Q3 2025 Keurig Dr Pepper Inc Earnings & Investor Update Call

Yeah.

Speaker #1: In fact , KDP will retain a controlling interest in the JV as well as operational control of the assets . And in establishing the JV , we will receive $4 billion in total proceeds at a cost of capital of just above seven in a 7.3 to 7.4 range .

Good morning, and welcome everyone.

We appreciate you taking the time to join US today, both in person in New York City and over the webcast.

Before walking through the agenda, let me first draw your attention to the slide in recognition of the forward looking statements we'll make today.

Please also keep in mind that we will be studying non-GAAP financial measures throughout our remarks and in the presentation that is posted on our website.

Speaker #1: An in addition projected in addition , KKR and Apollo have made a strategic investment into KDP and ultimately the Beverage Co , yielding $3 billion of incremental capital .

Now, let's discuss what to expect during our time together.

Our chairman Bob game Court will kick off the formal presentation with welcome remarks, followed by our CEO, Tim Cofer discussing our value creation framework and the strategic rationale for the J D Pizza acquisition and our planned separation.

Speaker #1: The second instrument is an attractively priced convertible security . It features a preferred dividend of 4.75% to be netted against any common dividends , and the excuse me and the conversion price is 37.25 .

Speaker #1: Good morning and welcome, everyone. We appreciate you taking the time to join us today, both in person in New York City and over the webcast.

Him and Olivier linear our newly appointed President of U S. Coffee will then walk through our future global coffee co business in more detail.

Speaker #1: That's a 6% premium to where KDP last traded prior to the announcement of the acquisition—an outcome that speaks to the upside potential we all see here.

Speaker #1: Before walking through the agenda, let me first draw your attention to the slide in recognition of the forward-looking statements we'll make today.

After a short break.

Eric Gourley, our president of U S refreshment beverages will discuss the future beverage cow S.

Speaker #1: I should mention that we plan to offer our shareholder partners an opportunity to participate in this financing to help with your modeling. You'll find a page in the appendix that outlines the accounting implications of each instrument.

Speaker #1: Please also keep in mind that we will be citing non-GAAP financial measures throughout our remarks and in the presentation that is posted on our website.

SVP of finance Jane Gelfand will provide an update on financials and capital structure and Roger Johnson, our chief transformation and supply chain officer will walk through our integration and separation plans.

Speaker #1: Now , let's discuss what to expect during our time together . Our chairman , Bob Gamgort , will kick off the formal presentation with welcome remarks , followed by our CEO , Tim Cooper , discussing our value creation framework and the strategic rationale for the Jdp to acquisition and our planned separation .

Speaker #1: And when you run your models, what you'll see is that we've been able to effectively drive, leverage, and lower while making a manageable trade-off.

Finally, Tim will provide an overview of Q3 earnings and share some final thoughts.

Speaker #1: In terms of accretion and cost of capital, based on your feedback, which informed our decisions over the last several weeks, we believe this is a more optimal balance to strike.

In total the prepared remarks portion of the day should take around two and a half hours.

We'll then break for 45 minutes to allow the in person attendees to explore our product showcase and then we'll return for Q&A panel.

Speaker #1: Tim and Olivier Lemiere, our newly appointed President of U.S. Coffee, will then walk through our future Global Coffee business in more detail.

We expect to conclude our event and the webcast at around one P M Eastern time.

Speaker #1: As Tim said, ensuring a solid balance sheet for each company is one of the critical milestones toward a successful separation, and we expect to be operationally ready to go by year-end 2026.

Speaker #1: After a short break , Eric Ghaly , our president of US Refreshing Beverages , will discuss the future Beverage Co SVP of finance , Jane Gelfand will provide an update on financials and capital structure .

We hope it will be a productive and insightful session for you.

Let me kick things off by walking, we our chairman Bob <unk> to the stage and he will introduce the rest of the board members joining us today everybody about.

Speaker #1: In the meantime , our job will be to focus on EBITDA growth and cash flow generation to facilitate that timeline . However , should we want to further accelerate the deleveraging path , there are other levers that we could employ to raise additional capital .

Speaker #1: And Roger Johnson , our chief transformation and supply chain officer , will walk through our integration and separation plans . Finally , Tim will provide an overview of Q3 earnings and share some final thoughts .

Good morning.

It's great to see everyone. Thanks for joining US here, we've got updates to provide on Katie P. In general on the transaction that we announced in August. We also have some great Q3 results to talk about so we don't want to forget those either.

Speaker #1: In total, the prepared remarks portion of the day should take around 2.5 hours. We'll then break for 45 minutes to allow the in-person attendees to explore our product showcase, and then we'll return for a Q&A panel.

Speaker #1: For instance , we might consider monetizing select non-core minority stakes and non-strategic brand assets , and we may also evaluate a partial IPO of Beverage Co to begin the separation process , which could raise additional primary proceeds to be clear , these are simply options for us to consider .

As Chief and mentioned, we've got a number of directors here today and what I'd like to do is just take a minute to introduce them. They are mostly or all located yet to our right over here.

Speaker #1: We expect to conclude our event and the webcast at around 1 p.m. Eastern Time. We hope it will be a productive and insightful session for you.

Pam has lee as our lead independent director she chairs our remuneration committee. She is our longest standing director having been at Dr. Pepper Snapple Ford prior to joining KCP kimco.

Speaker #1: Let me kick things off by welcoming our chairman , Bob Gamgort , to the stage , and he will introduce the rest of the board members joining us today .

Speaker #1: The only concrete commitment on this page and on this stage is to strong free cash flow generation to support our transformational vision of the future.

Tim Cofer, our CEO, you're going to hear a lot from him today.

Speaker #1: Over to you, Bob. Great. Thanks.

Juliet Hickman start over there Juliet serves on our audit committee and one of our very newest directors, Mike Van de Ven, who also serves on our audit committee and the directors are going to be available to interact with you during breaks in during the product demonstration. So please engage with them Pam and I agreed to come back on stage with the Madden.

Speaker #2: Good morning. It's great to see everyone. Thanks for joining us here. We've got updates to provide on KDP in general, on the transaction that we announced in August.

Speaker #1: And speaking of commitments, we recognize we have come to you with quite a bit of news today, and we're focused on supporting your full understanding.

Speaker #2: We also have some great Q3 results to talk about, so we don't want to forget those either. As Jason mentioned, we've got a number of directors here today.

Speaker #1: So, of all the messages I hope you'll take away from my presentation, it's the following: We will ensure an appropriate capital structure for KDP at transaction close, as well as for each individual company at separation and beyond.

Our team at the end of the day and answer questions as part of the formal Q&A session.

Speaker #2: And what I'd like to do is just take a minute to introduce them. They are mostly, or all, located off to our right over here.

So my purpose today is really to represent the perspective of the board.

Speaker #2: Pam Patsley is our lead independent director. She chairs our remuneration committee. She's our longest-standing director, having been on the Dr Pepper Snapple Board prior to joining KDP.

Speaker #1: Our focus is on strong cash flow to support deleveraging, as well as maintaining our competitive and attractive dividend. Through all of this, our unwavering goal is to set Beverage Co. and Global Coffee Co. up for financial success and operational success.

And I want to kick off today by offering five points that I think the board would like to emphasize at the start here and first of all Katy P has a long and consistent track record of delivering strong results since.

Speaker #2: Tim Cooper , our CEO , you're going to hear a lot from him today . Juliette Hickman is right over there . Juliette serves on our audit committee and one of our very newest directors , Mike van de Ven , who also serves on our audit committee .

Since formation, 6% revenue CAGR of 11% EPS CAGR and that places us in the top tier of CPG peers, but from a board perspective, our job is not to look backwards and congratulate ourselves on good results is really to position the company for future success and that's why we have.

Speaker #1: And as we do so, we will stay consistent and transparent in our financial communications to help build and maintain your confidence. With that, thank you very much.

Speaker #2: And the directors are going to be available to interact with you during breaks and during the product demonstrations. So please engage with them.

Speaker #1: And I'll pass it on to Roger Johnson.

Speaker #2: Pam and I are going to come back on stage with the management team at the end of the day and answer questions as part of the formal Q&A session.

Conviction in this acquisition and separation whats important is for you to have more detailed information more insight in our thought process and that's what we want to do today. So that you can come along with us on our journey on how we came to that conclusion and why we continue to have great confidence in.

Speaker #2: So my purpose today is , is really to represent the perspective of the board . And I want to kick off today by offering five points that I think the board would like to emphasize at the start .

Speaker #2: Hey , good morning .

Speaker #3: Can you hear me ? Good . Okay . My name is Roger Johnson , and I have the privilege of being the chief transformation officer and chief supply chain officer here at Keurig Doctor Pepper .

Speaker #2: Here . I mean , first of all , KDP has a long and consistent track record of delivering strong results since formation 6% revenue , kegger , 11% EPs , CAGR and that places us in the top tier of CPG peers .

Speaker #3: And in my capacity of chief transformation officer , I am responsible for the integration of JD into KDP . And then the subsequent separation into global coffee Company and beverage company .

The value creation potential of the transactions.

Having said that we heard your feedback we certainly noted the market reaction and then made it really clear to us that we needed the daylight today to better explain the strategy and the thought process behind it as I said, we also recognize we needed to change some of the execution of all elements of the transaction you saw the press release today.

Speaker #2: But from a board perspective, our job is not to look backwards and congratulate ourselves on good results. It's really to position the company for future success.

Speaker #3: So, I'd like to take a few minutes today to just walk through our approach in the execution of the transformation and maybe give you some more details of how we're approaching the work in front of us.

Those are good developments and we'll talk about more optionality going forward and we really think that we're on the right track and are being very responsive to your feedback.

Speaker #2: And that's why we have conviction in this acquisition and separation. What's important is for you to have more detailed information and more insight into our thought process, and that's what we want to do today so that you can come along with us on our journey, on how we came to that conclusion and why we continue to have great confidence in the value creation potential of the transactions.

Speaker #3: First off , we are genuinely excited about the opportunities ahead for both standalone companies . And as Bob and Tim mentioned earlier , we have strong support and oversight from our board of directors and the specially created Transaction Committee to guide this transformation .

So going from today to this future and state requires great execution.

In addition to talking about the end state we need to give you confidence in execution and we will do that today by showing you our integration plans, but I think more importantly, we're going to give you exposure to more people on our management team, who were actually responsible for that and for running the company and making sure that we continue to deliver great results like we just did in Q3.

Speaker #3: We've established an executive steering committee that meets weekly to provide critical oversight and timely strategic direction. We've also added rigor through a Transformation Management Office, or our TMO, which is focused on capturing synergies and driving growth opportunities to keep everyone focused.

Speaker #2: Having said that, we heard your feedback. We certainly noted the market reaction, and it became really clear to us that we needed a day like today to better explain the strategy and the thought process behind it.

So you'll meet them and they were gonna be flexible I mean, you've seen that we've been flexible since announcement, we're going to look for other opportunities to maximize value and we'll talk about some of the areas, where we're thinking about flexibility going forward throughout this presentation.

Speaker #2: As I said, we also recognize we needed to change some of the executional elements of the transaction. You saw the press release today.

Speaker #3: We've named a dedicated internal TMO team to lead these initiatives, allowing most of our teams to continue driving the base business momentum.

Speaker #2: Those are good developments, and we'll talk about more optionality going forward. We really think that we're on the right track and are being very responsive to your feedback.

So.

I think there are three points.

Speaker #3: This process is fostering strong communication between JD Peet's and KDP leadership, as well as our internal functional experts, to ensure success.

I would like to comment on before I turn it over Tim because I'm in a unique position to do this so first of all is the global coffee category.

Speaker #2: So going from today to this future end state requires great execution. In addition to talking about the end state, we need to give you confidence in execution.

So you'll find it interesting, but the left hand side. There is my trophy from 1985. This was an on campus competition sponsored by General Foods and it was called the Maxwell House brand management Challenge and it was about the coffee category.

Speaker #3: We've partnered with outside advisors who bring deep experience in integrations and complex transactions. They are long-standing relationships, both for us and JD.

Speaker #2: And we'll do that today by showing you our integration plans. But I think, more importantly, we're going to give you exposure to more people on our management team who are responsible for that and for running the company and making sure that we continue to deliver great results.

Speaker #3: Peet's, which means we can leverage their detailed knowledge of our collective businesses and their proven expertise from hundreds of similar processes across industries worldwide.

And my team want it which is why we have the trophy <unk>.

Speaker #2: Like we just did in Q3. So you'll meet them, and then we're going to be flexible. I mean, you've seen that.

Sparked my career in CPG. It also was how I enter general foods and it also started a 40 year relationship with the coffee category. So I've seen it over an extended period of time.

Speaker #2: We've been flexible since the announcement. We're going to look for other opportunities to maximize value. And we'll talk about some of the areas where we're thinking about flexibility going forward throughout this presentation.

Speaker #3: May add some more context on the scope of our transformation Management office . We've fully stood up critical work streams focused on objectives of integration , planning , future company designs , separation , synergy , value capture and spin readiness for both global coffee company and beverage company .

So there's no question in the post Covid period, we saw a slowdown in the global coffee category.

Speaker #2: So, I think there are three points that I would like to comment on before I turn it over to Tim, because I'm in a unique position to do this.

We also are beginning to see signs of recovery and what typically happens is a three year window starts to become reality.

Speaker #2: So first of all, this is the global coffee category. So you'll find it interesting. But on the left-hand side, there is my trophy from 1985.

We never thought that this was anything more than temporary or cyclical it's not structural.

Speaker #3: These efforts have been mobilized in collaborative but discrete work streams. We've organized these objectives into three primary focus areas for execution. First and foremost, change management.

And if you look at the category over 40 years, you will see periods of time, where the category slowed down only to accelerate rapidly afterwards, and that's exactly where we think we are right where now we're in the beginning of a recovery period.

Speaker #2: This was an on campus competition sponsored by General Foods , and it was called the Maxwell House Brand Management Challenge . And it was about the coffee category .

Speaker #2: And my team won it , which is why we have the trophy . It sparked my career in CPG . It also is how I entered General Foods , and it also started a 40 year relationship with the coffee category .

Speaker #3: We're engaging the hearts and minds of our organizations, showcasing future opportunities and creating that winning culture. As we move towards standalone success.

Over that 40 year period.

The volume growth of coffee is a 2% CAGR and we know that in CPG volume growth real growth is scarce and important but it's undeniable. When you look at a 40 year trend on coffee the trajectory continues to be going in the right direction actually Tim has a chart that will show you that very.

Speaker #2: So I've seen it over an extended period of time. There’s no question that in the post-COVID period, we saw a slowdown in the global coffee category.

Speaker #3: In commercial and supply chain , we're leveraging this unique moment to optimize and unlock growth in the potential across marketing , selling organizations and key go to market opportunities .

Speaker #2: We also are beginning to see signs of recovery, and what typically happens is a three-year window starts to become reality. We never thought that this was anything more than temporary or cyclical.

Very clearly.

So think about this if you believe it's cyclical and we're in the beginning of a recovery we have a strong business in Katy P coffee anchored by keurig.

Speaker #3: And then finally , for enterprise functions , we are focused on building fit for purpose teams calibrated to each company's unique needs and scale , ensuring both organizations have the strength and agility to succeed .

Speaker #2: It's not structural. And if you look at the category over 40 years, you will see periods of time where the categories slow down, only to accelerate rapidly afterwards.

We really believed to succeed going forward in coffee you gotta be global will talk a bit about that so if you wanted to form a global coffee powerhouse.

Speaker #3: As we fully mobilize the TMO . I've seen fantastic collaboration across our teams in these early days . It's really inspiring to watch our leaders really lean in to the road ahead together .

Speaker #2: And that's exactly where we think we are right now . We're in the beginning of a recovery period over that 40 year period , the volume growth of coffee is a 2% kegger , and we know that in CPG volume growth , real growth is scarce .

The best partner as J D. Pete this is a scarce and valuable asset.

Our high quality.

Honestly there is no alternative other than matching these two businesses together and when you see the fit it is striking how much each business complement each other and we're confident that together, we will form a formidable global coffee competitor.

Speaker #3: We've shifted into the next gear and are planning against key milestones. First of all, I'd say we're focused on integration planning, following the acquisition close with detailed action plans to capture synergies.

Speaker #2: It's an important point. However, it's undeniable that when you look at a 40-year trend on coffee, the trajectory continues to be going in the right direction.

Speaker #3: And we're also accelerating readiness work, developing future company operating models for both the global coffee company and the beverage company, and getting into the functional-specific preparation required for success.

Speaker #2: Actually , Tim has a chart that will show you that very , very clearly . So let's think about this . If you believe it's cyclical , we're in a beginning of a recovery .

So it gets to another question that came up from time to time in the past couple of weeks, which is.

What happened to the investment thesis how has it changed so I'll start with a real obvious comment which is since we put the companies together seven years ago, a lot has changed in the world competitors consumers.

Speaker #2: We have a strong business in KDP coffee, anchored by Keurig. We really believe that to succeed going forward in coffee, you’ve got to be global.

Speaker #3: Secondly , we're deep into separation planning to ensure clean , operational readiness for two world class public companies . Our goal is to be ready to separate by year end 2026 .

Speaker #2: We'll talk a bit about that. So, if you want to form a global coffee powerhouse, the best partner is JD Peet's.

Our customers in the way they think about it.

Certainly the macro environment is different so I think it's net of natural and necessary to evolve our strategy as well in 2018 the play was.

Speaker #2: This is a scarce and valuable asset. It's of high quality, and honestly, there is no alternative other than matching these two businesses together.

Speaker #3: And that means everything within our control will be stood up and ready by then . As Tim mentioned earlier , the actual timing will depend on achievement of multiple milestones , including our own , but our commitment is clear , secure operational readiness .

Really.

Good insight at that point in time, we took two subscale beverage companies, who are solely focused on North America, we brought them together to create a beverage challenger of scale.

Speaker #2: And when you see the fit, it is striking how much each business complements each other. And we're confident that together we will form a formidable global coffee competitor.

Speaker #3: As early and as robustly as possible, while actively capturing cost synergies. Our goal is clear: to build a global coffee powerhouse and the most agile North American beverage leader.

Speaker #2: So that gets to another question that came up from time to time in the past couple of weeks, which is, you know, what happened to the investment thesis?

And it was wildly successful if you take a look at what's happened over the past seven years I gave you the aggregate financial performance, but beyond that the strength of each individual company enhanced significantly over that time.

Speaker #2: How has it changed ? So I'll start with a real obvious comment , which is since we put the companies together seven years ago , a lot has changed in the world .

So if we're going to put together these two companies to form a global coffee competitor and we will talk about why global's important later, we could run them together. It is an option to run them as one company, but we think it is optimal to separate them. One company focus on a global opportunity, which is a very different management mindset.

Speaker #3: This transformation approach will make that vision a reality. To make sure both standalone organizations reach their full potential, we've placed a heavy focus on communications and change management.

Speaker #2: Competitors, consumers, and customers are all part of the ecosystem. The way they think about it—and certainly the macro environment—is different. So, I think it's natural and necessary to evolve our strategy as well.

Speaker #2: In 2018, the play was a really good insight. At that point in time, we took two subscale beverage companies that were solely focused on North America.

Speaker #3: Recently, we had the chance to spend meaningful time with the JD Pete's team on International Coffee Day. Very fitting, and it was a fantastic event in Amsterdam where we shared our vision, answered questions, and amplified the excitement across both teams.

Obviously on one category of coffee across the entire world of all forms and the other to continue to run this very valuable North American refreshment beverage growth machine that has significant runway still in front of it. It also gives investors a choice in two different styles of running these companies.

Speaker #2: We brought them together to create a beverage . Challenger of scale , and it was wildly successful . If you take a look at what's happened over the past seven years , I gave you the aggregate financial performance .

Speaker #3: The shared love of coffee brought the teams together and really gave everyone, including myself, a glimpse of what a true coffee powerhouse could feel like.

Speaker #2: But beyond that , the strength of each individual company enhanced significantly over that time . So if we're going to put together these two companies to form a global coffee competitor , and we'll talk about why global is important later , we could run them together .

More to come on that but it really shows that there was this natural evolution that started in 2018 and is our choice to run them separately.

Speaker #3: At the same time , we launched a line communications approaches , high frequency town halls , feedback loops , multi-channel digital outreach . Both internally and externally .

Youre going to hear from a number of speakers and I think the third area, where I can offer unique perspective as my confidence in the management team Tim.

Speaker #3: And this really ensures we're reaching every employee and engaging top leadership, including our Director and above populations. For many, this is the first time in their careers they've experienced a transformation of this scale, and enrolling them in the journey is an exciting opportunity to reinforce collaboration.

Speaker #2: It is an option to run them as one company, but we think it is optimal to separate them. One company focused on a global opportunity, which is a very different management mindset.

Tim who you're going to hear from right. After me will run the combined businesses and then upon separation he will be the CEO of our Standalone beverage company.

Speaker #2: Obviously, on one category, coffee across the entire world of all forms, and the other to continue to run this very valuable North American refreshment beverage growth machine that has significant runway still in front of it.

Olivier Eric and Roger I have worked with since the take private of Keurig in 2016 my.

My experience with Jane goes back further than that Jane was at Barclays. In 2012, and she was part of the team that supported the IPO of Pinnacle Foods, where I was CEO and the reason I give you that time period of my experience is I have seen this team deliver across a wide variety of challenging situations time and time again.

Speaker #3: We've shared clear guiding principles and leadership commitments on how we will work together for the outstanding outcomes we expect. We believe a consistent drumbeat of communication is critical to a seamless integration and eventual separation.

Speaker #2: It also gives investors a choice in two different styles of running . These companies . More to come on that , but it really shows that there was this natural evolution that started in 2018 and is our choice to run them separately .

Speaker #3: Without missing a beat . So far , employee feedback has been very positive , especially around leadership , transparency , communication , depth , and the opportunities ahead of us .

At the highest level of confidence in their ability to execute and that gives me confidence that we can get from where we are today to an outstanding end game. When we separate these companies so with that let me turn it over to Tim Cofer, our CEO he'll take you through a significant amount of content along with all of these other presenters and as I said upfront.

Speaker #2: You're going to hear from a number of speakers, and I think the third area where I can offer unique perspective is my confidence in the management team.

Speaker #3: And I can tell you firsthand from Amsterdam, Frisco, Burlington, all over, our colleagues are energized about the future potential of these two great companies.

Speaker #2: Tim , who you're going to hear from right after me , will run the combined businesses . And then upon separation , he will be the CEO of our standalone beverage company , Olivier , Eric and Roger .

I look forward to being back up here at the end with Pan will be happy to answer your questions at that time, so Tim over to you.

Speaker #2: I have worked with Jane since the take-private of Keurig in 2016. My experience with Jane goes back further than that. Jane was at Barclays in 2012, and she was part of the team that supported the IPO of Pinnacle Foods, where I was CEO.

Speaker #3: As mentioned earlier, our coffee company's Value Capture plan, about $400 million, is well underway with opportunities across procurement, manufacturing, and SG&A.

Got it.

Okay.

Speaker #3: And it . This target has been validated through both top down and detailed bottoms up planning . And we see it as highly actionable as Tim highlighted , these efficiencies are balanced across the three major buckets of procurement , manufacturing and logistics SG&A and IT .

Alright, good morning, everyone great to see all of you again, I I hope you've had a chance already to enjoy some of the amazing beverages that we have across these stations for those of you that are here live with us at NASDAQ I can imagine the coffee stations were hit pretty hard at being a Monday morning at all.

Speaker #2: And the reason I give you that time period of my experience is that I have seen this team deliver across a wide variety of challenging situations, time and time again.

Speaker #2: I have the highest level of confidence in their ability to execute, and that gives me confidence that we can get from where we are today to an outstanding end game.

Speaker #3: And ahead of close , we've established clean teams to ensure that work can happen outside the day to day business . So we can move quickly once the acquisition closes .

So building on Bob's comments.

Speaker #2: When we separate these companies . So with that , let me turn it over to Tim Coffer , our CEO . He'll take you through a significant amount of content along with all of these other presenters .

We have strong conviction.

In the strategic and financial merits.

This acquisition of J D Pete and the subsequent separation into these two pure play companies.

Speaker #2: And as I said up front, I look forward to being back up here at the end with Pam, and we'll be happy to answer your questions.

Speaker #3: Immediately after close , we'll activate each functional focus area to deliver on our three year synergy capture plan . And we're confident these cost synergies , combined with future growth opportunities , will set global coffee Company up for long term success .

Speaker #2: At that time . So , Tim , over to you . All right . Good morning , everyone . Great to see all of you again .

We are creating north Americas, most agile beverage challenger and a true global coffee powerhouse.

At the same time as Bob said I have spent the last two months.

Speaker #3: And it's our job to do the same for the beverage company, minimizing dis-synergies before and after separation. We expect that impact to be approximately $75 million, and we largely plan to offset it.

Speaker #2: I , I hope you've had a chance already to enjoy some of the amazing beverages that we have across these stations . For those of you that are here , live with us at Nasdaq .

Absorbing shareholder feedback.

And of course, the initial market reaction post the announcement and I recognize that there are a few areas of concern.

Speaker #2: I can imagine the coffee stations were.

Speaker #3: That means we’ve got to redesign organizations and spend structures with agility in mind, keeping any leakage manageable within the beverage company's overall P&L.

Speaker #3: Hit pretty hard . It being a Monday morning and all . So building on Bob's comments , we have strong conviction in the strategic and financial merits of this acquisition of JD Peet's and the subsequent separation into these two pure play companies .

As well as some open questions there.

That would benefit from more explanation that is why we're here today.

So in my discussions.

Speaker #3: I hope you can see and feel my excitement and confidence in our ability to land the right structure, build two successful companies, and create value for everyone throughout this transformation.

With each of you I think the questions have largely spanned these four areas.

Why is JD E peds the.

Speaker #3: We are creating North America's most agile beverage challenger and a true global coffee powerhouse . At the same time , as Bob said , I have spent the last two months absorbing shareholder feedback and of course , the initial market reaction post the announcement .

<unk> acquisition.

What does this separation into beverage Coe and global coffee cold uniquely enable.

Speaker #3: So, thank you for your time and engagement. I'm going to turn it over back to Tim to give a Q3 earnings update.

How will we optimize Katy piece capital structure post the acquisition and establish appropriate balance sheets for each of these separate entities and how well we insure that Kt P delivers with success throughout this process over the next couple of hours, we will answer.

Speaker #3: Thank you .

Speaker #2: All right. We are.

Speaker #3: Coming down the home stretch . Thank you . Roger . Look , one of the main objectives obviously in establishing that TMO is not only to do the hard work around separation integration and separation , but importantly to minimize the disruption of that activity so that our core teams can focus and deliver on the base business .

Speaker #3: And I recognize that there are a few areas of concern as well as some open questions that would benefit from more explanation. That is why we're here today.

These questions and more.

Now before diving into these topics, let's re ground you in our business and our strategy, we operate with a sole focus on beverages.

Speaker #3: So in my discussions with each of you, I think the questions have largely spanned these four areas: Why is JD Peet's the right acquisition?

Speaker #3: Quarter after quarter, I think our Q3 results that you've probably already seen in the press release are a testament to this approach.

I truly believe this is the best sector and CPG, it's large.

Speaker #3: What does the separation into Beverage Co and Global Coffee Co uniquely enable? How will we optimize CDP's capital structure post-acquisition and establish appropriate balance sheets for each of these separate entities?

It generates one trillion dollars at a global level.

Speaker #3: We continue to operate with focus and discipline. We delivered another strong quarter here in Q3, even with that tough macro backdrop.

It's growing we expect a mid single digit CAGR in the coming years supported by structural tailwind to sustain that momentum, it's dynamic with the ever evolving consumer preferences that create endless opportunities to drive consistent growth through innovation.

Speaker #3: So let me share some highlights on the quarter . Net sales accelerated in Q3 . They accelerated sequentially . They increased at a double digit rate with strengthening performance across all three of our reported segments .

Speaker #3: And how will we ensure that KDP delivers with success throughout this process? Over the next couple of hours, we will answer these questions and more.

And through mix management through premium amortization.

Speaker #3: We gained market share in key categories like CSDs and energy. We successfully implemented another round of pricing on our coffee business and an international.

It's financially attractive strong profitability.

Speaker #3: Now, before diving into these topics, let's reground you in our business and our strategy. We operate with a sole focus on beverages.

Compelling industry return profiles.

So we understand this beverage industry very well.

Speaker #3: We drove healthy relative trends amid challenging macro conditions. As I've heard throughout the morning, we are advancing a lot of exciting initiatives right now at KDP across both refreshment beverage and coffee.

Speaker #3: I truly believe this is the best sector in CPG. It's large, it generates $1 trillion at a global level. It's growing.

And we have a proven and successful value creation strategy at the core of this as you see on this slide our five pillars. They serve as our blueprint for how we drive sustainable consistent compelling performance overtime. The first three of those are commercial priorities broadly geared around the top line.

Speaker #3: We expect a mid-single digit kegger in the coming years , supported by structural tailwinds to sustain that momentum . It's dynamic with ever evolving consumer preferences that create endless opportunities to drive consistent growth through innovation , through mixed management , through premiumization .

Speaker #3: And these are as evidenced in the results really contributing to this near-term performance . And I think continued momentum . Having said that , as expected , inflationary pressures ramped during Q3 and even despite this , we delivered solid bottom line growth and generated meaningful cash flow in the third quarter .

<unk>.

The two enterprise enablers support that growth.

In a profitable efficient and high return way, let me touch very briefly on each one championing consumer obsessed brand building.

This means being consumer led consumer centric as we nurture and expand our iconic brands.

Speaker #3: It's financially attractive, with strong profitability and compelling industry return profiles. We understand this beverage industry very well, and we have a proven and successful value creation strategy at the core of this.

Speaker #3: So, with one quarter remaining in the year, as you've heard, we are raising our constant currency net sales outlook and reaffirming our EPS growth guidance.

Shaping our now and next beverage portfolio to access growth accretive white spaces.

Via our flexible build buy or partner model.

Speaker #3: We're confident that our robust commercial plans are innovation plans. Our operating rigor will help us achieve these updated targets and finish 2025 on a strong note.

Speaker #3: As you see on this slide, there are five pillars. They serve as our blueprint for how we drive sustainable, consistent, compelling performance over time.

Amplifying our route to market advantage strengthening our multi channel leadership with differentiated distribution capabilities.

Speaker #3: The first three of those are commercial priorities . Broadly geared around the top line . The two enterprise enablers support that growth in a profitable , efficient and high return way .

Generating fuel for growth.

Speaker #3: So, let's move to the consolidated results. You see it on the slide, and sales specifically grew 10.6%, led by about a 6.5% increase in volume mix, with strong results in U.S. Refreshment Beverages and international.

By reinforcing a continuous productivity mindset and a lean overhead operating model and of course dynamically allocating capital to support that long term value creation.

Speaker #3: Let me touch very briefly on each one , championing consumer obsessed , brand building . This means being consumer led , consumer centric as we nurture and expand our iconic brands , shaping our now and next beverage portfolio to access growth accretive white spaces via our flexible build , buy or partner model .

How are we applied that to our businesses, let's start with refreshment beverage.

Speaker #3: The ghost integration continues to perform very well. It's meeting all of our key metrics that we set out and delivering on year one of our investment thesis.

Our results speak for themselves.

Our flagship Dr. Pepper, we've turned this into the CSD categories innovation and marketing leader, we've driven nearly a decade of consistent market share gains and we've established ourselves as the number two market share position in the category.

Speaker #3: It's contributed 4.4 points to the top line net price increased 4.2% , primarily . That's reflecting the pricing actions we took on our coffee business in response to obviously see price inflation on the bottom line , operating income increased roughly 4% .

Speaker #3: A amplifying our route to market advantage , strengthening our multi-channel leadership with differentiated distribution capabilities , generating fuel for growth by reinforcing a continuous productivity mindset and a lean overhead operating model , and of course , dynamically allocating capital to support that long term value creation .

We thoughtfully built out meaningful incremental growth platforms in white spaces that we previously didn't compete in like energy and sports hydration.

Speaker #3: Net sales growth , productivity savings were partially offset by that inflationary pressure . I referenced all in EPs grew 6% to $0.54 , and that included a modest below the line benefit from a minority partnership gain .

And we've strengthened our competitively advantaged route to market DSD network through capital efficient territory expansions through brand partnerships and capability investments. The result of the efforts you see at the bottom of the page a high single digit.

Speaker #3: How have we applied that to our businesses ? Let's start with refreshment beverage . Our results speak for themselves . Our flagship doctor , Pepper .

Speaker #3: We've turned this into the CSD categories innovation and marketing leader. We've driven nearly a decade of consistent market share gains, and we've established ourselves as the number two market share position in the category.

Speaker #3: Okay , let's do a quick tour of the three reported segments , starting with refreshment , beverage . We maintained a what I characterize as exceptional momentum on this business with net sales growing 14.5% , driven by volume mix increase of over 11% , net price was also a driver , it added about three points to net sales .

Net sales CAGR since 2018, and we're just getting started with business momentum that should support continue sustained growth into the future.

What about in coffee look we know the operating backdrop in.

Speaker #3: We've thoughtfully built out meaningful, incremental growth platforms in white spaces that we previously didn't compete in, like energy and sports hydration.

In U S coffee has been more dynamic over the last few years, particularly in that post COVID-19 world and the multiple commodity cycles like the one we're in now and yet we've made important strides.

Speaker #3: Ghost clearly was a strong contributor to our growth, but also our base business. In fact, our base business accelerated in Q3, increasing in the high single digits, led by CSDs, Energy, and Sports Hydration.

Speaker #3: And we've strengthened our competitively advantaged route to market DSD network through capital efficient territory expansions , through brand partnerships and capability investments . The result of the efforts you see at the bottom of the page , a high single digit net sales kegger since 2018 .

We've reinforced <unk> position as the number one north American single serve system across both Brewers and pods, we've extended our portfolio into <unk>.

Speaker #3: Overall, the segment results in Refbot were prepared by that growth playbook that Eric took you through. Just a few minutes ago, brand building, innovation, and commercial execution.

Exciting growth areas like cold and Super premium we've continued to expand the number of households that brew curing every morning, now at 47 million strong and growing and we are preparing to catalyze the next chapter of our growth agenda.

Speaker #3: And we're just getting started with business momentum . That should support continue sustained growth into the future . What about in coffee ? Look , we know the operating backdrop in US coffee has been more dynamic over the last few years , particularly in that post-Covid world .

Speaker #3: Each contributing to the strong performance you see. We see significant runway for future growth in ref Bev, and we have strong plans in place going into '26 to ensure we deliver on that momentum.

With disruptive innovation.

We've invested in unique assets that drive competitive advantage, including our differentiated and highly profitable direct to consumer E. Commerce capabilities. All of these initiatives have supported a steady low single digit sales CAGR in recent years consistent.

Speaker #3: What about segment operating income ? You see it grew 10% with net sales gains and ongoing productivity savings . More than offsetting the impacts of inflation , as well as lapping earned equity gains that were larger in the prior year .

Speaker #3: And the multiple commodity cycles, like the one we're in now. And yet, we've made important strides. We've reinforced Keurig's position as the number one North American single-serve system across both brewers and pods.

Speaker #3: Let's shift to the US coffee segment. We continued our recovery trend and drove modest growth in both the top and bottom lines. Net sales increased by 1.5%.

Speaker #3: We've extended our portfolio into exciting growth areas like cold and super premium. We've continued to expand the number of households that brew Keurig every morning.

With our go forward expectations.

So through these commercial achievements as well as robust productivity and thoughtful cash deployment, we've delivered strong results at an enterprise level.

Speaker #3: Net price realization was 5.5%. As we implemented additional pricing actions on our Pods business and our Brewers business in response to inflation.

Speaker #3: Now at 47 million strong and growing, we are preparing to catalyze the next chapter of our growth agenda with disruptive innovation.

Since Kt piece formation in 2018 as you see on this slide we've grown net sales had a 6% CAGR.

We've grown adjusted EPS at an 11% CAGR while.

Speaker #3: This was partially offset by a volume mix decline of about four points . Primarily driven by lower Brewer shipments . And I will tell you , during the quarter , retailers are continuing to manage Brewer inventory very tightly .

Speaker #3: We've invested in unique assets that drive competitive advantage , including our differentiated and highly profitable direct to consumer e-commerce capabilities . All of these initiatives have supported a steady , low , single digit sales kegger in recent years , consistent with our go forward expectations .

While also returning meaningful cash to our shareholders.

Now at the same time.

Both our businesses and the external environment have changed and significant ways since 2018.

Speaker #3: And there's been some adjustment to the recent price increases by consumers. Pod shipments also declined, but more modestly. The elasticities are remaining quite manageable.

Just as Bob discussed earlier.

Original merger thesis.

Speaker #3: So, through these commercial achievements, as well as robust productivity and thoughtful cash deployment, we've delivered strong results at an enterprise level since CDP's formation in 2018.

It was really predicated on combining what at the time was to subscale businesses.

Speaker #3: And within our overall expectation. Overall, the coffee category remains resilient in our view, relative to this significant increase in input costs.

Okay.

We did that to create a north American beverage challenger.

Speaker #3: As you see on this slide, we've grown net sales at a 6% CAGR. We've grown adjusted EPS at an 11% CAGR, while also returning meaningful cash to our shareholders.

Speaker #3: And we're also seeing improvements in our own business. Admittedly, the commodity backdrop is difficult, and price overall is driving our top line.

What's happened in the last seven years.

Our refreshment beverage business is no longer sub scale. In fact, it is the same size today as total Katy P and merger.

Speaker #3: Olivier told you earlier that we're actively advancing robust innovation plans. He covered many of them, including marketing plans and driving more brewer sales.

Our actions to evolve our rest of the portfolio to strengthen our route to market have also structurally raised the organic profile of this business relative to 2018.

Speaker #3: Now , at the same time , both our businesses and the external environment have changed in significant ways since 2018 . Just as Bob discussed earlier , the original merger thesis was really predicated on combining what at the time was to subscale businesses .

Speaker #3: Some exciting news going into 26 with Keurig Coffee Collective and beyond . And overall , we would say , while pod shipments declined , we feel good about what we're seeing from an elasticity standpoint .

And in coffee, while we've made progress we acknowledge that the category growth trend has fallen short of our expectations in recent years.

Speaker #3: Let's talk about segment operating income . It grew about 2.5% with pricing and cost savings more than offsetting inflationary pressures . We're improved by we're sorry , we're encouraged by the improved trajectory on the bottom line .

And while we're the clear leader in North American single serve.

Speaker #3: We did that to create a North American beverage challenger. What's happened in the last seven years is that the refreshment beverage business is no longer subscale.

That business is arguably subscale in particular relative to our global competitors that can leverage broader advantages in technology, and sourcing and who can participate across the entire global coffee category.

Speaker #3: In fact , it is the same size today as total KDP at merger . Our actions to evolve our portfolio to strengthen a route to market have also structurally raised the organic profile of this business relative to 2018 and in coffee , while we've made progress , we acknowledged that the category growth trend has fallen short of our expectations in recent years .

Speaker #3: But we do expect impact from green coffee inflation and tariffs to build into the fourth quarter. All right. Now, international net sales grew 10% in constant currency.

So.

As a board and a management team.

Speaker #3: That's a 6% increase in net price , a 4% increase in volume mix results reflected strong relative performance in Mexico . Despite what you know are widely reported , macro challenges , as well as the pricing led growth in our Canadian coffee business , international operating income declined about 4% , primarily reflecting the impact of inflationary pressures as well as a tough year ago comparison .

We observe these changes since 2018.

We discuss these and we reached a couple of conclusions.

First our refreshment beverage business has both the scale and the advantage positioning to succeed as Bob said, either as a combined company.

Speaker #3: And while we're the clear leader in North American single serve, that business is arguably subscale, in particular relative to our global competitors that can leverage broader advantages in technology and sourcing, and who can participate across the entire global coffee category.

Or a stand alone.

And second.

While our coffee business has clear strengths.

It is not yet optimized to reach its full potential and current form and we decided.

Speaker #3: This was partially offset by the strong top line growth that I referenced in productivity savings . Overall , on international . I would tell you , we continue to see significant potential potential for this segment to have outsized top and bottom line contribution over time .

As a board that it needed further assessment and it could benefit from potential enhancement.

Speaker #3: So, as a board and a management team, we observe these changes. Since 2018, we have discussed these and we reached a couple of conclusions.

So the first step in that assessment.

Was to step back and take a fresh look at the coffee category.

Speaker #3: These Q3 results also underscored the cache generative nature of our business . Free cash flow was more than $500 million in the quarter , bringing that year to date total to 955 million .

You've heard Bob story 40 years ago. The Maxwell House Award I've also spent a lot of my career in coffee in a past life different employer.

Speaker #3: First, our refreshment beverage business has both the scale and the advantage positioning to succeed. As Bob said, either as a combined company or a standalone.

We're long term believers.

In the attractiveness of the global coffee category.

Speaker #3: But importantly , and you see it in this box , this year to date , figure includes the unfavorable one time impact of the $225 million ghost distribution payment that we made in Q1 .

Speaker #3: And second, while our coffee business has clear strengths, it is not yet optimized to reach its full potential in its current form. We decided, as a board, that it needed further assessment and that it could benefit from potential enhancement.

We believe in the structural tailwind supporting future growth, but we did the analysis once again to underwrite our confidence.

Let's start with the consumer lens.

Speaker #3: As we acquired this business and and took over distribution , obviously , excluding the impact of this one timer , we would have generated more than $1.1 billion in free cash flow on a year to date basis , representing obviously , a sizable step up from last year .

Coffee remains a preferred way to address the universal human need for energy and it's ever more important these days.

Speaker #3: So the first step in that assessment was to step back and take a fresh look at the coffee category. You've heard Bob's story 40 years ago.

Coffee is a highly emotional category.

It evokes passion.

Speaker #3: Looking ahead , you've heard us say it , and Jane mentioned it . We expect strong cash generation both in Q4 . Obviously in a full year basis .

It's artisanal.

Speaker #3: The Maxwell House Award. I've also spent a lot of my career in coffee in a past life with a different employer. We're long-term believers in the attractiveness of the global coffee category.

Kraft specialization plays a key role in premium rising the category, which is a clear growth tailwind.

Speaker #3: And the years to come, which will help support those deleveraging goals that Jane shared with you earlier. All right, let's move to guidance.

Coffee is habitual.

Coffee has on matched global frequency of consumption.

Speaker #3: We believe in the structural tailwinds supporting future growth, but we did the analysis once again to underwrite our confidence. Let's start with the consumer lens.

And coffee is healthy.

Speaker #3: Three quarters of the year are behind us. We are raising our constant currency net sales outlook to high single digits from mid-single digits.

Even as defined by regulators both in this country and globally simply put coffee is the number one beverage.

American consumers cannot live without and I'm, certainly I'm, certainly one of them and.

Speaker #3: Previously . We're also reaffirming and remain on track to deliver HSD EPs growth guidance . We recognize that the environment remains dynamic , especially when you think about tariffs .

Speaker #3: Coffee remains a preferred way to address the universal human need for energy, and it's ever more important these days. Coffee is a highly emotional category.

And and enjoys had similar status in so many markets around the world now to see the evidence of this categories essential nature.

Speaker #3: It evokes passion. Its artisanal craft specialization plays a key role in the premiumization of the category, which is a clear growth tailwind. Coffee is habitual.

Look at the long term trend on the chart Bob mentioned this in his opening remarks.

Speaker #3: The building inflationary impacts. But we've got the innovation, we've got the commercial plans, we've got execution in a great place, as well as disciplined expense management, and all of that.

What youll see over 40 years is a low single digit global volume growth and in dollar terms.

Speaker #3: Coffee has unmatched global frequency of consumption, and coffee is healthy, even as defined by regulators, both in this country and globally.

Recent growth trends are even faster.

Speaker #3: For us, this means we can continue to deliver on our guidance and for our shareholders. All right, let's wrap this up and then we'll go to a break before Q&A.

Thanks to premium as Asian and innovation.

Importantly, the structural factors supporting consumption growth remain as powerful as ever and I would highlight that increased adoption, especially in emerging markets.

Speaker #3: Simply put , coffee is the number one beverage American consumers cannot live without , and I'm certainly I am certainly one of them .

Speaker #3: So, we've reviewed the strong Q3 results. I want to now come back to the four questions I put up right when I took the stage this morning.

As younger generations embraced coffee culture and begin to shift versus historic T culture is yet another growth tailwind long term.

Speaker #3: And it enjoys that similar status in so many markets around the world. Now, to see the evidence of this category's essential nature, look at the long-term trend on the chart.

Speaker #3: And I think over the last couple of hours, I hope you'd agree, we provided meaningful updates and further details on our transformative value creation plans.

Now as with many categories coffee goes through cycles.

Speaker #3: Bob mentioned this in his opening remarks . What you'll see over 40 years is a low single digit global volume growth , and in dollar terms , recent growth trends are even faster thanks to Premiumization and innovation .

Including most recently this post Covid law that we've experienced but as Bob said and as this chart I think pays off nicely.

Speaker #3: Let's go back to these four questions . First , why the acquisition ? Because after careful consideration , we concluded that the acquisition of JD Peet's is a unique opportunity to strengthen our coffee business by adding substantial complementary global scale .

Historic pattern is that these laws are temporary and the category recovers to its long term growth trajectory.

Speaker #3: Importantly , the structural factors supporting consumption growth remain as powerful as ever , and I would highlight that increased adoption , especially in emerging markets as younger generations embrace coffee culture and begin to shift versus historic tea culture , is yet another growth tailwind .

We're seeing signs of this.

Right now in the United States. This post Covid recovery is underway.

Speaker #3: This combination will catalyze meaningful revenue opportunities , cost synergies , and in turn , drive strong financial delivery and sustainable competitive advantage . Second question why separate it all ?

<unk> volume trends bottomed out in 2020 two.

They have been stabilizing ever since.

And encouragingly this dynamic.

Speaker #3: Long term . Now , as with many categories , coffee goes through cycles , including most recently , this post Covid lull that we've experienced .

Also holds true this year year to date 2025.

Even as this high inflation has fueled significant price increases.

Speaker #3: You have the option to run it as a combined company because we believe in the power of focus. We believe in strong and distinct cultural identities.

You see here that the elasticities on an absolute basis compare favorably to the historic trend.

Speaker #3: But as Bob said , and as this chart , I think pays off nicely , the historic pattern is that these lows are temporary and the category recovers to its long term growth trajectory .

Speaker #3: At Global Coffee Co and Beverage Co, we can create even greater alignment and more purposeful action. And we believe that strategic optionality should be more available and accessible to each business.

So that was our assessment our step back assessment on the coffee category.

With renewed.

Speaker #3: We're seeing signs of this right now in the United States. This post-COVID recovery is underway. Category volume trends bottomed out in 2022.

Confidence in the attractiveness of that global coffee category. Our challenge was then to determine how do we optimize our coffee business. Our goal here was to create an even stronger business.

Speaker #3: As a standalone . Third question how do we tailor our capital structures to enable these outcomes ? By making revisions . We've solved for a more comfortable leverage at acquisition close with a different and attractive financing mix , and we've enhanced visibility to two properly calibrated balance sheets for each of these independent companies .

Speaker #3: They've been stabilizing ever since . And encouragingly , this dynamic also holds true this year . Year to date , 2025 . Even as this high inflation has fueled significant price increases .

With higher growth prospects.

Greater resilience.

And improved operational efficiencies.

And look we considered all options.

All options were on the table.

Speaker #3: You see here that the elasticities on an absolute basis compare favorably to the historic trend . So that was our assessment , our step back assessment on the coffee category with renewed confidence in the attractiveness of that global coffee category , are challenge was then to determine how do we optimize our coffee business .

Sell the business.

Spin it off as a standalone.

Continue to operate it as part of Kt.

But ultimately after thorough diligence our management team and our board of directors determined that the acquisition of J D. E. Pete's represented the most attractive and actionable path for maximizing the value of our coffee business.

Speaker #3: And finally, how do we ensure success? By focusing on milestones rather than dates, by putting the right processes in place to achieve those milestones, and by appointing the right leaders with the right experience to drive towards those goals.

Speaker #3: Our goal here was to create an even stronger business with higher growth prospects, greater resilience, and improved operational efficiencies. And look, we considered all options; all options were on the table.

Here's the reality scale matters in coffee.

The category addresses a universal need state.

Common formats common consumer trends similar premium is asian opportunities across markets.

Speaker #3: All right , let me wrap it up by stating the obvious . And it's on this slide . We are truly just getting started .

This means that consumer insights innovation technologies can be leveraged and reapplied across markets and of course in coffee there are clear economies of scale in operations and costs.

Speaker #3: Sell the business , spin it off as a standalone , continue to operate it as part of KDP . But ultimately , after thorough diligence , our management team and our board of directors determined that the acquisition of JD Peet's .

Speaker #3: The market reaction after August 25th was not what we hoped for , but I can tell you the reaction from our other stakeholders , including commercial partners , customers , KDP employees and future colleagues at JD Peet's have all been strongly positive .

Bob said it in his opening remarks J D E peds.

Speaker #3: Represented the most attractive and actionable path for maximizing the value of our coffee business. Here's the reality: scale matters in coffee. The category addresses a universal need state.

Is one of the very few assets of global scale in this category and it will step change keurig in several ways.

Speaker #3: We've given folks a very inspiring destination, and they're ready to go. We're excited about this future transformation as well. But I also want to be clear: we're not in a rush.

You see it on this chart, our coffee net sales will more than triple to $16 billion.

Speaker #3: Common formats . Common consumer trends . Similar premiumization opportunities across markets . This means that consumer insights , innovation technologies can be leveraged and reapplied across markets and of course , in coffee there are clear economies of scale in operations and costs .

Making us the second largest global coffee player and the largest pure play will gain access to additional geographies, including many high growth markets.

Speaker #3: We are making a big bet because we see enormous potential, and we're going to be highly deliberate in how we go about unlocking it.

We will become a significantly larger manufacturer and the number one coffee buyer in the world.

These elements are critical to fortifying keurig as an even stronger coffee player.

Speaker #3: I hope you sense that after today , our management team , our board of directors , see a tremendous amount of value creation opportunity from this two step transaction .

Speaker #3: Bob said in his opening remarks, "JD Peet's is one of the very few assets of global scale in this category, and it will step change."

In J D. Pete's, we also see a unique fit with the keurig business through this combination we can bring together the best of both companies.

Speaker #3: And we will not rest until we get that done. So as you heard today, this was a slide Bob started with.

Speaker #3: Keurig in several ways. You see it on this chart. Our coffee net sales will more than triple to $16 billion, making us the second largest global coffee player and the largest pure play.

Curing North American leadership, Knowhow innovation prowess, and J D E Peds global reach leading brands and four format expertise.

Speaker #3: We do have a consistent and proven track record of creating value in beverages. We create vibrant businesses through a playbook that works.

Speaker #3: We'll gain access to additional geographies, including many high-growth markets. We will become a significantly larger manufacturer and the number one coffee buyer in the world.

The resulting global coffee coal.

I'll enjoy an advantaged and complementary portfolio.

Speaker #3: We have deep insights that underpin our conviction in this deal, and we have a clear plan to deliver on its promise. At the same time, we're listening, and we are adjusting as and when needed.

Incremental revenue opportunities visible actionable achievable cost synergies and greater resilience.

Speaker #3: These elements are critical to fortifying Keurig as an even stronger coffee player. In JD Peet's, we also see a unique fit with the Keurig business. Through this combination, we can bring together the best of both companies.

Let's unpack each of these four.

Starting with advantaged and complementary portfolio.

The combined company will be able to benefit from global category growth.

Speaker #3: And this leadership team has the confidence. It has the experience to successfully carry out this transaction. But we also have the wisdom.

Given its strong brand portfolio, including 4 billion dollar plus trademarks.

Speaker #3: Keurig's North American leadership know how innovation , prowess , and JD Peet's global reach . Leading brands and full format expertise . The resulting global Coffee Co will enjoy an advantaged and complementary portfolio , incremental revenue opportunities , visible , actionable , achievable cost synergies and greater resilience .

Broad participation across every coffee subsegment and geographic diversification.

Speaker #3: We have the willingness to stay flexible in our approach. Again, I hope you've seen that today, and you will continue to see that as we chart our course to establishing North America's most agile beverage challenger and a true global coffee powerhouse.

Moving to enhanced revenue potential we see upside potential from scaling curing system expertise and J D E Pete's format capabilities across more brands and more markets.

Capitalizing on the growth runway for Pete's here in the United States.

Speaker #3: Thank you for your time. Those of you that are here with us at Nasdaq, we're going to take a break before we come back for Q&A.

Speaker #3: Let's unpack each of these four . Starting with advantaged and complementary portfolio . The combined company will be able to benefit from global category growth given its strong brand portfolio , including for billion dollars plus trademarks .

And extending curing next generation coffee systems beyond North America.

Speaker #3: I again encourage you to take full advantage of these fabulous beverage stations and those that are joining verbally. We are going to, or sorry, virtually.

The third is clear and actionable cost synergies, we will discuss this in more detail, but we have identified clear and actionable efficiencies there.

Speaker #3: Broad participation across every coffee subsegment and geographic diversification. Moving to enhanced revenue potential, we see upside potential from scaling Keurig's system expertise and J.D.

That we know will generate $400 million in savings in the next three years. These.

These synergies can fund reinvestment, while also supporting earnings growth.

And finally increased resilience, obviously as a larger company with greater supply chain capabilities, we will be much better positioned to navigate external volatility like tariffs and commodity fluctuations together the union of J D Peds and Keurig will creep.

Speaker #3: Pete's format capabilities across more brands and more markets, capitalizing on the growth runway for Pete's here in the United States and extending Keurig's next-generation coffee systems beyond North America.

Eight a stronger business that is more efficient and more capable of delivering consistent profitable growth.

Speaker #3: The third is clear and actionable cost synergies. We will discuss this in more detail, but we have identified clear and actionable efficiencies that we know will generate $400 million in savings in the next three years.

So upon closure of the J D Pizza acquisition, we will for the first time have scaled advantage platforms in both refreshment beverages and coffee.

Speaker #3: These synergies can fund reinvestment while also supporting earnings growth . And finally increased resilience . Obviously , as a larger company with greater supply chain capabilities , we will be much better positioned to navigate external volatility like tariffs and commodity fluctuations .

Through the subsequent separation each of these businesses.

Will become that focused pure play with attractive yet distinct profiles beveridge call.

A growth oriented player supported by our leading brand portfolio a competitively advantage route to market the business will be disruptive the business will be entrepreneurial and it will deliver an attractive growth profile with.

Speaker #3: Together, the union of JD Peet's and Keurig will create a stronger business that is more efficient and more capable of delivering consistent, profitable growth.

With potential upside from strategic Optionality over time.

Global coffee coal will be a steady grower with strong and resilient cash flow.

Speaker #3: So, upon closure of the JD Peet's acquisition, we will, for the first time, have scaled advantage platforms in both refreshment beverages and coffee through the subsequent separation.

Enhanced by near term synergy capture opportunities.

Performance will be supported by differentiated deep coffee capabilities and expertise.

Speaker #3: Each of these businesses will become that focused, pure play with attractive yet distinct profiles. Beverage Co. A is a gross-oriented player supported by a leading brand portfolio and a competitively advantaged route to market.

And as we've said earlier, while we could conceivably run. These two businesses together, we believe the separation will provide clear benefits to both entity.

Speaker #3: The business will be disruptive. The business will be entrepreneurial, and it will deliver an attractive growth profile with potential upside from strategic optionality over time.

What are those benefits.

First focus.

Each company will tailor its strategy its operating model its capital allocation priorities.

To align with distinct category and geographic exposures.

Speaker #3: Global Coffee Co will be a steady grower with strong and resilient cash flow, enhanced by near-term synergy capture opportunities. Performance will be supported by differentiated deep coffee capabilities and expertise.

Culture.

The respective leadership teams will have strategic clarity and we can structure and incentivize our organizations accordingly.

Strategic Optionality.

Each standalone entity can think creatively.

Speaker #3: And as we've said earlier, while we could conceivably run these two businesses together, we believe the separation will provide clear benefits to both entities.

And flexibly and pursuing additional value creation opportunities and finally shareholder benefits investors will be offered the opportunity for two very attractive yet distinct investment opportunities.

Speaker #3: What are those benefits ? First , focus each company will tailor its strategy , its operating model . It's capital allocation priorities to align with distinct category and geographic exposures .

Now as I said at the beginning of of my remarks.

We have conviction in these transactions.

And we have a clear view of the compelling destination. Once this is complete.

Speaker #3: Culture: The respective leadership teams will have strategic clarity, and we can structure and incentivize our organizations accordingly. Strategic optionality: each standalone entity can think creatively and flexibly in pursuing additional value creation opportunities.

It's now on us to execute with excellence.

And that all begins with a robust plan and the right team.

So we've recently established a transformation management office or a TMO.

To drive this comprehensive integration program.

Speaker #3: And finally , shareholder benefits investors will be offered the opportunity for two very attractive , yet distinct investment opportunities . Now , as I said at the beginning of of my remarks , we have conviction in these transactions and we have a clear view of the compelling destination .

Bob mentioned it earlier it will be led by our newly appointed Chief transformation and supply chain Officer, Roger Johnson, you'll hear more from Roger in a minute. The TMO structure is designed to establish the processes and the workflows to guide our integration teams. While also importantly, freeing up the <unk>.

Rest of the Katy P organization to focus on maintaining that great base business momentum that you've seen us deliver again in Q3.

Speaker #3: Once this is complete, it's now on us to execute with excellence. And that all begins with a robust plan and the right team.

The TMO will be comprised of a dedicated internal team in partnership with key advisors that'll be responsible for the integration planning the future company design for the value capture our board of directors and my Executive Steering Committee will obviously provide support and oversight.

Speaker #3: So we've recently established a transformation management office or a TMO to drive this comprehensive integration program . Bob mentioned it earlier . It will be led by our newly appointed chief Transformation and Supply chain officer , Roger Johnson .

Importantly, many of these leaders team members advisors, obviously had significant experience in executing complex transactions like this.

Speaker #3: You'll hear more from Roger in a minute. The TMO structure is designed to establish the processes and the workflows to guide our integration teams.

As just one example, among others I was fortunate enough to have a central role in the craft acquisition of Cadbury and the subsequent separation into Mona Lee's International Kraft Foods group many of the other leaders, including those you'll hear from today have had similar experience with complex.

Speaker #3: While also, importantly, freeing up the rest of the KDP organization to focus on maintaining that great base business momentum that you've seen us deliver again in Q3.

Speaker #3: The TMO will be comprised of a dedicated internal team in partnership with key advisors that will be responsible for the integration, planning, and future company design for value capture.

<unk> like this we will draw upon those collective experiences to further derisk the next steps.

Speaker #3: Our Board of Directors and my executive Steering Committee will obviously provide support and oversight . Importantly , many of these leaders , team members , advisors , obviously have significant experience in executing complex transactions like this .

So one important element of executing these transactions.

Is ensuring that we have the appropriate capital structures for Katy P at acquisition close and importantly for each independent entity upon separation.

Speaker #3: As just one example, among others, I was fortunate enough to have a central role in the Kraft acquisition of Cadbury and the subsequent separation into Mondelez International and Kraft Foods Group.

We are well aware that some investors were uncomfortable with our initially proposed post transaction leverage.

And as you've seen today in the press release, we've taken meaningful action to address those concerns.

Speaker #3: Many of the other leaders, including those you'll hear from today, have had similar experience with complex transactions like this. We will draw upon those collective experiences to further de-risk the next steps.

So we've announced two cost efficient transactions.

A minority investment.

Into a newly created coffee manufacturing JV.

And a private convertible investment into our future Beveridge call. These two equity like instruments will help to shore up our balance sheet.

Speaker #3: So one important element of executing these transactions is ensuring that we have the appropriate capital structures for KDP at acquisition close , and importantly , for each independent entity upon separation , we are well aware that some investors were uncomfortable with our initially proposed post-transaction leverage .

As you see on this slide and in the release, we now expect net leverage to be below five times when the acquisition closes and we're also targeting initial leverage ranges for.

Speaker #3: And as you've seen today in the press release, we've taken meaningful action to address those concerns. So, we've announced two cost-efficient transactions: a minority investment into a newly created coffee manufacturing JV and a private convertible investment into our future Beverage Co.

For Bev coal and a range of three five to four times.

And global coffee coal and a range of $3 75 to four and a quarter times.

Based on the anticipated cost of this new financing we continue to expect very attractive returns on our J D Pizza acquisition, including year, one EPS accretion of approximately 10%.

Speaker #3: These two equity-like instruments will help to shore up our balance sheet. As you see on this slide and in the release, we now expect net leverage to be below five times when the acquisition closes, and we're also targeting initial leverage ranges for Bevco in a range of 3.5 to 4 times.

These capital raises also have the benefit of partnering and aligning Katy P with sophisticated strategic investors, including Apollo and KKR.

Who understand and appreciate our vision.

Let me walk you through the key acquisition integration and separation milestones from here. We said this back when we announced the deal in late August we continue to expect that the J D. E Pizza deal will close in the first half of 2026.

Speaker #3: And global Coffee Co in a range of 3.75 to 4 and a quarter times . Based on the anticipated cost of this new financing , we continue to expect very attractive returns on our GPS acquisition , including year one EPs accretion of approximately 10% .

Our path to separation will be milestone based.

With a plan for us to be operationally ready by the end of 2026.

Speaker #3: These capital raises also have the benefit of partnering and aligning KDP with sophisticated strategic investors, including Apollo and KKR, who understand and appreciate our vision.

But before separating we want the following conditions to be in place first a quick start to synergy capture.

Second balance sheet readiness for both companies.

Third an independent board of directors and experienced leadership team for each Standalone company and finally market conditions that are conducive.

Speaker #3: Let me walk you through the key acquisition, integration, and separation milestones from here. We said this back when we announced the deal in late August.

Speaker #3: We continue to expect that the Jdp deal will close in the first half of 2026 . Our path to separation will be milestone based with a plan for us to be operationally ready by the end of 2026 , but before separating , we want the following conditions to be in place .

But as we've said all along.

We will be flexible in our approach to secure the best outcome.

In that spirit as we optimized from here one element, where we're taking a refreshed approach is to our leadership.

We've made the decision to not name the leader of global coffee cold at this time.

Speaker #3: First , a quick start to synergy capture . Second , balance sheet readiness for both companies . Third , an independent board of directors and experienced leadership team for each standalone company .

And we no longer intend for Sudan, Shukria darci to serve in that future role.

We will name full leadership teams of both new companies at a future date closer to separation.

So before we unpack, both global coffee coal and beverage Coe.

Speaker #3: And finally , market conditions that are conducive . But as we've said all along , we will be flexible in our approach to secure the best outcome in that spirit , as we optimize from here , one element where we're taking a refreshed approach is to our leadership .

Let me conclude with three priorities to maximize value creation.

First maintaining base business momentum as.

As you saw this morning, we reported strong Q3 results in fact, we raised net sales outlook.

Speaker #3: We've made the decision to not name the leader of Global Coffee Co at this time, and we no longer intend for Sudhanshu Priyadarshi to serve in that future role.

And we reaffirmed.

Our full year EPS guidance.

You should have also seen that J D. Pizza. This morning reaffirmed its full year guidance.

Speaker #3: We will name the full leadership teams of both new companies at a future date closer to the separation. So, before we unpack both Global Coffee Co. and Beverage Co., let me conclude with three priorities to maximize value creation.

Indeed, we are initiating this transformation from a position of strength.

Second priority.

Integrating with excellence.

To achieve our key deal objectives.

You'll hear more from Roger about the processes and the plans, we're putting in place to underwrite successful outcomes.

Speaker #3: First , maintaining base business momentum . As you saw this morning , we reported strong Q3 results . In fact , we raised net sales outlook .

And third setting up each company for success.

With focused strategies tailored operating models.

Purposeful capital allocation.

Speaker #3: And we reaffirmed our full-year EPS guidance. You should have also seen that JD Peet's this morning reaffirmed its full-year guidance.

After the separation, we expect both companies will offer their shareholders quality consistency and simplicity and be viewed as world class leaders.

Speaker #3: Indeed, we are initiating this transformation from a position of strength. Second priority: integrating with excellence to achieve our key deal objectives.

In their sectors.

Okay with that let's move to global coffee cold.

We're going to bring this new company to life.

Speaker #3: You'll hear more from Roger about the processes and the plans we're putting in place to underwrite successful outcomes. And third, setting up each company for success with focused strategies, tailored operating models, and purposeful capital allocation.

A couple of sections first I'll invite Olivier lemaire to stage.

He is our recently appointed President of U S coffee and he'll give an overview of the attractive keurig coffee business. I'll, then return to talk about J D E. Peds, specifically and then the combined global coffee coal.

Speaker #3: After the separation , we expect both companies will offer their shareholders quality , consistency , simplicity and be viewed as world class leaders in their sectors .

Real quick additional intro on Olivier.

He is a tremendous leader.

He's been with Katie P for 14 years. The last four he was president of our Katy P. Canada business and I can tell you in that capacity. He led Katy P. Canada, two significant coffee outperformance consistently growing pod volume Brewer <unk>.

Speaker #3: Okay, with that, let's move to Global Coffee Co. We're going to bring this new company to life in a couple of sections.

<unk> net sales and operating income.

Speaker #3: First, I'll invite Olivier Lemaire to the stage. He's the recently appointed President of US Coffee, and he'll give an overview of the attractive Keurig coffee business.

Indeed, Olivier knows the coffee business.

He has deep experience with integrations as well, including steering the former Keurig, Canada, and Canada dry months integration.

Speaker #3: I'll then return to talk about JD Peet's specifically and then the combined Global Coffee Co. real quick. Additional intro on Olivier.

Overall, he built a very strong Canadian organization and we're very excited I'm excited for him to take this.

Speaker #3: He is a tremendous leader. He's been with KDP for 14 years. For the last four, he has served as president of our KDP Canada business.

U S coffee desk Olivier over to you.

Speaker #3: And I can tell you that in that capacity, he led KDP Canada to significant coffee outperformance, consistently growing pod volume, brewer volume, net sales, and operating income.

Thanks, Tim Good morning, everyone.

So after 14 years, and a coffee and beverage industry I've seen firsthand the unique power of coffee to bring people together, whether it's friends families colleagues, there's just no other beverage like it.

Speaker #3: Indeed, Olivier knows the coffee business. He has deep experience with integrations as well, including steering the former Keurig Canada and Canada Dry.

And from my time in country of origin with coffee farmers to walking the floor of our different coffee labs and manufacturing facilities for building strong relationship with our many brand partners my passion for coffee and strong conviction about the future of our coffee business has only grown so it's a real honor to now lead our U S coffee business.

Speaker #3: Mott's integration . Overall , he built a very strong Canadian organization and we're very excited . Excited for him to take this US coffee desk .

And the amazing team behind their carrying system.

Speaker #3: Olivier, over to you. Thanks, Tim.

And with this system, we've created and that will drive a highly profitable subsegment of the coffee category.

Speaker #4: Good morning, everyone. After 14 years in the coffee and beverage industry, I've seen firsthand the unique power of coffee to bring people together.

Over the last 12 months, we've driven $4.6 billion in net sales and $1.4 billion in adjusted EBITDA.

We are trusted by some of the best coffee brands in the world with unmatched capability quality and scale.

Speaker #4: Whether it's friends , families , colleagues , there's just no other beverage like it . And from my time in country of origin with coffee farmers to walking the floor of a different coffee labs and manufacturing facilities , to building strong relationships with our many brand partners , my passion for coffee and strong conviction about the future of our coffee business has only grown .

Brand names like Starbucks Lavazza, Dunkin' Pete's met cafe, lack alone and Tim warns and many more.

And it goes as well for own powerhouse coffee brands Green Mountain coffee, the original donut shop and van Hoot.

Speaker #4: So it's a real honor to now lead our U.S. coffee business and the amazing team behind the Keurig system. With this system, we've created and now drive a highly profitable subsegment of the coffee category.

Keurig is and it's all driven by the carrier brand Keurig is a beloved brand with 94% brand awareness. It is truly the undisputed leader in single serve coffee.

Speaker #4: Over the last 12 months, we've driven $4.6 billion in net sales and $1.4 billion in adjusted EBITDA. We are trusted by some of the best coffee brands in the world, with unmatched capability, quality, and scale.

<unk> is one of those handful of businesses that have become synonymous with air categories people don't say I hope our vacation rental is a single serve coffee maker.

They say I hope, our airbnb as a keurig and.

And we don't take that lightly since 2019, we've added 13 million active households.

Speaker #4: Brand names like Starbucks , Lavazza , Dunkin , Peet's , McCafe , Lachlan and Tim Hortons and many more . And it goes as well for our own powerhouse coffee brands Green Mountain Coffee , the original donut Shop , and Van Hout .

Reaching $47 million in North America by 2024.

We've gone from being one in for Coffeemakers sold at retail to being one and three today.

And occurring system over these years continues to gain market share in both the coffeemakers, but also the coffee categories with K Cup pods now being the largest coffee format.

Speaker #4: Keurig is . And it's all driven by the Keurig brand . Keurig is a beloved brand with 94% brand awareness . It is truly the undisputed leader in single serve coffee .

And actually driving twice their retail sales to the next closest format.

Speaker #4: Keurig is one of those handful of businesses that have become synonymous with their categories . People don't say , I hope our vacation rental has a single serve coffee maker , they say , I hope our Airbnb has a Keurig and we don't take that lightly .

And from the start the Keurig system was designed to offer a variety and choice to our consumer.

And this open system drive significant value for all of our stakeholder.

Speaker #4: Since 2019 , we've added 13 million active households , reaching 47 million in North America by 2024 . We've gone from being 1 in 4 coffee makers sold at retail to being 1 in 3 today , and the Keurig system over these years continued to gain market share in both the coffee makers , but also the coffee categories with K-Cup pods now being the largest coffee format and actually driving twice the retail sales to the next closest format .

Our consumer love us for quality.

Our convenience and the variety of brands and beverages they can enjoy.

Our partners value our quality our system expertise in coffee knowhow.

And the retailers would recognize that we've driven premium amortization in the coffee category.

With single serve and K Cup pods driving more revenue per every cup of coffee.

So this creates a very strong growth engine.

More brands more variety appeals to more household generating more profit to be reinvested in the system.

Speaker #4: And from the start, the Keurig system was designed to offer variety and choice to our consumer. And this open system drives significant value for all of our stakeholders.

We also have a very strong track record of building and accelerating coffee brands, starting with our very own Green mountain coffee now realizing more than $800 million in retail sales annually and holding the number two position and they're carrying system.

Speaker #4: Our consumer love us for quality . Our convenience , and the variety of brands and beverages they can enjoy . Our partners value our quality , our system expertise in coffee , know how and the retailers would recognize that we've driven premiumization in the coffee category with single serve and K-Cup pods driving more revenue per every cup of coffee .

It is part of a robust owned and licensed portfolio of brands that drives strong distribution and obviously retail activation.

Here are a few examples.

Mcafee was a Brandon decline when it transitioned over in our system mid 2020 and has been growing share every year since.

Speaker #4: So this creates a very strong growth engine . More brands , more variety , appeals to more households , generating more profit to be reinvested in the system .

Lavazza is the fastest growing brand since we took over the selling rights and we see acceleration in distribution and retail activation.

Speaker #4: We also have a very strong track record of building and accelerating coffee brands, starting with our very own Green Mountain Coffee. Now realizing more than $800 million in retail sales annually and holding the number two position in the Keurig system, it is part of a robust owned and licensed portfolio of brands that drives strong distribution and, obviously, retail activation.

And finally.

The original Donut shop, we know flavored coffee is actually growing faster than black coffee.

And is the leader in flavored coffee growth with unique partnerships and beverage types.

In addition, we have a very powerful asset in our business with carrier dotcom.

The carrying dotcom consumer consumed twice daily average and as a five time lifetime value versus the average households.

Speaker #4: Here are a few examples . McCafe . It was a brand in decline when it transitioned over in our system mid 2020 , and has been growing share every year since .

With keurig dot well carry dot coms and excellent sales channel for our coffee business. It is also a significant driver of household penetration being the fourth largest sales channel for Brewers in volume.

Speaker #4: Lavazza is the fastest growing brand since we took over the selling rights and we see acceleration in distribution and retail activation . And finally , the original donut shop we know flavored coffee is actually growing faster than black coffee and is the leader in flavored coffee growth with unique partnerships and beverage types .

The site enables us to have a one on one relationship with more than 1.5 million consumer each month.

If it were to be part of our retail channels hearing dotcom would be amongst our top five with other industry Giants.

Speaker #4: In addition, we have a very powerful asset in our business with Keurig. The Keurig consumer consumes twice the daily average and has a five times lifetime value versus the average household.

For those that know our brand history know that keurig was actually founded in the workplaces delivering a fresh brewed solution over the dreaded still part of office coffee.

And on that foundation, we've built a very strong business in away from home with now 650000 workplaces with active Brewers and $1 2 million of hotel room, and we actually see significant upside in large away from home areas, primarily corporate workplaces manufacturing health.

Speaker #4: With Keurig . While Keurig is an excellent sales channel for coffee , business , it is also a significant driver of household penetration , being the fourth largest sales channel for brewers and volume the site enables us to have a one on one relationship with more than 1.5 million consumers each month .

Care construction.

There is a powerful synergistic relationship between our out of home and at home channels with workplaces servings, a great trial environment for both the procuring system and our many.

Speaker #4: If it were to be part of our retail channels , Keurig would be amongst our top five with other industry giants . For those that know our brand history , know that Keurig was actually founded in the workplaces , delivering a fresh brewed solution over the dreaded stale pot of office coffee .

Brands in the portfolio.

Our coffee business is actually delivered meaningful productivity over the last five years, averaging 4% in year over year cost savings through a series of initiatives ranging from tactical to strategic.

Speaker #4: And on that foundation , we've built a very strong business and away from home with now 650,000 workplaces with active brewers and 1.2 million hotel rooms , and we actually see significant upside in large away from home areas , primarily corporate workplaces , manufacturing , health care , construction .

These programs include Brewer direct import large nested count pack lightweight cups, and meaningful reductions across process and product waste.

Our productivity initiatives, usually serve dual purpose.

Speaker #4: There is a powerful synergistic relationship between our out of home and at home channels , with workplaces serving as a great trial environment for both the Keurig system and our many brands in the portfolio .

Of generating cost saving and advancing our sustainability agenda.

Reducing packaging packaging, eliminating waste and driving a more efficient logistics.

So by being cost conscious.

And driving a productivity mindset throughout the organization, we unlocked fuel to reinvest in our business.

Speaker #4: Our coffee business has actually delivered meaningful productivity over the last five years , averaging 4% in year over year cost saving through a series of initiatives ranging from tactical to strategic , these programs include Brewer Direct Import , large nested count pack , lightweight cups and meaningful reductions across process and product waste .

And with that fuel, we can actually drive and accelerate our strategic imperatives.

We know our business is strong and we know we can improve and over the last year, we've actually refine our consumer centric strategy and we're focused on four key areas.

Driving household penetration.

Growing premium coffee.

Speaker #4: Our productivity initiatives usually serve dual purpose of generating cost savings and advancing our sustainability agenda , reducing packaging , packaging , eliminating waste , and driving a more efficient logistics .

Scaling cold coffee solution and defining the future of coffee system.

In terms of Keurig, we're excited about our new marketing campaign hitting in Q4.

It will have strong end market presence.

Speaker #4: So by being cost conscious and driving a productivity mindset throughout the organization , we unlock fuel to reinvest in our business . And with that fuel , we can actually drive and accelerate our strategic imperatives .

And we believe that with consumer insights and strong data driven campaigns, we will be able to continue to unlock household penetration.

With premium coffee, we are on the eve of launching our first ever coffee brand with the carrier name.

Speaker #4: We know our business is strong , and we know we can improve . And over the last year , we've actually refined our consumer centric strategy , and we're focused on four key areas driving household penetration , growing premium coffee , scaling cold coffee solution , and defining the future coffee system in terms of Keurig , we're excited about our new marketing campaign hitting in Q4 .

The keurig coffee collected it.

It will be our first scaled and premium one premium brand.

It features elevated packaging.

It will Ah sorry elevated packaging.

It will have 30% more coffee within each cups and will have distinctively delicious plants.

And we're leaning into cold coffee solutions with innovations across Brewers pods and ready to drinks.

Speaker #4: It will have a strong in-market presence, and we believe that with consumer insights and strong, data-driven campaigns, we will be able to continue to unlock household penetration with premium coffee.

We've actually recently launched new refreshes based.

Based on Tictoc trends, and we found new ways to offer consumer the way to customize their favorite cold beverages.

Speaker #4: We are on the eve of launching our first ever coffee brand with Keurig name . The Keurig Coffee Collective . It will be our first scaled and premium owned premium brand .

And as you would've seen in the product showcase and invite you to do so at the break.

We are getting ready to disrupt once again, the coffee category with the launch of a breakthrough system Carryout.

Speaker #4: It features elevated packaging. It will be elevated packaging. It will have 30% more coffee within each cup and will have distinctively delicious blends.

I'll tell users K around plastic free and aluminum free pods.

It is designed to offer a large range of barista style beverages, including rich cups of coffee authentic espresso and a variety of coffee shops style beverage either hot or cold.

Speaker #4: And we're leaning into cold coffee solutions with innovations across brewers pods and ready to drinks . We've actually recently launched new refreshers based on TikTok trends , and we found new ways to offer consumer the way to customize their favorite cold beverages .

We have completed multiple rounds of in home testing with a carrying out this system.

Supported by pilot production of the K rounds and.

And we are looking forward to sharing this innovative format with consumers soon.

Speaker #4: And as you would have seen in the product showcase, I invite you to do so at the break. We are getting ready to disrupt once again.

And while it's early days, we are excited to think about scaling this innovation in the future.

Speaker #4: The coffee category with the launch of a breakthrough system , Keurig Alta . Alta uses k round , plastic free and aluminum free pods .

So with that I'd like to welcome Tim backup to speak the J D E piece and how these two complementary businesses will be even stronger together. Thank you.

Speaker #4: It is designed to offer a large range of barista style beverages , including rich cups of coffee , authentic espresso , and a variety of coffee shop style beverages .

Okay.

Okay.

Alright, I will put in a plug for those last two.

Speaker #4: Either hot or cold. We have completed multiple rounds of in-home testing with the Keurig Alta System, supported by pilot production of the K rounds, and we are looking forward to sharing this innovative format with consumers soon.

Coffees that Olivia shared with you.

If you've not tried our new keurig coffee collective for those of you in the room. It's in that station both back there my favorite New K Cup pod Outstanding Cup of coffee and then Alta please be sure and try Ulta before you go today.

Speaker #4: And while it's early days, we are excited to think about scaling this innovation in the future. So with that, I'd like to welcome Tim back up to speak to Jeff about how these two complementary businesses will be even stronger together.

So I will start this next section with thoughts on J D E Pete's, including an overview of the business why we think it's such a compelling asset and some of the recent strategic changes that are underway at that management team.

Speaker #4: Thank you. Hold on.

Then I'll discuss global coffee cold and highlight how the complementary nature of J D Peds and keurig creates this attractive pure play is truly positioned to win so if you're wondering what am I doing here why am I, the guy talking about J D E peds.

Speaker #3: All right . I will put in a plug for those last two coffees that Olivier shared with you . If you've not tried our new Keurig coffee Collective , for those of you in the room , it's in that station about back there .

The answers are number one I will be responsible for it while we run for a period of time as a combined company.

Speaker #3: My favorite new K-Cup pod . Outstanding cup of coffee . And then Alta . Please be sure and try Alta before you go today .

Number two is I do have an up close.

Speaker #3: So, I will start this next section with thoughts on JD Peet's, including an overview of the business, why we think it's such a compelling asset, and some of the recent strategic changes that are underway at that management team.

Perspective on this having spent months of diligence on this acquisition and getting to meet and interact with this leadership team and number three is believe it or not I used to run some of these brands back in a past life brands like Jakobson task Simo Kang Koga, Voya and others, So I actually.

Speaker #3: Then I'll discuss Global Coffee Co. and highlight how the complementary nature of JD, PS, and Keurig creates this attractive pure play that is truly positioned to win.

We think I know firsthand the strength of these brands and the roles that they play in the lives of our consumers and our customers.

Speaker #3: So, if you're wondering what I'm doing here – why I am the guy talking about JDE Peet's – the answer is number one.

I also want to tell you. We are very pleased that we actually have the CEO of J D E. Pete's Rafa olivera in the room Rafa you can give a quick wave there is he's in the audience, Ralph and I as you might imagine have gotten to know each other pretty well over the last few months and he's actually here state side for a couple of days.

Speaker #3: I will be responsible for it while we run for a period of time as a combined company. Number two is I do have an up-close perspective on this.

Speaker #3: Having spent months of diligence on this acquisition and getting to meet and interact with this leadership team. And number three is, believe it or not, I used to run some of these brands back in a past life.

Tomorrow he'll be at our Boston headquarters as we're advancing our integration and transformation agenda.

Speaker #3: Brands like Jacobs , Tassimo , Kenco , Gevalia and others . So I actually think I know firsthand the strength of these brands and the roles that they play in the lives of our consumers and our customers .

So let's talk about G D. Pete J D. Pete is a unique asset it's large.

It's profitable it is a global pure play coffee company $11 billion in net sales nearly $2 billion in adjusted EBITDA. The company holds the number one or the number two share position in dozens of markets around the world, reflecting an enviable portfolio of la.

Speaker #3: I also want to tell you that we are very pleased that we actually have the CEO of JD Peet's, Rafa Oliveira, in the room.

Speaker #3: Rafa , you can give a quick wave . There he is . He's in the audience . Rafa and I , as you might imagine , have gotten to know each other pretty well over the last few months .

Leading coffee brands the business is anchored by billion dollar icons like Pete's or Yakov <unk>, but it also boasts a sizeable regional and local portfolio brands like polo, more Kona and free L. Among others.

Speaker #3: And he's actually here stateside for a couple of days. Tomorrow, he'll be at our Boston headquarters as we're advancing our integration and transformation agenda.

Speaker #3: So let's talk about GDP . GDP is a unique asset . It's large . It's profitable . It is a global pure play coffee company .

J D is also distinguished by its rich coffee heritage.

This company has deep deep coffee expertise its participation in coffee dates back to the 17 hundreds with the founding of Dow AG birds in the Netherlands and its capabilities are quite strong as one example, we put it on this chart the company has the ability.

Speaker #3: $11 billion in net sales . Nearly $2 billion in adjusted EBITDA . The company holds the number one or the number two share position in dozens of markets around the world , reflecting an enviable portfolio of leading coffee brands .

To produce over 1000 distinct coffee blends you can imagine that's a skill and capability, especially useful in times of extreme coffee inflation and the tariffs volatility.

Speaker #3: The business is anchored by billion dollar icons like Peet's Law Jacobs , but it also boasts a sizable regional and local portfolio . Brands like Palao , Moccona and Friul , among others .

For me one of the simplest ways to understand this company's strength.

Speaker #3: JD is also distinguished by its rich coffee heritage . This company has deep , deep coffee expertise . Its participation in coffee dates back to the 1700s , with the founding of Dow Egberts in the Netherlands , and its capabilities are quite strong .

Is by looking at a map of the world.

Many countries have large and vibrant coffee categories and J D. E. Peds is present in most of those countries often with a leading position.

Coffee is a category in which the market leader is frequently a regional or local favorite not necessarily a global brand.

Speaker #3: As one example, we put it on this chart. The company has the ability to produce over 1,000 distinct coffee blends. You can imagine.

Consumers are fiercely loyal to their local brands, particularly in the largest and most developed coffee markets and J D. E. Pete has a portfolio aligned to that reality, so in the Netherlands, and Belgium, Dow Egberts is the category standard.

Speaker #3: That's a skill and capability especially useful in times of extreme coffee inflation and tariff volatility. For me, one of the simplest ways to understand this company's strengths is by looking at a map of the world.

In the U K, it's kenkel in Brazil, it's pull out in Germany, and actually much of central and Eastern Europe, Itchy outcomes and in France, It's lore, and that's just scratching the surface of their market leadership. So we recognize that this company's brands may be less familiar to.

Speaker #3: Many countries have large and vibrant coffee categories, and JD Peet's is present in most of those countries, often with a leading position.

Speaker #3: Coffee is a category in which the market leader is frequently a regional or local favorite, not necessarily a global brand. Consumers are fiercely loyal to their local brands, particularly in the largest and most developed coffee markets, and JD Peet's has a portfolio aligned to that reality.

And American audience, but as you can see their powerful equities with strong residents in their core markets.

And I'd be remiss to say that these brands also produced a very good tasting cup of coffee each very individualized kind of taste of the nation qualities again for those of you that are here Theres a station on my back left there that will give you a nice assortment of their brands in a highly recommend if you haven't had enough coffee already.

Speaker #3: So in the Netherlands and Belgium , Dow Egberts is the category standard . In the UK , it's Kenco . In Brazil , it's Palau in Germany , and actually much of Central and Eastern Europe .

Please try that the next break.

Another hallmark of J D E. Pizza is the broad category participation. The company has an offering spanning all major coffee formats.

Speaker #3: It's Jakobs , and in France it's Lau . And that's just scratching the surface of their market leadership . So we recognize that this company's brands may be less familiar to an American audience , but as you can see , they're powerful equities with strong resonance in their core markets .

From whole bean roast and ground single serve liquid ready to drink concentrate.

The portfolio also captures the full price stores.

Speaker #3: And I'd be remiss to say that these brands also produce a very good-tasting cup of coffee, each with a very individualized kind of taste of the nation.

From mainstream to superpremium.

The channel diversity is universal.

<unk> all major at home and away from home channels, where coffee is consume.

Speaker #3: Qualities . Again , for those of you that are here , there's a station on my back left there that will give you a nice assortment of their brands , and I highly recommend if you haven't had enough coffee already , please try it at the next break .

You can imagine there are significant strategic benefits to this broad category participation.

Now given its advantage brand portfolio and strong capabilities, it's probably no surprise that J D. Peds is also a leading partner to retailers across the globe.

Speaker #3: Another hallmark of JDP is the broad category participation. The company has an offering spanning all major coffee formats, from whole bean roast and ground to single-serve liquid and ready-to-drink concentrate.

I'll give you. One example, this chart here of a retailer major retailer in France lore actually holds the distinction as the number one.

Speaker #3: The portfolio also captures the full price tiers from mainstream to super premium . The channel diversity is universal , including all major at home and away from home channels where coffee is consumed .

Brand in all of CPG driving growth for the retail trade in France over the last 10 years ahead of even the biggest global trademarks like Coca Cola. These.

These photos that you see on the slide underscore the level of in store activation that retailer support because of the power of these coffee brands and the central role that they play in building shopper basket and driving category growth.

Speaker #3: You can imagine there are significant strategic benefits to this broad category . Participation . Now , given its advantage , brand portfolio and strong capabilities , it's probably no surprise that JD Peet's is also a leading partner to retailers across the globe .

J D Pizza brand strength.

Also extends to the consumer.

Speaker #3: I'll give you one example . This chart here of a retailer , major retailer in France law actually holds the distinction as the number one brand in all of CPG , driving growth for the retail trade in France over the last ten years , ahead of even the biggest global trademarks like Coca-Cola .

Its portfolio has beloved trademarks, obviously evidenced by the strong market shares I showed you, but what's equally important and I think encouraging for future growth prospects is the brand's particular resonance among younger consumers and.

In some markets here are three examples the sub 30 year old demographic prefers the leading J D pizza brand by nearly a two to one margin.

Speaker #3: These photos that you see on the slide underscore the level of in-store activation that retailers support because of the power of these coffee brands and the central role that they play in building shopper baskets and driving category growth. JD Peet's brand strength also extends to the consumer.

Relative to the next largest player that type of brand loyalty. Among the next generation is priceless as younger consumers grow their spending and influence in coffee as they age J D. Pete's appeal to these groups should represent a growth tailwind.

Speaker #3: Its portfolio has beloved trademarks , obviously evidenced by those strong market shares . I showed you . But what's equally important , and I think encouraging for future growth prospects is the brand's particular resonance among younger consumers in some markets .

The company also has brands with a demonstrated ability to stretch and I'll give you two examples on this chart take lore.

<unk> began as a roast and ground coffee staple.

But it's now expanded into basically all other consumable formats.

Speaker #3: Here are three examples . The sub 30 year old demographic prefers the leading JD brand by nearly a 2 to 1 margin , relative to the next largest player .

Including into appliances, and these adjacencies now account for a meaningful percent of total lore brand sales.

Speaker #3: That type of brand loyalty among the next generation is priceless. As younger consumers grow their spending and influence in coffee as they age, JD Peet's appeal to these groups should represent a growth tailwind.

The other example, yakov.

Yakov started as a German icon.

But over the last couple of decades has successfully established number one positions across central and Eastern Europe. In fact in 19 markets now more than half the sales of yaacov is outside of its home country of Germany.

Speaker #3: The company also has brands with a demonstrated ability to stretch . And I'll give you two examples on this chart . Take law , Lohr began as a roast and ground coffee staple , but it's now expanded into basically all other consumable formats , including into appliances , and these adjacencies now account for a meaningful percent of total Lohr brand sales .

I think this is notable.

Because one of the incremental revenue opportunities from combining keurig and J D. Pete is the pairing of our technology and our innovation with J D. Pizza brands. We believe the stretch potential of these J D. P trademarks can in tree create intrigue.

Speaker #3: The other example , Jacobs . Jacobs , started as a German icon , but over the last couple of decades has successfully established number one positions across Central and Eastern Europe .

Again growth opportunities down the road.

Beyond the commercial success.

The J D E Pizza business has also demonstrated resilient financial performance.

Speaker #3: In fact, in 19 markets now, more than half the sales of Jacobs are outside of its home country of Germany. I think this is notable because one of the incremental revenue opportunities from combining Keurig and JD is the pairing of our technology and our innovation with JD Peet's brands.

I'm sure I don't need to tell anyone in this room in fact, a few chats I did prior to the start of reflect this that the last few years has been marked by quite a bit of unusual level of green coffee inflation triple digit cumulative cost pressure on our Rebecca.

Robusta.

You see the numbers on this chart and yet even as a coffee pure play this business has delivered steady and consistent gross profit growth.

Speaker #3: We believe the stretch potential of these GDP trademarks can create intriguing growth opportunities down the road. Beyond the commercial success, the JD EPs business has also demonstrated resilient financial performance.

I think another indication of brand strength.

Bringing it all together, it's clear for us that J D. E. <unk> has a strong structural foundation.

This is a good business.

Speaker #3: I'm sure I don't need to tell anyone in this room . In fact , a few chats I did prior to the start reflect this that the last few years has been marked by quite a bit of unusual level of green coffee inflation , triple digit cumulative cost pressure on Arabica and Robusta .

It's got iconic brands.

It's got significant capabilities.

Yet it's also true that it's a business with significant value creation potential that has yet to be fully realized.

To be clear J D E Pete's management team recognize this.

Speaker #3: You see the numbers on this chart . And yet , even as a coffee , pure play , this business has delivered steady and consistent gross profit growth .

And they've already begun the important work to begin to capture that potential upside there.

They hosted a capital markets day back in July.

Speaker #3: I think another indication of brand strength brings it all together. It's clear for us that JD Peet's has a strong structural foundation.

And they set a path to become a more agile.

We're focused more commercially capable organization.

Speaker #3: This is a good business. It's got iconic brands, it's got significant capabilities, yet it's also true that it's a business with significant value creation potential that has yet to be fully realized.

I visited Amsterdam, a few times with Rafa and team.

And I can already see the early stages of this important cultural shift taking hold.

The centerpiece of their approach.

Isn't evolve strategy and they actually call it reignite the amazing.

Speaker #3: To be clear, JD Peet's management team recognized this, and they've already begun the important work to begin to capture that potential upside.

Now there are many elements to the plan, but I'll just highlight a few notable points.

And emphasis on fewer bigger bets.

Speaker #3: They hosted a Capital Markets Day back in July, and they set a path to become a more agile, more focused, and more commercially capable organization.

With resources and management attention going towards the largest brands greater consumer Centricity and commercial excellence and a stepped up productivity flywheel to unlock savings flexibility and agility.

Speaker #3: I visited Amsterdam a few times with Rapha and the team, and I can already see the early stages of this important cultural shift.

The strategy makes sense and it's definitely aligned with CPG best practices and operating principles and upon integrating J D peitz with keurig we.

Speaker #3: Taking hold . The centerpiece of their approach is an evolved strategy , and they aptly call it reignite . The amazing . Now , there are many elements to the plan , but I'll just highlight a few notable points an emphasis on fewer , bigger bets with resources and management , attention going towards the largest brands , greater consumer centricity and commercial excellence , and a stepped up productivity flywheel to unlock savings , flexibility and agility .

We would expect to continue this work and harmonize it into a combined strategic playbook for global coffee coal.

Okay.

It remains early days as they've embarked on this new strategy, but I would tell you there's already some initial proof points.

Showing up from this refined strategic approach I'll give you a couple of examples on big bets J D. Pizza is prioritizing leveraging insights and infrastructure to launch compelling innovations and ideas across multiple brands and multiple geographies and a highly efficient and profitable way.

Speaker #3: The strategy makes sense , and it's definitely aligned with CPG . Best practices and operating principles , and upon integrating JD Peet's with Keurig , we would expect to continue this work and harmonize it into a combined strategic playbook for global coffee Co .

As one example, right now there's a hot trend out there called Dubai chocolate.

J D piece was able to quickly launch a dubai chocolate coffee mix across multiple brands in 20 markets. This year using this platforming approach.

Speaker #3: It remains early days as they've embarked on this new strategy, but I would tell you there's already some initial proof points showing up from this refined strategic approach.

Less visibly, but no less critically the company has also made progress in refining its marketing approach and building capabilities in key areas like revenue growth management, we certainly know from experience.

Speaker #3: I'll give you a couple examples on big bets . JD pets is prioritizing leveraging insights and infrastructure to launch compelling innovations and ideas across multiple brands and multiple geographies in a highly efficient and profitable way .

The payback from these investments can be very high when you get it right.

And finally J D. Pizza is also beginning to progress its productivity program that they unveiled on their capital markets day. The planned target 500 million euros in savings through 'twenty 32, with roughly half being reinvested in the business.

Speaker #3: As one example, right now there's a hot trend out there called Dubai Chocolate. JD Peet's was able to quickly launch a Dubai Chocolate coffee mix across multiple brands in 20 markets.

Four primary areas underpinning this target.

Speaker #3: This year, using this platforming approach less visibly, but no less critically, the companies also made progress in refining its marketing approach and building capabilities in key areas like revenue growth management.

Portfolio simplification across brands, and Skus, and the manufacturing and distribution footprint simplified ways of working.

Which involves removing complexity and generating savings accordingly continuous improvement in sourcing in design and plant level productivity.

Speaker #3: We certainly know from experience that the payback from these investments can be very high when you get it right. And finally, JD Peet's is also beginning to progress.

And driving improvements in the company's asset light route to market system.

As you can imagine we carefully vetted this program as part of our diligence and we're confident that the savings are achievable.

Speaker #3: It's a productivity program that they unveiled on their Capital Markets Day. The plan targets €500 million in savings through 2032, with roughly half being reinvested in the business.

J D Pizza has already begun to implement this program, including some plant closures and other operating efficiencies that they announced this morning in their press release.

Speaker #3: Four primary areas underpinning this target portfolio simplification across brands and SKUs, and the manufacturing and distribution footprint. Simplified ways of working, which involves removing complexity and generating savings.

So you've now heard Olivier.

Talk about the strengths in our future growth plans for Keurig <unk>.

Speaker #3: Accordingly, continuous improvement in sourcing and design in plant-level productivity and driving improvements in the company's asset-light route to market system.

You've now heard me walkthrough, the virtues of J D peds.

Let's now talk about what happens when we put these businesses together.

So let's start with some background. These businesses are strong in their own right.

Speaker #3: As you can imagine, we carefully vetted this program as part of our diligence, and we're confident that the savings are achievable. JDP2 has already begun to implement this program, including some plant closures and other operating efficiencies that they announced this morning.

They've proven resilient and they've delivered solid performance in a very challenging operating backdrop. The last few years you see on this chart sales growth and adjusted EBITDA ranging in the low single digits.

And importantly, each business has proven highly cash generative for example, you see here keurig, we expect to deliver more than $600 million of free cash flow. This year and J D. Pizza. This morning reaffirmed its outlook for the year of 1 billion euros about $1 2 million.

Speaker #3: In their press release, you've now heard Olivier talk about the strengths and our future growth plans for Keurig. You've now heard me walk through the virtues of JDE Peet's.

Speaker #3: Let's now talk about what happens when we put these businesses together. So, let's start with some background. These businesses are strong in their own right.

<unk> billion dollars.

When we put these two companies together, we expect even stronger top and bottom line growth going forward.

Speaker #3: They've proven resilient, and they've delivered solid performance in a very challenging operating backdrop over the last few years. You can see on this chart, sales growth and adjusted EBITDA are ranging in the low single digits.

And let me take you through why we believe that.

To start global coffee cold, we'll be an advantaged market leader in the 400 billion dollar global coffee category and as I said previously scale matters in coffee this business will have at Glu.

Speaker #3: And importantly , each business has proven highly cash generative . For example , you see here , Keurig , we expect to deliver more than $600 million of free cash flow this year .

Global coffee coal will be the number two coffee player in the world by revenue and the number one pure play operating across 100 countries. It will have a strong portfolio of brands diversified across formats across channels. It will have a strong financial profile $16 billion in net sales and over $3 billion.

Speaker #3: And JD Peet's this morning reaffirmed its outlook for the year of €1 billion . About one point $2,000,000 billion . When we put these two companies together , we expect even stronger top and bottom line growth going forward .

And adjusted EBITDA.

The combined entity will have a broader product line than either Standalone company had blamed particular relative to keurig prior to the combination as you see on this first bar.

Speaker #3: And let me take you through why we believe that. To start, Global Coffee Co will be an advantaged market leader in the $400 billion global coffee category.

Our business was almost.

Almost exclusively focused on the single serve subcategory here in North America, but with the addition of J D. E. Pete you now see global classical will have a format mix that's far more closely aligned with the global category split and yet still with a favorable SKU.

Speaker #3: And as I said previously, scale matters in coffee. This business will have it. Global Coffee Co will be the number two coffee player in the world by revenue and the number one pure play operating across 100 countries.

Speaker #3: It will have a strong portfolio of brands diversified across formats and channels. It will have a strong financial profile, with $16 billion in net sales and over $3 billion in adjusted EBITDA.

To the high margin single serve segment and other more value add areas.

What does that mean global coffee core co can then fully participate in the growth of the entire category both in meeting existing consumer preferences and emerging.

Speaker #3: The combined entity will have a broader product line than either standalone company had, but in particular, relative to Keurig prior to the combination.

Growth opportunities.

Speaker #3: As you see on this first bar , our business was almost exclusively focused on the single serve subcategory here in North America . But with the addition of JD Peet's , you now see Global Coffee Co will have a format mix that's far more closely aligned with the global category split .

Similarly, as a true multinational now global coffee cold, we'll be better positioned to capture our fair share.

Of category growth at the category level coffee has two large structural growth drivers.

We think both of these are evergreen the.

Speaker #3: And yet still with a favorable skew to the high margin single serve segment . And other more value add areas . What does that mean ?

The first is per cap consumption growth.

This has been and we expect will continue to be a tailwind for the category.

Speaker #3: Global Coffee Co can then fully participate in the growth of the entire category, both in meeting existing consumer preferences and emerging growth opportunities.

It's supported by elements like a rising middle class.

And ongoing preference shifts, particularly in non coffee legacy markets of preferences.

Driven by youth from T to coffee.

Speaker #3: Similarly, as a true multinational, now Global Coffee Co. will be better positioned to capture a fair share of category growth at the category level. Coffee has two large structural growth drivers.

The second is premium innovation as measured by value per Cup. This trend is occurring across all formats.

And you see it most evident in the growth of premium solutions like single serve but it's occurring across brands as well with premium trademarks growing faster than mainstream and value. So while per capita consumption.

Speaker #3: We think both of these are evergreen. The first is per capita consumption growth. This has been, and we expect will continue to be, a tailwind for the category.

Is a greater opportunity, perhaps in less developed coffee markets and premium amortization.

Speaker #3: It's supported by elements like a rising middle class and ongoing preference shifts, particularly in non-coffee legacy markets of preferences driven by youth from tea to coffee.

Is a bigger trend in established countries, we actually see significant runway in both of these structural growth drivers.

The business will also enjoy unique revenue opportunities arising from this very complementary combination let me quickly talk to these five formats.

Speaker #3: The second is premiumization , as measured by value per cup . This trend is occurring across all formats , and you see it most evident in the growth of premium solutions like single serve .

Given the potential to expand curious brand equities now into new subcategories, leveraging J D E peds for care.

Speaker #3: But it's occurring across brands as well , with premium trademarks growing faster than mainstream and value . So while per capita consumption is a greater opportunity , perhaps in less developed coffee markets and premiumization is a bigger trend in established countries , we actually see significant runway in both of these structural growth drivers .

Segment exposure technology.

Especially in Brewers.

Keurig is best in class in Brewers, we'd been an innovation leader, we know how to produce them at an efficient and profitable manner. We can provide insights to some of J D. Pete systems like since sale Taslima and lore.

Channels.

Speaker #3: The business will also enjoy unique revenue opportunities arising from this very complementary combination . Let me quickly talk to these five formats . Given the potential to expand Keurig's brand equities now into new subcategories , leveraging JD Peet's full segment exposure technology , especially in Brewers , Keurig is best in class in brewers .

We can capitalize on our complimentary footprints, including and away from home.

Next generation next generation exciting keurig, Alta and K around innovation.

Now has the potential to think about expansion beyond North America.

And brands.

Targeting growth opportunities for specific brands in the portfolio and one I'll call attention to is peds.

Speaker #3: We've been an innovation leader . We know how to produce them at an efficient and profitable manner . We can provide insights to some of JD Pete's systems , like Sunsail , Tassimo and Law channels .

And I will give you more in a moment as you see the synergistic growth opportunities are ample and indeed global.

Let me talk a little bit more about Pete's just to bring that to life. We all know that brand I think pretty well here in the U S.

Speaker #3: We can capitalize on our complementary footprints , including in away from Home , next generation , Next Generation , exciting Keurig Alta and Crown Innovation now has the potential to think about expansion beyond North America and brands targeting growth opportunities for specific brands in the portfolio .

It has a rich heritage, it's a coffee pioneer it's got strong brand awareness premium coffee credentials across the U S. But as this map shows the map on the left.

Its market penetration is very much concentrated in the west coast.

And in particular, California, the home territory.

And it's commercial execution at point of buying meaningfully lag securities.

Speaker #3: And one I'll call attention to is Peet's, and I'll give you more in a moment. As you see, the synergistic growth opportunities are ample and indeed global.

But as a combined entity global coffee co can utilize <unk> significant commercial scale, our very strong customer relationships to improve Pete's geographic footprint.

Speaker #3: Let me talk a little bit more about Peet's just to bring that to life . We all know that brand . I think pretty well here in the US .

I'll give you one example with numbers.

Speaker #3: It has a rich heritage . It's a coffee pioneer . It's got strong brand awareness , premium coffee credentials across the US , but as this map shows , the map on the left , it's market penetration is very much concentrated in the West coast and in particular California .

You see that on the on the far right.

We have the ability to achieve while today curing achieved almost four times the feature and display activity of brand Pete we can and we will close that gap. The result can be a much larger faster growing pizza pre.

Speaker #3: The home territory, and its commercial execution at the point of buying, meaningfully lags Keurig's. But as a combined entity, Global Coffee Co. can utilize Keurig's significant commercial scale and very strong customer relationships to improve Peet's geographic footprint.

<unk> brand overtime.

So we've talked about the revenue opportunities, but we also see visible cost synergies and global coffee call. Our 400 million dollar synergy target in the first three years span several areas.

In procurement, we will benefit from enhanced scale of course, green coffee sourcing as well as direct and indirect spend pools in manufacturing and logistics, we have plans for network optimization.

Speaker #3: I'll give you one example with numbers . You see that on the on the far right , we have the ability to achieve well today Curig achieves almost four times the feature and display activity of brand Peet's .

For route to market consolidation and other go to market efficiencies.

And for SG&A, we've already identified corporate scale efficiencies as well as it infrastructure and other system savings.

Speaker #3: We can and we will close that gap . The result can be a much larger , faster growing . Peet's premium brand over time .

Importantly, these synergies have been scoped.

And we've developed concrete and actionable plans to deliver on these cost synergies if not exceed them.

Speaker #3: So we've talked about the revenue opportunities, but we also see visible cost synergies at Global Coffee Co. Our $400 million synergy target in the first three years spans several areas in procurement.

Ultimately, we expect global coffee coal will generate consistent attractive.

Speaker #3: We will benefit from enhanced scale across green coffee sourcing as well as direct and indirect spend pools in manufacturing and logistics . We have plans for network optimization for route to market consolidation and other go to market efficiencies , and for SG&A , we've already identified corporate scale efficiencies as well as it infrastructure and other system savings .

Profit growth.

It will be driven by a few factors first obviously profitable topline growth. This company will be well positioned to capture its fair share of the coffee categories volume growth, which as you've heard a couple of times consistently grows on a volume basis at a low single digit rate over time. This will obviously generate fixed cost absorption operating leverage benefit.

And in addition to that the innovation that you've heard about today, our price pack architecture, and our GM work promotional effectiveness can further translate that top line growth and a nice bottom line growth.

Speaker #3: Importantly, these synergies have been scoped, and we've developed concrete and actionable plans to deliver on these cost synergies, if not exceed them.

Next keurig and J D E peds, each have robust productivity programs.

Speaker #3: Ultimately , we expect global Coffee Co will generate consistent , attractive profit growth . This will be driven by a few factors . First , obviously profitable top line growth .

Even beyond the deal synergies I just covered.

And obviously some of these savings will be earmarked for reinvestment, but others will flow through to the bottom line and.

Speaker #3: This company will be well positioned to capture its fair share of the coffee category's volume growth , which , as you've heard , a couple of times , consistently grows on a volume basis at a low single digit rate over time .

And finally.

It's not built into our baseline financial outlooks.

But it's our belief that current coffee prices are clearly well above the long term trend and they do not appear to be supported by market fundamentals I'm not going to try to predict commodity market gyrations on this stage, but it is worth noting that.

Speaker #3: This will obviously generate fixed cost absorption . Operating leverage , benefits , and an addition to that , the innovation that you've heard about today , our price pack architecture and our GM work , promotional effectiveness can further translate that top line growth into a nice bottom line growth .

That any normalization in this cost would clearly drive a cyclical profit tailwind.

Speaker #3: Next , Keurig and JD Peet's each have robust productivity programs even beyond the deal synergies . I just covered . And obviously some of these savings will be earmarked for reinvestment , but others will flow through to the bottom line .

Bringing these elements together.

The business's structural advantages.

The potential revenue synergies the cost synergies of the combination the other profit levers available to the business.

Speaker #3: And finally, it's not built into our baseline financial outlooks, but it's our belief that current coffee prices are clearly well above the long-term trend.

Global coffee cold will support an attractive growth algorithm.

Now there certainly can be some year to year volatility in topline due to commodity volatility, but over time, we project low single digit net sales growth and high single digit adjusted EPS growth.

Speaker #3: And they do not appear to be supported by market fundamentals. I’m not going to try to predict commodity market gyrations on this stage, but it is worth noting that any normalization in this cost would clearly drive a cyclical profit tailwind.

And we would expect this business to be highly cash generative.

As you see on this chart anticipated cumulative free cash flow of more than $5 billion from 26 to 28.

Speaker #3: Bringing these elements together , the business is structural advantages . The potential revenue synergies , the cost synergies of the combination . The other profit levers available to the business , global Coffee Co will support and growth algorithm .

We are excited.

To create this global coffee powerhouse.

The world's largest.

Coffee pure play and a stable of the best loved brands.

Powered by advantaged capabilities.

Speaker #3: Now , there certainly can be some year to year volatility in top line due to commodity volatility . But over time we project low single digit net sales growth and high single digit adjusted EPs growth .

Yeah.

Alright, I think you've earned a well deserved break let's take a 15 minute break and we will come back and talk about beverage go. Thank you.

Please welcome Eric Gourlay President of U S refreshment beverages.

Speaker #3: And we would expect this business to be highly cash generative. As you see on this chart, anticipated cumulative free cash flow of more than $5 billion from 2026 to 2028.

Right.

You all hear me.

Excellent good morning.

Thrilled to be here getting to represent this great business and most likely I may new face to most of you.

Speaker #3: We are excited to create this global coffee powerhouse . The world's largest coffee pure play and a stable of the best loved brands powered by advantaged capabilities .

Believe it or not I've actually been in this industry closing and now on 30 years I spent the first 20.

In the Reg system.

And I just hit my 10th year anniversary here at ADP.

And look as I've told him Bob Our board there is absolutely no other place and I'd rather be right. Now then here with this collection of iconic brands in the incredible team that we've been able to assemble.

Speaker #3: All right. I think you've earned a well-deserved break. Let's take a 15-minute break, and we will come back and talk about Beverage Co.

So let me tell you why I feel that way.

<unk> had some of this to start with we work in a fantastic industry. It is large over $300 billion in retail sales and most importantly year. After year. It has demonstrated the ability to consistently grow sales dollars north of 3%.

And what fuels that growth is just how that dynamic the consumer and her ever increasing demands are.

Underlying megatrends. These are things, we all experienced in our day to day lives convenience wellness the need for functionality. These fueled our cycle of innovation and the opportunity to continuously participate in new pockets of growth.

And this landscape is way more fragmented than most people realize.

We view this as an opportunity for future expansion, particularly with our unique build by partner model.

So, let's talk a bit about the ESCO and why we feel like we are uniquely positioned to be a formidable challenger in this industry.

We have scale, we exited 2024 as you saw in tims sides north of $11 billion in net sales our businesses profitable our EBITDA margin is at 30% and again importantly, we're growing.

Since 2018 with average the topline growth rate of 8%.

We have incredible portfolio of brands with the ore with incredible organic growth upside that can be most of my presentation. Today, just the confidence we have in these products. We also have an advantaged commercial and route to market model. This includes one of only three national direct store delivery systems for.

Non alcoholic beverages here in the U S.

And we've invested significantly in our operations go support network expansion.

And yet we still have so much room for improvement.

So I'll now get into the details of why I personally have so much confidence we can maintain this momentum into the next chapter.

Okay.

So one of the things that is so very special about beverages is just how they are so very personal these are products, where consumers create deep lifelong relationships with their favorite brands.

We have many of these brands inside our portfolio brands that consumers love brands at our retailers value.

A few facts and figures on the side you will see over 25 brands that have over $100 million in annual retail sales. They are led by our $3 billion trademarks brand Dr. Pepper fast approaching $6 billion, Mark as well as category leaders like Canada dry in March.

Some other key brands, you'll see icons like Snapple ASW seven up as well as a few fast growing disruptors like Bloom Ghost and electrolytic.

Today, we believe we have a portfolio that not only provides us with exposure to growing categories, but to create scale for us with our customers and efficiency inside of our operations.

So over the past several years, we've done a really nice job of being very thoughtful on how we want to evolve our portfolio.

As you heard Tim mentioned, we employ a flexible but disciplined model, that's really centered around building buying or partnering it all starts with build and you can see on the slide where we have demonstrated a really strong track record of bringing innovation no. Better example of this is inside of our CSD portfolio here.

We are repeatedly recognized by our retailers for our market leading innovation.

We've also been very purposeful in our approach to utilizing.

Different ways to go expand the portfolio, particularly our partnership model.

Our opposed approach of partnerships is very very unique in the industry. We work hard to ensure that there is a win win and the relationship that we have aligned incentives and that both partners are in it for the long term. These.

These partnerships are able to leverage our DSD network and allow us to rapidly participate in growth pockets with a very capital efficient model.

And in a number of cases, they provide us with a superior risk. Adjusted return then we likely could achieve on our own through a build model.

So we'll start now with the portfolio with my favorite Brad our flagship brand Doctor Pepper I literally could speak for an hour just on brand Dr Pepper alone.

It is a brand that has had incredible success and yet we still believe tremendous headroom for growth.

A couple of years ago, you heard him say Doctor Pepper became the number two most consume soft drink brand.

This year 2025, we will complete our ninth consecutive year of share growth.

This is all built upon a consumer obsession for the brand you can see that demonstrated in category, leading household penetration growth as well as industry recognition for our marketing campaigns. We believe we ever repeatable playbook that works. It starts with Dr. Pepper's you need flavor, it's distinct positioning.

It plays firmly in wins in what we call the treat demand space, we're able to take that positioning and then make meaningful connections with what consumers really care about and where their passions are.

Right now you can see that on any given Saturday come to life in season eight of our highly successful fanfare campaign.

We also leverage winning innovation innovation that creates excitement not only with our consumers with our retailers and our distributors.

That drives some of the scale retail activation youll see in market for the full trademark importantly, not only for the innovation. This also attracts new households into our base flavor, we execute this well.

So this is great, but what excites me. The most is the runway we still have ahead of us.

Let me talk about Dr. Pepper zero sugar is still very much in its early days, you'll see in your scan data. It's already the number two zero sugar CSD, but still has significant opportunity in terms of distribution display presence even consumer awareness.

As a percentage of the trademarks mix, we're still only about 60% of the development of the number one zero sugar CSD.

Point number two.

Doctor Pepper as Gen Z is most popular beverage brand and we rapidly been adding households within this cohort fewer like myself a student of our industry.

You know that this type of trend is highly encouraging for longer term consumption growth.

And then finally, we have outsized growth opportunities in specific geographies. While were currently approaching a 13 chair nationally. However in any given local market, we can be as high as the mid twenty's and our heartlands or mid single digits on the coasts.

What's really encouraging right now as we're growing share across all market types and.

And lower share markets, our innovation has been the most impactful and actually bringing new households into the trademark.

And then final point as good as the market has been on brand Dr. Pepper, we honestly believe it could get even better.

This year, we've begun to leverage some of our new capabilities and precision and personalized marketing. This is now, allowing us to go reach target consumers with relevant content and a hyper efficient approach will speak a little bit more about that in a couple of minutes.

So this playbook.

We think it's a repeatable model that we can go apply to other parts of our portfolio. Let me just give you two quick examples of work in flight today, So Canada dry number one ginger ale long track record of growth.

Canada dry plays in the relaxed manned space. It also has a unique and honorable position.

Here, we've seen innovation also play an important role back in 2024, we launched what we call our fruits flash platform that year. It was recognized as the number one CSD innovation, we're bringing a second flavor in for 2026.

And much like brand Dr. Pepper, Canada dry also has geographic opportunities while its a three share nationally it's as high as the 12 share here in parts of the northeast.

Let's take a minute to talk about March.

March number one apple juice in sauce brand a staple for moms incredible equity in health here, though we still have potential for growth. Great example, you see on the slide is in our resource portfolio in certain formats like Cup in jars were north of the 50 share, but we had been a relatively.

Small player in the growing pouch segment over the past year with a focused marketing and commercial activation plan, specifically against pouch, we've been able to unlock significant growth.

So I'll, let you scan the right hand side of the slide you can see a host of other iconic brands within our portfolio that we think we can deploy the same playbook to unlock organic growth for those of you probably most of the audience here local to New York City. You May have noticed snapple has both a new campaign and.

Just last week the return of its iconic glass packaging in five classic flavors honoring the city, where it was born and its five boroughs.

So let me shift gears here another space.

I, probably consume too much of but we're excited about as a company the energy category energy now the third largest category in beverages $28 billion. If you look at the scanner data growing rapidly.

Whats really remarkable over to energy is just how are the past two decades. This category has continued to reinvent itself, it's been able to leverage different product profiles, whether it be ingredients caffeine amounts serving sizes brand positioning the category has been able to continually unlock additional occasions and bring a new.

Households.

Now, we're really seeing the latest iteration of this with the female targeted product lines.

Three years ago, we rounded honestly to a zero share in energy.

We knew this was a big opportunity. So we set out to go create a portfolio to win where we saw the growth occurring.

Products with great taste products that played in the zero sugar space.

Products that we could.

Target against distinct demand spaces.

With unique authentic brands today, we believe we have a complementary portfolio of brands that can win within their respective segments, especially when you couple that with our commercial approach international distribution network.

You'll see in your scanner data over the past four weeks, we've now surpassed the seven and a half share and we have line of sight to our stated goal of the 10 chair in the next few years.

So aside from energy.

We've also established platforms and several other high growth categories over the past few years through our long term distribution partnership with electrical it. We now have a strong play in sports hydration, specifically, we are the number one player in the rapid hydration segment. This is a 2 billion dollar segment that is growing at a blistering pace.

This summer we entered the prebiotic CSD space with Bloom pop.

Building on Bloom's incredible success today in energy initial launch retailer velocity per SKU was on par with the market leaders.

We're really excited about balloon pops potential and we just began scaling this nationally at the end of Q3 through our DSD network.

And then finally earlier this summer we had a acquisition a company called Dialer brands, which has allowed us to go play in the drink mix space dialogues, bringing both brands as well as capabilities.

Additionally, it is going to let our broader portfolio to instantly access this high growth and attractive functional powder segment.

So a lot of effort has gone into building this portfolio. However.

However, entering our category is one thing the bigger question can you effectively sustain the success.

Speaker #5: All .

And you can see on the slide across a variety of time horizons and a spectrum of categories.

How we have been able to significantly increase our market share relative to pre to ADP distribution.

This reinforces that access to our network, it's more than distribution, it's our ability to step change the selling and activation for our brand all the way from the national buying desk down to the outlet level.

Speaker #6: Please be seated. We are getting started in two minutes.

Yeah.

So part of the secret whether its successful innovation or some of the partnership scaling I. Just spoke about are some of the top tier capabilities that we've been able to create and are marketing commercial functions.

I mentioned earlier with brand Doctor Pepper, my excitement around our new capabilities to go amplify what we already believe is world class marketing.

This is all grounded in new abilities to go leverage AI powered data and analytics to go create a deeper understanding of the consumer.

Speaker #7: You know what ? I'm not going to worry . James . Look like . One minute . Give yourself a little .

This helps US guide our innovation is helping US set brand strategy and now it's also allowing us to create highly relevant personalized content and creative.

Our marketing and communication platforms are increasingly connected across both channels and platforms. This is going to let us unlock precision media capabilities, allowing us to go target the individual and drive efficiency and effectiveness in how we flight our marketing investments.

Speaker #8: More .

Speaker #6: We're starting in one minute. Everyone, find your seats.

Speaker #7: That was great. I'm like, please.

Right now of Kt, We think we have access to the right data the right systems and most importantly, the right talent.

Underpinning by an agile operating model to measure and react almost real time to ensure we are driving the best returns for our marketing investments. This fall. We started to go deploy this with our fans will campaign, you're going to hear us talk a lot more about this in the future.

And then an area that I've spent a great deal of my time, helping to go build out is the middle part of the slide is what we call. Our commercial engine. So this is the function, which really serves as the critical link between our brands and ultimately our routes to market. So inside the gears of the engine you see some of the best in breed capabilities. We've created can be omni marketing revenue manage.

And category management, how we show up with our customers.

These are capabilities that allow us to effectively represent our products with our customers with a high degree of confidence in the ability to go create value the advantage of us doing this well so regardless of the brand owner or the route to market is we can create a seamless experience for our retailers bring them meaningful commercial solutions.

Speaker #6: Please welcome Eric Gourlay, President of U.S. Refreshment Beverages.

Speaker #9: All right , y'all hear me ? Excellent . Good morning . Thrilled to be here getting to represent this great business . And most likely , I'm a new face to most of you .

It can fully take advantage of the breadth of what our portfolio has to offer.

And then final point on the slide we all know it strong national distribution, absolutely critical to go win in beverages.

Speaker #9: Believe it or not , I've actually been in this industry . Closing in now on 30 years . I spent the first 20 in the reg system and I just hit my 10th year anniversary here at KDP and look , as I've told Tim , Bob , our board , there is absolutely no other place than I'd rather be right now than here with this collection of iconic brands in the incredible team that we've been able to assemble .

Right now we have six different options that we can go use it really depends on what is the right fit for the product or what is the need of the retailer. So let me speak a bit more about those options.

So I'll talk more about company owned DSD, we have at both here in the U S and in Mexico, but we also are able to leverage some leading bottlers that complement our company owned DSD footprint in specific geographies.

Speaker #9: So, let me tell you why I feel that way. You know, Tim hit some of this to start with. We work in a fantastic industry.

For some products, we still utilize the effect of warehouse direct model, particularly for categories that have lower velocities are where there's a real preference by the retailer for that mode.

Speaker #9: It is large, over $300 billion in retail sales, and most importantly, it has demonstrated the ability to consistently grow sales dollars north of 3% year after year.

Fountain foodservice and on premise extremely important these channels provide access to high value away from home occasions. These are critical for building brands. Notable brand. Dr. Pepper is the most pervasive way available fountain beverage. This allows us to go have direct relationships with most major operators and customers in the foodservice.

Speaker #9: And what fuels that growth is just how the dynamic , the consumer and her ever increasing demands are underlying megatrends . These are things we all experience in our day to day lives convenience , wellness , the need for functionality .

This space.

Speaker #9: These fuel a cycle of innovation and the opportunity to continuously participate in new pockets of growth. This landscape is way more fragmented than most people realize.

And finally.

Winning in e-commerce has become increasingly important by our measures today, roughly one and a cold beverages. The purchases are occurring in a digitally oriented means and in many categories and retailers, it's providing over 100% of the growth.

Speaker #9: We view this as an opportunity for future expansion, particularly with our unique build, buy, partner model. So let's talk a bit about Bevco and why we feel like we are uniquely positioned to be a formidable challenger in this industry.

We are making the right investments to ensure we've got the specialized capabilities to effectively partner for growth, whether it's a pure play where omnichannel retailers.

So, let's talk a bit more about DSD why doesn't matter so much for beverages.

Speaker #9: We have scale. We exited 2024 with, as you saw in Tim's slides, north of $11 billion in net sales. Our business is profitable.

Well when you get into it great DSD execution is more than just a replenishment model done well is a powerful competitive advantage that allows you to build brands over time.

Speaker #9: Our EBITDA margin is at 30% . And again , importantly , we're growing since 2018 . We've averaged a top line growth rate of 8% .

<unk> provides access to outlets that are not serviced by warehouse direct most of the convenience retail channel most of on premise cannot get there with that DSD.

Speaker #9: We have an incredible portfolio of brands with incredible organic growth upside. That's going to be most of my presentation today: just the confidence we have in these products.

And even within retail channels. It allows a local selling associate to build a meaningful relationship with decision makers at the outlet level.

Speaker #9: We also have an advantage in our commercial and route-to-market model. This includes one of only three national direct store delivery systems for non-alcoholic beverages here in the U.S., and we've invested significantly in our operations to support network expansion.

These relationships coupled with the merchandising resources, we provide can translate into superior retail presence for our brands as well as getting your critical access to cold drink equipment and other means of trial.

Scale is what makes a DSD system work to generate the local brand building benefits there are significant labor and fixed cost scale.

Speaker #9: And yet we still have so much room for improvement. So I'll now get into the details on why I personally have so much confidence we can maintain this into the next chapter.

Scale drives a virtuous cycle that benefits from the leverage on that infrastructure and done well at a neighbor's further reinvestment and growth.

Speaker #9: So one of the things that is so very special about beverages is just how they are so very personal. These are products where consumers create deep, lifelong relationships with their favorite brands.

So let me Orient you towards <unk> network. These are the trucks that carry the majority of our portfolio again, we have one of only three systems that can covering the entirety of the U S footprint.

Speaker #9: We have many of these brands in our portfolio: brands that consumers love and brands that retailers value. So, a few facts and figures on the slide.

Our company owned trucks, they're depicted in the maroon on the side they cover roughly 80% of the population base and for the balance of the country. We have a longstanding strong strategic relationships with leading independent distributors, who operate with scale in their own respective geographies.

Speaker #9: You'll see over 25 brands that have over $100 million in annual retail sales. They are led by our $3 billion trademarks, brand Dr Pepper.

Speaker #9: Fast approaching the $6 billion mark , as well as category leaders like Canada Dry and Mott's . Some other key brands . You'll see icons like Snapple and 7Up , as well as a few fast growing disruptors like bloom , ghost and Electrolyte .

Look I've had the chance over the past few years.

Let's spend a great deal of time with some of the 13000 DSD employees that we have.

When you get a chance you experience the passion. These team members have her brands the expertise they bring to our customers everyday hitting almost 200000 outlets you can see firsthand why this is such a powerful competitive advantage.

Speaker #9: Today, we believe we have a portfolio that not only provides us with exposure to growing categories, but it creates scale for us with our customers and efficiency inside of our operations.

So we're really proud over the past six years of the work we've done to go strengthen our DSD network look we're improving every day.

In terms of both the service the capabilities that we're providing our retailers.

Speaker #9: So, over the past several years, we've done a really nice job of being very thoughtful in how we want to evolve our portfolio.

So let me talk about each of these vectors will start with territories since 2019 as Tim mentioned, we've made over 30 acquisitions.

Speaker #9: As you heard Tim mention , we employ a flexible but disciplined model that's really centered around building , buying or partnering . It all starts with build , and you can see on the slide where we have demonstrated a really strong track record of bringing innovation .

Some relatively modest a few rather large.

Whats Universal those where we've made these investments we've been very satisfied with the returns that they generated that said there is not a one size fits all model here. Our primary goal is to have a scaled and relevant DSD operation that puts the right focus on our brands, whether it's a partner or something we owned access.

Speaker #9: No better example of this than inside of our CFD portfolio. Here we are repeatedly recognized by our retailers for our market-leading innovation.

Speaker #9: We've also been very purposeful in our approach to utilizing different ways to go expand the portfolio , particularly our partnership model . Our approach to partnerships is very , very unique in the industry .

Is what is key.

Let me shift the portfolio one of the goals of our portfolio expansion has actually to go help us generate additional scale for a company owned DSD operations meaningful participation in categories like energy or sports hydration, they've had a material impact within specific channels no better example than inside of convenience retail.

Speaker #9: We work hard to ensure that there is a win-win in the relationship that we have, aligned incentives, and that both partners are in it for the long term.

Speaker #9: These partnerships are able to go leverage our DSD network and allow us to rapidly participate in growth pockets with a very capital efficient model and in a number of cases , they provide us with a superior risk adjusted return than we likely could achieve on our own through a build model .

Here, we've been able to improve our drop sizes close to 70% and in some instances they had the opportunity to go revisit our service frequency to go map better to some of our customers' needs again, a great example of that virtuous flywheel I spoke about a moment ago and how it can strengthen our ability to go capture growth, particularly in.

C stores, which is an extremely profitable space.

Speaker #9: So we'll start now with the portfolio , with my favorite brand . Our flagship brand , doctor Pepper . I literally could speak for an hour just on brand Doctor Pepper alone .

So a final point on the side is going to reference some of our digital capabilities. These here are really focused on our frontline selling.

We're rolling these out recently in the market really pleased with the results. The one I'll highlight is our perfect order.

Speaker #9: It is a brand that has had incredible success, and yet we still believe there is tremendous headroom for growth. A couple of years ago, you heard Tim say that Dr Pepper became the number two most consumed soft drink brand this year, 2025.

This is an application that's leveraging algorithms based on outlet specific data to help pre generate the order for the next delivery and just to bring this home. If you think about a big box store.

Speaker #9: We will complete our ninth consecutive year of share growth . This is all built upon a consumer obsession for the brand . You can see that demonstrated in category leading household penetration growth , as well as industry recognition for our marketing campaigns .

Generally a couple hundred thousand square feet, we may have 250 different skus spread across that store that a sales associate is responsible Friday. The next delivery order for where we've been able to employ this application, we're seeing meaningful improvement in in stock rates as well as a significant reduction in the time. It takes spent on lower value activities.

Speaker #9: We believe we have a repeatable playbook that works . It starts with Doctor Pepper's unique flavor . It's distinct positioning . It plays firmly in wins in what we call the treat demand space .

<unk> been counting walking around the outlet so with that additional time, we can enable these same individuals to shift their focus to local selling activities here.

Speaker #9: We're able to take that positioning and then make meaningful connections with what consumers really care about and where their passions are right now.

Here, we're also implementing real time access to outlet specific data, we are starting to enable with AI to help generate specific insights that's going to help aid in their ability to work with the local customer decision maker to unlock growth inside of that outlet extremely.

Speaker #9: You can see that on any given Saturday come to life in season eight of our highly successful Fansville campaign. We also leverage winning innovation that creates excitement not only with our consumers, but with our retailers and our distributors.

We are excited about where this is going to go.

Speaker #9: That drives some of the scale retail activation . You'll see in market for the full trademark . Importantly , not only for the innovation , this also tracks new households into our base flavor .

So shift gears a minute, let's talk about Mexico.

We also have a fast growing profitable billion dollar plus business in Mexico.

No. It's at an earlier stage, we think the same model that has driven our success in the U S. Also can be leveraged here, we are a leading brands starts with our flagship brand, Tennessee L. If youre not familiar with Graham Hennessy L is 100 year old locally sourced icon that is the number one mineral water in Mexico, We're now seeing that brand has.

Speaker #9: We execute this well, so this is great. But what excites me the most is the runway we still have ahead of us.

Speaker #9: Let me talk about doctor Pepper . Zero sugar , still very much in its early days . You'll see in your scan data it's already the number two zero sugar CST , but still has significant opportunity in terms of distribution , display , presence , even consumer awareness as a percentage of the trademarks mix .

Success moving into some adjacent spaces.

We also believe some of our U S trademarks can play a much bigger role in the Mexican market, particularly brand Dr. Pepper.

Speaker #9: We're still only about 60% of the development of the number one zero sugar C.S.D. Point number two, Dr Pepper is Gen Z's most popular beverage brand, and we've rapidly been adding households within this cohort.

Finally, like the U S. We continue to make meaningful investments in expanding our DSD network.

Much like the U S for Mexico, a critical enabler of brand development, particularly in a market where the traditional trade is still thriving today.

Speaker #9: If you are like myself, a student of our industry, you know that this type of trend is highly encouraging for longer-term consumption growth.

They are company owned footprint, we reach about half of the marketplace. We cover population centers in the central and northern part of the country. All of this together is why we feel great about our ability to go generate strong returns for Mexico for many years to come.

Speaker #9: And then finally , we have outsized growth opportunities in specific geographies . While we're currently approaching a 13 share nationally , however , in any given local market , we could be as high as the mid 20s in our heartlands or mid-single digits on the coast .

So spoken a lot about growth I also want to emphasize though we are focused on the right kind of growth growth that is going to allow us to go expand our margins over time pricing.

Speaker #9: What's really encouraging right now is we are growing share across all market types in lower share markets. Our innovation has been the most impactful and is actually bringing new households into the trademark.

Critical lever.

We are very well positioned to drive sustained net price realization across our major categories.

Another key thing is our largest category CSD is we still believe.

Speaker #9: And then, final point, as good as the marking has been on brand Dr Pepper, we honestly believe it could get even better.

Has a very very attractive price to value ratio, particularly when you compare that to other beverage options for purchase.

Speaker #9: This year . We begun to leverage some of our new capabilities in precision and personalized marketing . This is now allowing us to go reach target consumers with relevant content in a hyper efficient approach .

Let's talk about mixed management.

We have very strong revenue management capabilities done.

Done well, we're able to go meet both some affordability requirements, but also identify different levers to improve our unit economics weathers through promotional optimization or package and product mix.

Speaker #9: We'll speak a little bit more about that in a couple of minutes. So, this playbook, we think it's a repeatable model that we can go apply to other parts of our portfolio.

<unk> the virtuous cycle in convenience stores, the ability continue to grow in media consumption soft drink occasions as well as energy. These are really profitable leavers to continue to go get great margin accretive mix in your portfolio.

Speaker #9: And let me just give you two quick examples of work in flight today. So, Canada Dry, number one ginger ale, has a long track record of growth. Canada Dry plays in the relaxed-minded space.

Speaker #9: It also has a unique and notable position here. We've seen innovation also play an important role. Back in 2024, we launched what we call our Fruit Splash platform.

And then finally I'll touch on productivity, we all know productivity it supports reinvestment back into the brands.

Ideally can help expand margins annually, we target three to four points of productivity and we've been able to consistently deliver in that range over the past few years specific focus areas, where we have made and will continue to make investments are in our network.

Speaker #9: That year, it was recognized as the number one innovation. We're bringing a second flavor in for 2026. And much like the brand Pepper, Canada Dry also has geographic opportunities.

Speaker #9: While it's a 3 share nationally, it's as high as a 12 share here in parts of the Northeast. And let's take a minute to talk about Mott's.

Both within our manufacturing and our distribution facilities, we've got opportunities to further leverage automation and optimize our footprint.

Speaker #9: Mott's, the number one apple juice and sauce brand, is a staple for moms, providing incredible equity in health. Here, though, we still have potential for growth.

Digital I spoke a lot about frontline a few moments ago. We also have digital initiatives in flight to help set change our demand and supply planning visibility across the vast network.

Speaker #9: A great example you see on the slide is in our sauce portfolio, in certain formats like cups and jars. We're north of a 50 share, but we have been a relatively small player in the growing pouch segment. Over the past year, with a focused marketing and commercial activation plan specifically against pouch, we've been able to unlock significant growth.

And then finally operating model, we're continuing to strength and how we manage this productivity pipeline increasingly driving accountability down to our local orbits.

So when you bring it altogether Bev co has delivered consistent strong financial results since 2018 on a compounded annual basis top line growth approaching 8% EBITDA growth almost 12% in.

Speaker #9: So, I'll let you scan the right-hand side of the slide. You can see a host of other iconic brands within our portfolio that we think we can deploy this same playbook to unlock organic growth.

And look we've achieved these outcomes through what I covered today strong base business momentum and share gains deliberate capital efficient portfolio reshaping initiatives.

Speaker #9: For those of you , probably most of the audience here local to New York City , you may have noticed Snapple has both a new campaign and just last week , the return of its iconic glass packaging in five classic flavors honoring the city where it was born .

And targeted actions, which were able to mitigate inflation and help us go reinvest back against the core tenants of our business.

And we expect to sustain this momentum that supports the algorithm youll see up on the page.

Speaker #9: And its five boroughs . So let me shift gears here . Another space I probably consumed too much of . But we're excited about as a company , the energy category energy .

Mid single digit net sales growth and high single digit adjusted EPS growth.

Additionally, we expect to generate significant free cash flow, which will as Tim mentioned provide optionality for us to either invest against organic or potentially inorganic additional growth levers.

Speaker #9: Now the third largest category in beverages, at $28 billion. And if you look at the scanner data, it's growing rapidly. What's really remarkable about energy is just how it has evolved over the past two decades?

Speaker #9: This category has continued to reinvent itself . It's been able to leverage different product profiles , whether it be ingredients , caffeine amounts , serving sizes , brand positionings , the category has been able to continually unlock additional occasions and bring in new households .

So a few points to reiterate as I close here. This is a powerful platform in a fantastic industry.

Over the past six years. This team has proven its ability to consistently deliver attractive financial returns.

We now head into the future we're equipped with a fortified portfolio the right brands the exposure to high growth demand spaces, which we believe can meet our growth goals organically.

Speaker #9: Right now , we're really seeing the latest iteration of this with the female targeted product lines . Three years ago , we rounded honestly to a zero share in energy .

Additionally, we're poised to benefit from a step change in our new digitally enabled marketing capabilities.

Speaker #9: We knew this was a big opportunity , so we set out to go create a portfolio to win where we saw the growth occurring , products with great taste , products that played in the zero sugar space , products that we could target against distinct demand spaces with unique , authentic brands .

We have a model against our portfolio that creates optionality against how we can add to the portfolio in a very capital efficient manner.

We are strengthening our network and we're going to continue to recognize the benefits of improved execution. These.

These improvements will drive growth and margin accretive categories packages and channels and then finally, we have demonstrated the ability to unlock meaningful productivity and we believe we have a robust pipeline of opportunities to come.

Speaker #9: Today, we believe we have a complementary portfolio of brands that can win within the respective segments, especially when you couple that with our commercial approach and our national distribution network.

So as you assess the some of these efforts I think now hopefully you can understand why I have so much confidence in this team and as we head into the next chapter for Bebko confidence about our future and our ability to go deliver this very attractive algorithm, we have up on the page.

Speaker #9: You'll see in your scanner data over the past four weeks , we've now surpassed a seven and a half share , and we have line of sight to our stated goal of a ten share in the next few years .

Speaker #9: So aside from energy , we've also established platforms in several other high growth categories over the past two years through our long term distribution partnership with Electrolit , we now have a strong play in sports hydration .

Thank you guys. So much for your attention. This morning, I'm now going to turn the podium over to Jan.

Speaker #9: Specifically, we are the number one player in the rapid hydration segment. This is a $2 billion segment that is growing at a blistering pace. This summer, we entered the prebiotic CSD space with Bloom Pop, building on Bloom's incredible success to date in energy.

Speaker #9: In its launch , retailer velocity , per skew was on par with the market leaders . We're really excited about Bloom Pops potential , and we just began scaling this nationally at the end of Q3 through our DSD network .

Speaker #9: And then finally, earlier this summer, we had an acquisition of a company called Dyla Brands, which has allowed us to go play in the drink mix space.

Speaker #9: Dyla is bringing both brands as well as capabilities . Additionally , it's going to let our broader portfolio to instantly access this high growth and attractive functional powder segment .

Speaker #9: So a lot of effort has gone into building this portfolio. However, entering a category is one thing. The bigger question is, can you effectively sustain the success?

Speaker #9: And you can see on the slide, across a variety of time horizons in a spectrum of categories, how we have been able to significantly increase our market share relative to pre-CDDP distribution.

Speaker #9: This reinforces that access to our network is more than distribution. It’s our ability to step change the selling and activation for a brand, all the way from the national buying desk down to the outlet level.

Speaker #9: So part of the secret , whether it's successful innovation or some of the partnership scaling , I just spoke about or some of the top tier capabilities that we've been able to create in our marketing , commercial functions , I mentioned earlier with brand Pepper , my excitement around our new capabilities to go amplify what we already believe is world class marketing .

Independent company remain the same as we outlined in August.

Beverage Coe that includes an outlook of mid single digit net sales growth and high single digit adjusted EPS growth.

Speaker #9: This is all grounded in new abilities to leverage AI-powered data and analytics to create a deeper understanding of the consumer.

And for global coffee Cold, we envision outlook and long term targets consistent with low single digit net sales growth and high single digit EPS growth.

Speaker #9: This helps us guide our innovation. It's helping us set brand strategy, and now it's also allowing us to create highly relevant, personalized content and creative.

These will be strongly cash flow generative businesses with Bev co projected to generate over $6 billion of cash flow or free cash flow over the next three years and global coffee costs set to produce more than $5 billion.

Speaker #9: Our marketing and communication platforms are increasingly connected across both channels and platforms. This is going to let us unlock precision media capabilities, allowing us to target the individual and drive efficiency and effectiveness in how we flight our marketing investments.

While the exact dividend in each company will be determined closer to separation. What we can commit to you today is that across that you will maintain the level of our current dividend to start.

Speaker #9: Right now at KDP , we think we have access to the right data , the right systems , and most importantly , the right talent , underpinned by an agile operating model to measure and react almost real time to ensure we're driving the best returns for our marketing investments .

And we also come to you today with a clear view of starting that leverage for each Standalone company.

Upon separation, we expect beverage co to have net leverage between three and a half and four times with global coffee code targeted between $3 75, and four point to five times.

Speaker #9: This fall , we started to go deploy this with our Fansville campaign . You're going to hear us talk a lot more about this in the future , and then an area that I've spent a great deal of my time helping to go build out is the middle part of the slide is what we call our commercial engine .

Of course, both companies will continue to delever and strengthen their balance sheets. Following the separation as we keep to our commitment to strong investment grade profile.

Speaker #9: So this is the function which really serves as the critical link between our brands and ultimately our routes to market . So inside the gears of the engine , you see some of the best in breed capabilities .

Speaker #9: We've created could be omni marketing , revenue management , category management , how we show up with our customers . These are capabilities that allow us to effectively represent our products with our customers , with a high degree of confidence in the ability to go create value .

Let's zoom in on each company and a little bit more detail and this will build on the remarks of my colleagues.

For beverage co the financial algorithm and capital structure that we've laid out.

Our carefully designed to enable its growth potential its growth strategy and continued outperformance as.

Speaker #9: The advantage of us doing this well, regardless of the brand owner or the route to market, is that we can create a seamless experience for our retailers and bring them meaningful commercial solutions that can fully take advantage of the breadth of what our portfolio has to offer.

As you just heard from Eric our refreshment beverage business has already proven itself to be an agile challenger in north American beverages, and we fully intend to build understanding with long term targets that reflect that.

Speaker #9: And then the final point on the slide—we all know it: strong national distribution. Absolutely critical to go win in beverages.

Multiple factors are expected to contribute to mid single digit net sales growth.

Speaker #9: Right now, we have six different options that we can go use. And really, it depends on what is the right fit for the product or what is the need of the retailer.

Over the last several years, we have worked really hard to evolve our portfolio mix towards a faster growing weighted category average, which now features a well balanced set of volume mix and price drivers.

Speaker #9: So let me speak a bit more about those options . So I'll talk more about company owned DSD . We have it both here in the US and in Mexico , but we also are able to go leverage some leading bottlers that complement our company owned DSD footprint in specific geographies .

On top of that we layer a proven track record of market share gains supported by strong innovation and commercial capabilities.

And in addition.

Speaker #9: For some products, we still utilize the effect of the warehouse direct model for categories that have lower velocities, or where there is a real preference by the retailer for that mode.

Our ability to enter white spaces, and activate capital efficient partnerships now and in the future.

They're attacked.

Which means further growth optionality as we move through this period of integration and then afterwards during the after the separation.

Speaker #9: Fountain foodservice and on premise . Extremely important . These channels provide access to high value away from home occasions . These are critical for building brands .

Speaker #9: Notable brand Pepper is the most pervasively available fountain beverage. This allows us to have direct relationships with most major operators and customers in the food service space.

So combined with operating margin upside and some below the line leverage what becomes clearer as the path to high single digit EPS growth for the beverage Coe.

And to facilitate this we expect the capital structure at separation will be only modestly above where kt piece would have been prior to the deal with cash flow to delever quickly thereafter.

Speaker #9: And finally , winning in E-comm has become increasingly important by our measures today . Roughly 1 in 8 cold beverages , the purchases are occurring in a digitally oriented means and in many categories and retailers .

Speaker #9: It's providing over 100% of the growth. We are making the right investments to ensure we've got the specialized capabilities to effectively partner for growth, whether it's a pure play or our omnichannel retailers.

Separately, we will optimize global coffee Po for more resilient growth and strong cash flows.

What that means is our vision remains to create a pure play cash generative global coffee company.

Speaker #9: So let's talk a bit more about DSD . Why does it matter so much for beverages ? Well , when you get into it , great DSD execution is more than just a replenishment model done .

How does that manifest financially.

A combination of low single digit net sales growth over time with some volatility up and down over the course of commodity cycles due to pricing pass through dynamic.

Speaker #9: Well, it is a powerful competitive advantage that allows you to build brands over time. DSD provides access to outlets that are not serviced by Warehouse Direct.

And high single digit EPS growth, thanks to a combination of actionable cost synergies continuous productivity and below the line leverage.

Speaker #9: Most of the convenience retail channel , most of on premise , cannot get there without DSD , and even within retail channels , it allows a local selling associate to build a meaningful relationship with decision makers at the outlet level .

This combination should drive more steadily growing cash flow with upward potential should the coffee price normalize from here.

And for global coffee co to what we want is a balanced capital structure out of the gate, which means net leverage likely between $3 75, and 4.25 times at.

Speaker #9: These relationships, coupled with the merchandising resources we provide, can translate into a superior retail presence for our brands, as well as getting you critical access to cold drink equipment and other means of trial.

At separation.

So you know kind of better understand the financial vision and I'd like to shift the discussion to how we get there.

Speaker #9: Scale is what makes a DSD system work to generate the local brand. Building benefits. There are significant labor and fixed costs.

Over the last several weeks.

Speaker #9: Scale drives a virtuous cycle that benefits from the leverage on that infrastructure, and done well, it enables further reinvestment and growth. So let me orient you to our DSD network.

We set out to optimize our acquisition financing mix with two objectives.

First was to lower leverage at acquisition close.

And the second was to establish a clear line of sight to solid capital structures for each of the individual separated companies.

Speaker #9: These are the trucks that carry the majority of our portfolio. Again, we have one of only three systems that can cover the entirety of the U.S. footprint.

That process successfully culminated in today's announcement of a combined 7 billion dollar strategic equity investment anchored by two leading global investment firms Apollo and KKR.

Speaker #9: Our company owned trucks . They're depicted in the maroon on the slide . They cover roughly 80% of the population base . And for the balance of the country , we have long standing , strong strategic relationships with leading independent distributors who operate with scale in their own respective geographies .

I would highlight several benefits to the revised financing package.

One we will in fact reinforce our investment grade profile as a combined company with net leverage at close now approximately a turn lower than our original plan entailed.

Speaker #9: Look, I've had the chance over the past few years to spend a great deal of time with some of the 13,000 DSD employees that we have.

Secondly, we will have greater visibility to investment grade worthy capital structures for each independent company akin to what I just described.

Speaker #9: When you get a chance to experience the passion these team members have for our brands, the expertise they bring to our customers every day, hitting almost 200,000 outlets, you can see firsthand why this is such a powerful competitive advantage.

And even though the new capital is equity like it comes with a reasonable cost while pairing it up with world class investors, who see the strength of the opportunity at Kt, Pete and its successor companies.

Speaker #9: So we're really proud . Over the past six years of the work we've done to go strengthen our DSD network , look , we're improving every day in terms of both the service , the capabilities that we're providing our retailers .

All in against the backdrop of more comfortable leverage and attractive year, one EPS accretion of approximately 10% we.

Speaker #9: So let me talk about each of these vectors. We'll start with territories since 2019. As Tim mentioned, we've made over 30 acquisitions.

We hope this update will allow the strategic logic and value of the deal to take center stage in your evaluation.

Speaker #9: Some relatively modest , a few rather large . What's universal , though , is where we've made these investments . We've been very satisfied with the returns that they've generated .

Let's take a closer look at the structure of the deal.

Under our previously announced plan.

Speaker #9: That said , there is not a one size fits all model here . Our primary goal is to have a scaled and relevant DSD operation that puts the right focus on our brands , whether it's a partner or something .

Assuming a June 2026, close net leverage at 2026 year end was projected in the low fives.

What that meant was a starting point to close that would have been out approximately five six times.

Speaker #9: We owned . Access is what is key . Let me shift to portfolio . One of the goals of our portfolio expansion has actually to go help us generate additional scale for our company owned ESG operations .

After today, we expect initial leverage at close to be in the mid force and from there we plan to Delever at roughly half a turn a year. Thanks to a strong focus on cash flow.

Speaker #9: Meaningful participation in categories like energy or sports and hydration has had a material impact within specific channels. There's no better example than inside convenience retail.

The new investments will allow us to replace the full balance of junior subordinated notes and a smaller portion of senior debt that were originally intended to be part of the financing package.

Speaker #9: Here we've been able to improve our drop sizes close to 70%, and in some instances have had the opportunity to revisit our service frequency to better map to some of our customers' needs.

And all in the weighted average cap cost of capital of the deal is expected to be only modestly higher than our original plan.

Speaker #9: Again , a great example of that virtuous flywheel . I spoke about a moment ago , and how it can strengthen our ability to go capture growth , particularly in C-stores , which is an extremely profitable space .

The new instruments, we stood up take two forms.

Let's start with the creation of a new global coffee co joint venture with a consortium of investors led by Apollo and KKR.

Speaker #9: So, the final point on the slide is going to reference some of our digital capabilities. These here are really focused on our frontline selling.

The JV will focus on single serve manufacturing in North America with the earnings from pod manufacturing to be split among the partners, including Kt P.

Speaker #9: We're rolling these out recently in the market . Really pleased with the results . The one I'll highlight is our perfect order . This is an application that's leveraging algorithms based on outlet specific data to help pre-generate the order for the next delivery .

In fact, Katy P will retain a controlling interest in the JV as well as operational control of the assets and in establishing the JV will receive $4 billion in total proceeds at a cost of capital of just above seven and a 7.3 to 7.4 range.

Speaker #9: And just to bring this home, if you think about a big box store, generally a couple hundred thousand square feet, we may have 250 different SKUs spread across that store that a sales associate is responsible for the next delivery order for.

In addition projected.

In addition, KKR and Apollo have made a strategic investment into Katy P and ultimately the beverage coe, yielding $3 billion of incremental capital.

Speaker #9: Where we've been able to deploy this application . We're seeing meaningful improvement in in-stock rates as well as a significant reduction in the time it takes spent on lower value activities .

The second instrument is an attractively priced convertible security. It features a preferred dividend of $4, 75% to be netted against any common dividends and the current excuse me and the conversion price is 37 25, that's a 6% premium to where kt.

Speaker #9: Then, counting walking around the outlet, with that additional time we can enable these same individuals to shift their focus to local selling activities.

Speaker #9: Here . We're also implementing real time access to outlet specific data . We're starting to enable it with AI to help generate specific insights .

He last traded prior to the announcement of the acquisition and outcome that speaks to the upside potential we all see here.

Speaker #9: That's going to help aid in their ability to work with a local customer decision maker to unlock growth inside of that outlet. I'm extremely excited about where this is going to go.

I should mention that we plan to offer our shareholder partners an opportunity to participate in this financing.

Speaker #9: So shift gears a minute . Let's talk about Mexico . We also have a fast growing , profitable billion dollar plus business in Mexico , though it's at an earlier stage , we think the same model that has driven success in the US also can be leveraged here .

To help with your modeling you'll find a page in the appendix that outlines the accounting implications of each instrument and when you run your model what Youll see is that we've been able to effectively drive leverage lower while making a manageable tradeoff in terms of accretion and cost of capital.

Speaker #9: We have a leading brands . It starts with our flagship brand , Penafiel . If you're not familiar with brand , Penafiel is a 100 year old locally sourced icon that is the number one mineral water in Mexico .

Based on your feedback, which informed our decisions over the last several weeks.

Speaker #9: We're now seeing that brands have success moving into some adjacent spaces. We also believe some of our U.S. trademarks can play a much bigger role in the Mexican market, particularly the brand Dr Pepper.

We believe this is a more optimal balance to strike.

Okay.

As Tim said, ensuring solid balance sheets for each company is one of the critical milestones towards the successful separation.

Speaker #9: Finally , like the US , we continue to make meaningful investments in expanding our DSD network . Much like the US for Mexico , a critical enabler of brand development , particularly in a market where the traditional trade is still thriving today , our company owned footprint we reach about half of the marketplace we cover population centers in the central and northern part of the country .

And we expect to be operationally ready to go by year end 'twenty 'twenty six.

In the meantime, our job will be to focus on EBITDA growth and cash flow generation to facilitate that timeline.

However, should we want to further.

Speaker #9: All of this together is why we feel great about our ability to generate strong returns from Mexico for many years to come.

Salary the deleveraging path there are other levers that we could employ to raise additional capital.

For instance, we might consider monetizing select noncore minority Stakes and nonstrategic brand assets.

Speaker #9: So spoken a lot about growth . I also want to emphasize , though , we are focused on the right kind of growth growth that's going to allow us to expand our margins over time .

And we May also evaluate a partial IPO of beverage coe to begin the separation process, which could raise additional primary proceeds.

Speaker #9: Pricing and critical leverage. We are very well positioned to drive sustained net price realization across our major categories. Another key aspect is our largest category, CSDs.

To be clear.

These are simply options for us to consider.

The only concrete commitment on this page and on the stage is the strong free cash flow generation to support our transformational vision of the future.

Speaker #9: We still believe it has a very, very attractive price-to-value ratio, particularly when you compare that to other beverage options for purchase.

Speaker #9: Let's talk about mixed management. We have very strong revenue management capabilities that are done well. We're able to meet both some affordability requirements and identify different levers to improve our unit economics.

And speaking of commitments, we recognize we have come to you with quite a bit of news today and we're focused on supporting your full understanding.

So of all the messages I hope you'll take away from my presentation. It's the following.

Speaker #9: Whether it's through promotional optimization or package and product mix, I highlighted the virtuous cycle and convenience stores. The ability to continue to grow in media consumption.

We will ensure an appropriate capital structure for Katy P at transaction close.

As well as each individual company, a separation and beyond.

Speaker #9: Soft drink occasions , as well as energy . These are really profitable levers to continue to go get great margin accretive mix in your portfolio .

Our focus is on strong cash flow to support deleveraging as well as maintaining our competitive and attractive dividend.

Speaker #9: And then finally , I'll touch on productivity . We all know productivity . It supports reinvestment back into the brands . Ideally , it can help expand margins annually .

Through all of this our unwavering goal set beverage Coe and global coffee cold up for financial success and operational success.

Speaker #9: We target 3 to 4 points of productivity, and we've been able to consistently deliver in that range over the past few years.

And as we do so we will stay consistent and transparent in our financial communications to help build and maintain your confidence.

Speaker #9: Specific focus areas where we have made and will continue to make investments are in our network, both within our manufacturing and our distribution facilities.

With that thank you very much and I'll pass it on to Roger Johnson.

Speaker #9: We've got opportunities to further leverage automation and optimize our footprint. Digital. I spoke a lot about frontline a few moments ago.

You hear me.

Speaker #9: We also have digital initiatives in flight to help step-change our demand and supply planning visibility across the vast network, and then finally, our operating model.

Okay. My name is Roger Johnson, and I have the privilege of being the Chief transformation Officer, and Chief supply chain officer here at Keurig, Dr Pepper and in my capacity.

Speaker #9: We're continuing to strengthen how we manage this productivity pipeline , increasingly driving accountability down to our local orbits . So when you bring it all together , Bevco has delivered consistent , strong financial results since 2018 on a compounded annual basis .

Chief transformation officer, I am responsible for the.

Integration of JD EEP into Katy P and then the subsequent separation.

Two global coffee company and beverage company.

So I'd like to take a few minutes today to just walk through our approach in the execution of the transformation.

Speaker #9: Top line growth approaching 8% EBITDA growth almost 12% . And look , we've achieved these outcomes through what I covered today . Strong base business momentum in share gains , deliberate capital , efficient portfolio reshaping initiatives and targeted actions which were able to mitigate inflation and help us go reinvest back against the core tenets of our business .

And maybe give you some more details of our approaching.

The work in front of us.

First off.

We are genuinely excited about the opportunities ahead for both stand alone companies.

And as Bob and Tim mentioned earlier, we have strong support and oversight from our board of directors and especially created transaction Committee.

Speaker #9: And we expect to sustain this momentum that supports the algorithm. You'll see up on the page mid-single-digit net sales growth and high single-digit adjusted EPS growth.

The guide this transformation, we've established an executive steering committee that meets weekly.

To provide critical oversight timely strategic direction.

Speaker #9: Additionally, we expect to generate significant free cash flow, which will, as Tim mentioned, provide optionality for us to either invest in organic growth or potentially pursue inorganic growth levers.

We've also added rigor through a transformation management office or PMO, which is focused on capturing synergies and driving growth opportunities.

To keep everyone focused we've named a dedicated internal TMO team to lead these initiatives, allowing most of our teams to continue driving base business momentum.

Speaker #9: So, a few points to reiterate as I close here: this is a powerful platform in a fantastic industry. Over the past six years, this team has proven its ability to consistently deliver attractive financial returns.

This process is fostering strong communication between J D E Peet's, and Katie P leadership as well as our both internal functional experts.

Speaker #9: We now head into the future where , equipped with a fortified portfolio , the right brands , the exposure , the high growth demand , spaces which we believe can meet our growth goals organically .

And to ensure success, we have partnered with outside advisers, who bring deep experience and integrations and complex transactions.

Speaker #9: Additionally, poised to benefit from a step change in our new digitally enabled marketing capabilities, we have a model against our portfolio that creates optionality regarding how we can add to the portfolio in a very capital-efficient manner.

And there are long standing relationships, both for us and J D pits, which means we can leverage their detailed knowledge of our collective businesses and their proven expertise from hundreds of similar processes across industries worldwide.

Speaker #9: We are strengthening our network, and we are going to continue to recognize the benefits of improved execution. These improvements will drive growth in margin-accretive categories, packages, and channels.

May have some more context on the scope of our transformation management office, we fully stood up critical work streams focused on objectives of integration planning.

Speaker #9: And then finally, we have demonstrated the ability to unlock meaningful productivity. We believe we have a robust pipeline of opportunities to come.

Future company designs.

Separation.

Energy value capture.

And spin readiness.

Speaker #9: So, as you assess some of these efforts, I think now hopefully you can understand why I have so much confidence in this team.

For both global Coffee company and beverage company. These efforts have been mobilized in collaborative but discrete work streams.

Speaker #9: And as we head into the next chapter for Bevco, confidence about our future and our ability to deliver this very attractive algorithm we have up on the page.

We've organized these objectives into three primary focus areas for execution.

Speaker #9: Thank you all so much for your attention this morning. I'm now going to turn the podium over to Jane.

First and foremost change management, we're engaging the hearts and minds of our organization's showcasing future opportunities.

And creating that winning culture as we move towards Standalone success.

In commercial and supply chain, we're leveraging this unique moment to optimize and unlock growth and the potential across marketing selling organizations and key go to market opportunities.

And then finally for enterprise functions, we are focused on building fit for purpose teams calibrated to each company's unique needs and scale, ensuring both organizations have the strength and agility to succeed.

As we fully mobilized the TMO I've seen fantastic collaboration across our teams in these early days, it's really inspiring to watch our leaders really lean in to the road ahead.

Together, we've shifted into the next gear and planning against key milestones.

First of all I'd say, we're focused on integration planning following the acquisition close with detailed action plans to capture synergies.

And we're also accelerating readiness work.

Developing future company operating models for both global Coffee company and beverage company.

And getting into the functional specific preparation required for success.

Secondly, we're deep into separation planning.

To ensure clean operational readiness for two world class public companies.

Our goal is to be ready to separate by year end 2026.

And that means everything within our control will be stood up and ready by then.

As Tim mentioned earlier, the actual timing will depend on achievement of multiple milestones, including our own.

But our commitment is clear.

Secure operational readiness as early and as robustly as possible, while actively capturing cost synergies.

And our goal is clear to build a global coffee powerhouse and the most agile north American beverage leader.

This transformation approach will make that vision a reality.

To make sure both standalone organizations reach their full potential we've placed a heavy focus on communications and change management.

Recently, we had the chance to spend meaningful time with a J D. A pizza team on international coffee day very fitting.

And it was a fantastic event in Amsterdam, where we shared our vision and answered questions and amplify the excitement across both teams.

The shared love of coffee brought the teams together and really gave everyone, including myself a glimpse of what a true coffee powerhouse could feel like.

But at the same time, we launched a line communications approaches are high frequency town halls feedback loops multichannel digital outreach, both internally and externally.

It was really ensures we're reaching every employee and engaging top leadership, including our director and above populations.

For many.

This is the first time in their careers.

They've experienced the transformation of this scale.

And enrolling them in the journey is an exciting opportunity.

To reinforce collaboration we've sure clear guiding principles and leadership commitments on how we will work together for the outstanding outcomes, we expect.

We believe our consistent drumbeat of communication is critical to our seamless integration and eventual separation without missing a beat.

So far employee feedback has been very positive, especially around leadership transparency <unk>.

Communication depth and the opportunities ahead of us.

And I can tell you firsthand from Amsterdam, Frisco Burlington all over our colleagues are energized about the future potential of these two great companies.

As mentioned earlier, our coffee company value capture plan about $400 million is well underway with opportunities across procurement manufacturing and SG&A and I T.

This target has been validated through both top down and detailed bottoms up planning and we see it as highly actionable.

As Tim highlighted these efficiencies are balanced across the three major buckets of procurement manufacturing logistics, SG&A and I T and.

And ahead of close we've established clean teams to ensure that we're can happen outside the day to day business. So we can move quickly once the acquisition closes.

Okay.

Immediately after close we'll activate each functional focus area to deliver on our three year synergy capture plan.

And we're confident these cost synergies combined with future growth opportunities will set global coffee company up for long term success.

And to facilitate this, we expect the capital structure at separation will be only modestly above where it would have been prior to the deal, with cash flow to delever quickly thereafter.

And our job is to do the same for beverage company minimizing dis synergies before and after separation.

We expect that impact to be approximately $75 million and we largely planned to offset it.

Separately, we will optimize global coffee Po for more resilient growth and strong cash flows.

That means we got a redesign organizations and spend structures with agility in mind, keeping any leakage manageable within the beverage companies overall P&L.

What that means is our vision remains to create a pure-play, cash-generative global coffee company.

How does that manifest financially.

I hope you can see and feel my excitement and confidence in our ability to land the right structure.

The combination of low single-digit net sales growth over time, with some volatility up and down over the course of commodity cycles due to pricing pass-through dynamics.

Build two successful companies and create value for everyone.

Throughout this transformation.

So thank you for your time and engagement.

And I'm going to turn it over back to Tim to give a Q3 earnings update thank you.

[noise] coming down the homestretch. Thank you Roger look one of the main objectives, obviously in establishing that TMO is not only to do the hard work around separation.

Integration separation, but importantly to minimize the disruption.

That activity so that our core teams can focus and deliver on the base business quarter after quarter and I think our Q3 results that you've probably already seen in the press release are a testament to this approach we continue to operate with focus with discipline, we delivered another strong quarter here in Q.

Three even with that tough macroeconomic backdrop. So let me share some highlights on the quarter net sales accelerated in Q3.

They accelerated.

Sequentially, they increased at a double digit rate with strengthening performance across all three of our reported segments. We gained market share in key categories like Cst's and energy.

We successfully implemented another round of pricing on our coffee business and in international we drove healthy relative trends among challenging macro conditions.

So have you heard throughout the morning, we are advancing a lot of exciting initiatives right now at Katy P across both refreshment beverage and coffee and these are as evidenced in the results really contributing to this near term performance and I think continued momentum.

Having said that as expected inflationary pressures ramped during Q3 and even despite this we delivered solid bottom line growth and generated meaningful cash flow in the third quarter. So with one quarter remaining in the year as you've heard we are raising our constant currency net sale.

<unk> outlook.

And reaffirming our EPS growth guidance.

We're confident that our robust commercial plans our innovation plans are operating rigor will help us achieve these updated targets and finish 2025 on a strong note.

Tim Cofer: Good morning and welcome, everyone. We appreciate you taking the time to join us today, both in person in New York City and over the webcast. Before walking through the agenda, let me first draw your attention to the slide in recognition of the forward-looking statements we'll make today. Please also keep in mind that we will be citing non-GAAP financial measures throughout our remarks and in the presentation that is posted on our website. Now, let's discuss what to expect during our time together. Our Chairman, Bob Gamgort, will kick off the formal presentation with welcome remarks, followed by our CEO, Tim Cofer, discussing our value creation framework and the strategic rationale for the JDE Peet's acquisition and our planned separation. Tim and Olivier Lemire, our newly appointed President of US Coffee, will then walk through our future Global Coffee Co. business in more detail.

So let's move to the consolidated results you see it on this slide net sales specifically grew 10.6% led by about a six 5% increase in volume mix with strong results in U S rough Bev and international the Ghost integration continues to.

Perform very well, it's meeting all of our key metrics that we set out and delivering on year. One of our investment thesis is contributed four points four points to the top line.

Net price increased 4.2%, primarily that's reflecting the pricing actions, we took on our coffee business.

In response to obviously see price inflation on the bottom line operating income increased roughly 4% net sales growth productivity savings were partially offset by that inflationary pressure I referenced all in EPS grew 6% to 54.

Tim Cofer: After a short break, Eric Gorley, our President of US Refreshment Beverages, will discuss the future Beverage Co., SVP of Finance, Jane Gelfand, will provide an update on financials and capital structure, and Roger Johnson, our Chief Transformation and Supply Chain Officer, will walk through our integration and separation plans. Finally, Tim will provide an overview of Q3 earnings and share some final thoughts. In total, the prepared remarks portion of the day should take around 2.5 hours. We'll then break for 45 minutes to allow the in-person attendees to explore our product showcase, and then we'll return for a Q&A panel. We expect to conclude our event and the webcast at around 1:00 P.M. Eastern Time. We hope it'll be a productive and insightful session for you.

Sense and that included a modest below the line benefit from a minority partnership gain.

Okay, Let's do a quick tour of the three reported segments, starting with refreshment beverage.

We maintained.

What I characterize as exceptional momentum on this business with net sales growing 14.5% driven by volume mix increase of over 11%.

Net price was also a driver it added about three points to net sales ghost clearly was a strong contributor to our growth, but also our base business in fact, our base business accelerated in Q3, increasing in the high single digits led by Cst's.

Tim Cofer: Let me kick things off by welcoming our Chairman, Bob Gamgort, to the stage, and he will introduce the rest of the board members joining us today. Over to you, Bob.

Bob Gamgort: Good morning. It's great to see everyone. Thanks for joining us here. We've got updates to provide on Keurig Dr Pepper in general, on the transaction that we announced in August. We also have some great Q3 results to talk about, so we don't want to forget those either. As Chafin mentioned, we've got a number of directors here today, and what I'd like to do is just take a minute to introduce them. They are mostly all located, yeah, to our right over here. Pam Patsley is our Lead Independent Director. She chairs our remuneration committee. She's our longest-standing director, having been at Dr Pepper Snapple board prior to joining Keurig Dr Pepper. Tim Cofer, our CEO, you're going to hear a lot from him today. Juliet Hickman is right over there.

Energy sports hydration.

Overall, the segment results and Ralph Babb were prepared by that growth playbook that Erik took you through just a few minutes ago brand building innovation commercial execution, each contributing to the strong performance you see and.

And we see significant runway for future growth in rough Bev and we have strong plans in place going into 'twenty six to ensure we deliver on that momentum.

What about segment operating income you see it grew 10% with net sales gains and ongoing productivity savings more than offsetting the impacts of inflation as well as lapping earned equity gains that were larger than the prior year.

Bob Gamgort: Juliet serves on our audit committee, and one of our very newest directors, Mike Vandiven, who also serves on our audit committee. The directors are going to be available to interact with you during breaks and during the product demonstration, so please engage with them. Pam and I are going to come back on stage with the management team at the end of the day and answer questions as part of the formal Q&A session. My purpose today is really to represent the perspective of the board, and I want to kick off today by offering five points that I think the board would like to emphasize at the start here. First of all, Keurig Dr Pepper has a long and consistent track record of delivering strong results. Since formation, 6% revenue CAGR, 11% EPS CAGR, and that places us in the top tier of CPG peers.

Let's shift the U S coffee.

In U S. Coffee, we continued our recovery trend, we drove modest growth in both the top and bottom line net sales increased 1.5%.

Net price realization was five 5% as we implemented additional pricing actions on our pods business and our Brewers business in response to inflation.

This was obviously, partially offset by a volume mix decline of about four points, primarily driven by lower brewer shipments and I will tell you during the quarter retailers are continuing to manage brewer inventory very tightly and there's some adjustment to the recent price increase.

As by consumers pod shipments also declined but more modestly.

Bob Gamgort: From a board perspective, our job is not to look backwards and congratulate ourselves on good results. It's really to position the company for future success, and that's why we have conviction in this acquisition and separation. What's important is for you to have more detailed information, more insight in our thought process, and that's what we want to do today so that you can come along with us on our journey on how we came to that conclusion and why we continue to have great confidence in the value creation potential of the transactions. Having said that, we heard your feedback. We certainly noted the market reaction and it made it really clear to us that we needed a day like today to better explain the strategy and the thought process behind it, as I said.

And the elasticities are remaining quite manageable and within our overall expectation.

Overall, the coffee category remains resilient in our view relative to this significant increase in input costs and we're also seeing improvements in our own business.

Admittedly the commodity backdrop is difficult and price overall is driving our topline Oliver.

Olivier told you earlier, we're actively advancing robust innovation plans. He covered many of them marketing plans driving more brewer sales some exciting news going into 'twenty, six with keurig coffee collective and beyond and overall, we would say well pod.

Bob Gamgort: We also recognized we needed to change some of the executional elements of the transaction. You saw the press release today. Those are good developments, and we'll talk about more optionality going forward. We really think that we're on the right track and are being very responsive to your feedback. Going from today to this future end state requires great execution. In addition to talking about the end state, we need to give you confidence in execution, and we'll do that today by showing you our integration plans. I think more importantly, we're going to give you exposure to more people on our management team who are actually responsible for that and for running the company and making sure that we continue to deliver great results like we just did in Q3. You'll meet them. We're going to be flexible. You've seen that we've been flexible since announcement.

<unk> decline, we feel good about what we're seeing from an elasticity standpoint.

Let's talk about segment operating income it grew about 2.5% with pricing and cost savings more than offsetting inflationary pressures were improved by we're sorry, we're encouraged by the improved trajectory on the bottom line, but we do expect impact from Green coffee inflation in.

Tariffs to build into the fourth quarter.

Alright, now international net sales grew 10% in constant currency.

That's a 6% increase in net price.

A 4% increase in volume mix.

Results reflected strong relative performance in Mexico, Despite what you nor widely reported macro challenges as well as the pricing led growth in our Canadian coffee business.

Bob Gamgort: We're going to look for other opportunities to maximize value, and we'll talk about some of the areas where we're thinking about flexibility going forward throughout this presentation. I think there are three points that I would like to comment on before I turn it over to Tim because I'm in a unique position to do this. First of all is the global coffee category. You'll find it interesting, but the left-hand side there is my trophy from 1985. This was an on-campus competition sponsored by General Foods, and it was called the Maxwell House Brand Management Challenge, and it was about the coffee category. My team won it, which is why we have the trophy. It sparked my career in CPG. It also was how I entered General Foods, and it also started a 40-year relationship with the coffee category. I've seen it over an extended period of time.

International operating income declined about 4%, primarily reflecting the impact of inflationary pressures as well as a tough year ago comparison. This was partially offset by the strong topline growth that I referenced and productivity savings overall in international I would tell you we continue to see significant.

<unk> petition potential for this segment.

Take have outsized top and Bottomline contribution overtime.

These Q3 results also underscored the cash generative nature of our business free cash flow was more than $500 million in the quarter, bringing that year to date total to $955 million, but importantly, and you see it in.

Bob Gamgort: There is no question in the post-COVID period we saw a slowdown in the global coffee category. We also are beginning to see signs of recovery. What typically happens is a three-year window starts to become reality. We never thought that this was anything more than temporary or cyclical. It's not structural. If you look at the category over 40 years, you will see periods of time where the category slowed down only to accelerate rapidly afterwards. That's exactly where we think we are right now. We're in the beginning of a recovery period. Over that 40-year period, the volume growth of coffee is a 2% CAGR. We know that in CPG, volume growth, real growth is scarce and important. It's undeniable when you look at a 40-year trend on coffee, the trajectory continues to be going in the right direction.

This box this year to date figure includes the unfavorable one time impact of the 225 million dollar ghost distribution payment that we made in Q1 as we acquired this business in and took over distribution, obviously, excluding the impact of this one timer.

We would have generated more than $1.1 billion in free cash flow on a year to date basis, representing obviously, a sizable step up from last year. Looking ahead, you've heard us say it and Jane mentioned it we expect strong cash generation. Both in Q4, obviously in a full year basis and.

In the years to come which will help support those deleveraging goals that Jane shared with you earlier.

Bob Gamgort: Actually, Tim has a chart that will show you that very, very clearly. Think about this. If you believe it's cyclical and we're in the beginning of a recovery, we have a strong business in Keurig Dr Pepper Coffee anchored by Keurig. We really believe that to succeed going forward in coffee, you got to be global. We'll talk a bit about that. If you want to form a global coffee powerhouse, the best partner is JDE Peet's. This is a scarce and valuable asset. It's of high quality, and honestly, there is no alternative other than matching these two businesses together. When you see the fit, it is striking how much each business complements each other. We're confident that together we will form a formidable global coffee competitor.

Alright, let's move to guidance.

Three quarters of the year behind US we are raising our constant currency net sales outlook to high single digit from mid single digit previously we're also reaffirming.

And remain on track to deliver HST EPS growth guidance.

We recognize that the environment remains dynamic.

Especially when you think about tariffs the building inflationary impacts, but we've got the innovation we've got the commercial plans we've got execution.

In a great place as well as disciplined expense management and all of that for US means we can continue to deliver on our guidance and for our shareholders.

Bob Gamgort: That gets to another question that came up from time to time in the past couple of weeks, which is, you know, what happened to the investment thesis? How has it changed? I'll start with a real obvious comment, which is since we put the companies together seven years ago, a lot has changed in the world. Competitors, consumers, our customers and the way they think about it. Certainly, the macro environment is different. I think it's natural and necessary to evolve our strategy as well. In 2018, the play was a really good insight at that point in time. We took two subscale beverage companies who were solely focused on North America. We brought them together to create a beverage challenger of scale, and it was wildly successful.

Alright, let's wrap this up.

And then we will go to a break before Q&A.

So we've reviewed the strong Q3 results.

I want to now come back to the four questions I put up right. When I took the stage. This morning, and I think over the last couple of hours I hope you'd agree we provided meaningful updates and further details on our transformative value creation plans.

Let's go back to these four questions first.

Why the acquisition.

Because after careful consideration we concluded that the acquisition of J D. Peds is a unique opportunity.

Bob Gamgort: If you take a look at what's happened over the past seven years, I gave you the aggregate financial performance, but beyond that, the strength of each individual company enhanced significantly over that time. If we're going to put together these two companies to form a global coffee competitor, and we'll talk about why global is important later, we could run them together. It is an option to run them as one company, but we think it is optimal to separate them. One company focused on a global opportunity, which is a very different management mindset, obviously on one category, coffee across the entire world of all forms, and the other to continue to run this very valuable North American refreshment beverage growth machine that has significant runway still in front of it. It also gives investors a choice in two different styles of running these companies.

To strengthen our coffee business by adding substantial complementary global scale.

This combination will catalyze meaningful revenue opportunities cost synergies.

And in turn drive strong financial delivery and sustainable competitive advantage.

Second question why separated all you have the option to run it as a combined company.

Because we believe in the power of focus.

We believe strong and distinct cultural identities at global coffee coal and beverage coal can create even greater alignment.

Bob Gamgort: More to come on that, but it really shows that there was this natural evolution that started in 2018 and is our choice to run them separately. You're going to hear from a number of speakers, and I think the third area where I can offer a unique perspective is my confidence in the management team. Tim, who you're going to hear from right after me, will run the combined businesses, and upon separation, he will be the CEO of our standalone beverage company. Olivier, Eric, and Roger, I have worked with since the take-private of Keurig in 2016. My experience with Jane goes back further than that. Jane was at Barclays in 2012, and she was part of the team that supported the IPO of Pinnacle Foods where I was CEO.

And more purposeful action.

And we believe that strategic optionality should be more available and accessible to each business as a stand alone.

Third question.

How do we tailor our capital structures to enable these outcomes.

By making revisions.

We've solved for a more comfortable leverage at acquisition close with a different.

An attractive financing mix.

And we've enhanced visibility to properly calibrated balance sheets for each.

Bob Gamgort: The reason I give you that time period of my experience is I have seen this team deliver across a wide variety of challenging situations time and time again. I have the highest level of confidence in their ability to execute, and that gives me confidence that we can get from where we are today to an outstanding end game when we separate these companies. Let me turn it over to Tim Cofer, our CEO. He'll take you through a significant amount of content along with all of these other presenters. As I said up front, I look forward to being back up here at the end with Pam. We'll be happy to answer your questions at that time. Tim, over to you.

Of these independent companies.

And finally, how do we ensure success.

By focusing on milestones.

Rather than dates.

By putting the right processes in place to achieve those milestones and by appointing the right leaders with the right experience to drive towards those goals.

Alright, let.

Let me wrap it up by stating the obvious.

And it's on this slide we are truly just getting started.

The market reaction.

Tim Cofer: All right. Good morning, everyone. Great to see all of you again. I hope you've had a chance already to enjoy some of the amazing beverages that we have across these stations. For those of you that are here live with us at NASDAQ, I can imagine the coffee stations were hit pretty hard, it being a Monday morning and all. Building on Bob's comments, we have strong conviction in the strategic and financial merits of this acquisition of JDE Peet's and the subsequent separation into these two pure-play companies. We are creating North America's most agile beverage challenger and a true global coffee powerhouse. At the same time, as Bob said, I have spent the last two months absorbing shareholder feedback and, of course, the initial market reaction post the announcement.

After August 25th was not what we hoped for.

But I can tell you the reaction from our other stakeholders, including commercial partners cut.

Customers Katy P employees and future colleagues at J D Peds.

Have all been strongly positive.

We've given folks at very inspiring destination and they're ready to go.

We're excited about this.

Future transformation as well, but I also want to be clear.

We're not in a rush.

We are making a big bet, because we see enormous potential.

And we're gonna be highly deliberate in how we go about unlocking it.

I hope you sense that after today.

Our management team.

Our board of directors see a tremendous amount of value creation opportunity from this two step transaction and we will not rest until we get that done.

Tim Cofer: I recognize that there are a few areas of concern as well as some open questions that would benefit from more explanation. That is why we're here today. In my discussions with each of you, I think the questions have largely spanned these four areas. Why is JDE Peet's the right acquisition? What does the separation into Beverage Co. and Global Coffee Co. uniquely enable? How will we optimize KDP's capital structure post the acquisition and establish appropriate balance sheets for each of these separate entities? How will we ensure that KDP delivers with success throughout this process? Over the next couple of hours, we will answer these questions and more. Now, before diving into these topics, let's reground you in our business and our strategy. We operate with a sole focus on beverages. I truly believe this is the best sector in CPG. It's large.

So as you heard today this was a slide Bob started with.

We do have a consistent and proven track record of creating value in beverages.

We create vibrant businesses through a playbook that works.

We have deep insights.

That underpin our conviction in this deal.

And we have a clear plan to deliver on its promise.

At the same time, we're listening.

And we are adjusting.

As and when needed.

And this leadership team has the confidence it has the experience to successfully carryout.

This transaction.

But we also have the wisdom, we have the willingness to stay flexible in our approach.

Again, I hope you've seen that today.

And you will continue to see that.

As we chart, our course to establishing north Americas, most agile beverage challenger and a true global coffee powerhouse.

Tim Cofer: It generates $1 trillion at a global level. It's growing. We expect a mid-single-digit CAGR in the coming years, supported by structural tailwinds to sustain that momentum. It's dynamic with ever-evolving consumer preferences that create endless opportunities to drive consistent growth through innovation, through mix management, through premiumization. It's financially attractive, strong profitability, compelling industry return profiles. We understand this beverage industry very well, and we have a proven and successful value creation strategy. At the core of this, as you see on this slide, are five pillars. They serve as our blueprint for how we drive sustainable, consistent, compelling performance over time. The first three of those are commercial priorities, broadly geared around the top line. The two enterprise enablers support that growth in a profitable, efficient, and high-return way. Let me touch very briefly on each one. Championing consumer-obsessed brand building.

Okay.

Thank you for your time.

Those of you that are here with us at NASDAQ, we're going to take a break before we come back for Q&A I again encourage you to take full advantage of these fabulous beverage stations and those that are joining verbally we are going to or sorry, virtually we are going to come back at.

12 15.

<unk>. Thank you very much.

Ladies and gentlemen, please welcome members of Keurig, Dr. Pepper's Board of directors and management team to the stage.

Yes, we're here.

Yeah.

Alright.

We get.

Thank you I hope you enjoyed that break we're going to try some of our great beverages I will now move to a Q&A session with a panel. So we're happy to take your questions.

Tim Cofer: This means being consumer-led, consumer-centric as we nurture and expand our iconic brands. Shaping our now and next beverage portfolio to access growth, a creative white spaces via our flexible build, buy, or partner model. Amplifying our route-to-market advantage, strengthening our multi-channel leadership with differentiated distribution capabilities. Generating fuel for growth by reinforcing a continuous productivity mindset and a lean overhead operating model. Of course, dynamically allocating capital to support that long-term value creation. How have we applied that to our businesses? Let's start with refreshment beverage. Our results speak for themselves. Our flagship, Dr Pepper, we've turned this into the CSD category's innovation and marketing leader. We've driven nearly a decade of consistent market share gains, and we've established ourselves as the number two market share position in the category.

Yeah.

Sarah noted here in the front row okay.

Mhm.

Yeah.

So Tim it's been a couple of months now since you announced the transaction just can you give us an update as you've done more detailed work and look more under the hood.

Any incremental opportunities as you see it on the J D side.

As you've looked at the business the last couple of months and specifically on the cost synergy side.

The potential maybe for upside there level of visibility that you can deliver the savings you outlined and then just secondly on the base Katy P business today.

Just give us an update on the tariff situation, what's embedded in 26 guidance, how we should think about incrementally in 'twenty seven but also really wanted to understand how you're managing pricing on both the coffee side as well as the CST side, given what we're seeing with tariffs and the volatility there.

Sure there I'll start and Roger I might kick it to you one on cost synergies and then I can come back.

On the tariff and cost outlook look over the last eight weeks as I said I've spent a lot of time with our colleagues at J D. Pete's multiple trips into Amsterdam et cetera, you can imagine we did a great deal of due diligence prior to announcing this acquisition, but at some point you know that's kind of a public company due diligence, so now being able to really get underneath.

Tim Cofer: We've thoughtfully built out meaningful incremental growth platforms in white spaces that we previously didn't compete in, like energy and sports hydration. We've strengthened our competitively advantaged route-to-market DSD network through capital-efficient territory expansions, through brand partnerships, and capability investments. The result of the efforts you see at the bottom of the page, a high single-digit net sales CAGR since 2018. We're just getting started with business momentum that should support continued sustained growth into the future. What about in coffee? We know the operating backdrop in U.S. coffee has been more dynamic over the last few years, particularly in that post-COVID world and the multiple commodity cycles like the one we're in now. Yet we've made important strides. We've reinforced Keurig's position as the number one North American single-serve system across both brewers and pods. We've extended our portfolio into exciting growth areas like cold and super premium.

So hood a meet the leadership team review things like brand plans you know early thoughts on innovation.

And so on what I'm seeing is number one this is a good business. These are good bonds the brands the positions, etc. And you saw a lot of supporting evidence on stage earlier today I think the other is improved confidence in our synergies.

Both on a revenue basis in terms of the.

Growth opportunities everything from what we can do on the Brewer side. One is one of many towering strengths of legacy Keurig is our brewer knowhow, our brewer innovation, our brewer cost structure, and our brewer economics, and having seen the other side Brewers and having run one of those big.

As in my past life, I think Theres real benefits there I think a lot of the take.

Keurig legacy brands think of Green Mountain, and a doughnut shop and take it across all formats now in a more profitable way that's an opportunity for US then we start talking about things like Alt et cetera, So I'm I'm the more that I learn the more excited I am on the base business itself the early stages.

Tim Cofer: We've continued to expand the number of households that brew Keurig every morning, now at 47 million strong and growing. We are preparing to catalyze the next chapter of our growth agenda with disruptive innovation. We've invested in unique assets that drive competitive advantage, including our differentiated and highly profitable direct-to-consumer e-commerce capabilities. All of these initiatives have supported a steady low single-digit sales CAGR in recent years, consistent with our go forward expectations. Through these commercial achievements, as well as robust productivity and thoughtful cash deployment, we've delivered strong results at an enterprise level. Since KDP's formation in 2018, as you see on this slide, we've grown net sales at a 6% CAGR. We've grown adjusted EPS at an 11% CAGR while also returning meaningful cash to our shareholders. At the same time, both our businesses and the external environment have changed in significant ways since 2018.

Of the reignite the amazing strategy that that team is embarking upon as well as the synergies you want to talk a little more on cost Roger yes. So in the.

In the remarks that I had we talked about from a cost side procurement manufacturing logistics and SG&A of 19.

After the diligence work concluded kind of you've had a chance to dive in deeper and really start to underpin that I learn more about the reignite the amazing.

And then then see what's complementary and I would echo what Tim said.

Around maybe more obvious things brewers or otherwise, but then things about manufacturing footprint routes to market and associated I T systems that I would.

I have confidence that we're building out the plans the best we can as two separate companies that I'm confident in it and then we'll get into the clean rooms, a little more detail over the next couple of weeks to.

Substantially underpin those more.

And then on tariffs lastly, and then next Kevin looks like is.

Look first of all you need to use right. So it's not a global impact here for the others.

Tim Cofer: Just as Bob discussed earlier, the original merger thesis was really predicated on combining what at the time was two subscale businesses. We did that to create a North American beverage challenger. What's happened in the last seven years? Our refreshment beverage business is no longer subscale. In fact, it is the same size today as total KDP at merger. Our actions to evolve our refreshment beverage portfolio to strengthen our route-to-market have also structurally raised the organic profile of this business relative to 2018. In coffee, while we've made progress, we acknowledge that the category growth trend has fallen short of our expectations in recent years. While we're the clear leader in North American single serve, that business is arguably subscale in particular relative to our global competitors that can leverage broader advantages in technology and sourcing and who can participate across the entire global coffee category.

No doubt that cost pressure is a back half 'twenty five early 'twenty six phenomenon. So that pressure will continue under that as part of your phrasing. The question you know what's built into 26 guidance. There is no 26 guidance. That's not the purpose of today you guys know we have an algorithm that's an algorithm that we feel strongly.

About but today is not the day for 26 guidance I will tell you cost pressure will continue to Mount in Q4 and carryover in the front half of next year.

Great. Thanks, Kevin Grundy BNP Paribas.

Two questions just kind of taking a step back.

Strategically with respect to the deal maybe just spend a moment on the structure of the deal and why the board believes it made more sense than potentially a spin or sale of the coffee business, where you still get sort of the strategic focus that that sort of transaction would lend itself to.

And then relatedly.

What learnings does the board take from this and the market reaction in terms of the way you think about capital allocation communication with the large shareholders and things of that nature I would appreciate your thoughts. Thank you.

Yeah.

Okay I'll start off on it yes, I think I mean, Kevin I think we were incredibly transparent and one of the slides that Tim had today that said, we contemplated all potential alternatives status quo selling spinning and then this combination here.

Tim Cofer: As a board and a management team, we observed these changes since 2018. We discussed these and we reached a couple of conclusions. First, our refreshment beverage business has both the scale and the advantage positioning to succeed, as Bob said, either as a combined company or a standalone. Second, while our coffee business has clear strengths, it is not yet optimized to reach its full potential in current form. We decided as a board that it needed further assessment and it could benefit from potential enhancement. The first step in that assessment was to step back and take a fresh look at the coffee category. You've heard Bob's story 40 years ago, the Maxwell House Award. I've also spent a lot of my career in coffee in a past life, different employer. We're long-term believers in the attractiveness of the global coffee category.

And we analyzed each one of those and look at the potential value creation from that the problem with selling it is that you need a party on the other side who's willing to buy it and buy it at a price that you think is fair. This is a really large asset.

Spinning it off on its own does nothing.

It weakens the business, it's I talked about before about creating a scale player on a global basis spinning off keurig on its own.

<unk> is one that we felt would have destroyed value than we would have lost a lot of the synergies and the scale that we get as a combined company.

Theoretically you know one of the questions. I think you know we were talking at a break it you could spin it and then merge it you know at some point them well, that's an unknown you're not actually not allowed to spin a tax free and have a pre negotiated deal. So we couldn't do that and then you're left with a lot of uncertainty and some of these spin sale conversations are because there are a.

A group of investors and I understand it if we think the coffee is a problem. They don't like the coffee business, we actually do like the coffee business and we use a border responsible for creating value across our portfolio. So separating it so that people could come in and buy the refreshment beverage business and then let the coffee business language out there is not the board's responsibility and so when we took a look at all of the parcel.

Tim Cofer: We believe in the structural tailwinds supporting future growth. We did the analysis once again to underwrite our confidence. Let's start with the consumer lens. Coffee remains a preferred way to address the universal human need for energy, and it's ever more important these days. Coffee is a highly emotional category. It evokes passion. It's artisanal. Craft specialization plays a key role in premiumizing the category, which is a clear growth tailwind. Coffee is habitual. Coffee has unmatched global frequency of consumption. Coffee is healthy, even as defined by regulators, both in this country and globally. Simply put, coffee is the number one beverage American consumers cannot live without, and I'm certainly one of them. It enjoys that similar status in so many markets around the world. To see the evidence of this category's essential nature, look at the long-term trend on the chart.

<unk>, we firmly believe and you see that today that the combination of cure Katy piece coffee business anchored by Jurgen J D. Pete is a perfect match. These are complementary businesses that create a real global leader.

In coffee and this was the way that we chose to get there.

I Dunno Pimpin, let's take the second part in terms of lessons from the board or build on that one before I take this over too much.

Okay I'll take the easy part.

Yeah.

Yeah, we did learn a lot.

And otherwise we wouldn't be here again today.

Almost just two months after.

Some of our spoke to you all the first time.

And I think taking time.

And you know we did have a lot of outside advisors as you would expect.

All summer long spring summer.

We solicited other input other advisors and certainly everyone. In this room also was listen to and was hard and so I think you know I'm I'm not sure they'll ever be another one of just this thing again, but so that part is definitely.

Tim Cofer: Bob mentioned this in his opening remarks. What you'll see over 40 years is a low single-digit global volume growth. In dollar terms, recent growth trends are even faster thanks to premiumization and innovation. Importantly, the structural factors supporting consumption growth remain as powerful as ever. I would highlight that increased adoption, especially in emerging markets, as younger generations embrace coffee culture and begin to shift versus historic tea culture, is yet another growth tailwind long term. As with many categories, coffee goes through cycles, including most recently this post-COVID lull that we've experienced. As Bob said, and as this chart I think pays off nicely, the historic pattern is that these lulls are temporary and the category recovers to its long-term growth trajectory. We're seeing signs of this right now in the United States. This post-COVID recovery is underway. Category volume trends bottomed out in 2022.

They are learning I will emphasize what Bob said that and you heard it both from Bob and Tim in the more formal remarks that we did consider a lot of alternatives and along that way because we've heard feedback about J a V and question marks about that when we were doing some of that.

That strategic analysis survey of the market survey of alternatives whenever it involved JD peet's or something we had a separate committee of the board of disinterested in independent directors, so that all that feedback and.

Survey part of the market always went to just that group.

So I feel very good about our governance, our rigor around governance and our respect of independence and competing interests I think we've done a very good job, but theres no question, maybe just taking our time a little bit.

You know slowing a few decisions down would be the biggest takeaway in terms of learnings.

I hope that was helpful.

I think it's OK now and rotation of J P. Morgan I, just Oh, sorry, sorry, I think it will get Chris first okay.

Tim Cofer: They've been stabilizing ever since. Encouragingly, this dynamic also holds true this year, year to date 2025. Even as this high inflation has fueled significant price increases, you see here that the elasticities on an absolute basis compare favorably to the historic trend. That was our assessment, our step-back assessment on the coffee category. With renewed confidence in the attractiveness of that global coffee category, our challenge was then to determine how do we optimize our coffee business. Our goal here was to create an even stronger business with higher growth prospects, greater resilience, and improved operational efficiencies. We considered all options. All options were on the table. Sell the business, spin it off as a standalone, continue to operate it as part of Keurig Dr Pepper.

Sorry Andrea.

Uh huh.

Hum.

There's a lot of pressure now.

Can you hear me, Yeah, Chris Carey Wells Fargo.

Two questions. Please.

First on the free cash flow outlook 2026 to 2028.

Is this a view on free cash flow conversion or are you implicitly, giving any expectations for net income growth in that timeframe I'm conscious that the algorithms that you've laid out today are longer term, but are you also underwriting high single digits over 2026 to 23 eight for those two businesses from an earnings growth perspective.

So perhaps you can give any context on that I mean, obviously, we've gotten concrete expectations for 2026 to 2028 free cash flow, that's what I'm kind of testing that.

The second thing would be.

And what backdrops would you tap.

Tap into these additional financing.

<unk>, if you will right beverage I P O selling a minority stakes.

Green coffee inflation is going to carry into the front half of next year potentially.

Potentially that has EBITDA risks, okay. If EBITDA comes at a bit lower now, we finance or we tap into these financings what are the what are the thresholds by which those become near term realities. So free cash flow and then the financing things.

Tim Cofer: Ultimately, after thorough diligence, our management team and our Board of Directors determined that the acquisition of JDE Peet's represented the most attractive and actionable path for maximizing the value of our coffee business. Here's the reality. Scale matters in coffee. The category addresses a universal need state. Common formats, common consumer trends, similar premiumization opportunities across markets. This means that consumer insights, innovation, technologies can be leveraged and reapplied across markets. In coffee, there are clear economies of scale in operations and costs. Bob said it in his opening remarks. JDE Peet's is one of the very few assets of global scale in this category, and it will step change Keurig in several ways. You see it on this chart. Our coffee net sales will more than triple to $16 billion, making us the second largest global coffee player and the largest pure-play.

No.

I think most of you in this room know Jane and newer wells, He's our head of IR and CFO International but in addition over the last few months.

Jane has jumped into an expanded role as SVP of strategic finance and capital markets.

You're well.

Place to answer Christmas two questions. Thanks for team yet.

Good question, Chris So first time on free cash flow, what our goal and objective for today is to give you more clarity more data points.

Against which to plan and model and just understand better what we mean by division for beverage beverage Cowen Global Coffee Cup.

In doing so we thought it would be prudent to give you a view of what we think the cash generation potential of each of those businesses is over the next several years rather than pinning you down to any particular year and so what I would interpret that over 6 billion for Bev con over $5 billion for global coffee Kal.

And free cash flow generation to be is truly a three year view and we will unpack that as we go forward as we can give you more perspective on 2026, specifically, but I think what you're hearing US do is try and give you a view as we operate as a combined company.

Tim Cofer: We'll gain access to additional geographies, including many high-growth markets. We'll become a significantly larger manufacturer and the number one coffee buyer in the world. These elements are critical to fortifying Keurig as an even stronger coffee player. In JDE Peet's, we also see a unique fit with the Keurig business. Through this combination, we can bring together the best of both companies. Keurig's North American leadership, know-how, innovation prowess, and JDE Peet's global reach, leading brands, and full format expertise. The resulting Global Coffee Co will enjoy an advantaged and complementary portfolio, incremental revenue opportunities, visible, actionable, achievable cost synergies, and greater resilience. Let's unpack each of these four, starting with advantaged and complementary portfolio. The combined company will be able to benefit from global category growth, given its strong brand portfolio, including $4 billion plus trademarks, broad participation across every coffee subsegment, and geographic diversification.

Into each of the pieces because we know ultimately that will be what you are.

We're all marching towards.

Anyone else want to chime in on alternatives to otherwise I'll take it.

So look what we've done here over the last several weeks is to take a fresh look at the financing right and make sure that we're solving for the things that we know are important for the company and for shareholders, which is a balance sheet that are solid and visibility to balance sheets that are appropriate for the individual pieces.

I think we've done that very successfully today.

Moving your point of view from five point sector 4.6 at transaction close assuming June 2026.

You also have a view of what the deleveraging potential is of the business right at about half a turn a year. So very quickly you see that particularly with a muscle that we already have proven over time around emphasizing cashflow generation, we can get to a blended point for net leverage.

That.

Gives us real visibility to that separation now businesses.

Naturally our variable markets are variable conditions change and so what you should expect us to do is to evaluate all of our options right to build on what Pam said like the lesson is you gotta be flexible you know where you're marching you got to get there in a value maximizing way and what you're hearing from US is that there is a.

Tim Cofer: Moving to enhanced revenue potential, we see upside potential from scaling Keurig's system expertise and JDE Peet's format capabilities across more brands and more markets, capitalizing on the growth runway for Peet's here in the United States, and extending Keurig's next-generation coffee systems beyond North America. The third is clear and actionable cost synergies. We will discuss this in more detail, but we have identified clear and actionable efficiencies that we know will generate $400 million in savings in the next three years. These synergies can fund reinvestment while also supporting earnings growth. Finally, increased resilience. Obviously, as a larger company with greater supply chain capabilities, we will be much better positioned to navigate external volatility like tariffs and commodity fluctuations. Together, the union of JDE Peet's and Keurig will create a stronger business that is more efficient and more capable of delivering consistent, profitable growth.

Net of potential options and levers, we could pursue but we will only pursue those if we believe they unlock maximum value and better outcomes for the business.

Andrea Thank you Sandra instead of J P. Morgan. So my question is on the synergies I understand that the 400 million is on top of the 500 films a D. P and we have the details for the GPP. Obviously, there is a lot of.

Kind of optimization of the brands and then facilities as well. So I was hoping to see out of that 400 million I understand Jim you said a lot of this is I think SG&A the thinking of like how the hedging of the commodities and procurement can be with things that all of these and then.

And I understand GDP has a very strong capability for our hedging so thinking of how that can be linked and how conservative were you setting that guidance of $400 million now how to think as investors.

Thanks, Andrea let's <unk>.

First I want to just clarify the the baseline here and then I'll ask router to build from as unique position boosters had a supply chain and procurement and chief transformation officer.

Tim Cofer: Upon closure of the JDE Peet's acquisition, we will, for the first time, have scaled advantage platforms in both refreshment beverages and coffee. Through the subsequent separation, each of these businesses will become that focused pure-play with attractive yet distinct profiles. Beverage Co, a growth-oriented player supported by a leading brand portfolio, a competitively advantaged route to market. The business will be disruptive. The business will be entrepreneurial, and it will deliver an attractive growth profile with potential upside from strategic optionality over time. Global Coffee Co will be a steady grower with strong and resilient cash flow, enhanced by near-term synergy capture opportunities. Performance will be supported by differentiated deep coffee capabilities and expertise. As we said earlier, while we could conceivably run these two businesses together, we believe the separation will provide clear benefits to both entities. What are those benefits? First, focus.

For clarity to Andrea's question, the JD Pete's cost out program.

Is 500 million euros over seven years.

Half of which will be reinvested in the business.

The acquisition integration synergies are three or $400 million over three years as a result of the combination and.

And we have spent a great deal of time.

Leading up to the acquisition announcement first at a high level and in the last eight weeks that are far more detailed levels. We've kicked off this transformation management office.

And with external advisors as well, who have worked with both our company and J D Pizza company.

To comfort ourselves that those two numbers over those two time frames are incremental Roger what else would you say on andrea's doubleclick.

So from a.

Building the to the extent, we can right understanding the each of the programs right and independent programs.

I think we've arrived at a good place where we have confidence in the in the underpinnings.

We always reserve the right to get smarter, but one of the principles. We have is a best of both right and really bringing that to life as we're really underpinning. The plans again. The next step is to get into the clean room and understand detailed.

Tim Cofer: Each company will tailor its strategy, its operating model, its capital allocation priorities to align with distinct category and geographic exposures. Culture. The respective leadership teams will have strategic clarity, and we can structure and incentivize our organizations accordingly. Strategic optionality. Each standalone entity can think creatively and flexibly in pursuing additional value creation opportunities. Finally, shareholder benefits. Investors will be offered the opportunity for two very attractive yet distinct investment opportunities. As I said at the beginning of my remarks, we have conviction in these transactions, and we have a clear view of the compelling destination once this is complete. It's now on us to execute with excellence. That all begins with a robust plan and the right team. We've recently established a Transformation Management Office, or a TMO, to drive this comprehensive integration program. Bob mentioned it earlier.

Policies and whatever.

You know the coffee market is a fairly efficient market on its own and I think there's other opportunities there as we look at the capabilities, whether it's technology, whether it's development or what have you.

To really bring some flexibility to unlock further places to look specifically around coffee formulation and what have you.

And so you know I'm looking forward to the next couple of weeks of of getting into that.

I'll be in Amsterdam next week to two to start the process of going into the next click of it.

But to date, what we've seen is as you know.

Underpinning the are the numbers in a way that we feel confident and we reserve the right to accelerate that more and drive where we see opportunities. We know we have to phase. It. We know we have to make choices right. We can't do everything all at once.

But you know sitting here today I have confidence in that number.

Then as we learn more about policies and how to action those numbers and it will come back to you with with the with the schedules. After we after we build them.

No Peter Grom, and then lever.

Okay. Thank you Peter Grom from UBS. So two coffee questions, just maybe a follow up on that.

Tim Cofer: It will be led by our newly appointed Chief Transformation and Supply Chain Officer, Roger Johnson. You'll hear more from Roger in a minute. The TMO structure is designed to establish the processes and the workflows to guide our integration teams, while also importantly freeing up the rest of the KDP organization to focus on maintaining that great base business momentum that you've seen us deliver again in Q3. The TMO will be comprised of a dedicated internal team in partnership with key advisors that will be responsible for the integration planning, the future company design, for the value capture. Our Board of Directors and my Executive Steering Committee will obviously provide support and oversight. Importantly, many of these leaders, team members, advisors obviously have significant experience in executing complex transactions like this.

So the long term algorithm of low single digit top line growth into high single digit EPS growth is that inclusive of the synergies or are there other factors that drive that the degree of operating leverage and then just on the business itself. So just vol mix for coffee this quarter. It didn't really change that much sequentially despite pricing stepping higher so.

How much of that is actually the mix component versus the shipments actually holding stable and then just on elasticities. How are you thinking about that through the balance of the year.

Yes.

I can start I think the first answer is inclusive obviously, that's near term that's our long term algorithm near term that's a enabler for that on the coffee quarter. The second question you want to take that Geno and Olivia.

Outside Linda do you want to add.

You know I had a conversation with some of you offline about hey, what gives you confidence in the coffee category, a recovery and I think if you zoom out right and we've had a couple of years now of sequential volume improvement or not where we expect to be longer term, but this year and the year to date experience I think would be.

Tim Cofer: As just one example, among others, I was fortunate enough to have a central role in the Kraft acquisition of Cadbury and the subsequent separation into Mondelez International and Kraft Foods Group. Many of the other leaders, including those you'll hear from today, have had similar experience with complex transactions like this. We will draw upon those collective experiences to further de-risk the next steps. One important element of executing these transactions is ensuring that we have the appropriate capital structures for KDP at acquisition close and importantly for each independent entity upon separation. We are well aware that some investors were uncomfortable with our initially proposed post-transaction leverage. As you've seen today in the press release, we've taken meaningful action to address those concerns. We've announced two cost-efficient transactions, a minority investment into a newly created coffee manufacturing JV and a private convertible investment into our future Beverage Co.

Very supportive of this trend right. There is record pricing in the market because we have record high prices and yet despite that what we are seeing is very manageable elasticity. So to answer your question, specifically Peter and.

You did see some volume tradeoff as more pricing was enacted in the market at the same time, you had favorable mix within that sort of relaxed coffee segment I won't say that no pause are quite resilient and you are seeing more elasticity on the brewers, but that would've been expected.

Labour.

Filippo Felonious city, so going back to the coffee category more long term, Bob and Tim you talk both about the attractiveness of the category, maybe can you expand a little bit more on the rationale of the deal why was coffee the best category to double down compared to maybe some other fastest growth categories within beverages and he.

From a long term standpoint, like we've seen some of that category is taking some share in terms of caffeine consumption like energy drinks. So what gives you the confidence that that 2% 40 year CAGR is still kind of the right trajectory.

Tim Cofer: These two equity-like instruments will help to shore up our balance sheet. As you see on this slide and in the release, we now expect net leverage to be below five times when the acquisition closes. We're also targeting initial leverage ranges for Beverage Co in a range of 3.5 to 4 times and Global Coffee Co in a range of 3.75 to 4.25 times. Based on the anticipated cost of this new financing, we continue to expect very attractive returns on our JDE Peet's acquisition, including year-one EPS accretion of approximately 10%. These capital raises also have the benefit of partnering and aligning Keurig Dr Pepper with sophisticated strategic investors, including Apollo and KKR, who understand and appreciate our vision. Let me walk you through the key acquisition, integration, and separation milestones from here. We said this back when we announced the deal in late August.

Given that had been around for 40 years I'll start with the last one I seem to be an expert on that and then talk about.

The piece about the second the first part of the question. So let me go back to 1985 in that case study you know with a case study was how do you fix the coffee category given that given that everyone at or below a certain age of switching the diet coke that.

That was the case it was on campus in 1980, 5%. So the point is.

There are always the short term trends where categories are challenged by new formats, new new varieties.

Varieties.

That's why it's always important I think in CPG to step back and take a long term view and I could give you a twenty-five examples of short term trends that never plant panned out what's really interesting about coffee and the reason that is so powerful over the long term is what Tim said in his section there's an emotional element to it there's a premium innovation element to it there's a comfort element to it and also.

So it is one of the few food and beverage products I have worked on in my 40 year career, where it is deemed healthy other than water I haven't worked on one that the government wasn't trying to limit some version of consumption and so this is a rare situation where its energy and it has all the other attribute and it has a health tailwind to it and that's why there is.

Tim Cofer: We continue to expect that the JDE Peet's deal will close in the first half of 2026. Our path to separation will be milestone-based, with a plan for us to be operationally ready by the end of 2026. Before separating, we want the following conditions to be in place. First, a quick start to synergy capture. Second, balance sheet readiness for both companies. Third, an independent board of directors and experienced leadership team for each standalone company. Finally, market conditions that are conducive. As we've said all along, we will be flexible in our approach to secure the best outcome. In that spirit, as we optimize from here, one element where we're taking a refreshed approach is to our leadership. We've made the decision to not name the leader of Global Coffee Co at this time. We no longer intend for Sudhanshu Priyadarshi to serve in that future role.

No suggestion over the long term that it's going to change and all of the diagnostics that we were doing even post COVID-19. When it was slowing down there's nothing negative we could find about coffee.

You do some analysis, you'll always find something on the French he did at 1985, you would've saw the diet Coke coming in was replacing some of the occasions for a period of time you see the same thing now to a degree on energy we have zero belief that that is something that is a long term structural change in the category.

You said it well okay.

Rob.

Okay.

Yeah.

Thanks, Rob Moskow TD Cowen.

I wanted to know about the the high single digit EPS growth target for coffee, you know theres a lot of leverage there implied because the net sales target is only low single digit and.

What gives you confidence that there's enough leverage too to bridge those two and if I could also come back to your 40 years of experience.

The volume growth I noticed in the USDA chart shows volume growth over the last five years in coffee volume has grown over the past five years, but but Katie piece volume is down.

And and J D volume is down too so.

Tim Cofer: We will name full leadership teams of both new companies at a future date closer to separation. Before we unpack both Global Coffee Co. and Beverage Co., let me conclude with three priorities to maximize value creation. First, maintaining base business momentum. As you saw this morning, we reported strong Q3 results. In fact, we raised our net sales outlook and reaffirmed our full-year EPS guidance. You should have also seen that JDE Peet's this morning reaffirmed its full-year guidance. Indeed, we are initiating this transformation from a position of strength. Second priority, integrating with excellence to achieve our key deal objectives. You'll hear more from Roger about the processes and the plans we're putting in place to underwrite successful outcomes. Third, setting up each company for success with focused strategies, tailored operating models, and purposeful capital allocation.

So who's drinking all that coffee like who's Where's all that volume going if not to the European leader in the single serve leader here.

You want to take the first one and H S. Here and look I mean, what what we're laying out for you our very identifiable actionable cost synergies that we're going after in short order and then longer term opportunities. Both in terms of top line and you know kind of continuous productivity.

And reignite the amazing target through 2032, as a part of that all of which is to say when we think about HST certainly in the first years out of the gate, that's very visible from a cost synergy standpoint, right, but and also deleveraging can help bridge that as you go forward youre going to have.

With that much more traction on the various you know opportunities that Tim Unpack for you and will and you will also drive a more resilient business such that you can get more ongoing operating leverage, but we'll have to prove it to you right again out of the gate, you'll have a lot of visibility between below the line leverage and the cost synergies.

And you heard Roger talk about his conference there.

Yeah, maybe from a total at home consumption, obviously last four years, we saw a spike in consumption and at home through Covid and then the.

Decline in in home as people return to normal life and work. This has been stabilized over the last few years and where we're coming from a very strong foundation with 47 million households, and very good Intel that we've got tens of millions of high value households that have yet to convert into the keurig system. So we had strong marketing campaigns coming.

Tim Cofer: After the separation, we expect both companies will offer their shareholders quality, consistency, simplicity, and be viewed as world-class leaders in their sectors. OK, with that, let's move to Global Coffee Co. We're going to bring this new company to life in a couple of sections. First, I'll invite Olivier Lemire to stage. He's our recently appointed President of US Coffee, and he'll give an overview of the attractive Keurig coffee business. I'll then return to talk about JDE Peet's specifically, and then the combined Global Coffee Co. Real quick additional intro on Olivier. He is a tremendous leader. He's been with KDP for 14 years. The last four, he was President of our KDP Canada business. I can tell you, in that capacity, he led KDP Canada to significant coffee outperformance, consistently growing pod volume, brewer volume, net sales, and operating income. Indeed, Olivier knows the coffee business.

Up hitting in Q4 with good promise to consumer great coffee without the grind in a series of innovation and we saw new coffee system. We're very confident that we'll be able to return to growth from a volume standpoint.

It's good Lorne and then that's the powers.

I'm Lauren Lieberman from Barclays. So am.

I think a sensitive change potentially on timeline to separation is sort of like at you know where before by year end 'twenty six or will be ready to go.

So at the risk of words, nothing like him you know confirm if that's right or not.

But notwithstanding the comments on like lessons learned and we should go more slowly I'm. Just curious why like you know what the determining factors would be to decide to move more slowly or to do it right away.

What you'd be looking to achieve or benefit from going more slowly.

And then secondly, I think we're spending a lot of time talking about coffee why coffee coffee coffee what changes if anything for basketball going forward and I'd love to hear about that great I'll take the first one and Eric why don't you take shot at second.

Tim Cofer: He has deep experience with integrations as well, including steering the former Keurig Canada and Canada Dry Mott's integration. Overall, he built a very strong Canadian organization, and we're very excited for him to take this US Coffee desk. Olivier, over to you.

Lauren I would say I'm not sure you heard a definitive change in timeline, what we said on August 25th was we anticipated that this could close by the mid of next year and separate by the end of next year.

You heard something similar today, but there was a shift around we still expect.

Mid of next year for the for the close and that we will be ready to separate yearend. So those times are the same the differences in that nuance and I think what you heard from US today is it will be milestone based we are not going to commit to a hard date to you today and recall.

Bob Gamgort: Thanks, Tim. Good morning, everyone. After 14 years in the coffee and beverage industry, I've seen firsthand the unique power of coffee to bring people together. Whether it's friends, families, or colleagues, there's just no other beverage like it. From my time in country of origin with coffee farmers, to walking the floor of our different coffee labs and manufacturing facilities, to building strong relationships with our many brand partners, my passion for coffee and strong conviction about the future of our coffee business has only grown. It is a real honor to now lead our U.S. Coffee business and the amazing team behind the Keurig system. With this system, we've created and now drive a highly profitable subsegment of the coffee category. Over the last 12 months, we've driven $4.6 billion in net sales and $1.4 billion in adjusted EBITDA.

Those milestones are right, we want to be sure that our business is continuing to perform well guess what you saw it again today. It is and we're committed to that we want to be sure that we have.

The right capital structures in place and you heard us make big steps today towards that in terms of improved leverage at close and stated targets at separation.

You also heard US say, we need to be sure. We've got world class independent boards of directors and.

Proven experienced high caliber leadership teams and you heard even an update on one of those points today around leadership of global coffee co, which we're beginning a.

Bob Gamgort: We are trusted by some of the best coffee brands in the world with unmatched capability, quality, and scale. Brand names like Starbucks, Lavazza, Dunkin', Peet's, McCafé, La Colombe, and Tim Hortons, and many more. This goes as well for our own powerhouse coffee brands, Green Mountain Coffee, The Original Donut Shop, and Van Houtte. Keurig is, and it's all driven by the Keurig brand. Keurig is a beloved brand with 94% brand awareness. It is truly the undisputed leader in single-serve coffee. Keurig is one of those handful of businesses that have become synonymous with their categories. People don't say, "I hope our vacation rental is a single-serve coffee maker." They say, "I hope our Airbnb is a Keurig." We don't take that lightly. Since 2019, we've added 13 million active households, reaching 47 million in North America by 2024.

Process to find that right leader.

And then you also heard.

Let's make sure from a market condition standpoint that we've got the right conditions that could support a potential option not yet a firm decision will stay flex flexible and agile and Jane cover that in her section. So I think the broad timeline Lauren and grew up here is similar what we said on a 25, but with an.

[noise] nuance, where will be milestone based and will do it at the right time, when we're ready to get the right outcome for our shareholders you want to talk about Bev cone and <unk>.

What an independent Bev cole.

It looks like.

Was able to talk to you guys for about 25 minutes on kind of our playbook playbook that has been driving success we.

Really feel like that playbook is going to work in the future as well and I gave a number of examples I think the separation.

<unk> hit on it the focus.

Bob Gamgort: We've gone from being one in four coffee makers sold at retail to being one in three today. The Keurig system over these years continues to gain market share in both the coffee makers and the coffee categories, with K-Cup pods now being the largest coffee format and actually driving twice the retail sales of the next closest format. From the start, the Keurig system was designed to offer variety and choice to our consumer. This open system drives significant value for all of our stakeholders. Our consumers love us for our quality, our convenience, and the variety of brands and beverages they can enjoy. Our partners value our quality, our system expertise, and coffee know-how. Retailers would recognize that we've driven premiumization in the coffee category, with single-serve and K-Cup pods driving more revenue per every cup of coffee. This creates a very strong growth engine.

On the Bev co entity from the management team from our supporting functions from the board.

I think that's probably going to be the biggest benefit there is definitely a different culture.

For a fast moving soft drink centric DSD centric organization versus a warehouse model.

I think the amplification of that and just how we go about.

Creating the company's culture, coupled with the management team's focus will probably be the biggest underpinnings.

That said, we've got a playbook, that's working and I would expect you to see more of the same.

No doubt and the only build on Eric's point for sure around focus and culture. I think there are upside benefits to a standalone pure play rough that business. The other that I briefly mentioned in my remarks was around strategic Optionality and certainly today I'm not going to give you the list of here the five.

Things, but I would say you know as you continue to advance a scaled.

Strong brand portfolio, many different categories of participation strengthen that DSD muscle there could be options down the road that present themselves around ownership in different levers of the business you know brands distribution et cetera. So we will.

Bob Gamgort: More brands and more variety appeal to more households, generating more profit to be reinvested in the system. We also have a very strong track record of building and accelerating coffee brands, starting with our very own Green Mountain Coffee, now realizing more than $800 million in retail sales annually and holding the number two position in the Keurig system. It is part of a robust own-and-license portfolio of brands that drives strong distribution and retail activation. Here are a few examples. McCafé was a brand in decline when it transitioned over in our system mid-2020 and has been growing share every year since. Lavazza is the fastest growing brand since we took over the selling rights, and we see acceleration in distribution and retail activation.

A step at a time, but I do think an option like that longer term is enhanced its more accessible more available more actionable should we choose that that's in the best interest of the shareholder as a standalone rough Bev company.

Steve.

I was actually going to ask along a similar line, which shocking.

We have a habit of doing that.

So as Steve powers from Deutsche Bank, So I get the that future focus on Optionality post transaction, but as you assess this this.

This initiative today going out and kind of doubling down in coffee and separately because that's a big project. There wasn't envisioned so just the opportunity how do you get comfortable with the risk and opportunity costs of pursuing that.

Bob Gamgort: Finally, The Original Donut Shop. We know flavored coffee is actually growing faster than black coffee and is the leader in flavored coffee growth, with unique partnerships and beverage types. In addition, we have a very powerful asset in our business with Keurig.com. The Keurig.com consumer consumes twice the daily average and has a five-time lifetime value versus the average household. While Keurig.com is an excellent sales channel for a coffee business, it is also a significant driver of household penetration, being the fourth largest sales channel for brewers in volume. The site enables us to have a one-on-one relationship with more than 1.5 million consumers each month. If it were to be part of our retail channels, Keurig.com would be among our top five, alongside other industry giants.

And maintaining all the good that you've been doing on refresh beverages. How do you how do you handicap that and how big of a consideration was that.

But my main question do you have a secondary question, which probably is for James just on the on the separation I think that the base case is to spin coffee.

But then earlier when you talked about the different Optionality, you talked about a partial IPO of of beverages.

What that means for the existing debt. The Katy P has does that stay with beverage code is that go to coffee code do we know.

I'll start with the first one and Jane can take second look Steve.

It is all about execution. This is not something that's you.

Unique in the World, we would agree that it's a big undertaking and has complexity to it that's not daunting for us as I shared on stage many of US on this stage right now have experience in large acquisitions integrations separations right we've done it before.

Bob Gamgort: For those that know our brand history, Keurig was actually founded in the workplaces, delivering a fresh brewed solution over the dreaded stale pot of office coffee. On that foundation, we've built a very strong business in away-from-home, with now 650,000 workplaces with active brewers and 1.2 million hotel rooms. We actually see significant upside in large away-from-home areas, primarily corporate workplaces, manufacturing, health care, and construction. There is a powerful synergistic relationship between our out-of-home and at-home channels, with workplaces serving as a great trial environment for both the Keurig system and our many brands in the portfolio. Our coffee business has actually delivered meaningful productivity over the last five years, averaging 4% in year-over-year cost savings through a series of initiatives ranging from tactical to strategic.

Many of these people on stage and then it's really about do you have a great plan set of processes. That's why we elected today to also ask Roger to unpack, our transformation management office and our approach to that obviously external advisers et cetera carving off a group of individuals' scores folk.

Just on that to then allow the vast majority of our 29000 colleagues at Kt Pete to deliver their mission day. After day after day and I think you know Q3 quite honestly is an early proof point. This was a challenging quarter one might argue a quarter, where there were some distractions right.

And look you know that we put up a pretty good quarter here that we're proud of and so it is just about the right plan the right governance around it the right people with the right experience executing well.

Bob Gamgort: These programs include Brewer Direct Import, large nested count pack, lightweight cups, and meaningful reductions across process and product waste. Our productivity initiatives usually serve the dual purpose of generating cost savings and advancing our sustainability agenda, reducing packaging, eliminating waste, and driving a more efficient logistics. By being cost-conscious and driving a productivity mindset throughout the organization, we unlock fuel to reinvest in our business. With that fuel, we can actually drive and accelerate our strategic imperatives. We know our business is strong, and we know we can improve. Over the last year, we've actually refined our consumer-centric strategy, and we're focused on four key areas: driving household penetration, growing premium coffee, scaling cold coffee solutions, and defining the future coffee system. In terms of Keurig, we're excited about our new marketing campaign hitting in Q4.

Yeah. Good question on separation plans.

Youre right that we've now named a couple of options to pursue a separation.

The common element across those is.

It's a tax free separation and that piece is sacrosanct and we're going to solve for that first and foremost.

Secondarily, you got to think about what's the optimal separation mechanism and that depends on the circumstances in the market and again, what we think will create the most value right for our shareholders and sell one potential is a tax free spin. Another is this partial IPO of <unk>.

Incept, which would allow all of our shareholders to participate as we could consider floating a small portion of bev Cao as well as bringing additional participants rate and raise primary proceeds which can be used to accelerate deleveraging. We haven't made a decision.

What you should expect us to do is to solve for Optionality as long as possible and then think about to your point that the debt structure, how we raise the debt how we think about those.

Bob Gamgort: It will have strong in-market presence, and we believe that with consumer insights and strong data-driven campaigns, we will be able to continue to unlock household penetration. With premium coffee, we are on the eve of launching our first ever coffee brand with the Keurig name, the Keurig Coffee Collective. It will be our first scaled and owned premium brand. It features elevated packaging. It will have 30% more coffee within each cup and will have distinctively delicious blends. We're leaning into cold coffee solutions with innovations across brewers, pods, and ready-to-drinks. We've actually recently launched new refreshers based on TikTok trends, and we found new ways to offer consumers the way to customize their favorite cold beverages.

Those pieces those moving pieces to maximize our flexibility and not all of that has been decided yet but that is something that we are very actively considering.

Michael.

Thank you Michael Lavery Piper Sandler.

Just wanted to come back to some of the milestones you laid out.

One of which is operational performance would that include both businesses running on the algo targets and then second question just on the pace of Delevering. Originally you had expected about a five six at close and five two at the end of the year around a half a year.

Obviously around a 0.4 turn now you're calling out about a half a turn on a full year, but did anything change or is that conservative how do we think about the the half turn.

Again I'll take the first Jamie can take a second look.

Our expectation is we continue to perform at a high level at both Katie P. J D piece, you've seen it seen us do it so far this year and that's the expectation going forward and yes, we do believe I've said it on stage earlier, we're doing this transformational next step from a position of strength and we think that's the.

Bob Gamgort: As you would have seen in the product showcase, and I invite you to do so at the break, we are getting ready to disrupt once again the coffee category with the launch of a breakthrough system, Keurig Alta. Alta uses K-round plastic-free and aluminum-free pods. It is designed to offer a large range of barista-style beverages, including rich cups of coffee, authentic espresso, and a variety of coffee shop-style beverages, either hot or cold. We have completed multiple rounds of in-home testing with the Keurig Alta system, supported by pilot production of the K-rounds. We are looking forward to sharing this innovative format with consumers soon. While it's early days, we are excited to think about scaling this innovation in the future. With that, I'd like to welcome Tim back up to speak to JDE Peet's and how these two complementary businesses will be even stronger together. Thank you.

Best positioned to launch two new companies.

As it relates to the leverage right. So just to clarify because there are a bunch of numbers thrown around and I want them.

Ground us in what we're talking about the original plan as was announced in late August would've contemplated Ah.

Net leverage at acquisition close assuming June 'twenty 'twenty six at five six.

We've made a set of announcements today that gives us visibility to about four six on the same timeframe. You're also right that we've talked about pace of deleveraging right and there is a little bit of delta between what we're saying today, which we feel very very good about right. The half a turn a year and some of.

The assumptions that were built into the 5.2, which would have included some synergy capture in year, one and so look I think what you're hearing from US is the commitment to maximize right cash flow and get to a very quick pace on deleveraging I wouldn't read too much into exactly you know this number versus that this number.

Bob Gamgort: All right. I will put in a plug for those last two coffees that Olivier shared with you. If you've not tried our new Keurig Coffee Collective, for those of you in the room, it's in that station back there—my favorite new K-Cup pod; outstanding cup of coffee. Then, Alta. Please be sure and try Alta before you go today. I will start this next section with thoughts on JDE Peet's, including an overview of the business, why we think it's such a compelling asset, and some of the recent strategic changes that are underway at that management team. I'll discuss Global Coffee Co and highlight how the complementary nature of JDE Peet's and Keurig creates this attractive pure-play that is truly positioned to win. If you're wondering, what am I doing here? Why am I the guy talking about JDE Peet's?

The half a turn and then the commitment to see if we can accelerate that responsibly is why you should you should anchor to from here.

Camille.

Yeah.

Everybody co mail Goudreau Wella from Jefferies.

A couple of things as you responded to the market reaction and you were thinking about all of your options and why was the Apollo KKR option why really the best partners I believe I have a board member coming on will that board member be on both sides of future co. Just one of the sides and then when we think about you know we only had five hours to think about this but when you're thinking.

The new structure, you've talked about all the benefits why it should work everything thats.

Now everything is intended to go but what were the risks that you considered under this new structure on what if things don't go right. How much flexibility do we have to be able to get to where we're looking to go. Thanks.

Bob Gamgort: The answers are: Number one, I will be responsible for it while we run for a period of time as a combined company. Number two is, I do have an up-close perspective on this, having spent months of diligence on this acquisition and getting to meet and interact with this leadership team. Number three is, believe it or not, I used to run some of these brands back in a past life—brands like Jacobs, Tassimo, Kenco, Gevalia, and others. I actually think I know firsthand the strength of these brands and the roles that they play in the lives of our consumers and our customers. I also want to tell you we are very pleased that we actually have the CEO of JDE Peet's, Rafa Oliveira, in the room. Rafa, you can give a quick wave. There he is, in the audience.

Good.

I think Pam I'll take the board member question do you want to take the.

Two new investors take care of Palo Yeah.

Look we're extremely excited to partner with Apollo and KKR. Obviously, there is a real strategic merit and the investments that they've underwritten right and you see at unexpressed conviction in each of the future success of our companies right and the value of the assets there and the upside.

Particularly as you think about <unk> and all of the Optionality that we've talked about here, but also in terms of the single serve prospects in North America and in the JV.

Yeah, just the sort of economic profile of all of that we get the benefit of some of the smartest minds you know in the financial world with a ton of experience in transactions complicated transactions across industries across the world and we're excited to partner together and leverage that insight.

Bob Gamgort: Rafa and I, as you might imagine, have gotten to know each other pretty well over the last few months. He's actually here stateside for a couple of days. Tomorrow, he'll be at our Boston headquarters as we're advancing our integration and transformation agenda. Let's talk about JDE Peet's. JDE Peet's is a unique asset. It's large. It's profitable. It is a global pure-play coffee company, $11 billion in net sales, nearly $2 billion in adjusted EBITDA. The company holds the number one or the number two share position in dozens of markets around the world, reflecting an enviable portfolio of leading coffee brands. The business is anchored by billion-dollar icons like Peet's, L’OR, and Jacobs, but it also boasts a sizable regional and local portfolio, with brands like Pilão, Moccona, and Friele, among others. JDE Peet’s is also distinguished by its rich coffee heritage. This company has deep, deep coffee expertise.

I will pass it onto to Pam in terms of the board member and all of those born dynamics, but I'll. Just say you know all of the work that we've done over the last several weeks have absolutely been confirmatory of that partnership and the mindset with which we're walking into these strategic.

Strategic investments and partnerships and we're excited.

With regard to what we said in the press release. This morning about it would be our intent to name Brian dress skull as you know put them forward in the proxy for election to our board of directors I believe the press release said in conjunction with the transactions, which we were outlining.

In that press release.

However, we are initiating and have a very robust process using an outside.

Search firm.

To help us because at the end of the day whenever separation comes we will have to stand up as you've heard two fully independent boards able to field. The requisite committees and you know it is our goal to make those best in class, while we may have.

Bob Gamgort: Its participation in coffee dates back to the 1700s with the founding of Douwe Egberts in the Netherlands, and its capabilities are quite strong. As one example, we put it on this chart. The company has the ability to produce over 1,000 distinct coffee blends. You can imagine that's a skill and capability, especially useful in times of extreme coffee inflation and tariff volatility. For me, one of the simplest ways to understand this company's strength is by looking at a map of the world. Many countries have large and vibrant coffee categories, and JDE Peet’s is present in most of those countries, often with a leading position. Coffee is a category in which the market leader is frequently a regional or local favorite, not necessarily a global brand. Consumers are fiercely loyal to their local brands, particularly in the largest and most developed coffee markets.

Some supposition and ideas in our head as to who might go where we are way not at that point to begin to talk about that because we don't have enough people to fill both so it's going to be an iterative process and we will use someone from the outs.

And we have a internal committee that will be doing a lot of the legwork on behalf of the full board.

Independent directors and of course, Kam and Bob participating as we go through the interview process and looking at candidates. We always look for diversity of background diversity of skills and filling in gaps in terms of capabilities as we look around the board table and we have to keep.

That in mind now for two boards ultimately.

So hopefully that answers your question.

I think that's about all the time, we have today. So just want to thank everybody for joining us in person and on the webcast for your interest in Katy P. I think you've heard very clearly about our conviction in the acquisition of J D piece and the planned separation into two pure play companies and we hope you share our excitement that featured Katy P. Thank you.

Bob Gamgort: JDE Peet’s has a portfolio aligned to that reality. In the Netherlands and Belgium, Douwe Egberts is the category standard. In the UK, it's Kenco. In Brazil, it's Pilão. In Germany, and actually much of Central and Eastern Europe, it's Jacobs. In France, it's L’OR. That's just scratching the surface of their market leadership. We recognize that this company's brands may be less familiar to an American audience, but as you can see, they're powerful equities with strong resonance in their core markets. I'd be remiss to say that these brands also produce a very good tasting cup of coffee, each with very individualized kinds of taste that reflect the nation's qualities. For those of you that are here, there's a station on my back left that will give you a nice assortment of their brands.

Okay.

Yes.

Bob Gamgort: I highly recommend, if you haven't had enough coffee already, please try it at the next break. Another hallmark of JDE Peet’s is the broad category participation. The company has an offering spanning all major coffee formats from whole bean, roast and ground, single serve, liquid, ready-to-drink, and concentrate. The portfolio also captures the full price tiers from mainstream to super premium. The channel diversity is universal, including all major at-home and away-from-home channels where coffee is consumed. You can imagine there are significant strategic benefits to this broad category participation. Now, given its advantaged brand portfolio and strong capabilities, it's probably no surprise that JDE Peet's is also a leading partner to retailers across the globe. I'll give you one example: this chart here of a major retailer in France.

Bob Gamgort: L’OR actually holds the distinction as the number one brand in all of CPG, driving growth for the retail trade in France over the last 10 years, ahead of even the biggest global trademarks like Coca-Cola. These photos that you see on the slide underscore the level of in-store activation that retailers support because of the power of these coffee brands and the central role that they play in building shopper baskets and driving category growth. JDE Peet's brand strength also extends to the consumer. Its portfolio has beloved trademarks, obviously evidenced by those strong market shares I showed you. What's equally important, and I think encouraging for future growth prospects, is the brand's particular resonance among younger consumers. In some markets, here are three examples: the sub-30-year-old demographic prefers the leading JDE Peet's brand by nearly a two-to-one margin relative to the next largest player.

Bob Gamgort: That type of brand loyalty among the next generation is priceless. As younger consumers grow their spending and influence in coffee as they age, JDE Peet's appeal to these groups should represent a growth tailwind. The company also has brands with a demonstrated ability to stretch. I'll give you two examples on this chart. Take L’OR. L’OR began as a roast and ground coffee staple, but it's now expanded into basically all other consumable formats, including into appliances. These adjacencies now account for a meaningful percentage of total L’OR brand sales. The other example is Jacobs. Jacobs started as a German icon, but over the last couple of decades has successfully established number one positions across Central and Eastern Europe. In fact, in 19 markets, now more than half the sales of Jacobs are outside of its home country of Germany.

Bob Gamgort: I think this is notable because one of the incremental revenue opportunities from combining Keurig and JDE Peet's is the pairing of our technology and our innovation with JDE Peet's brands. We believe the stretch potential of these JDE Peet's trademarks can create intriguing growth opportunities down the road. Beyond the commercial success, the JDE Peet's business has also demonstrated resilient financial performance. I'm sure I don't need to tell one.

Tim Cofer: In this room, in fact, a few chats I did prior to this start reflect this, that the last few years have been marked by quite a bit of unusual levels of green coffee inflation. Triple-digit cumulative cost pressure on Arabica and Robusta. You see the numbers on this chart. Yet, even as a coffee pure play, this business has delivered steady and consistent gross profit growth. I think another indication of brand strength. Bringing it all together, it's clear for us that JDE Peet's has a strong structural foundation. This is a good business. It's got iconic brands. It's got significant capabilities. Yet it's also true that it's a business with significant value creation potential that has yet to be fully realized. To be clear, JDE Peet's management team recognized this. They've already begun the important work to begin to capture that potential upside.

Tim Cofer: They hosted a capital markets day back in July. They set a path to become a more agile, more focused, more commercially capable organization. I visited Amsterdam a few times with Rafa and the team. I can already see the early stages of this important cultural shift taking hold. The centerpiece of their approach is an evolved strategy. They aptly call it "Reignite the Amazing." There are many elements to the plan, but I'll just highlight a few notable points: an emphasis on fewer, bigger bets, with resources and management attention going towards the largest brands; greater consumer centricity and commercial excellence; and a stepped-up productivity flywheel to unlock savings, flexibility, and agility. The strategy makes sense.

Tim Cofer: It's definitely aligned with CPG best practices and operating principles. Upon integrating JDE Peet's with Keurig Dr Pepper, we would expect to continue this work and harmonize it into a combined strategic playbook for Global Coffee Co. It remains early days as they've embarked on this new strategy, but I would tell you, there's already some initial proof points showing up from this refined strategic approach. I'll give you a couple of examples. On big bets, JDE Peet's is prioritizing leveraging insights and infrastructure to launch compelling innovations and ideas across multiple brands and multiple geographies in a highly efficient and profitable way. As one example, right now, there's a hot trend out there called Dubai Chocolate. JDE Peet's was able to quickly launch a Dubai Chocolate coffee mix across multiple brands in 20 markets this year using this platforming approach.

Tim Cofer: Less visibly, but no less critically, the company has also made progress in refining its marketing approach and building capabilities in key areas like revenue growth management. We certainly know from experience that the payback from these investments can be very high when you get it right. Finally, JDE Peet's is also beginning to progress its productivity program that they unveiled on their capital markets day. The plan targets €500 million in savings through 2032, with roughly half being reinvested in the business. Four primary areas underpin this target: portfolio simplification across brands and SKUs and the manufacturing and distribution footprint; simplified ways of working, which involves removing complexity and generating savings accordingly; continuous improvement in sourcing, in design, and in plant-level productivity; and driving improvements in the company's asset-light route-to-market system. As you can imagine, we carefully vetted this program as part of our diligence.

Tim Cofer: We are confident that the savings are achievable. JDE Peet's has already begun to implement this program, including some plant closures and other operating efficiencies that they announced this morning in their press release. You have now heard Olivier talk about the strengths and our future growth plans for Keurig. You have now heard me walk through the virtues of JDE Peet's. Let's now talk about what happens when we put these businesses together. Let's start with some background. These businesses are strong in their own right. They have proven resilient. They have delivered solid performance in a very challenging operating backdrop the last few years. You see on this chart sales growth and adjusted EBITDA ranging in the low single digits. Importantly, each business has proven highly cash generative. For example, you see here, Keurig, we expect to deliver more than $600 million of free cash flow this year.

Tim Cofer: JDE Peet's this morning reaffirmed its outlook for the year of €1 billion, about $1.2 billion. When we put these two companies together, we expect even stronger top and bottom line growth going forward. Let me take you through why we believe that. To start, Global Coffee Co will be an advantaged market leader in the $400 billion global coffee category. As I said previously, scale matters in coffee. This business will have it. Global Coffee Co will be the number two coffee player in the world by revenue and the number one pure-play operating across 100 countries. It will have a strong portfolio of brands, diversified across formats and channels. It will have a strong financial profile: $16 billion in net sales and over $3 billion in adjusted EBITDA. The combined entity will have a broader product line than either standalone company had, particularly relative to Keurig.

Tim Cofer: Prior to the combination, as you see on this first bar, our business was almost exclusively focused on the single-serve subcategory here in North America. With the addition of JDE Peet's, you now see Global Coffee Co will have a format mix that's far more closely aligned with the global category split, yet still with a favorable SKU to the high-margin single-serve segment and other more value-add areas. What does that mean? Global Coffee Co can then fully participate in the growth of the entire category, both in meeting existing consumer preferences and emerging growth opportunities. Similarly, as a true multinational now, Global Coffee Co will be better positioned to capture a fair share of category growth. At the category level, coffee has two large structural growth drivers. We think both of these are evergreen. The first is per capita consumption growth.

Tim Cofer: This has been, and we expect will continue to be, a tailwind for the category. It is supported by elements like a rising middle class and ongoing preference shifts, particularly in non-coffee legacy markets, driven by youth shifting preferences from tea to coffee. The second is premiumization, as measured by value per cup. This trend is occurring across all formats. You see it most evident in the growth of premium solutions like single-serve. It is occurring across brands as well, with premium trademarks growing faster than mainstream in value. While per capita consumption is a greater opportunity, perhaps, in less developed coffee markets, and premiumization is a bigger trend in established countries, we actually see significant runway in both of these structural growth drivers. The business will also enjoy unique revenue opportunities arising from this very complementary combination. Let me quickly talk to these five. Formats.

Tim Cofer: Given the potential to expand Keurig's brand equities now into new subcategories, leveraging JDE Peet's full segment exposure, technology—especially in brewers—is key. Keurig is best in class in brewers. We've been an innovation leader. We know how to produce them in an efficient and profitable manner. We can provide insights to some of JDE Peet's systems like Senseo, Tassimo, and L’OR. Channels are important as well. We can capitalize on our complementary footprints, including in away from home. Next generation innovations like Keurig Alta and K-Round have the potential to think about expansion beyond North America. Regarding brands, we are targeting growth opportunities for specific brands in the portfolio. One I'll call attention to is Peet's, and I'll give you more in a moment. As you see, the synergistic growth opportunities are ample and indeed global. Let me talk a little bit more about Peet's, just to bring that to life.

Tim Cofer: We all know that brand, I think, pretty well here in the U.S. It has a rich heritage. It's a coffee pioneer. It has strong brand awareness and premium coffee credentials across the U.S. As this map shows, the map on the left, its market penetration is very much concentrated on the West Coast, and in particular, California, its home territory. Its commercial execution at the point of buying meaningfully lags Keurig's. As a combined entity, Global Coffee Co can utilize Keurig's significant commercial scale and our very strong customer relationships to improve Peet's geographic footprint. I'll give you one example with numbers. You see that on the far right. We have the ability to achieve; today, Keurig achieves almost four times the feature and display activity of brand Peet's. We can and we will close that gap. The result can be a much larger, faster-growing Peet's premium brand over time.

Tim Cofer: We've talked about the revenue opportunities. We also see visible cost synergies at Global Coffee Co. Our $400 million synergy target in the first three years spans several areas. In procurement, we will benefit from enhanced scale across green coffee sourcing, as well as direct and indirect spend pools. In manufacturing and logistics, we have plans for network optimization, route-to-market consolidation, and other go-to-market efficiencies. For SG&A, we've already identified corporate scale efficiencies, as well as IT infrastructure and other system savings. Importantly, these synergies have been scoped, and we've developed concrete and actionable plans to deliver on these cost synergies, if not exceed them. Ultimately, we expect Global Coffee Co. will generate consistent, attractive profit growth. This will be driven by a few factors. First, obviously, profitable top-line growth.

Tim Cofer: This company will be well-positioned to capture its fair share of the coffee category's volume growth, which, as you've heard a couple of times, consistently grows on a volume basis at a low single-digit rate over time. This will obviously generate fixed cost absorption and operating leverage benefits. In addition to that, the innovation that you've heard about today, our price pack architecture and RGM work, as well as promotional effectiveness, can further translate that top-line growth into nice bottom-line growth. Next, Keurig and JDE Peet's each have robust productivity programs, even beyond the deal synergies I just covered. Obviously, some of these savings will be earmarked for reinvestment, but others will flow through to the bottom line. Finally, it's not built into our baseline financial outlooks, but it's our belief that current coffee prices are clearly well above the long-term trend. They do not appear to be supported by market fundamentals.

Tim Cofer: I'm not going to try to predict commodity market gyrations on this stage. It is worth noting that any normalization in this cost would clearly drive a cyclical profit tailwind. Bringing these elements together, the business's structural advantages, the potential revenue synergies, the cost synergies of the combination, and the other profit levers available to the business, Global Coffee Co. will support an attractive growth algorithm. There certainly can be some year-to-year volatility in top-line due to commodity volatility. Over time, we project low single-digit net sales growth and high single-digit adjusted EPS growth. We would expect this business to be highly cash generative. As you see on this chart, anticipated cumulative free cash flow of more than $5 billion from 2026 to 2028. We are excited to create this global coffee powerhouse, the world's largest coffee pure-play, and a stable of the best-loved brands powered by advantaged capabilities.

Tim Cofer: All right, I think you've earned a well-deserved break. Let's take a 15-minute break. We will come back and talk about Beverage Co. Thank you. Please be seated. We are getting started in two minutes. You know what?

Bob Gamgort: I'm not going to worry enough.

Tim Cofer: We're starting in one minute. Everyone, find your seats.

Bob Gamgort: That was great.

Tim Cofer: Please welcome Eric Gorley, President of U.S. Refreshment Beverages.

Eric Gorley: All right. Y'all hear me? Excellent. Good morning. Thrilled to be here, getting to represent this great business. Most likely, I'm a new face to most of you. Believe it or not, I've actually been in this industry for nearly 30 years. I spent the first 20 in the red system, and I just hit my 10th year anniversary here at Keurig Dr Pepper. Look, as I've told Tim, Bob, and our Board, there is absolutely no other place that I'd rather be right now than here with this collection of iconic brands and the incredible team that we've been able to assemble. Let me tell you why I feel that way. You know, Tim hit some of this to start with. We work in a fantastic industry. It is large, over $300 billion in retail sales.

Eric Gorley: Most importantly, year after year, it has demonstrated the ability to consistently grow sales dollars north of 3%. What fuels that growth is just how dynamic the consumer and her ever-increasing demands are. Underlying megatrends—these are things we all experience in our day-to-day lives: convenience, wellness, the need for functionality—fuel a cycle of innovation and the opportunity to continuously participate in new pockets of growth. This landscape is way more fragmented than most people realize. We view this as an opportunity for future expansion, particularly with our unique build-buy-partner model. Let's talk a bit about Beverage Co. and why we feel like we are uniquely positioned to be a formidable challenger in this industry. We have scale. We exited 2024, as you saw in Tim's slides, north of $11 billion in net sales. Our business is profitable. Our EBITDA margin is at 30%. Importantly, we're growing.

Eric Gorley: Since 2018, we've averaged a top-line growth rate of 8%. We have incredible portfolio brands with incredible organic growth upside. That's going to be most of my presentation today—just the confidence we have in these products. We also have an advantaged commercial and route-to-market model. This includes one of only three national direct store delivery systems for non-alcoholic beverages here in the U.S. We've invested significantly in our operations to support network expansion. Yet, we still have so much room for improvement. I'll now get into the details on why I personally have so much confidence we can maintain this momentum into the next chapter. One of the things that is so very special about beverages is just how they are so very personal. These are products where consumers create deep, lifelong relationships with their favorite brands.

Eric Gorley: We have many of these brands inside our portfolio—brands that consumers love and brands that our retailers value. A few facts and figures: on the slide, you'll see over 25 brands that have over $100 million in annual retail sales. They are led by our $3 billion trademark, Dr Pepper, fast approaching the $6 billion mark, as well as category leaders like Canada Dry and Mott's. Some other key brands include icons like Snapple, A&W, and 7UP, as well as a few fast-growing disruptors like Bloom, Ghost, and Electrolit. Today, we believe we have a portfolio that not only provides us with exposure to growing categories, but also creates scale for us with our customers and efficiency inside of our operations. Over the past several years, we've done a really nice job of being very thoughtful in how we want to evolve our portfolio.

Eric Gorley: As you heard Tim mention, we employ a flexible but disciplined model that's really centered around building, buying, or partnering. It all starts with build. You can see on the slide where we have demonstrated a really strong track record of bringing innovation. No better example of this than inside our CSD portfolio. Here, we are repeatedly recognized by our retailers for our market-leading innovation. We've also been very purposeful in our approach to utilizing different ways to expand the portfolio, particularly our partnership model. Our approach to partnerships is very, very unique in the industry. We work hard to ensure that there is a win-win in the relationship, that we have aligned incentives, and that both partners are in it for the long term.

Eric Gorley: These partnerships are able to leverage our DSD network and allow us to rapidly participate in growth pockets with a very capital-efficient model. In a number of cases, they provide us with a superior risk-adjusted return than we likely could achieve on our own through a build model. We'll start now with the portfolio with my favorite brand, our flagship brand Dr Pepper. I literally could speak for an hour just on brand Dr Pepper alone. It is a brand that has had incredible success, yet we still believe there is tremendous headroom for growth. A couple of years ago, you heard Tim say Dr Pepper became the number two most consumed soft drink brand. This year, 2025, we will complete our ninth consecutive year of share growth. This is all built upon a consumer obsession for the brand.

Eric Gorley: You can see that demonstrated in category-leading household penetration growth, as well as industry recognition for our marketing campaigns. We believe we have a repeatable playbook that works. It starts with Dr Pepper's unique flavor and its distinct positioning. It plays firmly and wins in what we call the treat demand space. We're able to take that positioning and then make meaningful connections with what consumers really care about and where their passions are. Right now, you can see that on any given Saturday come to life in season eight of our highly successful Fansville campaign. We also leverage winning innovation—innovation that creates excitement not only with our consumers, but with our retailers and our distributors. That drives some of the scale retail activation you'll see in market for the full trademark.

Eric Gorley: Importantly, not only for the innovation, this also attracts new households into our base flavor when we execute this well. This is great. What excites me the most is the runway we still have ahead of us. Let me talk about Dr Pepper Zero Sugar, still very much in its early days. You'll see in your scan data, it's already the number two Zero Sugar CSD, but still has significant opportunity in terms of distribution, display presence, even consumer awareness. As a percentage of the trademark's mix, we're still only about 60% of the development of the number one Zero Sugar CSD. Point number two, Dr Pepper is Gen Z's most popular beverage brand. We've rapidly been adding households within this cohort. If you are, like myself, a student of our industry, you know that this type of trend is highly encouraging for longer-term consumption growth.

Eric Gorley: Finally, we have outsized growth opportunities in specific geographies. While we're currently approaching a 13% share nationally, in any given local market, we could be as high as the mid-20s% in our heartlands or mid-single digits on the coast. What's really encouraging right now is we are growing share across all market types. In lower share markets, our innovation has been the most impactful in actually bringing new households into the trademark. Final point, as good as the marketing has been on brand Dr Pepper, we honestly believe it could get even better. This year, we've begun to leverage some of our new capabilities in precision and personalized marketing. This is now allowing us to go reach target consumers with relevant content in a hyper-efficient approach. We'll speak a little bit more about that in a couple of minutes.

Eric Gorley: This playbook, we think it's a repeatable model that we can go apply to other parts of our portfolio. Let me just give you two quick examples of work in flight today. Canada Dry, the number one ginger ale, has a long track record of growth. Canada Dry plays in the relaxed demand space. It also has a unique and ownable position. Here, we've seen innovation also play an important role. Back in 2024, we launched what we call our Fruit Splash platform. That year, it was recognized as the number one CSD innovation. We're bringing a second flavor in for 2026. Much like brand Dr Pepper, Canada Dry also has geographic opportunities. While it's a 3% share nationally, it's as high as a 12% share in parts of the Northeast. Let's take a minute to talk about Mott's.

Eric Gorley: Motts, the number one apple juice and sauce brand, is a staple for moms and has incredible equity in health. Here, though, we still have potential for growth. A great example you see on the slide is in our sauce portfolio. In certain formats like cups and jars, we're north of a 50% share. We have been a relatively small player in the growing pouch segment. Over the past year, with a focused marketing and commercial activation plan specifically against pouch, we've been able to unlock significant growth. I'll let you scan the right-hand side of the slide. You can see a host of other iconic brands within our portfolio that we think we can deploy the same playbook to unlock organic growth.

Eric Gorley: For those of you, probably most of the audience here, local to New York City, you may have noticed Snapple has both a new campaign and just last week, the return of its iconic glass packaging in five classic flavors, honoring the city where it was born and its five boroughs. Let me shift gears here. Another space I probably consume too much of, but we're excited about as a company, the energy category. Energy now, the third largest category in beverages, $28 billion. If you look at the scanner data, growing rapidly. What's really remarkable about energy is just how over the past two decades, this category has continued to reinvent itself. It's been able to leverage different product profiles, whether it be ingredients, caffeine amounts, serving sizes, brand positionings. The category has been able to continually unlock additional occasions and bring in new households.

Eric Gorley: Right now, we're really seeing the latest iteration of this with the female-targeted product lines. Three years ago, we rounded honestly to a zero share in energy. We knew this was a big opportunity. We set out to create a portfolio to win where we saw the growth occurring—products with great taste, products that played in the zero sugar space, products that we could target against distinct demand spaces with unique, authentic brands. Today, we believe we have a complementary portfolio of brands that can win within their respective segments, especially when you couple that with our commercial approach and our national distribution network. You'll see in your scanner data, over the past four weeks, we've now surpassed the 7.5 share. We have line of sight to our stated goal of a 10 share in the next few years.

Eric Gorley: Aside from energy, we've also established platforms in several other high-growth categories over the past two years. Through our long-term distribution partnership with Electrolit, we now have a strong play in sports hydration. Specifically, we're the number one player in the rapid hydration segment. This is a $2 billion segment that is growing at a blistering pace. This summer, we entered the prebiotic CSD space with Bloompop, building on Bloom's incredible success to date in energy. In its launch retailer, velocity per SKU was on par with the market leaders. We're really excited about Bloompop's potential. We just began scaling this nationally at the end of Q3 through our DSD network. Finally, earlier this summer, we had an acquisition, a company called Dyla Brands, which has allowed us to go play in the drink mix space. Dyla is bringing both brands as well as capabilities.

Eric Gorley: Additionally, it's going to let our broader portfolio instantly access this high-growth and attractive functional powder segment. A lot of effort has gone into building this portfolio. However, entering a category is one thing; the bigger question is, can you effectively sustain the success? You can see on the slide, across a variety of time horizons and a spectrum of categories, how we have been able to significantly increase our market share relative to pre-Keurig Dr Pepper distribution. This reinforces that access to our network is more than distribution; it's our ability to step-change selling and activation for a brand, all the way from the national buying desk down to the outlet level. Part of the secret, whether it's successful innovation or some of the partnership scaling I just spoke about, are some of the top-tier capabilities that we've been able to create in our marketing commercial functions.

Eric Gorley: I mentioned earlier, with brand Dr Pepper, my excitement around our new capabilities to go amplify what we already believe is world-class marketing. This is all grounded in new abilities to go leverage AI-powered data and analytics to go create a deeper understanding of the consumer. This helps us guide our innovation. It's helping us set brand strategy. It's also allowing us to create highly relevant, personalized content and creative. Our marketing and communication platforms are increasingly connected across both channels and platforms. This is going to let us unlock precision media capabilities, allowing us to go target the individual and drive efficiency and effectiveness in how we flight our marketing investments.

Eric Gorley: Right now, at Keurig Dr Pepper, we think we have access to the right data, the right systems, and most importantly, the right talent, underpinned by an agile operating model to measure and react almost real-time to ensure we're driving the best returns for our marketing investments. This fall, we started to deploy this with our Fansville campaign. You're going to hear us talk a lot more about this in the future. An area that I've spent a great deal of my time helping to build out is the middle part of the slide, what we call our commercial engine. This is the function that really serves as the critical link between our brands and ultimately our routes to market. Inside the gears of the engine, you see some of the best-breed capabilities we've created.

Eric Gorley: It could be omni-marketing, revenue management, category management, and how we show up with our customers. These are capabilities that allow us to effectively represent our products with our customers with a high degree of confidence in our ability to create value. The advantage of us doing this well, regardless of the brand owner or the route to market, is that we can create a seamless experience for our retailers, bringing them meaningful commercial solutions that fully take advantage of the breadth of what our portfolio has to offer. The final point on the slide is that we all know strong national distribution is absolutely critical to win in beverages. Right now, we have six different options that we can use. It really depends on what is the right fit for the product or what the need of the retailer is. Let me speak a bit more about those options.

Eric Gorley: I'll talk more about company-owned DSD. We have it both here in the U.S. and in Mexico. We also are able to leverage some leading bottlers that complement our company-owned DSD footprint in specific geographies. For some products, we still utilize the effective warehouse direct model, particularly for categories that have lower velocities or where there is a real preference by the retailer for that mode. Fountain foodservice and on-premise are extremely important. These channels provide access to high-value away from home occasions. These are critical for building brands. Notably, brand Dr Pepper is the most pervasively available fountain beverage. This allows us to have direct relationships with most major operators and customers in the foodservice space. Winning in e-commerce has become increasingly important. By our measures today, roughly one in eight cold beverage purchases are occurring in a digitally oriented manner.

Eric Gorley: In many categories and retailers, it's providing over 100% of the growth. We are making the right investments to ensure we've got the specialized capabilities to effectively partner for growth, whether it's a pure-play or our omnichannel retailers. Let's talk a bit more about DSD. Why does it matter so much for beverages? When you get into it, great DSD execution is more than just a replenishment model. Done well, it is a powerful competitive advantage that allows you to build brands over time. DSD provides access to outlets that are not serviced by warehouse direct. Most of the convenience retail channel and most of on-premise cannot get there without DSD. Even within retail channels, it allows a local selling associate to build a meaningful relationship with decision-makers at the outlet level.

Eric Gorley: These relationships, coupled with the merchandising resources we provide, can translate into a superior retail presence for our brands, as well as getting you critical access to cold drink equipment and other means of trial. Scale is what makes a DSD system work. To generate the local brand-building benefits, there is significant labor and fixed cost. Scale drives a virtuous cycle that benefits from the leverage on that infrastructure. Done well, it enables further reinvestment and growth. Let me orient you to our DSD network. These are the trucks that carry the majority of our portfolio. We have one of only three systems that can cover the entirety of the U.S. footprint. Our company-owned trucks, depicted in the maroon on the slide, cover roughly 80% of the population base.

Eric Gorley: For the balance of the country, we have longstanding, strong strategic relationships with leading independent distributors who operate with scale in their own respective geographies. I've had the chance over the past few years to spend a great deal of time with some of the 13,000 DSD employees that we have. When you get a chance to experience the passion these team members have for our brands, the expertise they bring to our customers every day, hitting almost 200,000 outlets, you can see firsthand why this is such a powerful competitive advantage. We're really proud over the past six years of the work we've done to strengthen our DSD network. We're improving every day in terms of both the service and the capabilities that we're providing our retailers. Let me talk about each of these vectors. We'll start with territories.

Eric Gorley: Since 2019, as Tim mentioned, we've made over 30 acquisitions—some relatively modest, a few rather large. What's universal, though, is that where we've made these investments, we've been very satisfied with the returns that they've generated. There is not a one-size-fits-all model here. Our primary goal is to have a scaled and relevant DSD operation that puts the right focus on our brands. Whether it's a partner or something we own, access is what is key. Let me shift to our portfolio. One of the goals of our portfolio expansion has actually been to help us generate additional scale for our company-owned DSD operations. Meaningful participation in categories like energy or sports hydration has had a material impact within specific channels. There is no better example than inside of convenience retail. Here, we've been able to improve our drop sizes close to 70%.

Eric Gorley: In some instances, I've had the opportunity to revisit our service frequency to map better to some of our customers' needs. Again, a great example of that virtuous flywheel I spoke about a moment ago and how it can strengthen our ability to capture growth, particularly in C stores, which is an extremely profitable space. The final point on the slide references some of our digital capabilities. These here are really focused on our front-line selling. We're rolling these out recently in the market and are really pleased with the results. The one I'll highlight is our Perfect Order. This is an application that's leveraging algorithms based on outlet-specific data to help pre-generate the order for the next delivery.

Eric Gorley: Just to bring this home, if you think about a big box store, generally a couple hundred thousand square feet, we may have 250 different SKUs spread across that store that a sales associate is responsible for writing the next delivery order for. Where we've been able to deploy this application, we're seeing meaningful improvement in in-stock rates, as well as a significant reduction in the time spent on lower value activities in counting and walking around the outlet. With that additional time, we can enable these same individuals to shift their focus to local selling activities. Here, we're also implementing real-time access to outlet-specific data. We're starting to enable it with AI to help generate specific insights. That's going to help aid in their ability to work with a local customer decision-maker to unlock growth inside of that outlet. Extremely excited about where this is going to go.

Eric Gorley: Shift gears a minute. Let's talk about Mexico. We also have a fast-growing, profitable billion-dollar-plus business in Mexico. Though it's at an earlier stage, we think the same model that has driven success in the U.S. can also be leveraged here. We have a leading brand. It starts with our flagship brand, Penafiel. If you're not familiar with brand Penafiel, it's a 100-year-old locally sourced icon that is the number one mineral water in Mexico. We're now seeing that brand have success moving into some adjacent spaces. We also believe some of our U.S. trademarks can play a much bigger role in the Mexican market, particularly brand Dr Pepper. Finally, like the U.S., we continue to make meaningful investments in expanding our DSD network. Much like the U.S., for Mexico, a critical enabler of brand development, particularly in a market where the traditional trade is still thriving.

Eric Gorley: Today, our company-owned footprint reaches about half of the marketplace. We cover population centers in the central and northern part of the country. All this together is why we feel great about our ability to generate strong returns for Mexico for many years to come. I also want to emphasize, though, that we are focused on the right kind of growth—growth that's going to allow us to expand our margins over time. Pricing is a critical lever. We are very well positioned to drive sustained net price realization across our major categories. Another key aspect is our largest category, CSDs. We still believe it has a very attractive price-to-value ratio, particularly when you compare it to other beverage options for purchase. Let's talk about mix management. We have very strong revenue management capabilities.

Eric Gorley: Done well, we're able to go meet both some affordability requirements, but also identify different levers to improve our unit economics, whether it's through promotional optimization or package and product mix. I highlighted the virtuous cycle in convenience stores, the ability to continue to grow and meet consumption soft drink occasions, as well as energy. These are really profitable levers to continue to go get great margin and creative mix in your portfolio. Finally, I'll touch on productivity. We all know productivity supports reinvestment back into the brands and ideally can help expand margins. Annually, we target 3% to 4% of productivity, and we've been able to consistently deliver in that range over the past few years. Specific focus areas where we have made and will continue to make investments are in our network, both within our manufacturing and our distribution facilities.

Eric Gorley: We've got opportunities to further leverage automation and optimize our footprint. Digital, I spoke a lot about front-line a few moments ago. We also have digital initiatives in flight to help step-change our demand and supply planning visibility across the vast network. Finally, the operating model: we're continuing to strengthen how we manage this productivity pipeline, increasingly driving accountability down to our local orbits. When you bring it all together, Keurig Dr Pepper has delivered consistent, strong financial results. Since 2018, on a compounded annual basis, top-line growth approaching 8%, EBITDA growth almost 12%. We have achieved these outcomes through what I covered today: strong base business momentum and share gains, deliberate, capital-efficient portfolio reshaping initiatives, and targeted actions which were able to mitigate inflation and help us reinvest back against the core tenets of our business. We expect to sustain this momentum.

Eric Gorley: That supports the algorithm you'll see up on the page: mid-single-digit net sales growth and high single-digit adjusted EPS growth. Additionally, we expect to generate significant free cash flow, which will, as Tim mentioned, provide optionality for us to either invest against organic or potentially inorganic additional growth levers. A few points to reiterate as I close here: This is a powerful platform in a fantastic industry. Over the past six years, this team has proven its ability to consistently deliver attractive financial returns. We now head into the future equipped with a fortified portfolio, the right brands, the exposure, and the high-growth demand spaces, which we believe can meet our growth goals organically. Additionally, we are poised to benefit from a step change in our new digitally enabled marketing capabilities.

Eric Gorley: We have a model against our portfolio that creates optionality in how we can add to the portfolio in a very capital-efficient manner. We are strengthening our network, and we are going to continue to recognize the benefits of improved execution. These improvements will drive growth in margin and creative categories, packages, and channels. Finally, we have demonstrated the ability to unlock meaningful productivity, and we believe we have a robust pipeline of opportunities to come. As you assess some of these efforts, I think now, hopefully, you can understand why I have so much confidence in this team. As we head into the next chapter for Beverage Co., I have confidence about our future and our ability to deliver this very attractive algorithm we have up on the page. Thank you so much for your attention this morning. I am now going to turn the podium over to Jane.