Keurig Dr Pepper Inc. · NASDAQ:KDP
Keurig Dr Pepper — Q2 2024 Earnings Presentation
30 slides from Keurig Dr Pepper's earnings presentation, Jul 25, 2024
Slide 1: Q2 2024 Quarterly Results
Q2 2024 Quarterly Results JULY 25, 2024
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 & VP, Investor Relations & President, International Strategic Initiatives 4 Drink in the possibilities
Slide 5: Business Update
Business Update Tim Cofer Chief Executive Officer 5 Drink in the possibilities
Slide 6: On track to deliver our full year plan
On track to deliver our full year plan Healthy Q2 results, with Strong execution in accelerating volume/mix mixed consumer backdrop Continued progress in Reaffirmed 2024 outlook, advancing evolved strategy consistent with long- term algorithm 6 Drink in the possibilities
Slide 7: Q2 2024 highlights
Q2 2024 highlights Adj. net sales growth accelerated sequentially to 3.4% year-over-year Volume/mix growth, with gains in each segment Strong gross and operating margin expansion, enabled by net productivity and increased cost discipline Solid adj. EPS growth of 7.1%, in line with long-term algorith
Slide 8: Recent innovation is resonating with consumers
Recent innovation is resonating with consumers Dr Pepper Canada Dry The Original Donut Shop Peñafiel Creamy Coconut Fruit Splash Iced Refreshers Adas and Twist #1 limited time offering Incremental innovation Largest Keurig platform launch Strong growth from launch in KDP history driving share gains
Slide 9: Accelerating partner growth as DSD transitions continue
Accelerating partner growth as DSD transitions continue +1.1 pts >25% Market Share Volume Growth KDP-Served Regions1 in second quarter1 Beginning to unlock growth potential Strengthening marketplace trends as distribution transitions with significant opportunity ahead 9 1. Circana MULO + C dollar sh
Slide 10: Continued progress strengthening our DSD network
Continued progress strengthening our DSD network Transaction with Kalil Bottling Co. in Arizona extends nationwide DSD network Enhanced scale and brand building in fast-growing market with multi-cultural consumer base Production, distribution, and sales capability Closing expected in Q3 > 7M consume
Slide 11: Structural cost agenda to provide flexibility and fuel for growth
Structural cost agenda to provide flexibility and fuel for growth Continuous Productivity Network Optimization Overhead Discipline Flexibility to address Reinvestment Mixed consumer Emerging inflation Currency volatility 11 Drink in the possibilities
Slide 12: Progressing our ambitious Corporate Responsibility agenda
Progressing our ambitious Corporate Responsibility agenda • >80% renewable electricity Environment • Plastic-free coffee pod vision • Responsibly sourced coffee & cocoa Supply Chain • >40k acres of regenerative agriculture Health & • ~60% Positive Hydration products Well-Being • Better-for-you bever
Slide 13: U.S. Refreshment Beverages
U.S. Refreshment Beverages SEGMENT HIGHLIGHTS Low-single-digit net sales growth Performance led by CSD portfolio with positive price and volume/mix with share improving as Q2 progressed Strong partnership contribution Addressing still beverage softness from C4 share gains and via brand activity and
Slide 14: U.S. Coffee
U.S. Coffee SEGMENT HIGHLIGHTS Focus areas gaining traction Pod shipments stabilized Affordability: price packs & value marketing driven by owned & licensed Premiumization: super-premium brand tier share gains Cold: largest cold coffee push Sizable Keurig brewer share gains Muted at-home coffee cate
Slide 15: International
International SEGMENT HIGHLIGHTS Strong net sales growth Latin America LRB momentum increasing double-digits in driven by innovation and in-market constant currency execution Low/no-alcohol development Canada coffee share gains through continued expansion of across owned & licensed pods Atypique bra
Slide 16: Continue to execute against strategic agenda
Continue to execute against strategic agenda STRATEGY ALGORITHM OUR PURPOSE OUR VISION A beverage for every need, Net Sales Mid Drink Well. Do Good. anytime, anywhere Growth Single Digit OUR STRATEGIES Champion consumer- Shape our now and next beverage Amplify our route to Generate fuel for Dynamica
Slide 17: Results & Outlook
Results & Outlook Sudhanshu Priyadarshi Chief Financial Officer & President, International 17 Drink in the possibilities
Slide 18: Q2 2024 consolidated results
Q2 2024 consolidated results Net Sales ($ Billions) Adj. Operating Income ($ Millions) Adjusted EPS ($ per share) $3.9 $970 $3.8 3.4% YoY 11.0% $0.45 YoY $0.42 7.1% $873 YoY Q2’23 1 Q2’24 2 Q2’23 1 Q2’24 2 Q2’23 Q2’24 23.0% 24.7% Adjusted OI Margin 18 Financial metrics presented on an adjusted basis
Slide 19: U.S. Refreshment Beverages
U.S. Refreshment Beverages Q2 2024 Change Net Sales $2.4B 3.3% Adjusted Operating Income $723M 11.9% Adjusted Operating Margin 30.0% 2.3pts • Net sales grew 3.3%, comprised of 2.9% net price realization and 0.4% volume/mix growth • Volume/mix inflection reflected new partners scaling and innovation
Slide 20: U.S. Coffee
U.S. Coffee Q2 2024 Change Net Sales $950M (2.1%) Adjusted Operating Income $293M 0.3% Adjusted Operating Margin 30.8% 0.7pts • Net sales declined (2.1%), with volume/mix growth of 0.8% offset by lower net pricing of (2.9%) • Share gains drove flat pod volumes and brewer shipment growth • Operating
Slide 21: International
International Q2 2024 Change Net Sales $565M 14.7% Adjusted Operating Income $152M 30.2% Adjusted Operating Margin 26.9% 3.2pts • Net sales grew 14.7%, driven by strong volume/mix growth of 10.4% and net price realization of 4.3% • Healthy momentum across markets and categories, led by Latin America
Slide 22: Improving FCF supports our unchanged capital allocation agenda
Improving FCF supports our unchanged capital allocation agenda Invest for Growth Direct Shareholder Returns Accretive Opportunistic Internal Grow the partnerships share Investments dividend & M&A repurchase Consistently Strong Balance Sheet 22 Drink in the possibilities
Slide 23: Reiterating on-algorithm 2024 guidance
Reiterating on-algorithm 2024 guidance Net sales growth Adjusted EPS growth Mid-single-digit High-single-digit Projected 2H acceleration 1H-weighted Other Items $ 625-$645M 22-23% ~1.37B Increase Interest Expense Tax Rate Share Count year-over-year Free Cash Flow 23 Drink in the possibilities
Slide 24: Drink in the possibilities
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Slide 25: Questions & Answers
QUESTIONS & ANSWERS 25 Drink in the possibilities
Slide 26: Appendix
APPENDIX 26 Drink in the possibilities
Slide 27: Reconciliation of certain Non-GAAP information
Reconciliation of certain Non-GAAP information 27 Drink in the possibilities
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