Summary

• Celsius Holdings, Inc. is a consumer-packaged goods company engaged in the development, processing, marketing, sale, and distribution of functional drinks and liquid supplements to a range of consumers.
• Its core offerings include pre- and post-workout functional energy drinks and protein bars, under the CELSIUS Originals and Vibe names.
• Additionally, it provides CELSIUS On-the-Go Powder, which contains the same ingredients as the functional energy drinks in a convenient powder form.
• CELSIUS distributes its products domestically through direct-store delivery ("DSD"), distributors, and direct sales to retailers. Additionally, the company distributes its products in various foreign regions through regional and country-specific distribution partners.
• In 2023, the company experienced significant growth in sales, with total sales reaching $1,318 million. This marked an increase of $664.6 million or 101.74% compared to the sales figure of $653.4 million in 2022.
• The company's gross profit for 2023 amounted to $633 million, reflecting a difference of $362.13 million or 134.06% from the gross profit of $270.87 million in the previous year, 2022.
• Additionally, the company's operating profit increased in 2023, totaling $266.37 million, which was higher by $424.17 million or 268.58% compared to the operating profit of $-157.8 million in 2022.
• The net profit for the year 2023 was $266.8 million, representing an increase of $453.8 million or 242.5% compared to the net profit of $-187 million in 2022.
• Moreover, the diluted earnings per share (EPS) for 2023 were reported as $0.77, which showed an increase of $1.65 or 187.5% compared to the diluted EPS of $-0.88 in 2022.

Brief Company Overview

Celsius Holdings, Inc. (NASDAQ: CELH) is a consumer-packaged goods company engaged in the development, processing, marketing, sale, and distribution of functional drinks and liquid supplements to a range of consumers in the United States, Canada, Europe, the Middle East, Asia-Pacific, and internationally. Its core offerings include pre- and post-workout functional energy drinks and protein bars. The flagship brand is CELSIUS, a calorie-burning functional energy drink available in various flavors, including carbonated and non-carbonated options, under the CELSIUS Originals and Vibe names. Additionally, it provides CELSIUS On-the-Go Powder, which contains the same ingredients as the functional energy drinks in a convenient powder form, and CELSIUS ready-to-drink products. The product line includes CELSIUS Originals, CELSIUS HEAT, CELSIUS BCAA +Energy, CELSIUS On-the-Go, and CELSIUS Sweetened with Stevia. The ready-to-drink products are packaged in distinctive 12-ounce sleek containers.

CELSIUS distributes its products domestically through direct-store delivery ("DSD"), distributors, and direct sales to retailers. Additionally, products are sold online through e-commerce platforms such as Amazon, Instacart, and Walmart.com. The company distributes its products in various foreign regions through regional and country-specific distribution partners. The consumer base primarily consists of distributors, e-commerce retailers, and various brick-and-mortar outlets such as grocery and convenience stores, club stores, and health-focused locations such as gyms and nutrition stores. The company has also registered the CELSIUS and MetaPlus trademarks, among others, with the U.S. Patent and Trademark Office, as well as a number of trademarks in other countries where its products are distributed and sold.

As of March 2024, the company had a 52-week share price range of $85.56 to $26.75. The forwarding P/E ratio of the company is 69.44 times, the price-to-sales ratio (ttm) is 14.25 times, the profit margin is 17.21%, the operating margin is 16.97%, the return on assets (ttm) is 12.07%, the return on equity is 23.23%, and the diluted earnings per share (ttm) is $.77. The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $4.7 billion as of June 30, 2023, on the Nasdaq Capital Market. There were 232,793,007 shares of common stock outstanding as of February 21, 2024.

Recent Developments

• PepsiCo has begun serving as the distributor for CELSIUS in Canada since January 2024. Additionally, CELSIUS has chosen Suntory Beverage & Food Great Britain and Ireland as its sales and distribution partner in the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, and the Republic of Ireland. Sales of CELSIUS products in these regions will also commence in 2024.¹
• On February 9, 2024, Celsius Holdings, Inc. announced a global, multi-year, exclusive partnership with Scuderia Ferrari, naming CELSIUS as a Scuderia Ferrari Team Partner and the official energy drink of the Formula 1 racing team. The collaboration aims to provide essential energy to help drivers and team members perform at their best throughout an intense 24 Grand Prix season.²

Recent Financing Activities

• During the year ended December 31, 2023, the Company issued an aggregate of 2.6 million shares of common stock and received approximately $2.3 million, under the 2015 Plan Stock Incentive Plan.³

Financial Performance Highlights

Q4 2023 Highlights

In the fourth quarter of 2023, the company reported sales of $347.4 million, reflecting an increase of $169.4 million or 94.99% compared to the fourth quarter of 2022, which had sales of $178 million. The net profit for the fourth quarter of 2023 was $39.1 million, showing an increase of $67.3 million or 238.03% when compared to the net profit of $-28.2 million in the fourth quarter of 2022. Furthermore, the company's diluted earnings per share (EPS) for the fourth quarter of 2023 increased to $0.17, a positive change of $0.29 or 241.67% compared to the diluted EPS of $-0.12 in the fourth quarter of 2022.

Annual Performance Highlights

In 2023, the company experienced significant growth in sales, with total sales reaching $1,318 million. This marked an increase of $664.6 million or 101.74% compared to the sales figure of $653.4 million in 2022. The company's gross profit for 2023 amounted to $633 million, reflecting a difference of $362.13 million or 134.06% from the gross profit of $270.87 million in the previous year, 2022. Additionally, the company's operating profit increased in 2023, totaling $266.37 million, which was higher by $424.17 million or 268.58% compared to the operating profit of $-157.8 million in 2022. The net profit for the year 2023 was $266.8 million, representing an increase of $453.8 million or 242.5% compared to the net profit of $-187 million in 2022. Moreover, the diluted earnings per share (EPS) for 2023 were reported as $0.77, which showed an increase of $1.65 or 187.5% compared to the diluted EPS of $-0.88 in 2022.

For the fiscal year ending December 31, 2023, Celsius Holdings, Inc. reported revenues marking a significant increase from the previous year's revenue. This notable growth was predominantly driven by heightened revenues from North America. The surge in North American revenue stemmed from continued expansion in distribution points and SKUs per location. In Europe, revenues for 2023 totaled approximately $43.7 million, up by $12.7 million or 41% from 2022. Meanwhile, Asia-Pacific revenues contributed an additional $4.8 million, representing an increase of $1.1 million or 30% from the previous year. Other international markets, including Puerto Rico, generated approximately $6.2 million in revenue during 2023, showing a notable increase from $1.4 million in 2022. Gross profit enhancements were attributed to efficiencies in raw material sourcing and product waste reduction. Meanwhile, selling, general, and administrative expenses decreased primarily due to termination fees paid to distributors in 2022, partially offset by increases in depreciation and amortization, research and development, use and excise taxes, and other selling expenses. Administrative expenses saw a notable increase to $57.9 million primarily due to higher audit, legal, consulting, insurance, and office rent costs. The total net other income increase primarily stemmed from interest income earned on cash held in the company's money market accounts.

In 2023, Celsius Holdings, Inc. reported cash flows from operating activities totaling $141.2 million, marking an increase from $108.2 million in 2022, attributed to significant operational growth and favorable timing of cash receipts, driven by increased sales associated with Pepsi agreements. Cash flows used in investing activities amounted to $14.2 million, compared to $5.7 million in 2022, primarily due to increased purchases of property and equipment to support expanding operations. Financing activities utilized $25.2 million, representing a decrease from $534.1 million in 2022, primarily due to the absence of net proceeds from the issuance of Series A Preferred Stock related to Pepsi. Additionally, cash was used to pay dividends to Series A Preferred Stock totaling $27.5 million, versus $11.5 million in 2022.

Business Overview

Celsius is a provider of energy drinks in the functional energy drink industry, operating both domestically and internationally, and offering clinically proven and innovative formulas. The company’s products are available in both ready-to-drink and on-the-go powder forms, accessible across various retail channels in the U.S., including conventional grocery, natural, convenience, fitness, mass market, vitamin specialty, and e-commerce. Furthermore, Celsius is expanding into selected markets in Canada, Europe, the Middle East, and Asia-Pacific. It currently offers three functional energy drink lines:

CELSIUS Originals and Vibe: Celsius offers 12 fluid ounce products, available in various flavors and both carbonated and non-carbonated forms, tailored to meet a variety of consumer tastes and preferences. CELSIUS Originals typically refer to the traditional lineup of Celsius energy drinks, which are designed to provide functional benefits such as accelerating metabolism and boosting energy levels. These drinks are available in various flavors and formulations, catering to different consumer preferences.

On the other hand, Vibe is a newer product line introduced by Celsius Holdings, Inc. Vibe drinks also fall under the functional energy drink category and are formulated to offer similar benefits as the Originals line. However, Vibe may feature different flavors or additional ingredients tailored to specific tastes or nutritional requirements. The Vibe line may also encompass variations in packaging or marketing approach compared to the Originals line.

CELSIUS ESSENTIALS™: Introduced in 2023, this 16 fluid ounce line is formulated with aminos, offering a unique blend of ingredients aimed at supporting hydration, energy, and overall well-being. CELSIUS ESSENTIALS™ contain natural flavors and essential vitamins and minerals, aiming to deliver a refreshing and nutritious beverage option. This product line features different flavors and formulations compared to the traditional CELSIUS Originals and Vibe lines, catering to diverse consumer preferences and nutritional needs.

CELSIUS On-the-Go Powder: This line features the same ingredients found in Celsius's functional energy drinks but in a convenient powder form. It is designed for individuals who prefer a powder format that they can easily mix with water to create a refreshing beverage on the go. These powder packets typically contain the same functional ingredients found in CELSIUS ready-to-drink products, including natural caffeine from green tea extract, guarana extract, and ginger extract, along with essential vitamins and minerals. CELSIUS On-the-Go Powder provides consumers with flexibility in controlling the strength of their beverage and allows them to customize the flavor intensity according to their preferences. It serves as a convenient option for those leading active lifestyles or frequently on the move, offering an instant energy boost wherever they go.

Celsius Holdings, Inc. (CELH) generates revenue through the sales of its beverages and related products, primarily from the following sources:

Sales of Celsius Energy Drinks: The company earns a significant portion of its revenue from the sale of its flagship product, Celsius Energy Drinks. It produces and serves fitness drinks that offer healthy energy and metabolic acceleration, these beverages, available in various flavors and formulations, appeal to a broad consumer base, contributing to overall sales and revenue.

Expansion of Product Line: Celsius Holdings, Inc. continues to broaden its product line to include functional beverages and nutritional supplements, offering additional revenue streams. These new offerings cater to diverse consumer preferences and dietary requirements.

Retail and Distribution Channels: Revenue is generated through sales to various retail and distribution channels, including grocery stores, convenience stores, fitness centers, and online platforms. Leveraging these channels enables Celsius Holdings, Inc. to reach a wide customer base, driving sales and revenue growth.

International Expansion: The company expands its revenue streams by entering new international markets, forming partnerships with local distributors to meet global demand for its products. This diversification strategy extends its reach and revenue potential.

Licensing and Partnerships: Revenue is also generated through licensing agreements and partnerships with other brands. Collaborating with established companies provides access to new markets and promotional opportunities, further boosting sales and revenue.

The company operates with just one reportable segment. Nonetheless, the table below illustrates the revenue figures by geographical location for the fiscal year ended December 31, 2023.

Celsius Holdings, Inc.'s revenue distribution by geographic location for the fiscal year ended December 31, 2023. North America emerged as the primary revenue contributor, generating $1,263.34 million, comprising 95.85% of the total revenue. Europe followed with $43.72 million, representing 3.33% of the total revenue. Revenue from the Asia-Pacific region amounted to $4.76 million, contributing 0.36% to the total, while revenue from other unspecified regions stood at $6.2 million, making up 0.47% of the total revenue. Overall, Celsius's revenue for 2023 reached $1,318 million, with North America being the dominant market driving the company's revenue growth, followed by Europe, Asia-Pacific, and other regions, albeit with smaller contributions.

While Celsius Holdings, Inc. has expanded its reach internationally, its primary customer base remains centered in North America. The company's revenue is heavily influenced by its distribution channels, particularly in North America and Europe, where its partners are predominantly active. Notably, in 2023, Pepsi's sales accounted for 59.4% of Celsius's revenue, with contributions from Amazon at 7.6%, Costco at 12%, and other sources comprising the remaining 21%.

Other business information

On August 1, 2022, Celsius entered into a distribution agreement with Pepsi ("the Distribution Agreement") concerning the sale and distribution of certain beverage products in the U.S., excluding specific customer accounts, sales channels, Puerto Rico, and the U.S. Virgin Islands. Under this agreement, Celsius granted Pepsi the right to sell and distribute its existing beverage products in defined territories, as well as future beverage products added as licensed products. The Distribution Agreement allows termination without cause by either party in the 19th, 29th, and every 10th year thereafter, with a twelve-month notice. Celsius agreed to provide Pepsi with a right of first offer for certain additional countries and future distribution methods. Additionally, Celsius began shipments to Pepsi Canada in the fourth quarter of 2023, marking the commencement of distribution to the Canadian market in January 2024. As part of the agreement, Celsius issued approximately 1.5 million shares of its Series A Preferred Stock to Pepsi, generating $550 million in cash proceeds, excluding transaction costs.

Company History

Celsius Holdings, Inc.: Redefining Functional Beverages

Celsius Holdings, Inc. is a company renowned for its production of functional beverages, notably its flagship product, CELSIUS®. Founded in April 2004 by Steve Haley, the brand initially emerged under the name Celsius, Inc. The fundamental concept behind Celsius beverages was to pioneer a line of drinks capable of boosting metabolism and providing energy without relying on artificial ingredients or excessive caffeine.

Early Years (2004-2007)

In 2005, Celsius Holdings, Inc. launched its inaugural product, Celsius. Despite its innovative approach, the company encountered challenges in gaining substantial traction within the competitive beverage market during its early years. However, in 2007, a strategic rebranding effort led to the emergence of Celsius Holdings, Inc. This pivotal rebranding marked a significant turning point for the company, prompting a renewed focus on marketing strategies and the expansion of distribution channels.

Growth and Innovation (2007-Present)

Celsius Holdings, Inc. embarked on a trajectory of growth and innovation, continually introducing new flavors and product lines to cater to evolving consumer preferences. The company expanded its footprint in international markets and cultivated partnerships with a diverse array of retailers and distributors. Celsius targeted active individuals seeking healthier alternatives to traditional energy drinks, leveraging its beverages' natural ingredients, including green tea extract, ginger, and guarana, believed to possess metabolism-boosting properties.

Strategic Expansion and Partnerships

Over the years, Celsius Holdings, Inc. has forged strategic partnerships with fitness influencers, athletes, and sports organizations, enhancing its brand visibility and market presence. These collaborations have played a pivotal role in promoting the company's products and reinforcing its commitment to promoting an active lifestyle.

Public Listing and Continued Success

In 2012, Celsius Holdings, Inc. underwent a transformative milestone by going public and commencing trading on the NASDAQ under the ticker symbol CELH. This strategic move facilitated the company's access to capital and enabled the expansion of its distribution network, resulting in heightened visibility and increased sales. Celsius Holdings, Inc. has sustained its growth and success in the functional beverage market, with its products gaining widespread availability in numerous countries worldwide.

Ownership Structure

As a publicly traded company, Celsius Holdings, Inc.'s ownership is diversified among various shareholders. The largest shareholders include institutional investors, mutual funds, and individual investors. Notable institutional shareholders as of the most recent data include BlackRock, Vanguard Group, and Renaissance Technologies, reflecting a broad and diverse ownership base.

References

1. ^ https://www.prnewswire.com/news-releases/celsius-expands-to-canada-united-kingdom-and-ireland-302040082.html
2. ^ https://www.stocktitan.net/news/CELH/celsius-r-signs-global-energy-drink-partnership-with-scuderia-uhdecqrrp7vw.html
3. ^ https://www.moneycontroller.it/notizie-comunicati-aziende-quotate-mercati-finanziari/celsius-holdings-inc/quarterly-report-for-quarter-ending-september-30-2022-form-10-q-941188?show=all