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 
--------------------  --------  --------  -------  ---------- 
  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.


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.


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.


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.


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

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July 15, 2022 02:00 ET (06:00 GMT)

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