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Q1 2025 Results April 24, 2025 1
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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,” “expect,” “believe,” “could,” “estimate,” “feel,” “forecast,” “intend,” “may,” “on track,” “plan,” “positioned,” “potential,” “project,” “should,” “target,” “will,” “would,” and similar words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially. Forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially. These risks and uncertainties include, but are not limited to, global economic uncertainty or economic downturns, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions; the possibility that we are unable to successfully integrate GHOST Lifestyle LLCinto our business; disruption of our manufacturing and distribution operations or supply chain; our operating in intensely competitive categories; our ability to effectively respond to changing consumer preferences and shopping behavior; concerns about the safety, quality or health effects of our products; damage to our reputation or brand image; our ability to successfully manage our acquisitions and investments in new businesses or brands; our ability to realize benefits or successfully manage the potential negative consequences of our productivity initiatives; requirements for substantial investment and upgrading of our facilities and operations; our dependence on key information systems, and our exposure to business disruptions due to our use of information technology; substantial disruption at our manufacturing and distribution facilities; infringement of intellectual property rights, and adverse events regarding licensed intellectual property; our ability to attract, retain, develop and motivate a highly skilled and diverse workforce, and our ability to effectively manage changes in our workforce; our ability to renew collective bargaining agreements on satisfactory terms, or union activity; increases in our cost of employee benefits; reductions in our payment terms with our suppliers; the consummation of our share repurchase program or the effectiveness of such program to enhance long-term stockholder value; significant impairments of the value of our goodwill and other indefinite-lived intangible assets; our dependence on third-party bottling and distribution companies for a significant portion of our business; changes in the retail landscape or in sales to any key customer; our ability to maintain strategic relationships with brand owners and private label brands; management of our equity method investments by parties who may have different interests than we do; exposure to business disruptions or other negative impacts from the use of information technology by our third-party commercial partners and service providers; our reliance on the performance of a limited number of suppliers and manufacturers for our brewers, and a limited number of order fulfillment companies for our brewers, beverage concentrates and syrups; recession, financial and credit market disruptions and other political, social or economic conditions; impacts of U.S. and international laws and regulations; exposure to significant liabilities and damage to our reputation resulting from litigation or legal proceedings; increased concerns related to the use or disposal of plastics or other packaging materials; significant additional labeling or warning requirements or limitations on the marketing or sale of our products; our exposure to cybersecurity breaches and other business disruptions due to our use of information technology and third party service providers; our ability to comply with personal data protection and privacy laws; climate change or related legislation; water scarcity and quality; and fluctuations in our effective tax rate. These risks and uncertainties, as well as others, are more fully discussed in the Company’s filings with the SEC, including our Annual Report on Form 10-K filed with the SEC on February 25, 2025. While the lists of risk factors presented here and in our public filings are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Any forward-looking statement made herein speaks only as of the date of this document. We are under no obligation to, and expressly disclaim any obligation to, update, revise or withdraw any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by applicable laws or regulations. NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures, including Adjusted operating income, Adjusted operating margin, Adjusted diluted EPS and financial metrics presented on a constant currency basis, which differ from results using U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures should be considered as supplements to the GAAP reported measures, should not be considered replacements for, or superior to, the GAAP measures and may not be comparable to similarly named measures used by other companies. Non-GAAP financial measures typically exclude certain charges, including one-time costs that are not expected to occur routinely in future periods. The Company uses non-GAAP financial measures internally to focus management on performance excluding these special charges to gauge our business operating performance. Management believes this information is helpful to investors because it increases transparency and assists investors in understanding the underlying performance of the Company and in the analysis of ongoing operating trends. Additionally, management believes that non-GAAP financial measures are frequently used by analysts and investors in their evaluation of companies, and its continued inclusion provides consistency in financial reporting and enables analysts and investors to perform meaningful comparisons of past, present and future operating results. The most directly comparable GAAP financial measures and reconciliations to non-GAAP financial measures are set forth in the Appendix to this presentation and included in the Company’s filings with the SEC which are available at www.keurigdrpepper.com. For reconciliations of reported to adjusted basis and constant currency adjusted basis in the presentation, refer to pages A5-A12 of the earnings release. Forward looking statements 2
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3 1. Business Update 2. Results & Outlook 3. Q&A Agenda
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Tim Cofer Chief Executive Officer Sudhanshu Priyadarshi Chief Financial Officer & President, International 4 Jane Gelfand SVP, Finance – IR & International Conference call participants
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Business Update Tim Cofer Chief Executive Officer 5
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6 Good start to the year in Q1 Strong Q1 2025 driven by refreshment beverages Well-positioned in current environment On track to achieve full-year outlook
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7 Q1 2025 highlights Strong financial results, with 6%+ net sales growth and 10%+ EPS growth Share gains across key LRB brands, including Dr Pepper, Canada Dry, C4 and Electrolit Smooth start to GHOST integration & distribution, fortifying scaled and powerful energy platform Executional excellence and operating discipline drove accelerating price realization and overhead efficiency All financial metrics presented on an adjusted, constant currency basis.
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8 U.S. Refreshment Beverages Strong portfolio growth, led by CSDs Building energy momentum, with significant future runway Accelerating market share gains in sports hydration Q1 SEGMENT HIGHLIGHTS
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9 U.S. Coffee Volume/mix adjustment period as category pricing layers in Advancing premium, cold, and next-generation platforms To update Executed pricing actions to mitigate green coffee inflation Q1 SEGMENT HIGHLIGHTS
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10 International Strong relative trends across Mexico and Canada LRB momentum, driven by Penafiel and CSD portfolio Net price realization to build over balance of year after Q1 implementation Q1 SEGMENT HIGHLIGHTS
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STRATEGY Mid Single Digit High Single Digit + Optionality Net Sales Growth EPS Growth Cash Flow LONG-TERM ALGORITHM A beverage for every need, anytime, anywhereDrink Well. Do Good. OUR PURPOSE OUR VISION 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 Top beverage talent with a challenger mindset Team First // Deliver Big // Think Bold // Be Fearless and Fair OUR CULTURE Drink In The Possibilities OUR STRATEGIES 11 Delivering on 2025 commitments while advancing our strategy
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Results & Outlook Sudhanshu Priyadarshi Chief Financial Officer & President, International 12
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Q1 2025 consolidated results 13 $3.5 $3.6 Q1’24 Q1’25 $825 $847 Q1’24 Q1’25 $0.38 $0.42 Q1’24 Q1’25 NET SALES ($B) ADJ. OPERATING INCOME ($M) ADJUSTED EPS ($ PER SHARE) 6.4% YoY 3.9% YoY 10.5% YoY 23.3% Adjusted OI Margin 23.8% Financial metrics presented on an adjusted basis. Growth rates presented on an adjusted basis and in constant currency. Including the impact of currency, net sales grew 4.8%, adjusted operating income grew 2.7%, and adjusted EPS grew 10.5%.
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14 U.S. Refreshment Beverages • Net sales increased 11.0%, with volume/mix growth of 8.0% and favorable net price realization of 3.0% • Volume/mix reflected base business momentum, led by CSDs, and the initial contribution from the GHOST acquisition • Operating income growth was driven by net sales gains and productivity savings Q1 2025 Change Net Sales $2.3B 11.0% Adjusted Operating Income $676M 8.7% Adjusted Operating Margin 29.1% (0.6pts) Financial metrics presented on an adjusted basis.
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15 U.S. Coffee • Net sales decreased (3.7%), with favorable net price realization of 1.5% offset by a volume/mix decline of (5.2%) • Short-term volume and mix impacts from industry pricing layering in at different rates across the single serve category • Operating income pressure reflected net price realization and productivity savings only partly offsetting inflation and volume/mix pressure Q1 2025 Change Net Sales $877M (3.7%) Adjusted Operating Income $253M (12.5%) Adjusted Operating Margin 28.8% (2.9pts) Financial metrics presented on an adjusted basis.
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16 International Q1 2025 Change Net Sales $435M 5.4% Adjusted Operating Income $93M (4.6%) Adjusted Operating Margin 21.4% (2.2pts) Financial metrics presented on an adjusted basis. Growth rates presented on an adjusted basis and in constant currency Including the impact of currency, net sales declined 6.3%, adjusted operating income declined (14.7%), and adjusted operating margin declined (2.1 pts). • Net sales increased 5.4%, with favorable net price realization of 4.1% and volume/mix growth of 1.3% • Segment sales growth reflected strength in LRBs across both Canada and Mexico • Operating income growth expected to accelerate, with Q1 pressure primarily reflecting a timing mismatch between pricing implementation and inflation Higher-res needed
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FCF acceleration and balanced capital deployment 17 Invest for Growth Internal investments Grow the dividend Opportunistic share repurchase Direct Shareholder Returns Partnerships & M&A Strong Balance Sheet with Long-Term Leverage <2.5x Q1’25 Highlights Continued acceleration in free cash flow • Strong Q1 result, despite a discrete GHOST distribution payment Monetized multi-year Vita Coco stake • Transaction highlights mutual value creation inherent in our partnership model Capital Allocation Priorities
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~1 pt FX headwind Reaffirmed 2025 outlook 18 Net Sales Growth (Constant FX) Adjusted EPS Growth (Constant FX) Other Items $680-$700M Interest Expense 22-23% Tax Rate ~1.37B Diluted Shares Outstanding High-single-digitMid-single-digit Guidance includes anticipated contribution from the recent GHOST acquisition. FX headwind based on current outlook for exchange rates. 2025 tariff impact based on tariffs in place as of 4/24./25 Outlook incorporates initial anticipated impact of tariffs and related mitigations
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Closing Remarks Tim Cofer Chief Executive Officer 19
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Questions & Answers 20 20
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Appendix 21
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Reconciliation of certain Non-GAAP information 22
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