CELH - Earnings call transcript Q4 2019

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Operator

Greetings. Welcome to Celsius Holdings, Inc’s. Fourth Quarter and Full Year 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. this being note, Please Instructions] conference recorded. is [Operator

conference Cameron Donahue will now Hayden to the turn you. I with over IR. Thank

begin. may You

Cameron Donahue

Thank Fourth everyone. today morning, XXXX you, you Call. and us joining Earnings We Conference for and Quarter appreciate Holdings Full Year Celsius good

Officer; on Executive call and the Chief Negron, me are John Edwin Joining President Financial Fieldly, today Chief and Officer.

open at questions and be given that Following your the instructions to prepared the call remarks, time. we‘ll will

press the company celsiusholdingsinc.com All release its section. a XX-K and The the under at Relations today. with are website SEC on filed Investor available materials issued Form company’s the

As which uncertainties, be before XX, turn available many are the Celsius numerous expectations SEC and based today’s to that may available as additional duty aware are over beyond review will extent Please a involve risks today. and call reminder, be on management March also forecast, the the today, call information in as information. forward-looking of later that disclaims XXXX. any other replay undertakes statements, obligation to and safe I applicable Holdings statements. filings by update any to our you our disclosures statements of harbor forward-looking required and audio the in These encourage including this John, release the to company’s these contained no control. Except press We with to full law, for contain

President John? Officer, and With that, Executive to prepared turn I’d Chief over to Fieldly, call for like John the his comments.

John Fieldly

further distribution adding visibility channel expanded China. our and for and outstanding products business accounts, in for XXXX its another portfolio with Cameron. greater recognition Good year our partners our joining thank to morning, network, we us as existing brand you, commitment everyone, innovation, our today. relationships through restructured and extended you model gained Thank and of new Celsius was expanded

leader and in for positions support increasing and as supports relentless beverage returns initiatives of infrastructure that long-term commitment our these Celsius a a building Each solid growth global our of shareholders. are to

more across beverages beverages. consumers trends macro as functional alternatives, to healthier accelerate conventional seek The less the sugar, industry continue versus

the anticipated $XX In category, the is to category, X% it through by be and of in fastest-growing the category in energy Euromonitor beverage North globally XXXX, by an grew drink billion America XXXX. approximately one

by with sync demand, reaching XXXX, each more $XX new and year, grew retail sales at across We in now velocity in a than increasing distribution last higher consumers America our ever In higher volumes ports approximately with of are we to million channels an revenue. over XX% over XX% was set increase in rates all revenue, growth of million revenues and record driven North $XX This more before. trade.

revenue of set of growth Throughout XXXX, quarter in our quarter-over-quarter year financial topping XXXX with performance the sequential top and finished new fourth and four quarterly record quarters million the with $XX we line revenue. in

truly momentum. are considerable gaining We

fitness subcategory drink robust, at and the at the than well across growth going energy Bonnie Wells runway analyst, is September remains the energy XX, now on expected, across beverage suggesting we new broader disruption potential continue there’s category as of energy that Herzog, industry long market of mentioned, to positioned Sachs, Goldman gain The Back performance also mainstream, consumers more a still and enter there’s previously even category. to Fargo now share. time, XXXX, we commented, are

and position, wellness are absolutely shifts taking category is fitness see energy in with functional offerings. broad mass health our And opportunity the for functional, better a seismic appeal. massive we with proven We place She gaining right. for you

We future. have never our been more optimistic about

with to health growth North trade, all million retail, and and revenues annually, America, as $XX XX% Focusing our vending including wellness, channels geographies, online. in in on from I derived mentioned, increased of

expected, new flavor the in-store acquisition Group strong revenues increased November European months execution fully Europe, revenues two full and in and was to Food which of And due launches, year-over-year business model, our Asia in Func XXXX. of began royalty in December. licensing a post And result optimized our the revenue of in down of XX% a consolidated strategic in as model as year-over-year China shift to in beginning the

and agreement long-standing Technology, with risks. experienced our an Food and established partner, an established model the team that Through Qifeng operating we leverages our infrastructure mitigates

- and eliminated need fixed repayments. in Celsius a capital our China We previous future the to created injections by invested have investment recapture vehicle for through

China share important growing our an growth structure strategy, remains will this capture we piece accelerate the in of believe to and market Asia market. rapidly ability our

receive positions XXXX. the our allows over initial previously us than the flows results of initial and $XX This recoup years more to and million financial nearly minimum be of to in $X capital X invested Shifting contract. throughout us to will incremental structure cash throughout our approach royalty fees million

standpoint, immediate assumed accretive we strategic The a of Nordic began acquired and in first the opportunity. completed an they Food distribution Func distributor Group former which acquisition, was Food a relationship significant From Nordics. provides in Func when Group, company. Celsius wellness with our acquisition XXXX, We of a

our for an Europe. This build the share was and further of fitness Sweden in the one brand strategy distribution XX% it as acquisition rest drinks a our solidifies an global approximate best-selling dominant as platform of opens with new important to a position step in market

we FAST revenue operational already of have product gained capture. complementary entirely that synergies with line an a stream Nutrition yet transaction, Sports Through number begun to new Food we this Func and offering, additional innovative

which from premier are the Dr. Pepper remain regional delivery building on now XXXX, Anheuser-Busch On Monster, InBev, XXX% July Keurig beverage MillerCoors, independent which which Pepsi America distribution partners, than national store increase distributors. XXX focused many we front, more a network, as distributors, such of and North our is distribution direct includes

it’s expanded but also of availability, improving than reducing these point an locations catalyst the increase been of count We situations beginning XX% of stock our United management over a our increase by compared sales out relationships, more and at States, retail only our XXXX. sale. inventory availability XX,XXX across velocity, in to to not store the to we Through expanded our

metropolitan in will continued across reinforce many making have are States and We growth. from which United coverage markets progress great platform our summer, majority the to by plan

first the New the a non-alcoholic agreement X distribution New of In largest City we Nassau, and of Geyser, metropolitan the half Big and than independent and York Putnam. boroughs Geyser market. countries more York New serves locations distributor XX,XXX Suffolk, with York’s serving Westchester signed XXXX, the City of massive Big

third quarter, the successfully distribution in New And preferred X-Eleven and in over Target increasing to beginning market. City partner transitioned the our in territory, York significantly distribution our locations we a

retail, store model. to with continue in-store over we accounts As as additional further we XX% already transition velocity we our rates we’ll this accounts in a increase continue did delivery to we build out key and seeing lift Geyser, are direct which, Big network, sales through will where at in presence our believe, existing

North a Fitness existing In Gym, many Goods, number expanded Rite to accounts in America accounts, including few, Aid, & marquee a Shop, name of network many, others. we and Target, including of and have XXXX, addition, Gold’s XX-Hour Anytime Kroger, added X-Eleven, just Sporting our CVS, in many in QuikTrip, Stop DICK’S

unit the solution North authorization More America recently, over of a chain unique national Foodbuy with XX,XXX supply in procurement largest agreement service, we is Group Foodbuy, Compass America. business organization a with customer North and signed food locations.

adds hospitals, which all This new college across now divisions are casinos, and market nationwide among business others. campuses, include North will incremental units. Compass America channel for beverages Our opportunities us, restaurants airports, available

set the will XXXX over beverage planogramming been momentum X,XXX the this and partner, significant recent in into retail most continue And where locations new America opportunity. see Walmart, throughout throughout with announcement, we have North

highlight banner. was the more than In Kroger, the largest in the grocery States the the that under channel, United X,XXX nationwide expansion market store and chain grocery locations mass with with

with and of the XXXX, were available now all the quarter second in beverage Our both the nutrition and its product sports of aisles Kroger first is stores, including across sets. placements

available now is nationwide. more in Celsius expansion, stores the grocery than X,XXX With

performance grocery SPINS December MULO XXX% rate over year. channel with the the a over in weeks past the XXXX growth momentum this of XX through in tremendous based channel past in demonstrates brand

velocity retail partners and throughout driving further increased our We well growth maximize and positioned to availability distribution are drive rates and XXXX.

more convenience Circle expanded channel, states in expansion in convenience with and QuikTrip, enterprise we including XXXX, Flying RaceTrac XX placements K, XXX Meijer’s further Convenience, other in and X-Eleven, an with than billion others. J-Pilot, In with chains, $XX launched stores

as convenience network changes existing of in grow continue partners. retail channel. storage are to XXXX preferences Our convenience interest in consumer momentum allocating in we more based continues accounts will convenience in we on placements gain XXXX to for that throughout and retailers more to more continue to Celsius and this gaining be anticipate the grow will We

growing prior of prior December faster indicates SPINS volume XX XX.X%. channel. XX.X% a runway see a In this growth ahead. XX, year channel, shows Celsius the with XXXX versus or massive is for the an the have in at the data accumulated category all long we convenience ending ACV rate weeks the a opportunity than This most recent We

In more markets, through growth more States. throughout Group. the fueled operators, units in XX,XXX both than micro an now strong of and channel XXX healthy the available by and and Canteen the the in we markets covering and than micro Through vending increase channel, strong are vending micro saw market by vending United XXXX, purchases thousands Compass we

as universities. see hospitalities opportunities at in placements and hotels, we - restaurants, further in channel as gain We this locations, continued growth well at-work as colleges

in placements retail the we channel as plan in recently, as through large significant Most to and This locations others. opportunity. including X of United in to sales drink and available well major in for represent are a States, opportunity we capture in now portion a energy this JFK country, the gained New York airports OTG continues

our cornerstone teams. from XXXX, innovation innovation trend connection leadership innovative by in On has our of flavors, is well forward Each continuous business the front, the extremely are industry our and received, exhibited our health-minded innovative with affirming of with consumers’ our the taste beginning, driven launches of preferences. launch been and which trend cross-functional have consumer. which to forward today’s a we aligned flavor been And portfolio

new addition latest HEAT a we tropical twist. taste in packaging, to exotic refreshing with our which a unveiled - Jackfruit, the a of CELSIUS Subsequent tangy flavor, available sweetness burst is year-end, latest and our heat

initially as within usage product launch BCAA functional our workout. expanding post that it beverages expands new fuels channel our acid further recovery. for was a support healthy in line beverages, branch-chained Addition, line community The the we to portfolio, successful fitness our Further the amino occasions. offerings also work of of energy demand innovative response fitness celebrated muscle launched - that a

Our BCAA a to of lineup beverages. fitness strong complement products are existing our

new and flavors portfolio. further combinations, Our working building all adjacent they’re where categories team on while functional great-tasting our diligently increase delicious the of on upon the to focused innovation offerings portfolio, is breadth new our innovations verticals leveraging premium

of introduction in the In products, up building addition, and increase equity new we the expanded expanding in upon brand addition to category. to XXXX, position awareness in our efforts we and - driving further energy brand stepped distribution our premium our

We’re meaningful off-line. connections consumers online and emotional and with creating

One local hosted by from our integrated and chains included our various our launch of Live several activities. outdoor integrated as national including fitness classes nationwide as programs tour, guerilla activities, featuring Fit Tour, marketing the competitive fitness first of ambassadors well popular instructors

cities. way We across the with key made States our United stops in

these result As cost-effective tens in of of consumption of way. conductive we to most a settings, consumers of high thousands our efforts, in new products the energy reached a

our and with a created and meaningful to iconic drive play. expanded we XXXX, consumers to upon community connections. today’s and In global Through of build Celsius connected and live, continue trends meaningful programs, with where our awareness consumers will brand. our leverage continue we connections addition, work to emotional they we through In variety

continual distribution remains our with communities our creation for growth Our continuous on improved partnerships, and leveraging drive consistent. continued consistent, to our existing and and networks focus our value profitability. further strategy building optimizing accounts expanding core, through infrastructure strengthening high-quality Striving

to are industry these premium shifts our see XXXX. beverages. a position discussing our to momentum demanding trends portfolio. It beverage, look food and We I place with drive capitalize in more taking an consumers in time progress from with on to their continued and Celsius forward is exciting are throughout as leadership portfolio seismic our

our for Officer, prepared Financial I to will Edwin? remarks. call now Edwin the Chief Negron-Carballo, turn over his

Edwin Negron-Carballo

Thank you, John.

$X.X December in overall For for increases record was million opposed compared increases of in the to last $XX.X increase pricing. increase was to million X in year. revenue million, XX, as same months or period high to XXXX, the ended revenues basically volumes XX% a The due sales $XX.X product an

geography. by down both of to double-digit growth increase XX% strong expansion. the an million, Breaking mainly continued accounts record North increase a million America, existing $X.X related distribution In $XX.X growth drove and to in

Asian The X, compared million $X.X by of reflect our markets China a quarter increased January royalty fourth license model also arrangement, to and effective markets XXXX. European the fee business the The XXXX. in change to

Asian to million ago in the $X.X year revenue to compared amounted $XXX,XXX period.

improving there expenses, in the was profitability Asia, of in also significantly corresponding in decrease to However, which quarter our contributed a XXXX. fourth

all product pricing. the The $X.X in XX% increase $XX,XXX. quarter from $X.X Revenue to in million Gross to increased for or areas same revenues additional to was by XXXX. $XX.X increases volume million million as sales total in other pertains from opposed profit

to margin which December compares XXXX, product for months dollars the The ended in as XX.X%, sales in increases the X profit XX.X% XXXX volume to increases is Gross favorably XX, to gross quarter. was pricing. mainly related for increase opposed profit in

marketing in same months increase million for ended million, of the XXX% The $X.X $X.X increase in expenses quarter from amount the marketing marketing XX, higher an million of and X or the settlement related China Selling $X December our with reduction were charges XXXX. XXXX, million investments $X.X $XXX,XXX a XXXX. due to prior is reflected of as of for distributor year the to mainly

costs, This business integration these related incremental the of million to and marketing charges of of increases marketing the pertaining European million distribution acquisition the results activities as trade, XXXX. October date quarter $X.X include as to on now investments reflects XX, employee the of and impact of $X.X and sales

to to the General primarily million million, months XXXX, amounting the increase December were million ended December costs $XXX,XXX. an expenses from $X.X increase for XXXX. $X.X X XX, of and $X.X months X or administrative The XX, for XX% due was acquisition ended

of of by they increased the of now increased Employee in and to depreciation amortization expense $XXX,XXX, costs also period compared acquisition. as well administrative stock an as costs which reflect increased same when increase and option European date $XXX,XXX, the $XXX,XXX year. these other areas $XXX,XXX last Additionally, all by the since expenses as reflected the incurred

$XXX,XXX in for is Chinese note $XXX,XXX in of $XXX,XXX amount December total China the for profit receivable the of incurred months from the operating currency. XXXX. X which the other income the The expenses same the result the line, of in to other XXXX, Below period denominated which $XXX,XXX, amounted XX, is variance ended gain a fluctuation represents from in mainly the of

which there increase were Additionally, by and amortization financial were lower $XX,XXX other of net $XX,XXX. $XXX,XXX, offset costs an expenses partially of expense in of interest higher miscellaneous

per shares common company loss loss months net XX, ended of XXXX, million above, for and stockholders $X.XX compared result to net the the or $X.X basic the of ago year for shares a As X a December period. and the had available diluted $X.XX a in diluted to or of $XXX,XXX basic

We understanding our figures been business financial that our our and true non-GAAP non-GAAP effect, reconciliation the Adjusted this of earnings overall have enhance other included measures comparisons release. fourth $XXX,XXX XXXX of EBITDA, excluding of to compared XXXX. for net fourth visibility in was quarter a the EBITDA of the Asia believe the and results adjusted performance. to in quarter $XXX,XXX and information of investment To GAAP

to year results. full Now turning our

was $XX.X year million million increase mainly XXXX. American million revenue of an of $XX.X XX, or a of ended million, with $XX.X from ended last for an region, or $XX.X increase delivered over XX% growth XX, of increase significant For revenue the which XX%. the results associated robust December the the year XXXX, was approximately year North December This

million $X.X or $XX.X region increase European XX%. provided of an of million revenue, The

royalty in Asian effective license the X, revenues business arrangement, January model change for XXXX and our to reflect China XXXX. fee

revenue compared decreased a $X.X change. result $XXX,XXX as of million this in to XXXX, XXXX Asia to in

an prior $XXX,XXX, opposed other which increase to attributable volumes product all regions the aligned XXXX as pricing. The in was in from period in XXXX basically from to increase with year revenues to period increases results. to the sales total was Revenues amounted

profit $XX.X margins Gross $XX.X XX% XX% December ended XXXX profit and million by increased the in XX% to for December from December years the respectively. year or XX, XXXX, million ended and $XX.X Gross million XX, XX, totaled XXXX.

to increase $X.X related of the of profitability costs costs, is an the The the margin profitability contributed margins impact for profit gross This in of million increase gross favorable European the year. consolidation in incremental XXXX in product repackaging mainly and reductions freight business.

Sales million X.X% December and from XXXX. the This XXXX of basically change $XX.X ended December were our a million, apparent for XX, due effective $XX.X year framework, decrease for or business marketing the a direct licensing marketing X, mainly year to requires and XX, decrease expenses ended is which royalty to XXXX, in Celsius. China the model by investments January no longer $XXX,XXX

reduction XX% for our to marketing figures European of our the the to that include XXXX. These XX, million business which a investment in $X.X as same in October Excluding million $X.X activities amounted compared now or marketing increased period this actually performed investments when XXXX, by in are impact, XXXX.

in XX, now support activities and sales investments Additionally, year. $X.X last ended and period were date XX period the for European distributors of the million same the the which to our December $X.X include Furthermore, the higher higher than were same months than business for the to XXXX of trade as personnel, last marketing XXXX acquisition investment million for year. related for

distribution in commissions European and same months the last year were than to business million XXXX and due broker period of costs our Also, of of operations volume the ended $X.X higher December for integration storage date our the as and during XX, increases XX the the acquisition.

XX, costs. ended and due of from $X.X year XXXX compensation an the XXXX. to year million increase stock-based December mainly higher The approximately $XX.X the million, for to acquisition for million December expenses $XXX,XXX XX% administrative $XXX,XXX related or and $XX.X was General XX, were increase ended of

administrative amortization and European Additionally, of of date of $XXX,XXX pertaining $XXX,XXX acquisition. expenses the impact the $XXX,XXX also the of incremental services, to costs, pertaining $XXX,XXX there as these and pertaining higher to the expenses other integration as to employee costs business include of depreciation were professional

over XXXX change operating line, $XX.X Below XX, note XXXX mainly increased for in other which to loss total XXXX XXXX, the our year the with as the business $XXX,XXX a payable a the during ended ended for distributor has by China year includes the December been balance X-year our million the a of as executed reimbursement investment China agreement period. the which as This of part made recognition corresponding a $XX.X the XX, company the and pertaining from the in the from December by gain million distributor market model, receivable of result to China income sheet, of the recorded of the is on years. a

result was XXXX full net approximately The of loss $XX for a basic year the million for of or compared diluted $X.XX shareholders $X.XX per diluted and to income $XX.X million or net common shares and XXXX. net basic shares to per

has net excluding EBITDA, million, million was Asia non-GAAP results XXXX GAAP $X figures earnings the included compares Again, which our $X.X in in to year the XXXX. reconciliation Adjusted been full investment of release. our a to for

million company as capital compared as As cash to the of had December of of XXXX, $XX.X million $XX.X working also December had of million of XX, of XXXX, compared company December XXXX. December XX, XXXX. million XX, $XX.X as The to $X.X XX,

of payable by accounts liabilities receivables, Cash operations of approximately $X.X areas in economic $X.X provided and million December adjusted increases these million, million, increase for year decreases accounts total of profitability by a partially cash which $X.X use million. other an expenses inventories, prepaid was of from well as as in in totaled offset reflecting XXXX the during $X operations ended the in XX, net

our prepared for may remarks. Operator, concludes you Thank call you. now open That the questions.

Operator

[Operator Instructions] first Thalmann. Jeffrey Thank question Cohen Ladenburg Please proceed. with you. from is Our

Jeffrey Cohen

you? Edwin. and John How Hi, are

John Fieldly

Jeff. morning, Good Excellent.

Jeffrey Cohen

you. morning. Good Thank

there? as few DSD velocities about there, I’ll the little left? feel DSDs XX% What’s What’s you As as going partners. you’re to Talk XX% talked benefit? getting it XXX as a So as a about a channels to Do and left DSD, and questions. the efficiency bit you keep more far there? like and just far

John Fieldly

Excellent. Thank you, Jeff.

we’re the On XXX, - you’re we moment. store strong at at delivery, I the direct DSD stated, correct, as are front,

dozen distributors do additional with we discussions reporting, additional many. we’re in on we’re now of a As a and board, few have coming right variety -

around We of Geyser. markets most will probably preferred the by key over this Big be we’re We do markets New do Right feel flipping to right key have accounts able York markets, And key I North summer Big America. now momentarily. really XXX, Geyser. start we’ll covered Big with to over switched XX% we to by covered at where in started over by mentioned, Geyser. method. in X-Eleven will is City serviced serviced CVS as Target now it, is be

talks in with them flip Rite So as also, to Aid well. we’re over

covered. markets is key this to already to to over happen we we’re DMAs So those accounts working now with as the covered, continue where three by key have we And get key going these summer. right flip

our signage, sure seeing we’re rates is to a which increase in to existing we’re model we making -- when seeing velocity in in seeing stock. just actually velocity flip XX% XX% in-store around rates DSD just current rate in has great that the roughly We��re So that XX% we’re is seeing as the growth a better a accounts, well. execution, from we’re been existing accounts, lift existing

definitely move to So store more as going to rates accounts will velocity delivery, over we increase model. direct this the key towards continue

Jeffrey Cohen

bars Func Helsinki, got some do that it. other talked America, second And And see a and, as the Okay, far will little placements? products out we about coming as and the question, of you the XXXX? protein Finland some expect Foods line when in still FAST bit of North then particular, to in you Perfect.

John Fieldly

throughout innovative already Yeah. Norway, portfolio. opportunities, portfolio, snack portfolio, Sweden Europe. and current to is it’s where which only tasting, The further complementary Celsius but within FAST We great see other we - we have markets as distribution protein we not the highly with a through expanding existing Celsius, well acquisition, which acquired our do

very a offering. Celsius have, see few we complementary to momentum it focused and the portfolio a portfolio partners. we we’re the Once see but the in massive rolling looking FAST initially online very with of in launch to XXXX start FAST out as are with again, on do methodical with We a portfolio retail starting a

on to methodical are that. going We very be

within well of as cognizant as required new investments limited retail. resources, as the brands launching resources when well, very We’re

methodical very approach. we’re So on

offering, a lot We synergistic will to start as has complementary of XXXX it a test in which benefits.

Jeffrey Cohen

guess, then me, Got for it. I Edwin. lastly and And for

did some far one-timers of line line. G&A and You call out S&M the the the as as

far we business little had as as European normalization So could a flavor I as more we you integration. the what far us see? that give know as

I’m trying just to of sense a $XX.X get change. about million to annual million you and But sales the talked marketing, an on $XX.X the

So the for that it’s something increasing Or we XX% XX% like upcoming about Thanks. think the more toward for should the range range? is same year and G&A? the

Edwin Negron-Carballo

good very Yes, Sure. question. Absolutely.

it’s We’re question, bettering or the in we’re your European arms an still to But around kind evaluating, the and our be But OpEx lines, relates of depend well we’re business. think we have on would the obviously, that something XX% seeing around reasonable. going yes, it side. as to XX% I yes, to increase answer European the also investment estimating of business would as XX% marketing to

Jeffrey Cohen

Perfect.

for it That’s questions. the taking from me. Thanks Okay.

John Fieldly

you. Thank

Operator

Please Jeff from FBR. Sinderen B. proceed. question Van with next is Riley Our

Jeff Van Sinderen

addition I Can the speak of early, that? what even Walmart? the Good the potential with morning, How could revenue Walmart? just everyone. initial you of but magnitude, your And thinking what around if be know it’s about order more drove go? will rollout

John Fieldly

mention the good to mean, as XXX% seeing -- that over channel. also as an data Jeff. just it’s - of we’re just example, mass did the I you, I just think MULO MULO Thank Great - I Yeah. it’s well, in think want and we growth talk about channel question. easy kind I to

flavors where point what late to and transpired Target it’s - we we happened about of expansion. with we’re stores X well in additional limited X also in as able add flavors. and chain-wide additional also I think to launched XXXX further number a with stores flavors at Through And continue initially reset, evolution important now every and to that for as Target, were

build The until you’re I warehouse given stores, those that the key the DSD through direct by going the half to those stores DSD. partners be going in are in X,XXX So out Walmart. momentum flipping markets, we’ll see of half serviced over currently is we other Walmart, to those DMAs, same think

but extremely before we’re adding where direct Where at been able already there’s get Walmart, supply the to talks clubs, positive, has serviced the first DSD really their within partners through Walmart. Walmart about that to initial feedback landed chain flavors the And going additional have we warehouse reset. next the

now energy Walmart is we on more to additional think the massive and like much federal, of further is and set, be some Murphy’s their dry to Target, well off Right shelf also starting going opportunities locations but in there the so in Oil forth. leverage just so as through a So opportunity. we’re expand state

account, opportunity. So over your a accounts growing massive it’s multiple we points the those It’s this educating see of portfolio as well. within there managing with the with key leveraging and Celsius and as disruption consumers

always all have talked So I and accounts. of to creatures about habit it takes time activate these key

as Walmart leveraging pickups, doing well. of we’ve doing all been targeting and a with We’ve the key account as of at-home and of deliveries walmart.com, really it. in our their the been process on into the extremely do well we We’re And integrating lot accounts.

I opportunity. promising, To will that momentum not extremely massive say is provide has positive. and opportunity been But we specific do to So position a today. in initial you overwhelmingly the number, the see a

Jeff Van Sinderen

synergies your And you could how Okay. Great on then drivers growth little any more speak to about you’re more going? And integration strong give us the there? hear. Func the color seeing of is and a international

John Fieldly

track talked exceed the on international growth Func category. flavors, actually their innovative into with on driving we’ve to in really XX% experiential driving a our the Yes, that activity. share and that everything that partner, model Sweden marketing revenue Nordic momentum they execution activating They’re leveraging back from been online they it’s of within are leveraging approach the an and and through some ground years, That been XXX - integrating to energy our had driving have excellent through Food offline really a new successful with in-store them and very has market over Group now about has the also acquired year, consumers this considerable really retail. building

So that’s successful. been extremely

SOK expansion in through in We X-Elevens X-Eleven. also And very now the retailer in this expanded two number we’re retailers successful. XXXX The the country. further the two out was Finland, and In other in all the in further they also test there. in country. Norway number They saw petrol the right authorization within gaining to rolled - key

very are in in gyms expansion well health things clubs going retail. wellness further much very So and health mainstream and well, making into embedded and

cross-functional Some that. cross-functional initiatives teams, really the teams have to is cross we key through implemented sales marketing leverage best leveraging - and synergies practices of already leveraging our really insights on and

has been synergies. some improving logistics, and cost-saving well initiatives implement some G&A and We We’ve And insurance goods. audit of through within seen savings saw already as also cost in cost Also, the IT. synergies to there we’ve started side.

of So to all through to looking ROI drive best and we continue we’re this this really at best go the as benefit the from acquisition. really aspects

new addition, XXXX that for able distributors beyond. In us European leverage and growth, talking for you’re platform to and be seeing also just but we’ll throughout much where partners some market for we’re to opportunity already given new market in

Jeff Van Sinderen

on planned then And you squeeze just key initiatives marketing Okay, in. new for could XXXX? X if more great. I Any can touch

John Fieldly

the consumers connecting Live in Live emotional online, offline re-launched, with launched just that around continue an with in journey level. variety motion that country going that marketing the of bringing continuation a to markets of we’re with Fit on leveraging Tour, have and planned. We experience and Fit we XXXX initiatives key great really the We success, to and bringing back key Tour

further lot our success has in some flamingo reach. tropical to that influencer was key going continue as been marketing, activation, flavor Nordics, well. really digital the and our community with our launch also initiatives of to you’re And broadening social a driving see a great Also

Jeff Van Sinderen

Thanks of XXXX. for and best luck

John Fieldly

Excellent. Jeff. Thank you,

Edwin Negron-Carballo

Thank you.

Operator

Group. Our Instructions] question Vendetti Maxim proceed. next Anthony is [Operator with Please from

Anthony Vendetti

guys. Thanks. morning, Good

John Fieldly

Anthony. Good morning,

Edwin Negron-Carballo

morning. Good

Anthony Vendetti

ask - but So this just I guess, everyone. on of hate of I mind it’s to question, sort top of the

what’s So COVID-XX, categorize your about of see now as And now? any concern going speak if is sales, in you in what we as potential right terms best forward? of any, the there production, the impact, that you can way anyway, terms then

John Fieldly

team our initially with Mainland on pre Excellent. since watching at We’ve spotted partner, been the to eye back and ground Chinese Yes. for first Year. China. close all our been due on based Kong, going in the Wuhan, really that’s through we’ve employees a Anthony, out Hong when to Qifeng it coronavirus was keeping New December, it December -

really our making have been world. making We frequently is for all with number one, looked had driving have And increased inventories, supply do we chain, but we also increased working suppliers. sure suppliers very efficiencies, that, closely sure analyze our we And we’re the internally, it’s something backup around we what planning raw materials. we really - at

where we So suppliers we indicated the changing in confident any momentarily are. All position disruptions Obviously, feel have not will currently as are things the position our be there supply very rapidly. is. current

But we point, do have at keeping eye this So - on we’re we it. an concerns. any not

a up raw needed, feel weather months, up keeping inventories if and storm a next our and and over are closely good materials with we’re We to all working in position several the suppliers.

look momentum - in our this XXXX. unknown have at a and impact, regards as has we and a as very the QX, seen solid slowdown have in that’s we to ahead. not point little the continued In Because in momentum entered experienced we bit sit any we here sales fashion

So we’re still sales increase. seeing same-store

We’re the we’re quarter seeing for have XXXX. expand to record set distribution company another QX in and

that is So we’re transpires well feel positioned. QX and we into How beyond unknown.

lot not in will seen to marketing have all quarter impact conferences, trade at lot has a conferences. the initiatives, market our ramifications. be have this our have the point, know, our But where in say had not which an at but that’s potentially. have we of any We canceled, second impact there as we of been And business, we a to potential

Anthony Vendetti

Okay.

for think changes that’s helpful, Energy billion. that for landscape do the then How $X.X purchased Celsius? you And about obviously, competitive Rockstar John. Now, PepsiCo

John Fieldly

a rumor quite distribution interesting. is distribution been it’s the Yes, some to rumor moves well as as for partner. That’s maybe a Bang that network time the now, as

trade You’re magazines in the some hearing that industry. within of the

in lot very see Also, of their are are of in authorized prior we reasons. as great frankly, who On calls, I’ve Quite we a talked Pepsi that a - the the carrying working a chain. it’s interested partnership several. Celsius. actually benefits, as we independent And in Pepsi great They through have see a number synergies opportunity. been it within opportunity Fitness, where coolers distributors with see XX-Hour we it a and for about

because this an new now Pepsi drink. So that the acquired system distributors opportunity further agreement only the has within be could Pepsi Rockstar, had really for Rockstar us energy that exclusive allows they

opportunity. to is this going us. feel doors we It’s an So for open up more

many in and Anheuser-Busch event additional distributors to bottlers the open going distribution and others. or Also, system, to opportunities up further Bang through us that’s does for move Pepsi over distributors the

us. actually So months, benefit a great this as we leverage next the going we’re several it’s and a for opportunity over great to that see

Anthony Vendetti

come just And that premium - flavors, the talk all? brand of out your be is you to to of Or of category new new on terms product? that plan this is it versions John, then sort in seems able new continue pricing. changed Has still to the And brand going then at case that with lastly, extensions? about as pricing, able garner forward

John Fieldly

to you absolutely in to There’s regards energy were X free, they you’re Okay, category Bang offering. REIGN for locked in REIGN and new buy excellent. recall, discounts. if with launched, when Bang is steep pricing doing age were back premiumization When that right. get - the when In opportunity X architecture, develop. August a initially premium significant Celsius performance great

pricing. existing same that Celsius did - not at to maintained saw a premium a sales we and - continue really level grow. We discount stores

able on to really a being you category. really elasticity Celsius build position the shows that the portfolio, So in premium the price

the We that about we that - think to feel So continue excited player category. very being going premium a are we grow. in to that’s

premium growth. the you’re that category, mid-tier have brands category overall to value see within going the and are to the price into going are brands, category driving players come You

So and future feel pricing in opportunities is take up additional strong, pricing as well. we to there the remains

on flavors team innovation a innovative have our platform. on plans for adjacent cross-functional As categories, global we and expenses line really a into

additional You line us. from will really extensions see

BCAA to Recovery going offering. continue to We’re our leverage

coming to innovative see You’re flavors Celsius. of from going a also lot

with of the We on forefront consumers. connecting are

category. to coming that demands, and in has flavors stand and continue innovative the on launches been spot that to where have and momentum flavor drive to XXXX position. we excited we’re several And beyond, last variety will a Our market very the exactly into we and what the of consumer wants

Anthony Vendetti

Appreciate John. it. Thanks,

John Fieldly

Thank you, Anthony. Excellent.

Edwin Negron-Carballo

Thank you.

Operator

from We Ladenburg now with have Please a Cohen Jeffrey question follow-up Thalmann. proceed.

Jeffrey Cohen

more Any as couple with. I’ve Well, for growths I there? commentary far overall a to as circle the growth want placement and just around BCAA out line

John Fieldly

it Thank Celsius relation line, you, to the late branch-chained acid really In amino September XXXX. the launched in Jeff. recovery

it vitamin point at this in keeping specialty. We’re

special vitamin this keeping specialty We’re with line.

to the brand mass bring around we awareness before retail. line more building it We’re

opportunities massive with we our see that. as core with and right grow We line now continue to scale

We and mass, bring mainstream to will our lines the at but to right time.

category, especially As velocity very to competitive, right and had has moving it to our make already brand awareness right the making you truly products to of in trial generated this the be know, power energy when sure want have is all sure retail. brand out, we’re the and leverage awareness we successful, and we space

Jeffrey Cohen

at secondary it. quarter? in probably And fourth demand through historically, much then very you’ve the fourth top strong. Because seems a extremely had, least more seasonality and Got did seasonality than for QX quarter, or QX? it then Is had outstripping of what like was the we the line it higher the

John Fieldly

our you momentum. sales does seem, business we is at very building seasonal. when our the growth, it quarters, historically are quarter-over-quarter X And Yeah, look

I that, grow, is see we gaining to think as continue the will you brand - momentum. really but we

board. new We’re distribution velocities seeing continue to on coming increase and

as and the European a We consolidated fully consolidated impact also, And also you well. December, have then revenue. had November revenue

four we If growth, and America, going it’s North quarters I did in that’s look you move just as America. North have we to But quarter-over-quarter think - continue consecutive XXXX. into at

solid really We’re just seeing momentum.

the and it that momentum. not brand be But to growth business, although just we’re the brand seasonal, due underlying the opportunity have to the currently does seeing of the

Jeffrey Cohen

a momentum, or previously referring that QX when mentioned the And QX about XXXX to of set for you’re XXXX? related over record QX you’re QX into to talk of you QX, year-over-year Okay. XXXX and

John Fieldly

Yes, XXXX QX another quarter in the quarter XXXX. QX was anticipate to largest history largest company was the we and company biggest - in have QX in history,

Jeffrey Cohen

I got it. tremendous. That’s

Okay. follow Thanks for taking up. the

John Fieldly

it. you. You got Thank

Edwin Negron-Carballo

Thank you.

Operator

would for remarks. you. over conference to now to management closing I like turn Thank the back

John Fieldly

of today. Thank interest their I’d for you, Thank like you, everyone thank Sherry. the behalf everyone. On company, to

momentum. our demonstrates products results XXXX gaining considerable are Our

taking We are capitalizing category. place in and wellness energy today’s global and today’s the drink on health trends changes

healthy global lifestyle mass active appeal. with Our is position position a

building our opportunities deploying core practices. and We’re and leveraging best upon

winning that We rapidly and portfolio consumers have want. strategy growing market a in a

our opportunities new possible. not be it team, and Celsius achievements significant at bring our continue customers mission tremendous see is proud Our to profitably. to would ahead to grow to I’m them, and without we dedicated Celsius as

you, have thank our and your a I everyone, support our addition, their in for In Thank day. confidence and Celsius, team. interest investors great for continued in

Operator

does today’s This conclude you. Thank conference.

You and your time, you may this for disconnect your lines thank at participation.

Celsius (CELH) 12 Mar 202019 Q4 Earnings call transcript