TIDMFEVR
RNS Number : 7436F
Fevertree Drinks PLC
20 July 2021
July 20, 2021
Fever-Tree Drinks plc
FY21 Half Year 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 FY21
ending 30(th) June 2021, ahead of reporting its Interim Results on
15(th) September 2021.
Financial highlights
Revenue, GBPm FY21 H1 FY20 H1 Change Constant Currency
Change
----------------------- -------- -------- ------- ------------------
UK 50.3 48.3 4% 4%
======================= ======== ======== ======= ==================
US 36.2 27.4 32% 42%
======================= ======== ======== ======= ==================
Europe like-for-like
(excl. GDP) 36.7 20.5 79% 81%
Europe total* 41.3 20.5 102% 104%
======================= ======== ======== ======= ==================
ROW 14.0 8.1 73% 71%
======================= ======== ======== ======= ==================
Total like-for-like
(excl. GDP) 137.1 104.2 32% 34%
Total* 141.8 104.2 36% 39%
----------------------- -------- -------- ------- ------------------
*FY21 H1 includes GBP4.7m revenue from GDP's portfolio
brands
Fever-Tree delivered strong sales growth across all its key
markets in the first half of FY21 as the On-Trade gradually
re-opened during the second quarter and Off-Trade sales remained
very encouraging. Revenue growth of 39% on a constant currency
basis was ahead of the Board's expectations despite the comparable
levels of COVID restrictions present in the first half of FY21
compared to the first half of FY20. However, challenges surrounding
global logistics cost pressures have progressively impacted the
Group's margins.
UK
Fever-Tree performed well during the first half of the year,
growing revenue by 4%, reflecting the strength of the brand which
was enhanced during 2020 as we continued to invest despite the
challenging market back-drop.
The On-Trade remained closed for the first quarter of the year,
with a gradual re-opening throughout the second quarter. There have
been clear signs of pent-up demand as bars, restaurants and pubs
reopened, albeit slightly tempered by the continuation of social
distancing and capacity restrictions. We remain well-positioned as
the On-Trade continues to re-open, with the remaining COVID
restrictions lifted in the UK on the 19(th) July enabling larger
events to restart, nightclubs to re-open, and the removal of social
distancing.
Fever-Tree's Off-Trade sales have remained strong even as the
On-Trade re-opened, remaining at similar levels to 2020, and
increasing by 17% [1] compared to 2019, demonstrating the growing
popularity of enjoying a simple long mixed drink at home and
Fever-Tree's role in driving this occasion. We continue to work
closely with our retail and spirits partners to drive greater
consumer trial and awareness at home, maintaining our market
leading position with an increased value share of 38.5% [2] ; c.1%
higher than the same period last year.
US
Fever-Tree continues to build on its significant momentum in the
US during 2020, delivering GBP36.2 million revenue; a 32% increase
year-on-year (42% at constant currency). This result was
particularly encouraging given the very strong comparators from the
first half of 2020 and is testament to our continued brand
strength, our growing presence in the Off-Trade, the success of our
new products, as well as the strong growth we have seen as the
On-Trade began to open on a State-by-State basis as the period
progressed.
Our Off-Trade sales have remained very strong, where the
increasing popularity of the Fever-Tree brand is driving category
growth, supported by increased premium spirits consumption. This
progress was reflected in the Nielsen data, where sales during the
first half of the year increased 17% [3] , lapping a strong period
of growth in the first half of 2020.
Whilst the pandemic has led to a growing interest in making
long-mixed drinks at home, we are encouraged by the initial
reopening of the On-Trade, having won more new national accounts
during 2020 than we did in 2019. Since May On-Trade sales have been
outperforming sales from the comparable period in 2019 with clear
signs of pent-up demand across the country, giving us further
confidence going into the summer months.
Europe
Total European revenue for the first half of the year was up
102%, which was 81% on a like-for-like basis, at constant currency
and excluding GBP4.7 million revenue from GDP's portfolio brands
during H1 2021. This is an incredibly strong performance, supported
by importers building stock in anticipation of a strong summer of
trading. Even when the impact of last years' importer de-stock is
taken into account, Fever-Tree's underlying growth was still an
impressive c.30%.
The Group continues to make very encouraging progress in the
Off-Trade with strong sales and value share gains across our key
markets and, as the On-Trade continues to re-open across the
region, we are confident that our prevailing brand strength, along
with the well-established market trends towards premiumisation
across Europe, continues to position us very strongly as we look to
the opportunity ahead in the region.
ROW
We have made excellent progress in our Rest of the World region,
with GBP14 million revenue, representing strong growth of 73%
year-on-year, benefiting from some phasing year-on-year, with
strong underlying growth of c.40% across the region.
We continue to drive category growth and strengthen the brand in
both Australia and Canada, and whilst our comparators for the
second half of the year will be tough, we expect to continue to
extend our market leading position in both markets and remain
excited about our long-term potential to expand further in both the
Off-Trade and On-Trade.
Margins
Gross margin in the first half of the year has been impacted by
significantly elevated costs resulting from the disruption
currently impacting global logistics. As a result, we anticipate H1
gross margins for the Fever-Tree brand of c.45%, and c.44%
inclusive of revenue from GDP's portfolio brands.
We remain focused on driving growth, as our first half revenue
performance demonstrates, with overhead spend in-line with
expectations and, as a result, an EBITDA margin of c.20.5% for the
first half
FY21 outlook
Fever-Tree remains committed to investing in the substantial
future opportunity for the brand across all our regions, enabled by
the Group's strong balance sheet and conviction in our ability to
deliver long-term sustainable growth.
The investments we made in the business during 2020 have started
to pay dividend as our markets continue to reopen. Over the last
year we have strengthened our brand and gained market share across
our regions which, along with supportive industry trends and the
clear signs of pent-up demand in the On-Trade, gives us confidence
in the Group's position as we look ahead.
The On-Trade restrictions and closures resulting from the
pandemic are now subsiding and we are seeing the benefits of
maintaining our strong relationships with our partners in that
channel. As the On-Trade has reopened we have continued to see good
momentum in the Off-Trade driven by increased adoption of long
mixed drinking at home and increased support from retailer and
spirit partners. Consequently, we continue to strengthen our market
share across our regions.
As a result of the strong start to the year, we are increasing
our revenue guidance to GBP295m - GBP304m for the full year.
However, as is being seen in other sectors, growing challenges from
COVID-related logistics disruption and associated costs is putting
pressure on the Group's margins. Consequently, we anticipate gross
margins of c.44% for FY21, or 43% inclusive of revenue from GDP's
portfolio brands, delivering an EBITDA margin of c.20%. Whilst we
anticipate some margin improvement next year, we believe logistic
cost headwinds will continue alongside input cost increases on raw
materials and product costs. However, we remain very confident of
continued strong sales momentum across our regions and continue to
invest in the business to capitalise on the longer-term structural
growth opportunity ahead of us.
Tim Warrillow, CEO of Fever-Tree commented:
"Fever-Tree has made significant progress in the first half of
2021, delivering a strong revenue performance. The last 18 months
have highlighted the strength of the Fever-Tree brand amongst our
consumers and customers as well as the fantastic team and partners
we have in place. We continued to invest in the opportunity during
the pandemic and have already started to see the benefits of our
long-term outlook as the world has started to reopen.
Our performance in the On-Trade as it has reopened has been
encouraging in all our markets and our performance in the Off-Trade
has also remained strong, with sales far exceeding pre-COVID levels
in the UK, US, across Europe, and the Rest of the World.
Our margins have been notably impacted by global logistics
disruption. Despite this, we remain confident as ever in the
strength of our business model and the opportunity to improve
margins as we cycle out of the current period of COVID
disruption.
Our long-term opportunity continues to be enhanced by the
structural trends we are seeing, including the growing interest in
premium spirits and the popularity of long mixed drinks. This
momentum is being supported by our retail and spirit partners, and
Fever-Tree's ability to capitalize and drive this opportunity is
unmatched by any other premium mixer brand, giving us confidence in
the future growth potential for Fever-Tree."
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 Joint Broker - Numis Securities
Garry Levin I Matt Lewis 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; Amanda Healy +44 (0)7795 051 635
[1] IRI 26 weeks to 13 June 2021
[2] IRI 13 weeks to 13 June 2021
[3] Nielsen: 24 weeks to 19(th) June 2021
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