Keurig Dr Pepper full-year results ‘in line with targets’, says CEO

Keurig Dr Pepper (KDP) recorded a 76% increase in 2018 net sales to $7.44 billion, achieving results ‘in line with targets’, according to CEO Bob Gamgort.

The rise primarily reflected the impact of the merger between Keurig Green Mountain and Dr Pepper Snapple last year.

On an adjusted pro forma basis – which are non-GAAP financial measures and assume the merger occurred in December 2016 – the company’s net sales grew 2.3%.

Net income decreased approximately 31% to $0.59 billion in 2018, largely reflecting the unfavourable year-over-year impact of items affecting comparability, partially offset by the impact of the merger. Adjusted pro forma net income advanced 23% to $1.45 billion.

In the firm’s largest division, packaged beverages, sales growth was flat. However, the firm drew attention to the strong performance of brands such as Canada Dry, Dr Pepper and Big Red.

In the coffee systems unit, sales were marginally down, in part due to a decline in brewing devices. KDP said the dip is a result of an increase in brewer quality that has resulted in consumers keeping their brewers longer.

Commenting on the results, KDP CEO Bob Gamgort said: “We finished 2018 on a strong note, successfully managing through the merger integration and achieving full-year results in line with our 2018 targets. We also delivered strong in-market performance, growing market share in carbonated soft drinks, single-serve coffee and other key categories.

“Looking ahead, we are confident in our outlook for 2019 adjusted diluted EPS growth of 15% to 17%, which is in line with our long-term merger target, despite the operating environment becoming more challenging.”

After the merger closed in July last year, KDP secured a deal to acquire US-based premium water company Core Nutrition for $525 million.

The firm then announced a deal with Danone Waters of America to sell, distribute and merchandise Evian water in the US, as part of a long-term agreement designed to accelerate the brand’s growth. 

And last month, KDP said it will move its Texas headquarters from Pleno to a new 350,000-square-foot site at The Star in Frisco – home of the Dallas Cowboys American football team.

For 2019, the company expects to deliver net sales growth of approximately 2%.