Nielsen data on energy drink market volume development in the United States from July.
Market share appears to be growing.
https://x.com/bevinsights/status/1825527943755362480?s=46&t=WEG-cVPSomkRhXnGNjpFZw
https://x.com/bevinsights/status/1825528234370363712?s=46&t=WEG-cVPSomkRhXnGNjpFZw
https://x.com/bevinsights/status/1825531601750565199?s=46&t=WEG-cVPSomkRhXnGNjpFZw
At the end of this post is a tweet with a good summary of yesterday’s 11.6% share price drop. Celsius CEO John Fieldly announced yesterday during a Barclays conference call that orders from Pepsi, Celsius’s distributor, will decrease by about 100-120 million this quarter.
The reason for this is Pepsi’s inventory optimization, meaning they want to sell down more of their current stock before placing new orders. In light of the numbers, a sort of earnings miss can be expected for Celsius’s Q3 report.
In the long term, I wouldn’t be as worried about this as the market’s reaction suggested. Nielsen’s end-consumer data has continued to show growth. I think Pepsi’s thinking at the time of the original order was that with strong end-customer demand growth, it’s better to have extra stock than to be out of stock if demand increases more than expected. Of course, Celsius’s previous growth figures were also inflated in the sense that they were partly driven by Pepsi’s inventory build-up rather than end-consumer sales.
Perhaps we will see more bullish “growth” again in Celsius’s Q4’24 or Q1’25 results if Pepsi’s restocking occurs during those quarters.
https://x.com/oscar100_x/status/1831413712554750089?s=46&t=eZYTWGmEQtOFOMjKJ5-LUw
Exactly. One needs patience with this, and it might take several years to return to ATH levels. However, I still have enough confidence as long as market share is maintained/grows in the US market and expansion elsewhere progresses as expected. My impression is that these sell really well in Finland, and at least on K-store shelves, the stock turns over quickly. Margins are excellent, and if sales in other new markets follow the same pattern, then the multiples will definitely compress. Pepsi’s distribution hiccups don’t affect Europe at all, but it must be remembered that the majority of revenue still comes from the US.
H1 orders from Pepsi were already reduced by $47M, and the upcoming $110M drop in Q3 will normalize the inventory situation. Even so, there was good growth in H1 and market share was gained.
While waiting for the Q3 figures, I might add a little if the market really overreacts, but cautiously. I jumped on this train a bit too early. Fortunately, it’s still just a small portion of my portfolio. 
Celsius sales channels:
Pepsi 248 553
Costco 34 243
Others 101 961
Others include international and online sales, meaning mainly Amazon. Other channels are also growing as they expand into Europe.
Noniin jätkät, jos on pitkän aikaa odotettu jotain positiivista uutista, niin nyt tuli loistava pohjaindikaattori. ”
Jim Cramer has expressed concerns about Celsius Holdings Inc. (NASDAQ:CELH), suggesting that the company’s partnership with PepsiCo, Inc. (NYSE:PEP) does not seem to be benefiting it as expected. Although Celsius Holdings Inc. (NASDAQ:CELH) was once a high-flying stock, it has recently fallen back. Cramer prefers to wait until a company stabilizes before considering it for investment, and he views Celsius Holdings Inc. (NASDAQ:CELH) as still struggling.”
It seems the market entry in Finland has been successful. Citymarket is advertising it, and it’s in a prime location in the local shop as well. In XXL, there were pallets at the entrance and a cooler next to the checkouts. Teens were walking around the parking lot with cans in their hands. It’s a small market, of course, which doesn’t carry much weight, but if it’s the same elsewhere in Europe, there’s plenty of growth market to go around. A quick Google search shows wide distribution in Sweden as well. I bought a can to try, and it’s the first energy drink that didn’t leave me feeling gross afterwards. Opening position acquired.
Time for a review.
A few scattered observations:
Listed around 2007 via a ‘reverse merger’ through some not-so-lucky mining company
The original branding as a health drink failed, but it looked so successful initially that Coca-Cola, together with Nestle, developed their own ‘negative-calorie’ drink to compete with Celsius. Around 2010, there was a wave of lawsuits against these beverage manufacturers’ claims; CC & Nestle lost theirs and pulled the drink from the market, while Celsius won its trial—there was nothing fishy about the research results.
However, the lawsuit took a toll on the business, which is at the mercy of distributors.
Rebranding sometime in 2012 while delisted; the lead investor bought out the founders and brought in star-class executives who rebranded Celsius from a health drink to an energy drink (well, a health-energy drink).
Apparently the only company that has gone down and back up every step of the ladder from the list (Nasdaq) to being delisted, and from delisted back up again; I don’t remember the exact ladder (‘penny-stock etc’), but the CEO goes through them in the interview.
Unlike more traditional energy drinks, Celsius is a ‘health-energy drink’ rather than a hyper-masculine brand where the drinker jumps out of planes or does triple-ollies (I haven’t skated, as you can tell from the terminology) from one rooftop to another. Thus, there is no gender preference.
History:
2008
Distribution in Chicago, Detroit, Boston, Los Angeles, etc. Revenue 2.5M, loss just over 5M.
2009
Raising capital by shuffling Series B, raising the stakes. Testing demand through Costco and other big chains; full gas if it’s there. A loss of nearly 8M on revenue of just under 6M. (2M increase in accounts receivable)
2010
Revenue just over 8M, loss ~20M. Loss due to national marketing stunts including TV, apparently implemented because experiences with ‘penetration’ in big chains were good.
2011
Hit the ground, deregistered.
2016
Back in the game, 15M in equity, revenue about 23M and loss of 3M (the re-registration shows a few years back, some millions in losses made there too)
2017
Revenue 36M (+59%), loss 16k. 20M in equity.
2018
Revenue 57M (+45%), loss 11M (Large international marketing campaigns). 12M in equity.
2019
Revenue 75M (+43%) Profit generated 10M. 25M in equity. China distribution deals made (expensive). Shares sold for 26M (I guess an offering or something, can’t be bothered to check).
2020
Revenue 131M (+74%). Volume starts to significantly improve gross margin. Some ‘note’ thing related to China distribution deals dropped the profit by over 10M, profit just under a mil. Just under 70M in equity.
Cash flow looks strange due to China stuff. 4M acquired by using ‘stock options’ (cash flow statement). Possibly related to compensations, which were 6M. Dilution anyway.
2021
Revenue 314M (+140%), growth almost entirely from the US (97%). Gross margin decreased ~6 percentage points because cans (aluminum) became more expensive. Marketing +110% YoY (year over year), i.e., 75M. Stock options (compensation) tripled YoY. Profit ~4M. Balance sheet positive by 165M.
2022
Revenue 654M (+108%), growth from the US and marginally from Asia, decline in Europe. Loss of 200M. Marketing budget 353M (+372% YoY). Balance sheet 860M in the black (over half a billion from the Pepsi distribution deal). Cash flow 100M.
In the cash flow statement, over half a billion in share capital dilution to Pepsi. Pepsi deal entered the picture from August.
2023
Revenue 1.3B (+102%). US +105%, Europe +41%, Asia +30%, and others more than quadrupled. But everything else is tiny compared to the US. Gross margin jumped close to 50% due to ‘efficiencies in raw material sourcing, and product waste reduction’. Profit just under 200M. Balance sheet over 900M in the black.
Cash flow 100M - if you adjust for the growth in receivables (the assumption being that all the money will be received that was pushed on credit in 2023 + another assumption that it doesn’t stay rotting on the retailer’s shelf, which would burden the following year’s sales accordingly), you get over 200M.
2024
Q2 New distribution agreements here and there around the world. Balance sheet: approx. 900M in the black. H1 2024 758M (+30% vs. H1 2023). Pepsi apparently has some issues with distribution stuff. Profit H1 132M (+80% vs. H1 2023).
H1 cash flow is a ballpark figure around a quarter billion.
Taking into account errors in assumptions and calculations I might have made, I could ballpark the current valuation at ~15-20 * annual cash generation.
My own experience with the product is that it smells and tastes like acidic fruits (good!), there’s none of that weird mix of axle grease, gear oil, and butt crack in the scent that I’ve sometimes smelled when someone opens a more traditional energy drink nearby.
(a very subjective evaluation 
)
I don’t know if this is useful to anyone else, but I wanted to do a small review myself because I find the company interesting 
A few informative links:
Excellent review of the rebranding:
(73) The Strategy That Broke Celsius’ 10-Year Slump - YouTube
Interview with the CEO; he knows the history well even though he wasn’t there from the start:
Celsius CEO: From Near Bankruptcy to $10B Company (youtube.com)
Celsius Q3 comes out on 11/06, so there is still quite a bit of time before then, and analysts have time to revise their forecasts downwards.
Trading volume is still high, but the price drop seems to have halted around the 32 level.
Personally, I don’t believe the Pepsi issue is long-term, and that upcoming drop should already be pretty well priced in. At the same time, Amazon is performing well, and Celsius is the clear number one in the US market.
In Canada, Celsius products hold ranks #14, #16, and #18. Nothing on UK Amazon yet, but this market is only just opening up.
I’m cautiously optimistic and could now look for an opportunity for a small addition.
Here’s a tweet thread about Celsius.
It might not offer anything new to those who have been following the company more closely.
https://x.com/DividendDude_X/status/1841214995234713619
Celsius is sliding. I’m already tempted to hit the buy button.
Does anyone know if insiders have been loading up lately, since the share price has come down so much?
-4% when it hits the board without any particular news, my buying finger almost invariably starts itching. This was the case this time as well, and I increased my position. Furthermore, as product demand on Amazon doesn’t seem to have decreased (still the bestseller in its category) and the product is moving at a good pace off the shelves in Finnish stores as well, the growth outlook seems to be in good shape.
An interesting question for me is, for example, how sales have started picking up in France? I didn’t find much on the topic with a quick search.
I would certainly be interested in the development of sales in countries outside the USA. There is quite little data available. Relative to US sales, it is still very small. Below is what I consider a comprehensive discussion about the company and its prospects.
Latest - if you want to follow more closely, all the 10-Qs are there on the SEC website 
Edit: in the table $1,000
This tweet compares Celsius and Coca-Cola in terms of valuation and revenue growth.
https://x.com/finchat_io/status/1843884561278603597
Thanks Hapzu, although the past figures were indeed known. In my opinion, the most interesting information for an investor is the kind that hasn’t yet been covered in the annual report or interim report. Information that isn’t easily or effortlessly available to everyone. Regarding Canada, it was noted in the Q2 report that sales have started even more briskly than expected.
I started looking for more answers to this question and decided to expand the research to include Canada and the UK, in both of which Celsius was launched this year. I decided to look at it from the perspective of how many major supermarkets or similar stores Celsius products are sold in. Unfortunately, traveling there was not possible due to circumstances, so I ended up searching for information on the websites of grocery retailers.
France
Regarding France, I was disappointed, as Celsius products were not yet found in the selections of major grocery stores. However, I am lenient about this, as the product was launched only after the middle of Q3. I searched the websites of the following stores, and I would think that Celsius products can be expected to be found in at least some of these in the future:
A special mention for France: Celsius recently started a sponsorship deal with Charles Leclerc, who, as a Monacan F1 driver, might appeal to French F1 fans on some level. I’m not that familiar with F1, so it’s possible he doesn’t specifically appeal to the French. Either way, a big name for a partnership regardless.
United Kingdom
Regarding the Brits, I had heard earlier that the product has been widely available especially in Tescos and that there has been demand. I checked the online stores of the following retailers:
Unfortunately, for the UK, only Tesco’s online selection had Celsius energy drinks, but browsing X has left the impression that Celsius has sold well in the British Isles too.
https://x.com/dede_eyesan/status/1818238181067604287
A special mention for the UK: Celsius’s website has a form where students at British universities/colleges can apply to be brand ambassadors and ‘get’ to promote Celsius products on their campuses. Apparently, the work is paid, but likely free Celsiuses or merch are promised as additional rewards.
Canada
The reason for Canada’s very brisk sales in Q2 started to become clear when investigating product availability. Celsius products were available in all of the following:
Additionally, the drink is widely available in 7-Eleven and Circle K convenience stores. Finally, an image from the Celsius Store Locator, showing exactly those Canadian sales points for the mentioned convenience stores, totaling over 2,000 locations:
In summary
I would say that regarding France, it’s hard to say much yet, but it likely won’t have much of an impact on the Q3 results. The UK could be a dark horse, but that too is hard to estimate in advance. I expect Canada to drive international growth, and the figures might even surprise positively. It should also be mentioned that Ireland, Australia, and New Zealand are in Celsius’s plans for this year, but they are unlikely to have a significant impact at least on the Q3 report.
Thank you. France, like a few other countries, has its own Instagram account. There was a post there saying it can be found in the stores of the largest chain, i.e., Carrefour. Posted a couple of weeks ago.
This is great news! And a good reminder to myself as well that it’s worth looking for information from multiple sources, otherwise you might end up relying on incorrect information! 
I also found Celsius drinks in Malaysia on the shelves of the largest stores. They weren’t displayed particularly prominently, though, and they weren’t like the ones we have here. Some weird tea-based drinks; not a fan.
Celcius or Celsius?
There shouldn’t be country-specific differences. But there’s a tea-style drink available.
You brought up a good point. The CEO talks about the importance of placement in an interview. He sees it as a make-or-break factor: ‘you got to get to the eye-level’.
The effectiveness of distribution/retail deals combined with marketing campaigns is really only visible in retrospect from sales figures, unless one goes around stores checking the displays.
In Finland, Celsius seems to be on display everywhere I’ve been, just as prominently as Monster.
But I personally don’t worry too much about that international growth; it will come in due time once deals and campaigns are secured in different countries—it’s not worth pushing everything all at once. I found it more important to try the drink and its competitors myself—and I don’t see anyone who has become a ‘live fit’ customer switching away from it.
Except, of course, if tea is served from Celsius cans somewhere 
Was it one of these, by the way?
