FY23
pre-close trading update for the year ending 31st
December 2023
Good operational progress
has resulted in a doubling of EBITDA in the second half of the year
despite a challenging trading environment.
Financial highlights
Revenue, £m
|
FY23
|
FY22
|
Change
|
Constant currency
|
UK
|
114.8
|
116.2
|
(1%)
|
|
US
|
117.0
|
95.6
|
22%
|
24%
|
Europe (Fever-Tree brand revenue)
|
94.6
|
89.2
|
6%
|
4%
|
Europe total
revenue*
|
105.4
|
101.0
|
4%
|
2%
|
ROW
|
27.2
|
31.5
|
(14%)
|
(10%)
|
Total
|
364.4
|
344.3
|
6%
|
6%
|
*includes GDP portfolio brand revenue
Fever-Tree delivered Group revenue
growth of c.6% year-on-year to c.£364 million. Despite
macroeconomic headwinds, the brand continues to make good progress,
particularly in the US, and has delivered market share growth
across our key markets. The Group expects to deliver Adjusted
EBITDA for the full year of c.£30 million, within our guidance
range. This means the Group doubled EBITDA in the second half of
the year following significant progress in driving operational
efficiencies and offsetting material inflationary cost pressures,
and will continue to deliver significant margin improvement in
2024.
UK
- Continued share gains
·
Total UK revenue was ahead of guidance reflecting
good trading in Q4, particularly in the On-Trade.
·
In the Off-Trade, the brand delivered notable
growth in our Gingers, Flavoured Sodas, and Adult Soft range, as
well as a strong start for our new cocktail mixers, whilst in the
On-Trade, despite the continued pressure on the cost of living, the
brand ended the year with its strongest ever value
share[1].
·
The increasing diversification of the portfolio
has ensured the brand remains the clear leader of the total UK
mixer category[2] and best placed to capture gains
as sentiment continues to improve.
US
- Strong volume and revenue growth
·
Fever-Tree delivered strong revenue growth of 22%
during the year (24% at constant currency) despite the impact of a
greater than expected FX headwind and a subdued macroeconomic
environment in Q4.
·
In the Off-Trade, Nielsen recorded sales increased
by 24% year-on-year[3], driven by the strong
performance of our new can format across all flavour
categories.
·
The brand had a very encouraging December and
continues to perform ahead of the mixer category, extending our
number one value share in both the Tonic and Ginger Beer
categories3, with our innovation also performing
strongly as we continue to broaden our category
opportunity.
Europe - Brand continues to strengthen despite challenging
trading backdrop
·
Fever-Tree brand revenue grew by 6% (4% at
constant currency) during the year. We continue to extend our
premium mixer leadership position across Europe[4], but our revenue growth was impacted by subdued
consumer sentiment in several markets, most notably in Germany.
This meant our total revenue in Europe, including GDP portfolio
brands in the German market, increased by 4% (2% at constant
currency).
·
We strengthened our route-to-market across the
region and successfully completed the transition to new
distributors in France and Greece during 2023, setting the brand up
to take advantage of the significant category growth opportunities
in these markets over the coming years.
Rest of the World - Building the platform for long-term
growth
·
Despite a positive second half performance,
Fever-Tree's revenue declined by 14% for the full year (-10% at
constant currency). Our revenue across the Rest of the World region
excluding Australia was in growth, however, the transition to a new
subsidiary set-up in Australia, which included a one-off inventory
buy-back in the first half of the year, impacted revenue delivery
for the total region.
·
We remain the number one premium mixer in
Australia[5] due to good underlying momentum
of the brand and look forward to 2024 with optimism having set
ourselves up to take advantage of this attractive market going
forward.
·
Fever-Tree also continues to make progress across
our other Rest of the World markets, with exciting plans in Japan
as we build on our relationship with Asahi Breweries.
FY24 outlook and guidance
·
We expect to deliver good growth in 2024 and
reiterate our guidance of 10% revenue growth for the Fever-Tree
brand. We are refocusing our portfolio of non-Fever-Tree brands in
Germany and, as such, expect c.£7 million reduction in portfolio
brand revenue in 2024. As a result of this, we expect total Group
revenue to grow by 8%.
·
Importantly, we remain confident of delivering a
significant improvement in gross margin in 2024, underpinned by new
glass contracts with fully hedged energy pricing, lower
Trans-Atlantic freight rates, a continuation of cost-saving
initiatives, alongside our long-term approach to sustainable price
increases across our markets. Therefore, we are also reiterating
our guidance of c.15% Adjusted EBITDA margin for 2024.
Tim
Warrillow, CEO of Fever-Tree commented:
"The Fever-Tree brand has performed well in 2023, growing our
market share in all of our key markets, despite a challenging
macroeconomic environment. The US ended the year as our largest
region, where we have extended our leadership position in both the
Tonic and Ginger Beer categories. The brand enjoyed a strong
Christmas trading period in the UK, especially in the On-Trade,
whilst at home, our new Espresso Martini mixer clearly became a
festive drink of choice. Despite recession in Germany impacting our
European performance and the one-off effect of the transition to
our new subsidiary in Australia, we remain confident of driving
good growth in those regions in 2024.
Importantly, we have driven a significant increase in our
EBITDA margin in the second half of the year and are confident that
the operational efficiencies we have implemented, alongside a
reduction in inflationary cost pressures, will drive a doubling of
EBITDA in 2024 and provide a strong platform for profitable growth
going forward."
Fever-Tree will announce its Preliminary Results for the year
ending 31st December 2023 on 26th March
2024.
For more information please
contact:
Investor queries
Ann Hyams, Director of Investor
Relations I ann.hyams@fever-tree.com
I +44 (0)20 4516 8106
Media queries
Oliver Winters, Director of
Communications I oliver.winters@fever-tree.com
I +44 (0)770 332 9024
Nominated Advisor and Broker - Investec Bank
plc
David Flin I +44 (0)20 7597
5970
Corporate Broker - Morgan Stanley & Co. International
plc
Andrew Foster I Jessica Pauley I +44
(0)20 7425 8000
Financial PR advisers -
FGS Global
Faeth Birch +44 (0)7768 943 171;
Anjali Unnikrishnan +44 (0)7826 534 233