Real Madrid coach Carlo Ancelotti says the title holders are not favourites for this season's Champions League.

Real open their campaign against Celtic.

Under the Italian coach, Los Blancos went all the way to the final last term and beat Liverpool 1-0 in Paris to win their 14th Champions League title.

"It's a good sign that Real Madrid are not among the Champions League favourites," Ancelotti told the pre-match press conference ahead of the Celtic clash.

"Because last year we had even less chance statistically. This year we have improved a bit more. I think it's going to happen as it happened last year.

"We are going to compete until the end. Hopefully we can compete in the final.

"In this competition we will always be respected, because history speaks for this club.

"We begin [this season] with a lot of excitement, but we can't think too far ahead of the group [stage]. And then we'll see what happens after the World Cup."

Real Madrid were drawn with Celtic, RB Leipzig and Shakhtar Donetsk in Group F, but Ancelotti believes that there is no easy group in the Champions League.

"It's not an easy group, we know all the teams well," added the Italian coach.

"Celtic are doing well and we have to respect them, as well as the other two teams, Leipzig and Shakhtar.

"We have the memory of last year against Sheriff [Tiraspol], and we know that in this first phase there are many surprises. I think it will be a balanced group."