EPS of $0.45 increased by 21.6% from previous year
Gross margin of 55.0%
Net income of 616.00M
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Keurig Dr Pepper Inc (0Z62.L) QQ3 2024 Results – Resilient Profitability and Cash Flow Amid Moderate Revenue Growth
Executive Summary
Keurig Dr Pepper Inc. reported a solid QQ3 2024 backdrop characterized by modest revenue growth and resilient profitability, underscored by strong cash generation. Revenue reached $3.891 billion, up 2.26% year-over-year, while gross margin remained robust at approximately 55% and operating margin near 23%. Net income of $616 million delivered EPS of $0.45, up about 18–22% versus the prior-year/previous quarter metrics, reflecting ongoing cost discipline and favorable pricing/mix dynamics. Despite a muted sequential top-line trajectory (QoQ revenue down ~0.8%), the company generated healthy operating cash flow of $628 million and free cash flow of $503 million, supporting a sizable dividend and steady capital allocation.” ,
Net Income: $616 million; net margin ≈ 15.83%; YoY +18.92%; QoQ +19.61%.
Financial Highlights
Key QQ3 2024 metrics (USD):
- Revenue: $3.891 billion; YoY +2.26%; QoQ -0.79%.
- Gross Profit: $2.140 billion; gross margin ~54.99%; YoY +1.37%; QoQ +2.84%.
- EBITDA: $1.083 billion; EBITDA margin ≈ 27.83%.
- Operating Income: $902 million; operating margin ≈ 23.18%.
- Net Income: $616 million; net margin ≈ 15.83%; YoY +18.92%; QoQ +19.61%.
- Earnings Per Share (Diluted): $0.45; YoY +21.62%; QoQ +18.42%.
- Operating Cash Flow: $628 million; CFO per share ≈ $0.463.
- Free Cash Flow: $503 million; FCF per share ≈ $0.371.
- Balance sheet highlights: cash and equivalents ~$552 million; total debt ~$16.531 billion; net debt ~$15.979 billion; total assets ~$52.718 billion; total equity ~$24.969 billion.
- Liquidity and leverage: current ratio 0.533; quick ratio 0.341; cash ratio 0.0727; debt to capitalization ~0.378; debt to equity ~0.608; interest coverage ~5.41x.
- Dividend and cash allocation: dividends paid ~$292 million; debt repayment ~$46 million; share repurchases ~$15 million; payout ratio ≈ 47.4%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.89B
2.26%
-0.79%
Gross Profit
2.14B
1.37%
2.84%
Operating Income
902.00M
0.67%
-1.74%
Net Income
616.00M
18.92%
19.61%
EPS
0.45
21.62%
18.42%
Key Financial Ratios
currentRatio
0.53
grossProfitMargin
53.3%
operatingProfitMargin
24.3%
netProfitMargin
15.8%
returnOnAssets
1.17%
returnOnEquity
2.47%
debtEquityRatio
0.61
operatingCashFlowPerShare
$0.46
freeCashFlowPerShare
$0.37
dividendPayoutRatio
47.4%
priceToBookRatio
2.04
priceEarningsRatio
20.64
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcripts for the QQ3 2024 results were not provided in the supplied data. Consequently, there are no management quotes available to quote or contextualize beyond the reported financial results.
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Forward Guidance
No formal forward guidance was included in the provided data. Investors should monitor the following factors as potential drivers of outturn: (1) price/mix trajectory and volume growth across the Packaged Beverages and Latin America Beverages segments; (2) input cost dynamics (commodity prices, packaging costs) and potential hedging; (3) currency effects given multinational footprint; (4) debt maturity profile and ongoing capital allocation (dividends vs. buybacks vs. growth investments); and (5) competitive dynamics within the non-alcoholic beverages landscape. In the absence of official guidance, the margin trajectory and cash flow sustainability will be key anchors for the investment thesis.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0Z62.L Focus
55.00%
24.30%
2.47%
20.64%
0J4X.L
40.20%
21.10%
10.60%
21.78%
0JT5.L
49.00%
33.10%
14.00%
17.53%
0L8A.L
37.90%
32.70%
4.61%
16.05%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, QQ3 2024 demonstrates Keurig Dr Pepper’s ability to generate solid profitability and cash flow despite modest top-line growth and a heavy debt load. The company’s margin resilience (gross margin ~55%, operating margin ~23%) and strong FCF generation support a constructive long-term investment thesis, particularly if deleveraging progresses and mix improvements materialize. Key catalysts include ongoing price/mix discipline, potential growth in LATAM, and continued efficiency programs. However, the high debt burden and modest liquidity metrics warrant cautious monitoring of leverage trajectory, interest costs, and capital allocation decisions in a rising-rate environment.
Key Investment Factors
Growth Potential
Portfolio breadth in recognizable brands (Dr Pepper, Snapple, Mister T), ongoing price/mix optimization, and potential Latin America expansion support moderate revenue growth and improving margins. Free cash flow generation (~$503M in QQ3) provides financial flexibility to deleverage and fund dividends; market growth in LATAM beverages could offer incremental volume and pricing leverage.
Profitability Risk
High absolute debt level (total debt ~$16.53B; net debt ~$15.98B) with interest coverage around 5.4x limits near-term leverage to a broader margin cushion. Commodity and currency volatility, competitive intensity from Coca-Cola and PepsiCo in various channels, and potential supply chain disruptions pose ongoing risks. A low liquidity ratio (current ~0.53) suggests tighter near-term working capital management could be required.
Financial Position
Healthy operating cash flow and dividend coverage underpin shareholder-friendly capital allocation, but the balance sheet remains debt-heavy with sizable goodwill/intangible assets (~$43.15B) that could be sensitive to impairment in a stressed environment. Payout ratio ~47.4% supports current investor expectations while leaving limited headroom for aggressive buybacks if deleveraging accelerates.
SWOT Analysis
Strengths
Leading diversified beverage portfolio with strong brand recognition (Dr Pepper, Snapple, Keurig), enabling broad retail and on-premise reach.
Robust free cash flow generation supports continued dividend payments and modest capital returns.
Established distribution network and scale in the U.S. market provide competitive resilience.
Weaknesses
Significant leverage and high absolute debt level constrain balance sheet flexibility.
Heavy reliance on a few large brands may expose the company to competitive pricing pressure and channel shifts.
Opportunities
Expansion potential in Latin America Beverages segment and emerging markets.
Pricing and mix optimization to sustain margins amid input-cost volatility.
Efficiency initiatives and potential SKU optimization to improve asset turnover.
Threats
Commodity price volatility and packaging costs impacting gross margins.
Currency movements and macroeconomic volatility in international markets.
Intense competition from larger global players and evolving consumer preferences toward value-led or health-oriented beverages.