as their own brands on making sure we have our strategic focus and collaborations.

And they’re expanding us in food service. We’re leveraging over 30,000 sales reps across the country. There’s always opportunities to improve, right? And how do you better tie in? How do we become that better supplier to Pepsi?

And we just hired starting on the twenty fourth, Eric Hansen, twenty seven year vet of PepsiCo in a variety of leadership positions. And that’s just to further enhance that partnership and collaboration and unlock synergies and opportunities. We work extremely closely. A lot of our team members on the sales side have worked at Pepsi and we’re there’s I think the relationship is as solid as it’s over been. It’s going to continue to get even solider with Eric joining the team in the next two weeks.

And the organization. We work closely on strategies and they want us to win just as bad as we want to win. And we all need to sell more cans and more cases and bring new consumers in and drive more incrementality. When you talk about some of the data and tie in and software and some of the inventory, I mean, we’ve done some great things in the organization to really maximize the Pepsi partnership in 2025.

Jared Langans, CFO, Celsius: Yes. So our sales guys are fully wired in now. So So we’ve got 400 to 500 strong out on the street that are kind of incremental to the Pepsi sales force. So we’ve got our apps that are wired into their apps now. So for ordering and building displays and selling in additional cases, So that’s tied in also our supply chain is tied in even tighter to their supply chain in terms of forecast and looking out.

So if we look today as we monitor depletions, our depletions are consistent with what you’re seeing on the scanner data. So we’re in good shape. There’s always kind of that end of quarter where you could always have a little bit of timing, but that’s more noise than any kind of structural thing. So we’re in good shape. This quarter we were in good shape last quarter.

So as we continue to track, we think we’re from an inventory optimization. If we see anything, we’ll call it out. But at the moment, as we’re looking at the depletions and as we’re working with them on forecasting, no issues to call out today. But I think overall last year, they did have a pretty significant optimization across their entire footprint. And I believe a couple of weeks ago at CAGNY they did talk about how they were moving the Frito program into their mixing centers.

So they we weren’t the only ones that got kind of caught up in the optimization. There was a lot of space they had to free up in order to be able to bring that those products and that brand into the mixing centers to further drive optimization within their systems. So that’s behind us. And I think where things stand today like you said we’ve got Eric Humphrey coming on board in a week and a half or so. And he’ll just further strengthen our relationship and our partnership with Pepsi.

John Fieldly, Chairman and CEO, Celsius: And we’re really looking at all aspects of the business, right? So looking at Germans like supply chain, how do we improve procurement, logistics, how do we get more efficient, right, on our side and how do we better leverage their infrastructure. So our teams are working very closely with them. Then you also look at, as Jared, the supply chain, the sales organization. So we’re collaborating in a variety of parts of the country where we’re actually working on a collaborative approach, selling the energy portfolio for them.

So those are things we’re working on. Also tied in these suggested orders is a major opportunity to unlock. We’re able to our team has when they go into a store, they know the store manager, they know the location, they know the planogram, they know the displays that are up, the incrementality. We can place suggested orders that go straight to that rep that’s managing that store. So it’s you’re pre selling in.

So we’ve been working on our timing and sequencing within the sales organization, so we can get even much more efficient, drive more efficiency out of those trucks, so we can get better stops, better execution and better displays. The only way to win, we got to win, we got to win by disrupting the path to purchase. We can do top funnel, mid funnel and lower funnel to increase that consideration of purchase, but those retail execution is extremely important to win in this game. So that’s where we really need to get and continue to improve on. And this is a big unlock is having these suggested orders with them.

Just shows you the relationship there. I mean, to have that just think of the commitment and the trust that’s required in order to do a suggested order for a customer because that does not happen once and one fail, you’ll be blocked from that customer on ever doing that again. So that shows you how great the organizations are really working together and the trust that is built between these organizations. So, I think, and then on a marketing side, we’re starting to work with them as well, some marketing opportunities and in store collaboration. So cooler placements, you see us in a lot almost all of the Pepsi energy coolers were there.

And everyone probably traveled, you saw us in a lot of the airports and partnerships, so foodservice. And so I think partnership is strong.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Great. Terry, maybe sticking with you for a second here and kind of building on that. I would just love some perspective on just how we should be thinking about The U. S. Top line growth from a core Celsius perspective.

Obviously, category growth, demand, market share, all those will play a role, but you are lapping pretty outsized impact as it relates to inventory destocking, impacts from promotional allowances, etcetera. But that also kind of follows a year in ’twenty three where it seems like there was a little bit of an inventory build. So it’s been harder for us, my peers, I think some in the room, how to figure out how much of this inventory promotional impact will normalize as we think about the year ahead. So I know you don’t give guidance, but maybe conceptually talk through how we should be thinking about lapping these impacts?

Jared Langans, CFO, Celsius: Yes. So from a high level, just looking at this year, obviously, the first half of the year is going to be a tougher comp than the back half of the year from our numbers, right? If you look last year, we were roughly 22% at retail, so good solid growth. It was a little stronger in the front half as you talked about. The whole energy category got a little soft in Q3 and then kind of picked back up in Q4.

We still we have the same kind of path. We do have some significant inventory movement that happened in Q3. So we’ll have a big pickup there. If you look at through the rest of your John did talk about with innovation launches happening more in mid April instead of mid January and some of our promotional calendar kind of being skewed more towards the back end of Q1 into Q2. There’s a little bit of comp pressure that you’ll see in the first quarter.

You’ll see it get a little less so in the second and then kind of what we talked about with kind of when you got to I guess like May, sometime between May. There’s definitely some comps that we’ll be rolling over that are call it easier from a reported perspective. So I think you’ll see the softness we talked about in the first half and you’ll start to see us pick up as we get through the second quarter, much more so in the third quarter and then we’ve got a little bit in the fourth quarter as well. So that’s kind of the cadence and that kind of goes with some of the movements you’ve seen and also kind of some of the trajectory you’ve seen with the whole category in general where you’re expected to see a little bit of building across the year, right, where the second half is expected to be stronger than the first half part of that comps. Some of our soft comps happen to just coincide with some of the energy category soft comps, right, P3 being the main one.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Okay. No, that’s really helpful. And then maybe rounding out kind of the sorry, two last questions, just kind of the core portfolio. I mean, you touched on the shelf space opportunity. Can you just talk about what’s planned from an innovation perspective?

You launched the hydration sticks a short while ago, so you just talked about the opportunity there. And I think this was your first real move outside of kind of the core energy drink category. But do you see opportunities for the Celsius brand to kind of expand into other adjacent categories as well?

John Fieldly, Chairman and CEO, Celsius: Yes. I think when you look at this year, it’s really when you look at our core vibe in centrals, it’s going to be flavor innovation. That’s our big bets for this year. When you look at Mango Lemonade for summer, you got Retro Vibe and Playa Vibe. We have a grape slush we’re launching with the Essentials line.

We got a few other flavors and we’re excited about an LTO we’ll be launching in the back half of this year that more to come on that. But when you look at the first four way into like a subcategory and adjacencies, it’s hydration, something we’ve talked about a lot. A lot of our consumers have asked for more opportunities to consume Celsius throughout the day and hydration pairs perfectly for our portfolio being a fitness, health and wellness brand. Initially, it’s launched on Amazon, just rolling out, it will be on walmart.com and a variety of other retailers coming soon. It’s really too early to tell on the how large that would be.

We do have a really large powder business that continues to grow. We see a lot of opportunities in powders. More retailers are taking our powder sticks on the go, energy sticks on. So I think that’s a that is definitely a business we’re focused on growing. And I mean, it’s over almost $100,000,000 business for us.

So sizable and growing and there’s retailers are leaning in, great flavors there. This hydration is a huge unlock. And I think there’s other opportunities. We want to be careful on how far we stretch the brand, so very cognizant on that with the team. But there is potentially is other opportunities along the way that we’ll evaluate, but timing and sequencing is really, really critical.

And at the end of the day, we got to win in energy. Like that’s our number one priority. We’re learning with the hydration, but we are committed to winning in energy.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Okay. That makes sense. And then so maybe rounding out here, can you just talk about the brand’s opportunity to kind of expand internationally? You moved into several new markets this year. What have you learned about the brand in those markets?

And as you think about growth from here, is it more about new markets? Or do you see an opportunity to expand distribution within those new markets that you wanted to build over the last year?

John Fieldly, Chairman and CEO, Celsius: Yes. I mean, the same health and wellness trends we see in The U. S. Are global trends and everything is one click away. So, we do have a really good distribution and share in Sweden.

We’re right around a 13 to 14 share in Sweden. We’ve been there a while, been there over ten years. That’s a great market for us. Actually one of our first markets expanding internationally, but two individuals found Celsius back then in Miami and bought a container and took it back and built it. So that’s why we landed there.

We’ve always been focused on The U. S. We do have high single digits in Finland, only there a few years, but the major markets we just launched that you’re referencing is The UK, Ireland, Australia, New Zealand and France. Those five markets rolled out, started to roll out in back half of twenty twenty four and 2025. We’re taking a very methodical approach.

So we picked English speaking, great partners build great brands as well. We partner with Suntory for the international expansion in these markets. They have great distribution, been really great on collaboration. We’re targeting specific retailers and building a loyal consumer base before we expand into other into further distribution. So keep in mind, you only have six months, maybe three months at best at retail to make it.

If you don’t make it, you’re out. So we want to be very methodical in our approach. We’re also being cognizant on profitability. So it’s a balanced approach. Now we have seen initial success have been very promising.

In Australia, we partnered with seven Eleven for the lead launch. It’s been really well. It’s they referenced as one of the best launches they’ve seen in the last five, seven years. It’s been really successful. We’re starting to roll out in further distribution.

That has gone much better than we initially anticipated. So we’re really excited about that market. The UK, we partnered with Tesco, MetroMarts first and now have been expanding and rolling out to other markets. Really early in the early phases there and France the same. So everything is promising, but we don’t want to over we don’t want to get too excited.

It’s timing and sequencing. Let’s let these revenues come through. Let’s see how we continue to build upon this consumer base. We know the flavor profile, the brand positioning is resonating with those consumers in these markets and we’re really excited about the opportunity, but we don’t want people to get ahead of their skis here. We’re going to continue to add more resources in these markets as we gain more revenue and more profitability.

And we’re going to go as fast as the brand continues to grow. So we got great strategies coming this summer, more distribution coming internationally. And where we go from there, I think you’re probably looking at expansion in 2026 and 2027. I want to keep everyone super focused. Jared and I have spoken about this.

It’s very important. We don’t want to go too thin, too broadly. So we’re hyper focused on these key launches within these markets and we’re going

Peter Grom, U. S. Consumer Staples Analyst, UBS: to continue to build scale there. Okay. So we only have a few minutes left here. So I wanted to talk about Alani now. So maybe John, just broader question, just give us some high level thoughts on the brand and maybe how it’s positioned in the energy drink category.

John Fieldly, Chairman and CEO, Celsius: We’re really excited about Alani Nu. We’ve admired that brand for many years. We know the founders over the years. And the brand is resonating with a very unique consumer segment. It’s going after that female, Gen Z, new to category.

It is a growing segment within the energy market. It has a great loyal following. It has some great innovation standing student health and wellness as well. So really look at those megatrends in food and beverage and the Alani portfolio is tailwinds are strong behind that brand for that female shopper. And you look at the distribution, you look at where the infrastructure we have at Celsius and how one plus one can even is going to be even stronger working together and collaborating.

This puts Celsius as over 16.5 share in the energy category, makes it a mega number three player. It allows pricing promotional strategy unlocks with a multiple portfolio strategy, it is very typical to play at this high level with a singular brand because you’re always being leaned on unless you’re on deal every day of the week. So there’s a variety of opens up pricing promotional strategies, supplier synergies, infrastructure synergies, and just continues to put Celsius now has a modern energy portfolio for today’s consumer. So we’re excited about it. Their brand team is amazing.

This is just going to be a great opportunity for to continue to it’s accretive the revenue in year one, accretive the EPS and puts us well positioned for today, tomorrow and what we see in the future.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Given that both brands are kind of rooted in that health and wellness, I mean, is there a bit of a brand overlap in your core consumer?

John Fieldly, Chairman and CEO, Celsius: Well, when you look at the that’s a lot of questions we get from investors is that, you’re fiftyfifty, approximately fiftyfifty male, female with the Celsius shoppers. So now the Alani portfolio is cannibalizing. That’s not the case. You look at the Celsius consumer, you look at the Mintel data and some of the panel data, we’re seeing that we have about a 15% of our Celsius consumers are also buying Alani, but actually it’s even a higher number for Red Bull and Monster. So it’s not as high as individuals as perception is, and it’s a growing segment.

So there’s a female shopper is massive out there. There’s a variety of different needs states and both these brands deliver different needs states and attributes and have a reason to be in the coolers and a reason to exist together. So we don’t we see it as incremental.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Sure. That’s helpful. Jared, maybe one overview. Can you just talk on the potential integration, how you plan to bring these two brands together and kind of maybe where you see the biggest opportunity for synergies looking ahead?

Jared Langans, CFO, Celsius: Yes, I mean, the biggest thing is really taking the infrastructure that we’ve built across the sales force, four hundred, five hundred people. We’ve got a large key accounts team, we’ve got great relationships with retailers, really bringing them into that sales system. Also our supply chain, we’ve got a center of excellence we created last year. We’ve built up and scaled our supply chain team so that we can onboard them pretty seamlessly, get them into our orbit structure, get them into our contracts from a raw materials, packaging, freight perspective and really take kind of where we were twenty four months ago and kind of accelerate that up over a twenty four month period. So if you go back two years and kind of look what we’ve been able to do to our system through our sales force, through our supply chain, we’re looking to do the same thing to them and really accelerate that and drive the synergies through our system with the scale that we’ve built.

So a lot of it’s going to be workforce and supply chain, but then also savings across procurement and things like that, some back shop savings as well. But really a lot of it is kind of known cost that we can really put a line in the sand on.

Peter Grom, U. S. Consumer Staples Analyst, UBS: Okay. Maybe sticking with you for a second Jared and shifting and talking about profitability for a second was kind of one of the bright spots here as we exited the year. Gross margin north 50%, similar position for the full year. Can you just talk about how you see gross margin and profitability more broadly evolving from here as you look out over the next twelve months? Obviously, aluminum and administrative premium have been pretty topical across all beverages.

I’m curious how you see those cost buckets kind of impacting your trajectory just based on where things stand today?

Jared Langans, CFO, Celsius: Yes. I mean, from a short term perspective, we’ve got some price locks and things in place. So we’re comfortable from ’24. I think we mentioned that a couple of weeks or a month ago. We’re in pretty good shape for this year now Depending upon where tariffs and things like that go, we do see with big beverages, the plant we bought and with some scale that we’ve done, some upside opportunity on that 50% margin, good tariffs and things like that drive some down side.

So we’ve kind of circled that 50% as a good number for us this year. There is some upside. There could be some downside. So kind of net net that’s kind of where we are. I think from a tariff perspective it’s hard to say because it changes every other day, right?

So I try not to do too much modeling on the tariff stuff. With the 25% that just got put in place, we’re still in good shape and we mentioned that about a month ago. But you never know things change. We do have with our center of excellence opportunities and different channels to bring things in and different ingredients providers, so different routes into market. So we do have different strategies we can utilize if we need to.

So we’re pretty comfortable where things stand today.

John Fieldly, Chairman and CEO, Celsius: We continue to have a variety of strategies to drive more leverage out of the system. So, talking about Big Beverage, the acquisition we made in Q4, that’s going to continue to unlock and just really continue to optimize our raw material and ingredient routes and

Peter Grom, U. S. Consumer Staples Analyst, UBS: big opportunities. Okay. And maybe just one final one here, just sticking with margins, but on more the selling and marketing side, right? I mean, it was 26% in 24%. I know a component of that wasn’t really just stepped up investment part of it was the deleverage that you saw.

But so just as we think about ’25, Jared, what do you think is kind of a reasonable target?

Jared Langans, CFO, Celsius: I mean historically, we’ve probably been closer to kind of 22, 20 three. We did spike up to the 26. I think if we do see opportunity to invest behind the brand then we will. There could be some depending upon total revenues quarter by quarter you could see it a little higher, a little lower. Obviously Q2, Q3 tend to have a little higher revenue.

So Q1, Q4 could be a little bit higher from the sales and marketing as a percentage of revenue. But we do we will take the opportunity to invest behind that if we see opportunity to. I think we’ll just have to kind of communicate that throughout the year. But we do John has talked about, we do want to grow market share. We do really want to make sure that the 15% to 20% expansion is successful, really build that brand awareness, especially in some of those areas Pac Northwest, Midwest, where we don’t have the brand awareness that we have.

So to really drive that, sometimes it does take a little bit more to get there and then you can kind of scale back from there. So there are pockets that we’ll see opportunities and we’ll just communicate that throughout the year.

John Fieldly, Chairman and CEO, Celsius: And we did talk about CAGNY. We have a really a summer program. We’re going to be kicking off really a healthy halo marketing program. So we didn’t have that last year. So we do have that, as Jared mentioned, heading in with 10% to 15% to 20% space increases.

So we have some broader distribution. We got some great innovation coming in. And based on how revenues turn out, it could be at the higher end because of some of these initiatives we’re taking advantage of. But right now is the time to really invest behind this brand. It’s got huge opportunities.

The ACV is at an all time peak. You’re coming off for a greater resets. You got retailers leaning in. Like I mentioned, some of those front checkout coolers at Kroger and Walmart and seven Elevens of those and expansion of seven Eleven and just some of the collaboration. So we’re really excited about the summer and we got some great marketing programs that are planned.

Peter Grom, U. S. Consumer Staples Analyst, UBS: All right. Well, why don’t that’s a perfect place to stop, I think. John, Jared, thank you so much for joining us today. We wish you nothing but the best of luck moving forward. All right, Hans.

John Fieldly, Chairman and CEO, Celsius: Thank you for having us.

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