Celsius Holdings Inc at Stephens Investment Conference Transcript

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

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : I think a good place to start, a lot of investors are familiar with the brand, but a lot of investors, I think, are still starting to gain familiarity with it. Celsius is one of the fastest-growing brands really across all categories. What would you say about your product resonates so much with consumers that supports the growth that we've been seeing.

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. Last year, you guys got a big win, signing distribution partnership with Pepsi. Can you just offer us some thoughts on how that partnership has helped fuel your growth and really kind of the incremental opportunity that, that brings to distributing the brand?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. Toby, one of the metrics that you mentioned there was ACV and how we saw a pretty rapid step up in that following the partnership. But if we think about the actual breadth of your products available in the store, how do you think about the opportunity there to really increase the number of available SKUs in the number of facings, especially relative to some of your peers, you mentioned like a Monster or like a Red Bull.

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : I think we touched on a little bit some of the unique characteristics that Celsius has. But how does that enhance your ability to really reach beyond that core energy drink consumer that we've talked about. And in particular, tying that back to retail, how does that impact your ability to maybe gain shelf space that's outside of where your energy drink peers are positioned in the store?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Well, to go off of that point, obviously, you have your product here at our conference, kind of the traditional white collar office worker. We've seen a very high adoption rate in that cohort, which is not your typical energy drink cohort. You talked about some of the brand positioning, but what do you think about Celsius again, relative to some of your peers allows them to win in a category with white collar workers where energy drinks normally wouldn't be.

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. Why don't we pause there and see if there's any questions from the audience? Unidentified Analyst As you think about your share gains, when you think about kind of taking share (inaudible) what color (inaudible) share gains (inaudible) that market or moving down market?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Great. Maybe just to wrap up as we were kind of talking about the versatility theme. Toby, you had mentioned some of the food service opportunity with Pepsi. Recently, you guys announced pretty significant wins at Dunkin' and Jersey Mike's. Can you maybe just give us some color into how those partnerships unfolded and what the opportunity in foodservice looks like?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Do you think, especially given some of the dynamics we've talked about around traditional kind of white collar workers consuming your product. If you can capture a consumer at the college level as they transition through the life cycle and enter the workforce, does that give you an opportunity to really solidify them as a lifetime Celsius consumer if you reach them at college and they just really switch kind of the day part that they consume it in?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Absolutely. You did touch on your co-manufacturer relationships. Can you just maybe give us a couple of quick comments on capacity-wise, I mean, since you guys have been growing so strong, is there ample room to scale up with them?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. If we zoom in to the near-term environment, what are you guys seeing right now with kind of promotional spend? What have your retail partners have been saying to you regarding kind of expectations around promotion and pricing?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : How do you feel -- just kind of keep it on that same train of thought about your price position relative to your competition? I mean, obviously, there wasn't a ton of private label in the category. Do you guys think about like maintaining a certain price gap versus peers. Is that something that doesn't really matter in the category? Just your thoughts around that.

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Great. While we're keeping on the topic of kind of pricing and promotions. When you think about limited time offerings, seasonal offerings, what role does that play in your broader merchandising strategy? And maybe any thoughts we should think about kind of entering the new year and again, relative to kind of peer set, what you see them doing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 15, 2023 / 8:00PM, CELH.OQ - Celsius Holdings Inc at Stephens Investment Conference

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. And -- go ahead. Unidentified Analyst

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Great. Again, keeping on the same train of thought with expanded in-store visibility and driving kind of trial. You guys have been expanding the number of branded fridge placements that you're doing. What do you think the opportunity is there? And do you find that in stores where you have branded fridges or kind of off-shelf displays that you see a lot of incremental trial buys and that brings new consumers to the brand? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 15, 2023 / 8:00PM, CELH.OQ - Celsius Holdings Inc at Stephens Investment Conference

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Do you get any pushback from retailers when you try to put fridge placements in or kind of any thoughts on that?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. I'll open it up for questions one more time. And I think let's switch gears, we talked a lot about the top line. Maybe talk about some of the operations piece of the business. I think a good place to start near term, just what you're seeing kind of commodity basket and how you guys feel about gross margins moving into 2024?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's helpful. Maybe keeping in that same train of thought, you guys currently have a very strong balance sheet, $750 million whatever in cash. What are your thoughts about optionality? You mentioned vertical integration, but does that cash just build? Do you have a couple of kind of key places that you think it would be best be deployed?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : That's great. Unidentified Analyst Just on customer acquisition costs. I guess I'm trying to get a sense of what kind of visibility -- or decision happen? You know you're going to spend what's the payout -- is it adding people (inaudible) the marketing dollars is that people (inaudible)?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Great. Well, maybe as we wrap things up, we can just close with some thoughts on the international piece of the business, which I think sometimes gets over shadowed just given the size of the domestic opportunity. But maybe just some closing thoughts on kind of the opportunity you see in international markets and anything we should be aware there?

Question: James Ronald Salera - Stephens Inc., Research Division - Analyst : Great. I think that's a great stopping point. Toby, Cameron, thank you very much for your time today, and thank you, everyone, for joining us.