Keurig Dr Pepper Inc. · NASDAQ:KDP
Keurig Dr Pepper — Q3 2024 Earnings Presentation
29 slides from Keurig Dr Pepper's earnings presentation, Oct 24, 2024
Slide 1: Q3 2024 Quarterly Results
Q3 2024 Quarterly Results OCTOBER 24, 2024 1
Slide 2: Forward-looking statements
Forward-looking statements Certain statements contained herein are “forward-looking statements” within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as “outlook,” “guidance,” “anticipate,” “enable,” “e
Slide 3: Agenda
Agenda 1. Business Update 2. Results & Outlook 3. Q&A 3 Drink in the possibilities
Slide 4: Conference call participants
Conference call participants Tim Cofer Sudhanshu Priyadarshi Jane Gelfand Chief Executive Officer Chief Financial Officer & President, VP, Investor Relations & Strategic Initiatives International 4 Drink in the possibilities
Slide 5: Business Update
BUSINESS UPDATE Tim Cofer Chief Executive Officer 5 Drink in the possibilities
Slide 6: Announcing exciting acquisition of GHOST
Announcing exciting acquisition of GHOST Fast-growing, differentiated brand, anchored by a leading energy drink Founder-led Scaled Visionary entrepreneurs to Approximately $500M in continue to lead GHOST annual sales1 Fast-growing Diverse portfolio Net sales more than RTD energy, supplements, quadru
Slide 7: GHOST substantially enhances KDP's presence in the energy category
GHOST substantially enhances KDP’s presence in the energy category LONG-TERM TAILWINDS IN ENERGY KDP ESTABLISHING A PLATFORM OF BRANDS $ 23B Annual Retail Sales1 11% Sales CAGR2 Large category Healthy long-term trends Energy & Alertness 39 % Complementary brands to target distinct consumer HH Penetr
Slide 8: Transaction exemplifies KDP's disciplined capital allocation approach
Transaction exemplifies KDP’s disciplined capital allocation approach ATTRACTIVE DEAL CHARACTERISTICS Majority control Founder alignment DSD flywheel 60% initial stake; purchase of Leadership continuity; win-win Larger drop sizes; remaining stake in H1’28 structure for KDP & GHOST increased C-store
Slide 9: Q3 2024 highlights
Q3 2024 highlights Constant FX net sales growth of 3.1% year-over-year, with step up expected in Q4 Acceleration in volume/mix, led by strengthening U.S. Refreshment Beverages trends Net price realization expected to improve, as transient factors fade and new actions take effect Solid adjusted EPS g
Slide 10: Continued progress against our strategic agenda
Continued progress against our strategic agenda Champion Consumer-Obsessed Brand Building Shape our Now and Next Beverage Portfolio Amplify our Route to Market Advantage Generate Fuel for Growth Dynamically Allocate Capital 10 Drink in the possibilities
Slide 11: Continued progress against our strategic agenda
Continued progress against our strategic agenda • Broad-based Q3 share gains, across geographies and verticals Champion • Innovation traction Consumer-Obsessed – LRBs: Dr Pepper Creamy Coconut, Canada Dry Fruit Splash, Mott’s Brand Building – Coffee: K-Brew + Chill, The Original Donut Shop Refresher
Slide 12: U.S. Refreshment Beverages
U.S. Refreshment Beverages SEGMENT HIGHLIGHTS Accelerating net sales growth, Resilient CSD trends, driven by strengthening volume/mix led by Dr Pepper and Canada Dry Growing Electrolit contribution, Supporting affordability in Stills; with distribution & display ramping re-energizing Mott’s brand 12
Slide 13: U.S. Coffee
U.S. Coffee SEGMENT HIGHLIGHTS Continued progress despite Healthy pod market share, soft Q3, positioning KDP for driven by three-pronged strategy success when category recovers emphasizing affordability, premium, and cold coffee opportunity Double-digit brewer unit growth, Single serve price increas
Slide 14: International
International SEGMENT HIGHLIGHTS Strong net sales growth, Healthy Latin America LRB trends, with balanced contribution from with broad-based share gains volume/mix and price realization Canada LRB growth, Continued Coffee share gains led by Canada Dry, Dr Pepper across pods and brewers and low/no-al
Slide 15: Closing the year strong and advancing strategy
Closing the year strong and advancing strategy STRATEGY LONG-TERM ALGORITHM OUR PURPOSE OUR VISION Drink Well. Do Good. A beverage for every need, Net Sales Mid Growth anytime, anywhere Single Digit OUR STRATEGIES Champion Shape our now and consumer- obsessed brand next beverage Amplify our route to
Slide 16: Results & Outlook
RESULTS & OUTLOOK Sudhanshu Priyadarshi Chief Financial Officer & President, International 16 Drink in the possibilities
Slide 17: Q3 2024 consolidated results
Q3 2024 consolidated results NET SALES ($ BILLIONS) ADJ. OPERATING INCOME ($ MILLIONS) ADJUSTED EPS ($ PER SHARE) $3.9 $1,050 $3.8 3.1% $0.51 YoY 7.5% $984 YoY $0.48 6.3% YoY Q3’23 1 Q3’24 2 Q3’23 1 Q3’24 2 Q3’23 Q3’24 25.9% 27.0% Adjusted OI Margin Financial metrics presented on an adjusted basis,
Slide 18: U.S. Refreshment Beverages
U.S. Refreshment Beverages Q3 2024 Change Net Sales $2.4B 5.3% Adjusted Operating Income $742M 6.8% Adjusted Operating Margin 31.0% 0.4pts • Net sales increased 5.3%, with 4.0% volume/mix growth and higher net price realization of 1.3% • Volume/mix performance reflected a building contribution from
Slide 19: U.S. Coffee
U.S. Coffee Q3 2024 Change Net Sales $1.0B (3.6%) Adjusted Operating Income $309M (7.2%) Adjusted Operating Margin 31.7% (1.2pts) • Net sales declined (3.6%), with volume/mix growth of 2.7%, offset by unfavorable net price realization of (6.3%) • Market share momentum drove flattish pod volumes and
Slide 20: International
International Q3 2024 Change Net Sales $525M 6.5% Adjusted Operating Income $161M 16.6% Adjusted Operating Margin 30.7% 2.6pts • Net sales increased 6.5%, with higher net price realization of 3.4% and volume/mix growth of 3.1% • Market share momentum across geographies and categories • Operating inc
Slide 21: Dynamically allocating capital to support KDP priorities
Dynamically allocating capital to support KDP priorities Invest for Growth Direct Shareholder Returns Capital Allocation Highlights Strengthening FCF generation supporting multiple priorities: • Planned $990M investment for Internal Partnerships Grow the Opportunistic majority stake in GHOST share i
Slide 22: Reiterating 2024 outlook
Reiterating 2024 outlook Net sales growth Adjusted EPS growth Mid-single-digit High-single-digit Other Items $ 615-$625M 22-23% ~1.37B Increase Interest Expense Tax Rate Share Count year-over-year Free Cash Flow 22 Net sales and adjusted EPS guidance presented on a constant currency basis Drink in t
Slide 23: Drink in the possibilities
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Slide 24: Questions & Answers
QUESTIONS & ANSWERS 24 Drink in the possibilities
Slide 25: Appendix
APPENDIX 25 Drink in the possibilities
Slide 26: Reconciliation of certain Non-GAAP information
Reconciliation of certain Non-GAAP information 26 Drink in the possibilities
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