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• Full Year Revenue Growth: Constant currency net sales grew approximately 4%.

• Full Year EPS Growth: EPS increased by 8%.

• Q4 Revenue Growth: Constant currency net sales increased more than 6%.

• Q4 US Refreshment Beverages Sales Growth: Net sales grew 10.3%.

• Q4 US Coffee Sales Decline: Net sales decreased 2%.

• Q4 International Sales Growth: Constant currency net sales increased at a high single-digit rate.

• Free Cash Flow: Full year free cash flow was $1.7 billion.

• Share Buybacks: $1.1 billion worth of share buybacks.

• Dividend Increase: 7% increase in quarterly dividend.

• Management Leverage: Ended 2024 with management leverage of 3.3 times.

• 2025 Guidance: Mid-single-digit net sales growth and high single-digit EPS growth expected.

• Warning! GuruFocus has detected 4 Warning Sign with KDP.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Keurig Dr Pepper Inc (NASDAQ:KDP) delivered strong financial performance in 2024, with constant currency net sales growing approximately 4% and EPS growing 8%.

• The company successfully expanded its portfolio into high-growth segments, including the acquisition of GHOST in the energy category.

• KDP's US refreshment beverages segment showed impressive growth, with a 10% increase in net sales in Q4, driven by strong performance in carbonated soft drinks.

• The company achieved significant productivity savings and overhead leverage, contributing to improved profitability.

• KDP strengthened its free cash flow generation, enabling strategic investments, share buybacks, and dividend increases.

Negative Points

• The US Coffee segment experienced a 2% decline in net sales in Q4, impacted by temporary net price declines and green coffee inflation.

• KDP faces challenges from escalating inflationary pressures, particularly in green coffee costs, which may require further pricing actions.

• The company's management leverage increased to 3.3 times, above the long-term target of less than 2.5 times, due to the GHOST acquisition.

• KDP anticipates a 1 to 2 percentage point headwind from foreign exchange rates in 2025.

• The company expects subdued performance in the US Coffee segment in 2025 due to dynamic commodity environments and inflationary pressures.

Q & A Highlights

Q: Can you discuss the building blocks for 2025, particularly regarding revenue and profit growth, considering factors like the leap year, Easter dynamics, and green coffee inflation? A: Sudhanshu Priyadarshi, CFO, explained that they expect mid-single-digit net sales growth and high single-digit EPS growth for 2025. The key drivers include momentum in US refreshment beverages and International segments, innovation, commercial plans, and modest net pricing. The GHOST acquisition will also contribute incrementally. Despite challenges like green coffee inflation, they plan to offset this through pricing, productivity, and overhead discipline.