Celsius Holdings Inc at Evercore ISI Consumer & Retail Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Robert Ottenstein - Evercore ISI - Analyst : So just starting off, for those who may not be as familiar with the story as your long-term investors, does that characterization make sense to you? And when you look at your brand versus the other new-wave brands, whether it's a C4, a GHOST, a ZOA, A SHOC, Alani Nu, and there's a bunch of them, what do you think distinguishes Celsius from the rest of the pack in terms of branding, the product, the liquid?

Question: Robert Ottenstein - Evercore ISI - Analyst : John, those comments actually remind me of a conversation that you and I had, I don't know if it was three years ago, four years ago. It was at NACS. Coca-Cola had just come out with Coke Energy. And I was asking you if you were worried about that. And you had this great response. You just kind of like, hell no, Robert. You said, this is the best thing that could happen because this is normalizing the energy drink category, making it more mainstream and away from being a nichier-type category. This is actually really good for us. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 14, 2023 / 6:45PM, CELH.OQ - Celsius Holdings Inc at Evercore ISI Consumer & Retail Conference (Virtual) And I think you're -- what you just said to me resonates with that a little bit. I think that was pressing. Any further thoughts and learnings from -- it's amazing. I mean, Coke Energy didn't really work. The Mountain Dew Energy is stumbling. Any thoughts in terms of learnings of what may have gone wrong with the big guys and why they're not taken off, and then this whole idea of mainstreaming the category that you're starting to play into?

Question: Robert Ottenstein - Evercore ISI - Analyst : That's very exciting and something I had no idea about. So that's -- I appreciate that. So John, let's talk a little bit about demographics. The traditional energy drinks had a kind of a very specific demographic, very male, a little bit more blue collar. In terms of CELSIUS, what's your, roughly speaking, maybe gender breakout, income, any other key demographic tells that you think are important? And have they stayed relatively constant over the last five years? Or are you -- or is your growth actually coming from bringing in new demographics?

Question: Robert Ottenstein - Evercore ISI - Analyst : Yeah. Those comments, in terms of the Hispanic, African American, that -- it also is very new to me. Is that a function of specific targeting? Is it a function of maybe the states where you're really strong like a California, a Florida? Or do you think that it's a sense that the other energy drinks were more targeted to different demographics, and therefore, there is a different factor at play here? Just curious of how you're thinking about that.

Question: Robert Ottenstein - Evercore ISI - Analyst : No, I guess I'm having the Sparkling Frozen Berry. It's fabulous.

Question: Robert Ottenstein - Evercore ISI - Analyst : It's awesome. So look, I want to talk a little bit about pricing and promo, which is, always a sensitive topic. It's an important one, and there's some tricky dynamics here. So -- and I'm sensitive that this is a sensitive topic. And some of the stuff here is tricky to talk about, right? So if you look at the energy drink sector, right, less pricing than CSDs. Red Bull kind of ahead, should have taken a leadership. It dragged its feet for a while. It and Monster finally took some pricing in the fall of last year, which looks like it's largely stuck, and people have followed. But -- what we're starting to pick up on a little bit is a little bit increased promo now. Now that could just be a return to normal, right? Because during COVID, the job is get the product on the shelf, right? And there's no point in promoing if the product's not on the shelf. And a lot of -- not so much you, but a lot of your competitors did have problems getting product on the shelf. The other thing that we're hearing a little bit about, and it's kind of good news, bad news in the sense that -- and again, I'm just mentioning what I'm hearing, that you guys have really been taking some significant share from Red Bull. And Red Bull doesn't like to lose market share. And they are starting to hit the promo button a little bit. So love to get your thoughts on this topic and to the extent -- you're comfortable again. I know this is stuff that is very competitively sensitive. It's tricky stuff, but how do you -- I mean, look, your 8% market share, looking like you're going to go to 10%. A lot of it is new. Unquestionably, a lot of it is new, but you're causing the big people a little bit of pain and they can react in different ways. So -- and one of those ways is promos. So how should we think about -- how are you thinking about that dynamic now where there could be more promo?

Question: Robert Ottenstein - Evercore ISI - Analyst : Yeah, and you actually moved right into my question. Next question was -- and you touched on it. I don't know if you can elaborate on it at all, but it is a street war, right? I mean, it is a hand-to-hand combat count after count. It's really rough and tumble, lots of stuff goes back and forth. Do you feel that being aligned with Pepsi gives you an advantage that you didn't have? Do you feel that the big guys are going to think twice about how they compete against you, tactically speaking, given that you're aligned with Pepsi, as opposed to being a small independent? Because there's a lot of games that people play. And there's the big kid in the school yard and the little kid. And a little kid likes to have alliances, and sometimes that helps a lot. So just trying to get a sense of how being hooked up with Pepsi benefits as you really have become very high on the radar screen, not just of consumers, but also of the bigger players. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 14, 2023 / 6:45PM, CELH.OQ - Celsius Holdings Inc at Evercore ISI Consumer & Retail Conference (Virtual)

Question: Robert Ottenstein - Evercore ISI - Analyst : And then, of course, you also have -- you still have Big Geyser, right?

Question: Robert Ottenstein - Evercore ISI - Analyst : Yeah, no, he is phenomenal. And we see just terrific execution in New York and Long Island. So absolutely. So the two big competitors out there have really, really different brand strategies, right? They couldn't be more different. One is very focused, a relatively limited number of SKUs, one or two innovations a year. The other big competitor is like just trying to grab as much shelf space and doors with different innovations into adjacencies as possible. Where do you see your strategy developing? So far, you've had some great innovation. A lot of it is flavor and attitudinal in a sense. Are you going to stick with that? Or are you hinted maybe doing some other stuff in -- earlier on, when we started the conversation, you did start talking about different occasions like the food occasion, which may lead to, perhaps, a different liquid. I don't know. So maybe if you can talk about how do you see the brand going over the next three to four, five years?

Question: Robert Ottenstein - Evercore ISI - Analyst : So one of the things that blew me away three years ago or so was the learning -- the amazing presence you have at Amazon and the e-commerce. So I'd love to understand is the incrementality of that and how it helps you competitively, right? So is this the same consumer, a different consumer? If it's a different consumer, how is it a different consumer? Is it different demographic? Are the margins incremental or dilutive? And then when you go into your conversations with other channels, is your strong presence in Amazon a positive or is it a negative and a challenge that you have to overcome? So love to understand that whole area of your business and how it impacts on the rest.

Question: Robert Ottenstein - Evercore ISI - Analyst : And is the growth rate on Amazon faster or slower than, let's say, what we see in scanner?

Question: Robert Ottenstein - Evercore ISI - Analyst : Yeah, great. Well, we've got two minutes left. John, I want to just -- can I hand it over to you and Toby to wrap things up? The stock has been a home run. Some people would say 8%, 9% market share and call it a day. You seem to be much more ambitious than that. So what's the pitch to investors now for the future?

Question: Robert Ottenstein - Evercore ISI - Analyst : Just one final question that's brought up from that, and that is look, this is 200 milligrams of caffeine, which is on par for energy drinks, right? That's energy drink. Would you -- are you considering a lower caffeinated -- lower amount of caffeine for -- to hit more meal occasions or different occasions? Is that something that's on your radar screen? Or you are going to stick with the more energy drink profile of 200 and --? And there are some, right? There are some energy drinks that are lower that are 150. They're even 120 and hybrid drinks at 80. So just wondering how you're thinking about caffeination.

Question: Robert Ottenstein - Evercore ISI - Analyst : All right. I think I read you. Thank you very much, guys. Really appreciate it. Cheers and look forward to following the progress and trying the new flavors. Thank you.