FY20 Interim Results to 30 June 2020

Resilient outcome for the half-year, further strengthening our position as the clear global leading premium mixer brand

FY20 Interim Highlights

Strong Off-Trade performance and diversified revenues across regions and channels has enabled the Group to mitigate the impact of On-Trade closures caused by COVID-19

Off-Trade sales exceeded expectations across our regions

• Maintained position as number one brand in the UK mixer category at retail
• Very strong US performance notably ahead of expectations as the brand continues to gain traction
• Resilient underlying performance in Europe, with reported revenue impacted by temporary importer de-stocking during lockdown
• Very encouraging Off-Trade growth in key RoW markets of Canada and Australia

Rapidly identified and reacted to evolving purchasing and consumption habits

• Upweighted marketing spend to focus on at-home consumption with the Group's first ever national television advertisement in the UK, driving significant growth in consumer awareness
• Successful roll out of larger pack format in UK delivering good rate of sale growth
• Investment in online retail platforms drove significant growth in this channel globally

A strong and secure financial position has enabled the Group to remain focused on the long-term opportunity, continue to invest, and to make strategic progress

• Successful launches of the Premium Soda range in the UK and Sparkling Pink Grapefruit in the US
• Acquisition of GDP Global Drinks Partnership, the Group's sales agent in Germany, just after period end, underlying the Group's ambition in Germany and the wider European opportunity

Financial highlights

¹ Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment charges and finance costs

• Resilient revenue performance of £104.2 million in the first half, a decrease of 11% year-on-year
• Gross profit margin was impacted by COVID-related shift in channel and regional sales mix, and the US price optimisation. Excluding COVID-19 impacts, gross margin for the first half would have been c.49.0%
• Despite the short-term disruption of COVID-19, we continue to upweight investment in marketing and our team to support the long-term opportunity across all regions, maintaining previously budgeted underlying operating costs of c.£60 million for the full year
• This increased investment and the impacts of COVID-19 on revenue and gross margin impacted our Adjusted EBITDA margin in the first half but we remain confident that continuing to invest in our people and our brand will position us strongly as we emerge from the current period of uncertainty
• Asset light business model continues to support the Group's secure financial position with net cash improving to £136.9 million at period end
• Paying an interim dividend of 5.41 pence per share, an increase of 4% year-on-year, reflecting the financial strength, confidence in the business, as well as our strong cash generation

Tim Warrillow, CEO of Fever-Tree, commented

“I am very proud of how the Fever-Tree team has responded over the last six months and the results that we have delivered. Our priority throughout the COVID-19 pandemic has been our close-knit team, who are integral to the success of the business. We did not furlough any team members and instead focused on redeploying talent around the business. We have also continued to invest in building the team across the globe, adding 20 new employees in the first half of the year.

Our performance in the Off-Trade over the first half of the year has been very encouraging with sales across our regions exceeding our expectations. People's interest and excitement about mixing drinks at home has really taken hold over the lockdown period, attracting more households to the Fever-Tree brand than ever before. Consequently, we have increased our penetration in the UK, consolidated our number one position, and driven value share gains in the US, Europe, and as far afield as Canada and Australia. Despite the On-Trade closure for a large proportion of the first half of the year, we have continued to support our On-Trade partners across our regions and are well-placed to benefit from the return of this important channel.

We have had an encouraging start to the second half of the year and, while we certainly aren't immune to the ongoing challenges of COVID-19, our performance and our investments so far this year, coupled with the growing interest in long mixed drinks, gives me confidence that we will exit the crisis in an even stronger position than we entered it.”