Bolstered by PepsiCo Partnership, Celsius' Growth Outlook Looks Strong Despite Near-Term Volatility

Celsius is poised to grow in the energy drink category in North America, as a long-term partnership agreement with PepsiCo (through 2041 although potentialy longer) align the two parties' interests for long-term growth. In addition, the acquisition of Alani Nu has unlocked opportunities to tap demand from female consumers. That said, we remain skeptical that Celsius has successfully built a durable competitive position underpinned by brand intangibles or cost advantages, given intense competition from resource-rich incumbents with strong brands, such as Monster and Red Bull, and the propensity of smaller entrants to deliver innovation.