Celsius, based in Boca Raton, FL, markets a line of energy drinks that feature caffeine and a suite of other functional ingredients. The company’s flagship product, a beverage called Celsius, is sold as a dietary supplement and contains a blend of taurine, guarana extract, green tea extract, glucuronolactone and ginger extract.
The Celsius Heat line extension was launched in early 2017. It also includes 300 mg of caffeine and 2 grams of L-citrulline, an amino acid that is part of the body’s nitric oxide pathway. Boosting nitric oxide stimulates vasodilation and blood flow and has been linked to athletic performance increases.
Accelerating growth
The brand has been one of the faster growing functional beverages brands. Its top line revenue has gone from $36 million in 2017, to $53 million in 2018 to $75 million last year.
With its second quarter earnings report, Celsius has steepened the curve of that graph even further. The company reported $30 million revenue, which is up 86% over the second quarter of 2019. For the first six months of 2020 the company brought in $58.2 million in top line revenue, an increase of more than 90% over the first six months of 2019.
CEO John Fieldly said Celsius is working to expand brink and mortar distribution in North America, and can now be found in more than 70% of the country’s largest metropolitan areas. And sales of the brand have been soaring online, too. Fieldly said Celsius is now the third biggest energy drink seller on Amazon after Monster and Red Bull. The company’s share of the Amazon energy drink market now stands at 11.4%, Fieldly said, compared to 34.8% for Monster and 14.9% for Red Bull.
Sales were strong in Europe as well. Last year Celsius purchased Norwegian company Func Food Group, which brought with it some functional food products as well as a distribution network in the Scandinavian countries.
Celsius Holdings appears to be well capitalized, with an influx of $16 million in 2015 from a group led by Hong Kong businessman Li Ka-Shing, who according to Forbes magazine is the richest person in Asia. Def Jam co-founder Russell Simmons also participated in that investment. Last year it closed on a deal with Chinese company Qifeng that will earn it royalties on sales of the brand in mainland China.
Private placement cash infusion
Nevertheless, the company decided on a $22 million private placement investment that was announced this week. The company declined to name the investors, other than to say one is “Asia’s leading private equity firm” while the other is a “leading global institutional investor.”
"The injection of funds will allow us to eliminate our outstanding bonds incurred in connection with our October 2019 acquisition of Func Food Group Oyj, which bonds are due in October 2020 and provide working capital enabling Celsius to maximize the significant growth opportunities in both domestic and global markets," president Fieldly said.
Celsius’ share price hit a recent high of $25.38 a share following the earnings announcement, but declined to $20.52 today following the private placement, which diluted shares somewhat.
