TIDMFEVR
RNS Number : 1232N
Fevertree Drinks PLC
28 January 2021
Fever-Tree Drinks plc
FY20 Trading update
Fever-Tree, the world's leading supplier of premium carbonated
mixers, announces a trading update for the year ending 31(st)
December 2020, ahead of reporting its Preliminary Results on 18(th)
March 2021.
Financial highlights
Revenue, FY20 FY19 Change
GBPm
---------- ------ ------ -------
UK 103.3 132.6 (22)%
US 58.5 47.6 23%
Europe* 65.3 64.4 1%
ROW 25.0 15.8 58%
Total 252.1 260.5 (3)%
---------- ------ ------ -------
*FY20 includes GBP6.4m revenue from GDP's portfolio brands
Fever-Tree delivered a resilient performance in 2020,
underpinned by strong sales and strategic progress in the Off-Trade
and e-commerce channels across our regions which helped to mitigate
the impact of widespread closures of the On-Trade during the
year.
Despite the ongoing challenges posed by the pandemic the Group
delivered a strong second half performance across our key markets
and is expected to deliver revenue for the full year of c.GBP252
million, which is ahead of the guidance provided at our Interim
Results in September.
UK
The Group's performance in the UK in 2020 reflected not only our
ability to adapt quickly to the shifts in consumer behaviour posed
by COVID-19 but also the underlying strength of our brand with both
our customers and consumers.
The Group's Off-Trade sales increased by c. 20% compared to 2019
as we took proactive steps to build on the growing popularity of
long mixed drinks as an everyday affordable treat at home. We
worked closely with our retail and spirits partners, launched new
flavours and formats such as our Premium Soda range and 15x150ml
can packs, and upweighted our marketing spend, enabling us to drive
greater consumer trial and awareness at home. This resulted in a
significant uplift in household penetration and Fever-Tree finished
the year as the clear market leader with a value share of
40.1%[1].
As expected, our On-Trade sales were impacted by the periods of
lockdown and on-going restrictions during the year, leading to a
decline of c. 60% year-on-year. While the On-Trade currently
remains closed, we continue to maintain strong relationships with
our On-Trade partners and are well placed to benefit from this as
the sector begins to reopen in the coming months.
US
2020 saw Fever-Tree build significant momentum in the US
delivering a 23% increase in overall revenue. This result was
particularly encouraging given the very strong comparators from the
second half of 2019 and is testament to the strength of our
Off-Trade and e-commerce performance amid widespread On-Trade
restrictions during the year.
Our Off-Trade sales have grown very strongly, where the
increasing popularity of the Fever-Tree brand is driving category
growth, supported by increased spirits consumption, especially in
the premium segment. This progress was reflected in the Nielsen
data, where continued strong growth in the second half of the year
resulted in a full year sales increase of 57%[2] for 2020.
The pandemic led to a sustained shift to at-home consumption in
the US, reflecting the growing interest in making long mixed drinks
at-home, which alongside the roll out of the price optimisation and
continued investment in our marketing spend, attracted more
consumers to the brand, driving further trial and adoption
opportunities.
In addition, we are delighted to announce that in December 2020
we started to produce Fever-Tree products with a new bottling
partner on the West Coast of the US. As we ramp up production at
that site it will not only reduce our transport and logistic costs,
but it will also significantly reduce lead times, providing greater
agility to respond to the growing demand in the US market.
Europe
European revenue for the full year was up 1% to GBP65.3m, a
robust performance given the On-Trade exposure of our Southern
European markets which were heavily impacted by the pandemic. The
Group made very encouraging progress in the Off-Trade during the
year with strong sales and value share gains across our key
markets. As expected our sales strengthened during the second half
of the year as the impact of importer de-stocking in the first half
unwound. The integration of the GDP business in Germany is well
progressed and their portfolio brands generated GBP6.4m of
incremental revenue, which contributed to the strong second half
performance.
Our European importers are serviced predominately through our
network of three bottling sites and one canning site across the
region which has enabled us to trade with very little disruption
since Brexit on 1(st) January 2021.
Despite the ongoing impact of COVID-19 on the On-Trade, we are
confident that our prevailing brand strength, along with the
well-established market trends towards premiumisation across
Europe, continues to position us very strongly as we look to the
opportunity ahead in the region.
ROW
We have made excellent progress in our two largest markets,
Australia and Canada, delivering very strong Off-Trade sales and
securing new distribution which contributed to an overall revenue
growth for the region of 58% to GBP25.0m.
In Australia we made significant progress during the year,
driving category growth and increasing our position as the clear
premium mixer category leader as we increased share across both
retail and liquor channels. Canada accelerated strongly in the
second half, with Fever-Tree driving more incremental value in the
tonic category than any other brand, whilst results were further
assisted by an inventory build with our importer.
The progress made in 2020 and the increasing strength of the
Fever-Tree brand in both Australia and Canada provides us with a
strong platform to drive further category growth in these exciting
markets, further underlining the truly global opportunity ahead for
the brand.
Financials
Shifts in region and channel mix continued to impact the gross
margin during the second half of the year. Our EBITDA margin is
in-line with expectations, and while this is down on the prior
year, due to the strong revenue performance, earnings are expected
to be ahead of expectations.
The Group remains in a strong financial position, with a robust
balance sheet, underpinned by Group cash of GBP143m (12% increase
year on year).
FY21 outlook
While uncertainty continues into 2021, our resilient performance
over the course of 2020 and the momentum seen in many of our key
markets alongside our continued brand strength and supportive
trends, gives us confidence in the Group's position as we look
ahead.
The Off-Trade continues to see good momentum in many regions
with at-home consumption and the growing interest in long mixed
drinks becoming increasingly established, supported by retailers
and spirits partners alike. We would expect some of the Off-Trade
demand to switch to the On-Trade as it begins to re-open during the
year, and with our brand strength and the relationships we have
with our On-Trade partners we are well placed to benefit.
Whilst On-Trade restrictions and closures resulting from the
pandemic will continue to influence channel and territory mix, we
remain committed to investing in the future opportunity for the
brand across all our regions, enabled by the Group's strong balance
sheet and conviction in our ability to deliver long-term
sustainable growth.
Tim Warrillow, CEO of Fever-Tree commented:
"I am very proud of how the Fever-Tree team has responded over
the course of 2020 and the results that we have delivered. The last
twelve months have highlighted the strength of the Fever-Tree brand
amongst our consumers and customers as well as the fantastic team
and partners we have in place. We made a conscious decision not to
furlough any of the team while continuing to invest in the
opportunity ahead and this has positioned us well as we look beyond
the current uncertainty.
The COVID-19 pandemic has thrown up many challenges but it has
also accelerated the trends we have been talking about for a number
of years - namely the growing interest in premium spirits and long
mixed drinks as at-home mixing has taken hold not only with
consumers but retail and spirits partners alike. Our ability to
capitalise on and drive this trend has seen Fever-Tree reach more
households and become a feature in more fridges worldwide than ever
before.
While our performance across the Off-Trade in the UK and Europe
has been very encouraging, special mention must be made of our
performance in the US, Australia and Canada, where we have seen
outstanding growth in the past twelve months underlining the global
opportunity still ahead for the brand. I am of course mindful that
uncertainty remains especially in terms of the timing of reopening
of the On-Trade across many markets but our performance over the
last year, combined with our track record against the competition
and the supportive global trends gives us confidence in the future
growth potential for Fever-Tree."
For more information please contact:
Investor queries
Ann Hyams, Director of Investor Relations I ann.hyams@fever-tree.com I +44 (0)7435 828 138
Media queries
Oliver Winters, Director of Communications I
oliver.winters@fever-tree.com I +44 (0)770 332 9024
Nominated Advisor and Joint Broker - Numis Securities
Garry Levin I Matt Lewis I Hugo Rubinstein I +44 (0)20 7260
1000
Joint Broker - Investec Bank plc
David Flin I Alex Wright I +44 (0)20 7597 5970
Financial PR advisers - Finsbury
Faeth Birch +44 (0)7768 943 171; Chris Ryall +44 (0)7342 713
748; Amanda Healy +44 (0)7795 051 635
[1] IRI 13 weeks to 27 December 2020
[2] Nielsen: 52 weeks to 26(th) Dec 2020
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