TIDMFEVR
RNS Number : 9740T
Fevertree Drinks PLC
20 November 2019
20 November 2019
Fevertree Drinks plc
("Fever-Tree" or the "Group")
Trading Update
Fever-Tree, the world's leading supplier of premium carbonated
mixers, announces a trading update ahead of the year ending 31
December 2019.
Highlights
-- Continued growth across all four regions
-- Acceleration in key growth markets of the US and Europe in the second half
-- UK On-Trade has continued to perform well despite exceptionally strong comparators in 2018
-- UK Off-Trade performance has been behind expectations,
reflecting the wider slowdown in consumer retail spending
-- Fever-Tree retains its significant market leadership position
with a 38% value share at UK Off-Trade
-- RoW performance remains very encouraging
-- First US bottling partner signed, production on the West Coast to commence in 2020
UK
In the year when the Group has lapped exceptional comparators
from summer 2018 and more recently seen a wider slowdown in
consumer spending, the Group expects to deliver c.2% growth in its
most mature market.
In the UK Off-Trade, our performance has been behind our
expectations in the second half as we continued to lap very tough
comparators in July and August and more recently seen a slowdown in
consumer spending, as reflected in the wider retail data.
Despite these short-term headwinds, Fever-Tree remains in a very
strong position in the UK Off-Trade, maintaining our leadership
position with 38% value share with little impact from the
increasing number of premium competitors who collectively remain at
under 5% value share.
Our On-Trade business, which accounts for half of the Group's UK
revenue, has continued to perform well in the second half. We have
won new accounts, further strengthened our leadership position, and
seen good growth across our major national on-trade accounts.
Whilst our tonic range still remains the key focus, we are seeing
increasing opportunities and interest from our customers and
consumers in our broader range of mixers as we look ahead to
2020.
USA
Sales have accelerated in the second half reflecting both the
significant distribution expansion across our key Off-Trade
accounts seen in Q2 as well as further distribution gains in our
On-Trade channel where our partnership with Southern Glazers Wines
& Spirits continues to perform well.
We are building an increasingly strong platform and the recent
signing of a US bottling partner to commence bottling on the West
Coast in 2020 is a further significant milestone.
The premium mixer category continues to experience strong growth
in the United States, with Fever-Tree at the forefront of this
dynamic category. As a result, we are well placed to build on our
leadership position in this significant market.
Given the considerable progress seen in the second half, we now
expect to deliver growth of c.34% which is ahead of our previous
expectations.
Europe
As expected, the Group has seen an acceleration of growth in the
second half in Europe and expects to deliver growth for the full
year of c.19%. Fever-Tree has already established a market
leadership position in Belgium and Denmark, with value share
building in a number of other key markets. The long term
opportunity in Europe is significant, growing and well diversified
across countries, channels and flavours.
RoW
The premium mixed drinks trend continues to spread around the
world with Fever-Tree's global market leadership position growing
alongside it. As a result, we expect to deliver growth of c.35% for
the full year.
Fever-Tree is driving category growth and increasing its value
share across a number of markets around the world, including
Australia and Canada, which are growing in significance. In
addition, we continue to seed the brand across a large number of
markets with considerable future potential, underpinning our
optimism in the long-term opportunity for the brand across our RoW
region.
Full Year Outlook
The Group remains on track to deliver growth across all its
regions with the US performing ahead of our expectations in the
second half.
However, given the short-term headwinds at UK Off-Trade, the
Board now expects the Group to report revenue for the full year
ending 31 December 2019 of between GBP266m-GBP268m, representing
year-on-year growth of 12-13%, with margin expectations
unchanged.
Tim Warrillow, CEO, commented:
"We continue to see growth across all four regions. Indeed,
sales accelerated in our key growth markets of the US and Europe.
Fever-Tree's progress in the US is particularly encouraging and the
signing of a US bottling partner is a further step in building our
operations in this exciting market.
Despite challenging comparators, our performance in the UK
On-Trade underlines the strength of the brand and while the mixer
category in the Off-Trade is moderating alongside the recent
slowdown seen across the wider grocery channel, we continue to
maintain our clear UK market leadership position."
Conference Call
A conference call for analysts and investors will be held at
8.00am today.
Participants wishing to dial into the conference call can do so
using the following details:
International Dial
In number: +44 (0) 2071 928000
Confirmation code: 5171438
A 7 day replay facility will be available afterwards on:
International Dial
In number: +44 (0) 3333009785
Replay Conference: ID: 5171438
For further information:
Fevertree Drinks plc +44 (0)20 7349 4922
Tim Warrillow, Co-founder and CEO
Andy Branchflower, Finance Director
Oliver Winters, Communications & IR Director
Numis Securities - Nominated Adviser and Joint Broker +44 (0)20 7260 1000
Garry Levin
Matt Lewis
Hugo Rubinstein
Investec Bank plc - Joint Broker +44 (0)20 7597 5970
David Flin
Alex Wright
David Anderson
Brunswick Group +44 (0) 20 7404 5959
Jonathan Glass
Fiona Micallef-Eynaud
Notes to Editors:
Fever-Tree is the world's leading supplier of premium carbonated
mixers for alcoholic spirits by retail sales value, with
distribution to over 70 countries worldwide. Based in the UK, the
brand was launched in 2005 to provide high quality mixers which
could cater to the growing demand for premium spirits, in
particular gin, but also increasingly for vodka, rum and whisky.
The Company now sells a range of carbonated mixers to hotels,
restaurants, bars and cafes ("On-Trade") as well as selected retail
outlets ("Off-Trade").
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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