TIDMFEVR
RNS Number : 5709S
Fevertree Drinks PLC
15 July 2022
July 15, 2022
Fever-Tree Drinks plc
FY22 Interim Pre-Close Trading update
Fever-Tree, the world's leading supplier of premium carbonated
mixers, announces a trading update for the first six months of FY22
ending 30(th) June 2022, ahead of reporting its Interim Results on
13(th) September 2022.
Financial highlights
Revenue, GBPm FY22 H1 FY21 H1 Change Constant
Currency
Change
-------------------- -------- -------- ------- ----------
UK 53.5 50.3 6% 6%
==================== ======== ======== ======= ==========
US 40.1 36.2 11% 9%
==================== ======== ======== ======= ==========
Europe Fever-Tree
brand revenue 46.5 36.7 27% 31%
Europe total* 52.4 41.3 27% 31%
==================== ======== ======== ======= ==========
ROW 15.0 14.0 7% 5%
==================== ======== ======== ======= ==========
Total* 160.9 141.8 14% 14%
-------------------- -------- -------- ------- ----------
*includes revenue from GDP's portfolio brands
Fever-Tree delivered a solid first half revenue performance as
the On-Trade showed promising signs of recovery and as a result the
Group is maintaining its revenue guidance range of GBP355 million
to GBP365 million for the full year.
The impact of logistics and cost headwinds prevalent across the
industry have significantly worsened in recent months, and we now
anticipate gross margins of c.37% and an EBITDA margin of c.14% for
the first half. We expect this to continue to impact the business
during the second half, resulting in a revised EBITDA guidance of
between GBP37.5 million and GBP45 million for the full year.
Consumer demand remains strong and we are focused on driving a
number of initiatives to prioritise availability whilst also
mitigating the on-going impact of the current logistics and cost
headwinds.
UK
Fever-Tree's UK revenue grew by 6% in the first half of 2022.
The On-Trade was impacted by the Omicron variant at the start of
the period, before momentum built as the half progressed.
Year-on-year growth of 73% for this channel was in-line with our
expectations and we have further extended our category leading
position. We have a strong summer promotional programme in place,
focusing on our Premium Soda range to drive the increasingly
popular Spritz occasion alongside our well-established Tonic
offerings.
Fever-Tree's Off-Trade sales declined by 21% in the first half
of the year as we lapped a lockdown period in 2021, mirroring a
re-balancing of the whole category as some sales shift back to the
On-Trade. Whilst the first half was softer than expected,
encouragingly the brand has increased its volume share at grocery
during H1 and we look forward to our typically strong summer and
Christmas trading periods, supported by exciting promotions and
activations across retailers.
US
Demand for Fever-Tree in the US remains very strong. An 11%
revenue increase year-on-year (9% at constant currency) was
encouraging against the challenging backdrop of port congestion and
labour shortages which culminated in inventory shortages impacting
sales towards the end of the period.
Fever-Tree's Off-Trade sales have increased by 144% compared to
pre-Covid levels in 2019 [1] which demonstrates the significant
growth of the brand in the US over the last three years. Our
Sparkling Pink Grapefruit in particular continues to perform well,
demonstrating the broad category appeal of the brand and its
ability to drive growth across a number of popular mixing
categories.
We have also been encouraged by the performance of the On-Trade
where we have outperformed sales from the comparable period in
2019, which alongside the increased distribution we have won across
a number of national accounts, gives us further confidence for the
rest of the year and beyond.
We are taking significant steps to rebuild inventory levels and
given the high level of demand from both customers and consumers we
remain confident of delivering a strong full year revenue
performance.
Europe
Total European revenue for the first half of the year was up 27%
(31% at constant currency). This is a very strong performance given
the comparators from the prior year, supported by the return of the
On-Trade and primarily driven by our key Southern European
markets.
The Group continues to make good progress in the Off-Trade and
we are confident that our prevailing brand strength and unmatched
regional presence, along with the well-established market trends
towards premiumisation across Europe, positions us well as we look
to the opportunity ahead.
ROW
We are making good progress in our Rest of the World region,
growing revenue by 7% year-on-year against strong comparatives,
with underlying growth of 15% across the region. We continue to
extend our market leading position in our largest two markets,
Australia and Canada, and remain excited about our long-term
potential to expand further in both the Off-Trade and On-Trade.
In Australia, we are driving category growth and increasing our
share at National Grocery, and in Canada, we are transitioning to a
new larger local distributor and look forward to driving the
opportunity further over the coming years.
FY22 outlook
We are maintaining our revenue guidance range of GBP355 million
to GBP365 million for the full year.
In the last eight weeks we have seen rapid shifts in the
operational and cost backdrop. As a result, our outlook has
materially changed with regards to three specific areas:
-- Labour shortages have impacted our US East Coast production
ramp up, resulting in greater UK production required to fulfil
against the strong demand in the US, and with it, more exposure to
sea freight with rates increasing by up to 50% since the start of
the year on key routes
-- Glass availability has become severely restricted, which has
limited the opportunity to deliver upside to revenue despite strong
demand
-- Further, industry-wide cost pressures have increased, most
notably glass costs, where we will see double digit increases for
H2 alongside continued logistics cost increases and disruption
The result of this exceptionally challenging environment,
alongside some limited sales mix and FX hedging impacts, is that we
expect a further 400bps to 600bps of margin dilution and as such
expect gross margin in a range of 33% to 35%.
We are focused on mitigating these cost impacts whilst also
prioritising continuity of supply. Demand remains strong across our
key regions, and we are confident that a number of significant cost
impacts, including our exposure to sea freight, will be transitory
in nature. As such, we will continue to invest in the business to
drive the long-term opportunity through marketing expenditure,
people and innovation, and expect operational expenditure of
c.22.5% of revenue, resulting in an EBITDA range of c.GBP37.5
million - c.GBP45 million for FY22.
Tim Warrillow, CEO of Fever-Tree commented:
"Fever-Tree has delivered a solid revenue performance in the
first half of 2022, with a particularly strong performance in
Europe and demand continuing to build in the US. Whilst we are
seeing positive top line performance and expect to deliver good
revenue growth for the full year, the challenging logistical and
cost headwinds we highlighted previously have significantly
worsened in recent months and we now expect them to notably impact
our full year margins.
The business is working on a large number of initiatives, and
more closely than ever with suppliers throughout our supply chain,
to mitigate the transitory headwinds and at the same time ensure we
can satisfy the strong demand we are seeing in our growth
regions.
Despite the current challenges of the volatile logistical and
cost environment, we continue to make good progress across our
regions. The strong and growing consumer demand for the brand, our
exciting pipeline of innovation, and the growing interest in
long-mixed drinks, gives us more confidence than ever in the
long-term opportunity."
There will be a conference call with Management on Friday 15th
July 2022 at 8:00am BST. The call can be accessed via:
Fever-Tree Pre-Close Conference Call
For more information please contact:
Investor queries
Ann Hyams, Director of Investor Relations I
ann.hyams@fever-tree.com I +44 (0)20 4516 8106
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
Stuart Dickson 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; Anjali Unnikrishnan +44 (0)7826
534 233; Carolina Neri +44 (0)7502 127 516
[1] Nielsen 26 weeks to 18 June 2022
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTGPUUCMUPPGBC
(END) Dow Jones Newswires
July 15, 2022 02:00 ET (06:00 GMT)
Fevertree Drinks (LSE:FEVR)
Historical Stock Chart
From Feb 2024 to Mar 2024
Fevertree Drinks (LSE:FEVR)
Historical Stock Chart
From Mar 2023 to Mar 2024