Fever-Tree Drinks plc
TRADING UPDATE
May 19, 2022
Fever-Tree, the world's leading supplier of premium carbonated mixers, announces a trading update ahead of its Annual General Meeting (“AGM”), which is being held today at 11.30am BST.
Fever-Tree has made a solid start to the year, trading in-line with expectations set out in March.
On-Trade
In the UK, our most mature market, On-Trade sales at the start of the year were impacted by Omicron, but we have continued to see momentum build month to month. In the US and across key European and RoW markets, our On-Trade sales have been strong and are already well above pre-pandemic levels. As we look ahead to the summer months our brand strength, growing presence, and the close relationships we have built with our partners puts us in a strong position to take advantage of the consumer appetite to return to social occasions out of home.
Off-Trade
In the UK Off-Trade, in the first few months of the year the category has continued to rebalance as the On-Trade re-emerges whilst also lapping last year's lockdowns. We remain well placed as we move into the summer months and have strong plans in place with retailers, most notably around the Platinum Jubilee celebrations in early June. Elsewhere, Fever-Tree continues to perform well in the Off-Trade. In the US consumer demand remains very strong and Fever-Tree's sales continue to show impressive growth with an increase of over 150% since pre-pandemic levels in 2019[1]. In Europe, the brand's strong sales and value share gains across our key markets remain encouraging, and in Australia and Canada our position as the clear premium mixer category leader is enabling us to capitalise on and drive the trends in long mixed drinks.
Investing in products and infrastructure
We continue to innovate and broaden our portfolio of drinks across regions. In the first few months of the year, we have launched a Limited-Edition Passionfruit & Lime Tonic in the UK, which has received strong initial Off-Trade interest ahead of the summer, as well as launching our Sparkling Pink Grapefruit Soda in the On-Trade in the UK and Europe after its continued stand-out success in the US. We continue to be excited by our innovation pipeline and look forward to a number of new product launches over the next 18 months.
Alongside our investment in innovation, we remain focused on scaling production in the US with our local bottling partner. The West Coast bottling line is operational whilst the East Coast line is gradually ramping up during the first half of this year, and once fully operational, will add further capacity and flexibility to our network. This will not only enable us to execute on the substantial opportunity in the US, but also progressively reduce our exposure to elevated shipping costs and delays, as well as reduce the carbon emissions associated with our supply chain.
FY22 outlook
We continue to operate against an industry-wide backdrop of logistics disruption, most notably in relation to the shipping of product to the US, and inflationary cost pressures. Whilst uncertainty remains in the near term, we are working with our supply chain partners on a large number of initiatives, including the ramping up of US East Coast production, which will help to mitigate these cost pressures as we progress further through this year and more so as we progress into 2023.
Against this backdrop our team remains focused on supplying our customers and maintaining our strong top line growth. We are not only confident in the long-term prospects for the brand, but also of delivering another good performance this year and are trading in line with the Board's expectations for the full year to 31 December 2022, as set out in March: Revenue range of c.£355m – £365m and an EBITDA range of c.£63 – £66m.