Fevertree Drinks plc
FY24 Interim Results to 30 June 2024
FY24 Interim Highlights
· The Fever-Tree brand delivered revenue growth of 2% year-on-year at constant currency, against a subdued consumer backdrop and poor weather in the second quarter across the UK and Europe.
· Strong summer trading post period-end with growth of +13% for the Fever-Tree brand in July and August.
· Continued good growth in the US, extending our market share and number one position in Tonic Water and Ginger Beer categories, driven by distribution gains and flavour and format innovation.
· Significant operational progress driving 520 bps of gross margin improvement and c.80% increase in Adjusted EBITDA as we begin to deliver substantial Group margin recovery.
· Recommending an interim dividend of 5.85 pence per share, an increase of 2% year-on-year.
| £m | H1 FY24 | H1 FY23 | Change | Constant Currency Change |
| Revenue | ||||
| UK | 50.9 | 53.8 | (6)% | |
| US | 60.3 | 56.1 | 7% | 10% |
| Europe Fever-Tree brand revenue | 44.5 | 50.5 | (12)% | (10)% |
| ROW | 14.9 | 9.6 | 56% | 57% |
| Total Fever-Tree revenue | 170.6 | 170.0 | 0% | 2% |
| GDP brand revenue | 2.3 | 5.6 | (59)% | |
| Total Group revenue | 172.9 | 175.6 | (2)% | 0% |
| Gross profit | 62.0 | 53.8 | 15% | |
| Gross margin | 35.9% | 30.7% | 520bps | |
| Adjusted EBITDA[1] | 18.2 | 10.2 | 79% | |
| Adjusted EBITDA margin | 10.5% | 5.8% | 470bps | |
| Diluted EPS (pence per share) | 6.49 | 0.94 | 590% | |
| Dividend (pence per share) | 5.85 | 5.74 | 2% | |
| Cash | 65.9 | 75.8 | (13)% |
Strategic Highlights
· Growing market share in all of our key regions, demonstrating the strength of the Fever-Tree brand.
· Continued diversification of the portfolio to cater to evolving consumer preferences across drinks categories. Non-Tonic products now comprise over 40% of global revenues, driven by strong growth of Ginger Beer and a growing position in cocktail mixers and adult soft drinks.
· Good progress on key operational initiatives and softening inflationary headwinds underpin our confidence in further margin recovery in the second half of the year. The Group remains on-track to deliver c.600 bps of gross margin improvement for the full year, as well as ongoing improvement over the medium term.
· Strong Balance Sheet, which is a significant competitive advantage over many of our premium mixer competitors globally and enables the opportunity to invest for growth. The Group anticipates being in a position to return surplus cash to shareholders during FY25.
Outlook and Guidance
The Group has made a strong start to the second half of the year across all of our regions. We expect to deliver brand growth for the second half of c.7% to c.10%, resulting in revenue growth of c.4% to c.5% across the full year for the Fever-Tree brand.
We continue to make significant operational progress and are on track to deliver c.600bps of gross margin improvement. We will continue to invest behind the brand with c.£90m of overhead spend over the full year, in-line with expectations.
Tim Warrillow, CEO of Fever-Tree, commented:
“The Fever-Tree brand performed well against a tough market backdrop. We continued to deliver double digit revenue growth in the US at constant currency, as well as a strong performance in our ROW region. The first half performance in the UK and Europe was impacted by unseasonable weather at the start of summer alongside distributor order phasing in Europe, but we have seen a strong improvement in these regions as the summer belatedly arrived.
Whilst the first half was challenging, we are controlling the controllables. We have delivered substantial margin improvement, resulting in a c.80% increase in EBITDA year-on-year, as well as driving share gains against the competition across all our regions, demonstrating the growing strength of the Fever-Tree brand.
We’re optimistic of an acceleration of growth across the second half of the year and have seen a much more positive trading performance in July and August.
Looking further ahead, our continued investment in the brand and focus on innovation in recent years ensures we are better positioned than ever to capitalise on the long-term drink trends, both in terms of continued spirit growth and premiumisation but also as adults continue to seek out a broader range of premium drinks, both with and without alcohol.”
There will be live audio webcast on Thursday 12th September 2024 at 10:00am BST. The webcast can be accessed via:
Fever-Tree FY24 Interim Results webcast
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 Broker – Investec Bank plc
David Flin I +44 (0)20 7597 5970
Corporate Broker – Morgan Stanley & Co, International plc
Andrew Foster I Jessica Pauley I +44 (0)20 7425 8000
Financial PR advisers – FGS Global
Faeth Birch +44 (0)7768 943 171; Anjali Unnikrishnan +44 (0) 7826 534 233