Fevertree Drinks Plc – Preliminary Results

Fevertree Drinks plc

(“Fever-Tree” or the “Group”)

Preliminary Results

Fever-Tree, the world's leading supplier of premium carbonated mixers, today announces its Preliminary Results for the year ended 31 December 2019 following the FCA guidance issued on 21 March 2020 requesting public companies to delay the announcement of results .

 * Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment charges and finance costs.

2019 Highlights

Financial

• Double digit revenue growth, driven largely by strong US growth
• Challenging UK market lapping exceptional comparators, especially in the Off-Trade, resulting in a 1% decline in revenue
• Gross profit margin of 50.5% (2018: 51.8%)
• Adjusted EBITDA* of £77.0m (2018: £78.6m) reflecting ongoing investment for future growth
• Profit after tax of £58.5m (2018: £61.8m)
• Diluted EPS of 50.26 pence (2018: 53.19 pence)
• Final dividend of 9.88 pence per share, bringing total dividend for the year to 15.08 pence per share (2018: 14.50 pence per share)
• Very strong balance sheet, debt free with net cash at year end of £128.3m (2018: £83.6m)

Operational

• Retained UK category leadership in both the On and Off-Trade channels despite a highly competitive UK market
• Increasing geographic spread, with a very positive performance in key growth markets including the US, Germany, Australia and Canada
• Further building of operational capability in the US, signing a key first bottling partner in the region
• Broadening the product portfolio, with good progress in our ginger range in multiple markets
• Continued to invest behind the brand for the longer term, most notably in our growth regions
• Asset light, outsourced business model providing a low fixed cost base and significant operational flexibility

Post Period End:

• Solid start to the new financial year, with Group trading in the first two months in line with the Board's expectations
• US pricing initiative announced in January very well received by On and Off-Trade customers with promising results from initial trials and new accounts secured
• While COVID-19 will have a material impact on FY20 trading, the Group is financially strong and has well balanced revenue streams diversified across regions, channels and customers.

Tim Warrillow, Co-founder and CEO of Fever-Tree said:

“The Group delivered good growth in 2019 despite a more subdued UK market, with double-digit growth across our international regions. We strengthened our global leadership position and in doing so continued to build a strong platform to deliver long term, sustainable growth.

We made a solid start to the new financial year, with Group trading in the first two months in line with the Board's expectations.The US in particular started the year strongly and we have been encouraged by the response from our key customers to the US price optimisation.

Clearly the scale and impact of COVID-19 has posed some significant challenges across our regions. With regards to our people, we have a strong close-knit team who are integral to the success of the business and as such o ur position since the beginning of this crisis has been to offer support and certainty to all employees and to this end we have not furloughed anyone. In fact, those that have some spare capacity we have encouraged to sign up to support their local communities through initiatives such as the NHS volunteer army, or indeed redeploy to different departments across the business. We are determined to come out the other side as an even stronger business but also one that has made a difference during the crisis.

With regards to trading, while the On-Trade sector is facing an extremely challenging period, we have seen strong sales in the Off-Trade in many of our markets both from the initial buying ahead of lockdown but also in recent weeks as at home consumption has remained robust.

While we will not be unaffected by the current situation, especially in the On-Trade, Fever-Tree is well positioned to manage our way through this situation. We are a global business with revenue diversified across regions, channels and customers. Financially the Group is very secure. We are debt free, with a strong cash position. The Group's unique asset light, outsourced business model means we have a low fixed cost base, a small, dedicated team and the flexibility to manage the current challenges. The wider long-term trend towards premium spirits and premium long mixed drinks continues and we are confident the Group will be well placed once the current period of disruption and uncertainty ends.”