Q1 '24 QUARTERLY RESULTS
APRIL 25, 2024
Forward-looking statements
Certain statements contained herein are "forward-looking statements" within the meaning of applicable securities laws and regulations. These forward-looking statements include, but are not limited to, words such as "outlook," "guidance," "anticipate," "expect," "believe," "could," "estimate," "forecast," "intend," "may," "plan," "potential," "project," "should," "target," "will," "would," and similar words or phrases. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements regarding the estimated or anticipated future results of Keurig Dr Pepper Inc. (the "Company") and other statements that are not historical facts. These statements are based on the current expectations of our management and are not predictions of actual performance.
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, 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; increases in our cost of employee benefits; 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; 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 22, 2024. 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 diluted EPS, free cash flow and management leverage ratio, 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 A6-A9 of the earnings release.
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possibilities | |
Agenda
- Introduction
- Business Update & Strategy Review
- Financial Results & Outlook
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Conference call participants
Bob Gamgort | Tim Cofer | Sudhanshu | Jane Gelfand |
Chairman & | Incoming CEO & | Priyadarshi | VP, Investor Relations & |
Chief Executive Officer | Chief Operating Officer | Chief Financial Officer & | Strategic Initiatives |
President, International |
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INTRODUCTION
Bob Gamgort
Chairman & Chief Executive Officer
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In Q1, multiple initiatives to extend KDP's track record of success
STRONG START | MULTI-YEAR | $1B+ | STRONG |
TO 2024 | SINGLE SERVE VISION | BUYBACK | FOUNDATION FOR |
NEXT CHAPTER |
Q1 net sales at top end | Unveiled reimagined | Repurchased 38M |
and EPS above outlook, | single serve system | shares in Q1 - the |
with progress across | with plastic- and | largest quarterly |
multiple strategic | aluminum-free | buyback in KDP history |
dimensions | consumable |
Evolved strategy, portfolio, and leadership team to extend track record of value creation
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possibilities | |
Successful CEO transition
Smooth and deliberate transition period began in Fall 2023
Tim Cofer appointed CEO and to join the Board of Directors effective April 26
Bob Gamgort to serve as KDP's
Executive Chairman
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BUSINESS UPDATE & STRATEGY REVIEW
Tim Cofer
Incoming CEO & Chief Operating Officer
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Evolved strategy to guide the next chapter of KDP
OUR PURPOSE
Drink Well. Do Good.
Champion | Shape our now and next |
consumer-obsessed | |
beverage portfolio | |
brand building | |
OUR STRATEGIES
Amplify our route to market advantage
OUR VISION
A beverage for every need,
anytime, anywhere
Generate fuel for growth | Dynamically allocate |
capital | |
• Lead with the consumer | • Lean into growth categories | ||
• | Invest in our iconic brands | • | Create win-win partnerships |
• | Innovate and disrupt | • | Accelerate International |
- Extend multi-channel leadership
- Strengthen DSD
- Broaden digital capabilities
- Drive continuous net productivity
- Optimize network
- Maintain lean overheads
- Enhance returns via smart investments
- Ensure efficient capital structure
- Return cash to shareholders
OUR CULTURE
Top beverage talent with a challenger mindset
Team First // Deliver Big // Think Bold // Be Fearless and Fair
Drink In The Possibilities
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Q1 2024 highlights
Q1 constant-currencynet sales growth accelerated sequentially to ~3% year-over-year
Continued strong momentum in U.S. Refreshment
Beverages and International
Meaningful progress in U.S. Coffee, with improving volume and continued margin recovery
Significant gross margin expansion enabled
reinvestment and double-digitbottom-line growth
$1.4 billion returned to shareholders via the quarterly dividend and opportunistic buybacks
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Disclaimer
Keurig Dr Pepper Inc. published this content on 24 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 21:36:51 UTC.