REG - Fevertree Drinks PLC - FY24 Preliminary Results to 31 December 2024
25/03/2025 07:15
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RNS Number : 9600B Fevertree Drinks PLC 25 March 2025
Fevertree Drinks plc
FY24 Preliminary Results to 31 December 2024
Financial Highlights
· Fever-Tree brand revenue growth accelerated to 7% 1 in the second
half to deliver 4%(1) growth for the full year.
· Strong US growth of 12%(1), with value share gains across key
categories, including Ginger Beer and Tonic.
· Significant gross margin improvement of 540bps, resulting in a 66%
increase in Adjusted EBITDA to £50.7 million, in-line with expectations.
· Fever-Tree recognised £5.0 million in exceptional items in the
period relating to the transition to the Molson Coors partnership.
· Strong working capital improvement, contributing to £96 million net
cash, a 60% increase year-on-year.
· Recommending a final dividend of 11.12 pence per share, an increase
of 2% year-on-year.
· Extending the buyback programme by an additional £29 million,
resulting in up to £100 million to be returned to shareholders over FY25.
£m FY24 FY23 Change Constant currency change
Revenue
UK 111.1 114.8 (3)%
US 128.0 117.0 9% 12%
Europe (Fever-Tree brand revenue) 92.7 94.6 (2)% 0%
ROW 32.2 27.2 19% 22%
Total Fever-Tree revenue 364.0 353.6 3% 4%
GDP brand revenue 4.5 10.8
Total Group revenue 368.5 364.4 1% 3%
Gross profit 138.4 117.0 18%
Gross margin 37.5% 32.1% 540bps
Adjusted EBITDA 2 50.7 30.5 66%
Adjusted EBITDA margin 13.7% 8.4% 530bps
Diluted EPS (pence per share) 20.85 13.18 58%
Normalised EPS (pence per share) 28.01 15.37 82%
Ordinary Dividend (pence per share) 16.97 16.64 2%
Net cash 96.0 59.9 60%
FY24 strategic highlights
· The brand continues to outperform our competitors across our key
markets.
o In the US, Fever-Tree has extended its leadership position in the Ginger
Beer and Tonic Water categories to 32% and 27% respectively 3 .
o We remain the clear market leader in the UK, outperforming the mixer
category at retail in 2024 4 , despite well documented industry headwinds.
o In Europe, the brand gained value share of the total mixer category, as
well as extending its strong lead as the largest premium mixer brand 5 .
o The brand continues to diversify its portfolio to cater to a broader range
of adult drinking occasions, with our non-Tonic products performing strongly
and now comprising c.45% of our global sales, growing by 21% CAGR over the
last 5 years.
New strategic partnership announced with Molson Coors in the US post-year end
· On 30(th) January 2025, Fever-Tree entered into a long-term strategic
partnership with Molson Coors based on a shared vision, belief and commitment
to step-change Fever-Tree's growth in the US.
· The agreement provides Molson Coors with the exclusive sales,
distribution and production rights for the Fever-Tree brand in the US, for an
agreed period. Fever-Tree retains full control of brand identity, vision and
the development of new products for the US market.
· Molson Coors' scale and expertise accelerates Fever-Tree's ability to
capture the sizeable total addressable market across alcohol and non-alcohol
categories in the US.
· The growth opportunity for the brand will be supported by a
significant upweighting in marketing investment.
· The partnership will capitalise on Molson Coors' broad supply chain
network, procurement strength and expertise to drive operational efficiencies,
as well as managing the onshoring of US production over time.
· Whilst only a few weeks have passed since the announcement, sales
momentum has remained strong and good initial progress has been made, and we
look forward to embedding the partnership and working with Molson Coors in the
coming months to fully transition Fever-Tree into their business.
FY25 outlook and guidance:
Following the announcement of Fever-Tree's strategic partnership with Molson
Coors in the US, the Group expects to deliver strong Group revenue and EBITDA
growth over the medium-term. As highlighted at the time of the announcement,
FY25 will be a transition year for the US business and therefore we are
comfortable with consensus expectations of low single digit Group revenue
growth and c.12% Group Adjusted EBITDA margin.
Tim Warrillow, Co-Founder and CEO of Fever-Tree, commented:
"The Fever-Tree brand performed well in 2024, despite the subdued consumer
environment. Across every key region, we are gaining market share, with more
consumers discovering, enjoying, and becoming loyal to Fever-Tree each year
across a growing variety of drinking occasions. This was particularly
noticeable in our largest region, the US, where once again the brand grew
strongly and well ahead of the market.
Our growing market share continues to be driven by our deep understanding of
global drinking trends allowing us to make the most of evolving consumer
preferences. As a result, non-Tonic products now make up c.45% of our global
revenues, driven by the success of our Ginger Beer and our expanding position
in cocktail mixers and adult soft drinks.
Looking to the future, our focus remains on unlocking Fever-Tree's long-term
potential across the world and capitalising on the unique position the brand
has established sitting across alcohol and non-alcohol occasions.
A landmark moment in this journey came just after year-end with the
announcement of our most significant strategic step to date: a transformative
partnership with Molson Coors in the US. This collaboration marks a step
change for our presence in the world's largest premium drinks market. Molson
Coors' powerful network of US distributors across both on and off-trade,
combined with their dedicated, national salesforce and deep customer
relationships creates the ideal platform to maximise our brand strength and
future potential across both alcohol and non-alcoholic occasions."
There will be a live audio webcast on Tuesday 25(th) March 2025 at 10:00am GMT
which can be accessed below:
Fever-Tree FY24 Results webcast
(https://www.investis-live.com/fever-tree/67c9ba1d408d9a0016699706/gtfee)
For more information please contact:
Investor queries
Ann Hyams, Director of Investor Relations I ann.hyams@fever-tree.com
(mailto:ann.hyams@fever-tree.com) I +44 (0)7435 828 138
Media queries
Oliver Winters, Director of Communications I oliver.winters@fever-tree.com
(mailto: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
Financial Advisor & Corporate Broker - Morgan Stanley & Co.
International plc
Henry Stewart I Andrew Foster I Jessica Pauley I +44 (0)20 7425 8000
Corporate Broker - Jefferies International Limited
Ed Matthews I Richard Taylor I +44 (0)20 7029 8000
Financial PR advisers - FGS Global
Faeth Birch +44 (0)7768 943 171; Anjali Unniknan +44 (0) 7826 534 233
FY24 Group Performance
The Group delivered another strong brand performance in 2024, despite the
continued macro challenges, as discretionary spend remained subdued and the
inflationary environment continued to be a headwind for both costs and
consumer sentiment. Notwithstanding these headwinds, the Group delivered
revenue of £368.5m, representing a 3% increase year-on-year at constant
currency as we continued to gain market share in all our key markets,
especially in the US; our largest market and the one that presents the most
exciting near-term opportunity for the Group.
The brand's performance against the competition has been strengthened by our
unrivalled knowledge of consumer drinking preferences globally, which guides
our innovation as we diversify the portfolio to cater to evolving consumer
trends across drinks categories. Consequently, non-Tonic products now comprise
over c.45% of global revenues, driven by strong growth of Ginger Beer and our
growing position in cocktail mixers and adult soft drinks. The breadth of our
range and our increasingly strong competitive position across the world means
that the brand is better placed than ever to take advantage of the increasing
global desire for longer, lighter, better-quality drinks that can be consumed
with or without alcohol.
As well as our drive to extend our global footprint and brand strength, the
business has also been focused on cost mitigation and operational efficiency
programmes, which along with the softening of significant cost headwinds, has
meant that we delivered 540bps of gross margin improvement during the year,
primarily from lower glass costs and trans-Atlantic freight rates. Going
forward, while not immune to external headwinds, the operational progress that
the team has made will ensure that the business is much more resilient and has
the ability to deliver further gross margin improvement in the years ahead.
The primary focus of the management team has always been the substantial
long-term opportunity we believe the brand has around the world and, in the
period just after the year-end, we announced our most significant strategic
step to-date: A new strategic partnership with Molson Coors in the US. The
business is incredibly excited about this transformational partnership, which
will be discussed in more detail in the section below about the US market.
Strategic update I Fever-Tree continues to outperform the competitor set across key markets
Revenue, £m FY24 FY23 Change Constant currency
UK 111.1 114.8 (3)%
US 128.0 117.0 9% 12%
Europe Fever-Tree brand revenue 92.7 94.6 (2)% 0%
ROW 32.2 27.2 19% 22%
Total Fever-Tree revenue 364.0 353.6 3% 4%
GDP brand revenue 4.5 10.8
Total 368.5 364.4 1% 3%
US I Strong growth and a significant new partnership announcement post-year end
The brand had another successful year in the US despite a more subdued spirit
environment, delivering revenue of £128.0m, which represents 9% growth (12%
at constant currency).
In the Off-Trade channel, which accounts for c.75% of our US sales, Fever-Tree
grew its market share of the total mixer category and extended its market
leading value share in both the Tonic and Ginger Beer categories, with 27% and
32% value share respectively(3). In addition, we continue to contribute more
than any other brand to the growth of the Grapefruit and Club Soda categories
in the US, and our Margarita and Bloody Mary cocktail mixers have also started
to make notable share gains.
Overall, our performance has outpaced all of our competitors, premium or
mainstream. Our total Off-Trade sales grew by 15% and we are now over four
times larger than our nearest premium competitor at US retail(3), driven by
our increasing rate-of-sale and distribution gains, with Fever-Tree products
now present in almost 35,000 Off-Trade accounts.
The brand is also gaining further traction and presence in the On-Trade, and
is now in over 40,000 accounts, an increase of 14% year-on-year, securing new
accounts across a range of On-Trade chains, including Courtyard by Marriott,
Benihana and Logans Roadhouse. Fever-Tree is also appearing on more menus, and
we continue to use this important channel to activate our new products and
create more awareness and excitement behind the brand.
Innovation has always been at the heart of the Fever-Tree business and as we
have developed our business globally we have become more focused on ensuring
we tailor our innovation to local drinking trends and behaviours. This year we
have focused on our new cocktail mixer range and have won significant
distribution for our Margarita and Bloody Mary cocktail mixers both of which
are significant categories in the US. We also launched our Espresso Martini
cocktail mixer in Q4, which is one of the fastest growing cocktails across the
US market and as a result the launch got a lot of initial traction following
an exciting launch event just ahead of the holiday season.
By far the most significant strategic step we have taken in the US market was
announced just after the period-end: A long-term strategic partnership with
Molson Coors for the exclusive sales, distribution and production of the
Fever-Tree brand in the US.
This partnership will enable the brand to benefit from the unique scale and
muscle of Molson Coors' national network of US distributors and customers
across both the On- and Off-Trade. In addition, we will benefit from their
very strong and deep customer relationships, merchandising capability and
their production and supply chain network, expertise and economies of scale.
Crucially, both companies are strongly aligned in their ambition for the
Fever-Tree brand, with a shared vision and commitment to driving the
opportunity across both alcohol and non-alcohol occasions. This includes the
deployment of a substantial incremental marketing fund to provide further
firepower for growth.
This is a considerable milestone for the US business. The brand was already in
a fantastic position, and we now believe that we have entered a new
transformational phase for the brand's development, to drive our core
opportunity within the mixer category to the next level, as well as opening up
new opportunities for growth in categories such as adult soft drinks and RTDs.
UK I Successful portfolio diversification beyond Tonics
Fever-Tree delivered £111.1m revenue in the UK, a decrease of 3% year-on-year
following a period impacted by low consumer sentiment, especially in the
On-Trade, as well as a declining Gin category. However, the UK economy started
to show signs of improvement towards the end of the year, reflected in a much
stronger second half performance for the brand, giving us confidence of
returning to growth as we go into 2025.
In the Off-Trade, Fever-Tree continued to outperform a declining mixer
category, gaining 0.6 ppts value share across the year, extending our number
one value share position, while mainstream brands lost share to own label(4).
Encouragingly, Fever-Tree gained value share across both Tonics, the most
significant part of the mixer category, as well as in mixers outside of
Tonics, such as Ginger Ale and Sodas(4), with particularly strong growth of
our Pink Grapefruit Soda and new Cocktail Mixers.
The On-Trade channel remained impacted by lower discretionary spend, which led
to declines in both the spirit and mixer categories during 2024. Although
Fever-Tree was not immune to these impacts, the brand remained the mixer of
choice for bars, pubs and restaurants across the country by a significant
margin, finishing the year with a value share of 1.6 times our nearest
competitor 6 .
While the Gin & Tonic remains a popular serve in the UK, Gin declines over
the last few years have made the growth of our non-Tonic mixer categories even
more important as we increasingly cater to the wider spirit category. We have
been extremely pleased with our progress in developing, listing and building
awareness for our non-Tonic products, with another year of strong growth,
which means they now represent almost 30% of our UK sales, up from 10% in
2019.
One of our most recent product additions, Pink Grapefruit Soda, had a
particularly strong year, with sales growth of c.50% during 2024, capitalising
on the increasingly popularity of premium Tequila and the Paloma serve.
Our Cocktail Mixers have also been gaining good traction in the UK, supported
by a multi-channel marketing campaign focusing on premium ingredients, great
taste, and demonstrating the simplicity of making more complex cocktails, such
as Margaritas and Mojitos. We have now gained >8,000 points of distribution
at UK retail, more than double the amount we had at the end of last year, as
well as listings in >2,000 On-Trade accounts as we expand our offering into
an even greater number of drinking occasions.
In addition, our Adult Soft Drink range has increased in sales value by 8.4%
year-on-year, as we continue to use the brand's strong credentials as a
sophisticated non-alcoholic option for consumers. Our recently introduced
4x250ml can pack in the Off-Trade has already achieved a strong rate-of-sale,
reaffirming our belief that Fever-Tree is perfectly positioned to extend our
range beyond mixers into Adult Soft Drinks.
Importantly, despite another tough macro backdrop, the brand continues to be
the mixer of choice in the UK, with a higher value share than any other brand
by a significant margin, as well as being purchased by more households.
Europe I Extending the brand's premium leadership position
Fever-Tree brand revenue (excluding the revenue we get from GDP's distributed
brands) was £92.7m, which was flat year-on-year at constant currency. Total
reported European revenue declined due to the consolidation of non-Fever-Tree
brands distributed by GDP in Germany.
Importantly, underlying brand revenue increased by 1%, which was a good result
given the weak consumer environment and adverse weather conditions across the
region. The brand performed well in our high-growth markets, including Italy
and France, which was partially offset by tougher conditions across central
Europe, including Germany.
Fever-Tree also performed well against the competition at retail, growing
value share of total mixers by 0.6 ppts and our share of premium mixers by 1.9
ppts as we continue to outperform and drive growth of the category(5).
Consequently, we finished the year with our highest ever value share of the
total mixer category, at 15.8%(5), with good gains in products like Ginger
beer and Pink Grapefruit as we diversify our offering beyond Tonics.
Ginger Beer remains our stand-out performer. We have been consistently driving
significant share gains in this category and now hold almost 39% value share
across the region, an increase of 3.4 percentage points year-on-year(5).
The On-Trade channel has been more exposed to consumer sentiment, however,
Fever-Tree extended its distribution across our key markets, with notable
account gains in Italy (+8% year-on-year), The Netherlands (+5%) and Belgium
(+8%), setting the brand up for good growth in 2025.
Our marketing efforts during 2024 have been focused on our high-growth
markets, where we have used both above and below the line campaigns. We have
utilised a broad range of channels, including an out-of-home and digital
campaign in France, and a social media and digital campaign in Italy, both of
which resulted in record levels of brand awareness in those markets.
Finally, we continue to focus on innovation and portfolio extensions,
launching adult soft drinks with the introduction of 250ml cans of Ginger Beer
and Pink Grapefruit, extending our distribution in Belgium and The Netherlands
in locations such as petrol stations, convenience stores and travel retail. As
part of this launch, the brand has made very good progress in Switzerland with
Selecta, a European leader in vending machines.
Overall, the brand continues to make good progress despite the tough market
conditions, as we extend our market share of the total mixer category,
alongside driving strong growth from our latest product additions. Our growth
accelerated in the second half of the year, giving us confidence that
performance will improve as consumer sentiment recovers.
RoW I Growing ahead of the mixer category in Australia and Canada
Fever-Tree delivered revenues of £32.2m in our Rest of the World Region, an
increase of 19% year-on-year (22% at constant currency) as we annualised the
inventory buy-back during the transition to our new subsidiary set-up in
Australia.
In Australia, 2024 marked the first full calendar year since setting up our
own subsidiary, with the business now well positioned to accelerate the
brand's progress through stronger partnerships with retailers and customers,
and greater control of the value chain, from sales to distribution. We are
also on-track to commence local production in Australia at the start of 2025.
Supported by the newly established Fever-Tree Australia, the brand continues
to deliver good sales growth, as well as gaining share of the mixer category.
In the Off-Trade, Fever-Tree sales grew by 9%, with market share gains of
1.4ppts across total mixers as we continue to grow well ahead of the
category 7 . The brand also had a strong performance in the On-Trade, driven
by strong summer programming, including targeted investment across our core
SKUs, with the majority of the growth coming from our soda range.
Our growth in Australia has been supported by several new product launches,
notably, 250ml cans of Soda and Ginger Beer designed as a soft drink format,
as well as the launch of our cocktail mixers in a number of large liquor
chains, including the largest liquor retailer in Australia, which is
accelerating the sales growth of our cocktail mixers and helping them to gain
traction.
In Canada, Fever-Tree has been the primary driver of category growth over the
last year, gaining two percentage points of share during 2024. Our can format
is doing particularly well, growing by over 20% in 2024 as we see the
popularity of this format increase, and our Sparkling range, including
Grapefruit, Sicilian Lemonade and Lime & Yuzu, continues to gain traction
as we demonstrate their versatility as both a mixer and an adult soft drink.
The brand also made good progress in the liquor channel, launching our
products in LCBO, the world's biggest purchaser of beverage alcohol. This is
the first time any mixer or soft drink has been sold in their stores and is a
great illustration of the brand's traction in the Canadian market. Fever-Tree
is being cross-merchandised with spirits to drive different drinking occasions
in over 200 of their stores and we hope to build on this success and extend
the brand's coverage to more of their network in the future.
In another first for the Canadian market, we launched The Caesar cocktail
mixer, catering to the number one selling cocktail in Canada, alongside our
Margarita and Mojito Mixers, which have already had initial success in the UK
and US.
The Fever-Tree brand is now in over 90 markets across the world, most of which
where we have first mover advantage and a large number where we see
significant opportunity over the long term, from Asia, to South America, and
beyond. Japan is a great example of where we have started to execute against
the large addressable opportunity and continue to make good progress with
Asahi Breweries as our distribution partner. And more broadly across Asia, we
remain focused on the high-end On-Trade and spirit partnerships as we seed the
brand and ensure Fever-Tree is the mixer of choice across the region.
Overall, I am pleased with our progress of the brand across the Rest of the
World region, where we remain uniquely positioned to take advantage of
near-term and long-term opportunities.
Fever-Tree Team
The Group continues to foster a highly engaged workforce, who are proud to
work for Fever-Tree.
This year, we have had four main focuses:
1. Learning & Development - A new intranet was launched with mandatory
and optional training and learning courses about the business.
2. Engagement & Wellbeing - Each year we refine our calendar of events
and resources to enable our team to socialise across departments and get
involved in a range of activities from sports clubs to expert speaker events.
3. Diversity & Inclusivity - Alongside our permanent 'Women and
Allies' and 'Be Proud' groups, we hosted a number of office events to
celebrate different religious and cultural festivals, or mark important
occasions.
4. Rewards & Remuneration - We launched 'The Rewards Lounge' where
employees can see the benefits package on offer and make it bespoke to their
individual needs and wants, including a wellbeing allowance annually for every
employee.
As you can see, a lot of emphasis has been placed on maintaining and enhancing
the positive culture within the organisation, and this effort was recognised
by our team through the internal engagement survey we ran during the year,
where c.90% of respondents saying they were enthusiastic about their work and
over 90% feeling personally invested in their roles. These scores not only
foster a supportive and collaborative environment, but also drive productivity
and creative thinking, positioning us for continued success and growth.
Sustainability
We are driving meaningful action across the ESG spectrum, embedding
sustainability and social responsibility at the heart of our business.
Under our Climate branch, we have taken a significant step forward by
developing our first net zero roadmap. This builds upon our extensive efforts
to map our carbon footprint-both at a corporate level and across our product
range-ensuring we have a clear, data-driven path toward reducing our
environmental impact.
Within our Communities branch, we continue to champion important causes,
including our longstanding support for Malaria No More. Additionally, we have
strengthened our commitment to ethical sourcing by updating our Human Rights
Charter and engaging directly with our ingredients supply chain partners to
reinforce responsible sourcing practices and uphold human rights standards.
By taking action across these critical areas, we are not only strengthening
our business but also making a positive and lasting impact on the world around
us.
Summary
The Group is looking forward with renewed excitement about the ever-growing
opportunity to grow the brand around the world. Whilst we have continued to
solidify our position as the market leader by value in our mature markets,
such as the UK and Denmark, we have also continued to set the brand up for
success in a number of high potential markets further afield. This has
included the successful establishment of our own subsidiary in Australia, good
progress in Japan as we solidify our partnership with Asahi, and most
significantly beginning our new partnership with Molson Coors in the US just
after the year-end.
Our confidence in the long-term opportunity is rooted in the consumer trends
that we are seeing globally: Spirits gaining popularity compared to wine and
beer, a growing preference for longer and lighter spirit drinks, as well
consumers growing desire to socialise with sophisticated non-alcoholic drinks.
And we believe that when it comes to every one of the evolving consumer trends
outlined, we are best placed to satisfy these new and evolving expectations.
As not only do we have the broadest distribution of any premium mixer brand
globally, but our range of mixers is unmatched, and we have recently developed
products and formats to meet the growing desire for low alcoholic and
non-alcoholic drinks.
This is why Fever-Tree continues to outperform the category and gain share
across our key markets with the brand growing in strength around the world.
Alongside our focus on the brand and topline growth, the business will
continue to deliver margin improvement across our non-US regions across 2025
and 2026, before driving Group margin expansion from 2027 as our new US
partnership starts to benefit from significant economies of scale. We will
also continue to invest behind the brand to make the most of the growing
opportunity that lies ahead, with an upweighted marketing budget in the US for
the next few years. This is underpinned by our balance sheet which, following
the Molson Coors partnership, is stronger than ever, allowing us to invest for
growth, as well as increased opportunities to return cash to shareholders.
Finance review
The Group delivered 4% year-on-year growth in Fever-Tree brand revenue at
constant currency against a challenging trading backdrop.
The brand performed strongly in the US and Rest of the World (ROW) markets,
with constant currency revenue growth of 12% and 22%, respectively. In the US,
Fever-Tree grew market share against the competition and extended its number
one position in the Tonic and Ginger Beer categories, while the ROW market
benefited from the successful establishment of the Fever-Tree Australia
subsidiary operation. In the UK and Europe, whilst performance was impacted by
a subdued category backdrop and adverse weather, the Group continued to make
strategic progress, launching new products, driving growth across its
non-tonic portfolio and maintaining its leadership position in premium mixers.
Building on the proactive steps that have been taken over recent years, the
Group delivered a strong recovery in gross margin in 2024, improving by 540
basis points to 37.5% (2023: 32.1%), while operating expenditure remained
consistent at 23.8% of Group revenue (2023: 23.7%). After recognition of £5.0
million of exceptional items, the Group delivered a 66.0% increase in adjusted
EBITDA to £50.7m (2023: £30.5m) and an improvement in adjusted EBITDA margin
to 13.7% (2023: 8.4%).
Working capital management was a key focus in 2024 as we looked to leverage
our global operations technology programme. Working capital improved to 20.3%
of revenue (2023: 28.5%), delivering a significant increase in operating cash
flow conversion to 149.8% (2023: 15.2%). As a result, cash held increased by
60.2% to £96.0 million (2023: £59.9 million). As a reflection of continued
confidence in the strength of the Group's balance sheet, the Board recommends
a final dividend of 11.12 pence per share, an increase of 2.0% year-on-year.
We are confident that the improvements we continue to drive in our global
supply chain capability, procurement processes and operating business models
are combining to forge a stronger, more resilient operating platform for the
Group that will not only help to mitigate the on-going challenges of
macroeconomic and geopolitical volatility, but also deliver further margin
recovery over time, and most importantly, allow us to capitalise on the global
potential of the brand in years to come.
Further to this, the post period end announcement of the strategic partnership
with Molson Coors in the US will allow the Group to leverage the expertise,
scale and total beverage ambition of Molson Coors to deliver against an
ever-broadening opportunity for Fever-Tree in our key growth market. The
partnership also provides the platform for upweighted US brand investment in
the near term and strong margin improvement in the medium term as production
is on-shored, all underscored by a reduction in the working capital required
to deliver the US opportunity, which will now be funded by Molson Coors.
This exciting development for the Group is testament to the value of the
Fever-Tree brand and its increasing relevance to both alcohol and non-
alcoholic occasions in regions across the globe. It is a reminder of the
versatility and cash-generative nature of our asset-light outsourced business
model and underscores the importance of our committed strategy to prioritise
innovation, investment and long term stewardship of the brand whilst
navigating the volatile macroeconomic and geopolitical environment over recent
years.
Gross Margin
The Group delivered a strong improvement in gross margin in 2024 to 37.5%
(2023: 32.1%). This result was testament to work that has been undertaken over
several years to drive operational improvements against a backdrop of
macroeconomic and geopolitical instability. These initiatives have been
delivered across four key areas:
1. Expanding our production footprint: establishing capacity closer to our
key growth markets to minimise transport costs, optimise our inventory
holdings and facilitate quicker reactions to market dynamics.
· Work performed to bring local Australian production online in 2025.
· Strategic partnership with Molson Coors announced post period end
provides a roadmap to onshoring US production over the medium term and will
allow the Group to leverage Molson Coors' operational expertise and
significant economies of scale
2. Optimising our existing footprint: working closely with our current
partners to drive efficiency and effectiveness as we manage our complexity.
· Leveraged our new technology platform to consolidate volumes across key
UK bottling and canning partners, driving improved run sizes and optimised
pricing
3. Procurement: leveraging our global scale, widening and on-shoring our
supplier base and ensuring our contracts are calibrated for both the current
disruptive environment and our longer term growth as we scale through our
regionalised production footprint.
· Worked in partnership with our new primary glass supplier following the
2023 tender process to deliver on-going improvements and an effective energy
hedging strategy
4. Technology: underpinning all of the above is a wide-ranging programme
to embed technology across our global operations that will give us best in
class ways of working, data and insights to manage near term disruption, as
well as underpinning our future growth.
· Continued to embed technology improvements across global operations to
implement best-in-class practices, manage disruptions, improve working capital
and underpin future growth.
Operating expenditure
Adjusted underlying operating expenses rose by 1.4% in 2024 to £87.7 million
(2023: £86.5 million), remaining in line with prior years at 23.8% of Group
revenue (2023: 23.7%). Marketing spend increased marginally to 9.4% (2023:
9.2%) of brand revenue, whilst staff costs and other overheads were flat as a
percentage of revenue at14.8% (2023: 14.8%).
The improvement in gross margin alongside a consistent level of operating
expenditure (excluding exceptional items) delivered a strong recovery in
adjusted EBITDA margin to 13.7% (2023: 8.4%) and a 66.0% increase in adjusted
EBITDA to £50.7 million.
The Group recognised exceptional items of £5.0 million in 2024 (2023: £nil)
relating to the US. This includes £4.3 million in costs from winding down the
primary US bottling relationship and £0.7 million in advisory fees incurred
ahead of announcing the strategic partnership with Molson Coors.
Depreciation charges were £6.5 million (2023: 6.3 million), with amortisation
increasing to £3.1 million (2023: £1.7 million) as we began the amortisation
of the global operations technology programme and invested in a water licence
at our key UK bottling partner, providing access to local spring water. Share
based payments rose to £3.3 million (2023: £1.7 million). Following these
movements, the Group delivered an 57.1% increase in operating profit, to
£32.8 million (2023: £20.8 million).
Tax
Effective current tax on profits relating to the current period was 25.1%
(2023: 18.5%). The balance of the effective tax rate is made up of current tax
adjustments relating to prior periods and deferred tax impacts.
Earnings Per Share
The basic earnings per share are 20.90 pence (2023: 13.20 pence), and diluted
earnings per share are 20.85 pence (2023: 13.18 pence).
In order to compare earnings per share year on year, earnings have been
adjusted to exclude amortisation and exceptional items. The UK statutory tax
rates have been applied to these earnings to calculate a comparable post tax
profit.
On this basis, normalised earnings per share for 2024 are 28.01 pence (2023:
15.37 pence), an increase of 82.3% from 2023.
Balance sheet and working capital
Working capital improvement was a key focus throughout 2024. The most
significant improvement came from a decrease in inventory costs to £45.8
million (2023: £67.6 million), driven by inventory management optimisations
and a reduction in the cost of inventory held.
Trade and other receivables reduced as a percentage of revenue to £86.1
million (2023: £91.5 million). The ageing profile of trade receivables
remained consistent, and the Group continues to manage credit risk closely
through proactive customer engagement and appropriate levels of credit
insurance. Trade and other payables marginally improved to £57.0 million
(2023: £55.3 million).
These improvements drove a significant reduction in net working capital of
£28.9 million to £74.9 million (2023: £103.8 million), improving to 20.3%
of Group revenue (2023: 28.5%). This improvement, alongside the 66.0% increase
in adjusted EBITDA, resulted in cash generated from operations increasing to
149.8% (2023: 15.2%).
Capital expenditure
Capital expenditure additions were £14.1 million in 2024 (2023: £9.8
million). Tangible fixed asset additions remain low and included investment in
reusable packaging in Germany. Intangible asset additions included a water
licence of £3.5 million for the provision of new local spring water source at
our primary UK bottling partner and expenditures of £7.3 million related to
our global operations technology programme and innovation projects. Overall
intangible asset additions were £10.8 million (2023: £7.0 million), with
capital expenditure expected to reduce in 2025.
Cash position
The improvement in working capital and increase in adjusted EBITDA led to
significant cash generation, resulting in net inflows of £36.1 million and a
year-end balance of £96.0 million (2023: £59.9 million), an increase of
60.2% year on year.
The Group's Capital Allocation framework remains unchanged. We intend to
retain sufficient cash for investment opportunities, primarily in operational
expenditure, including increased marketing spend in growth regions. We are
also vigilant regarding M&A opportunities that would further assist with
the delivery of our strategy. Where the Board considers there to be surplus
cash held on the Balance Sheet it will consider additional distributions to
shareholders.
Dividend
The Group is committed to a progressive dividend policy, recommending a final
dividend of 11.12 pence per share for 2024 (2023: 10.90 pence), bringing the
total to 16.97 pence (2023: 16.64 pence). If approved at the AGM on 5th of
June 2025, the final dividend will be paid on 20th of June 2025 to
shareholders on the register on 16th of May 2025.
Post period events
On January 30, 2025, Fever-Tree and Molson Coors announced a long-term
strategic partnership, granting Molson Coors exclusive rights to sell,
distribute, and produce the Fever-Tree brand in the United States under a new
license agreement starting February 1, 2025.
As part of this collaboration, Molson Coors acquired an 8.5% stake in
Fevertree Drinks plc (post-issue) for
consideration of £71.0 million and to assist with the transition of
operations, acquired the local trading entity Fevertree USA Inc for
consideration of $23.9 million in cash.
Following this announcement, Fever-Tree initiated a share buyback programme in
February 2025 of up to £71 million, which we are extending by a further £29
million, subject to shareholder approval at the upcoming AGM, leveraging the
Group's strong balance sheet and further improved prospects for cash flow
generation resulting from this strategic partnership.
The aforementioned events are non- adjusting events as at 31 December 2024.
Performance indicators:
The Group monitors its performance through several key indicators. These are
formulated at Board meetings and reviewed at both an operational and Board
level. Progress against these key indicators was closely monitored during the
year.
Revenue growth %
Group revenue growth was +1.1% in 2024 (2023: +5.8%).
Gross margin %
The Group achieved an adjusted gross margin of 37.5% in 2024 (2023: 32.1%).
Adjusted EBITDA margin %
The Group achieved an adjusted EBITDA margin of 13.7% in 2024 (2023: 8.4%).
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
£m £m
Revenue 368.5 364.4
Cost of sales (230.1) (247.4)
Gross profit 138.4 117.0
Administrative expenses (105.6) (96.2)
Adjusted EBITDA 50.7 30.5
Depreciation (6.5) (6.3)
Amortisation (3.1) (1.7)
Share-based payment charges (3.3) (1.7)
Operating profit before exceptional item 37.8 20.8
Exceptional item (5.0) -
Operating profit 32.8 20.8
Finance income 3.3 2.0
Finance expense (0.6) (0.6)
Profit before tax 35.5 22.2
Tax expense (11.1) (6.8)
Profit for the year 24.4 15.4
Items that may be reclassified to profit or loss
Foreign currency translation difference of foreign operations 0.6 -
Effective portion of cash flow hedges 0.3 0.3
Related tax - -
Total other comprehensive income 0.9 0.3
Total comprehensive income for the year 25.3 15.7
Earnings per share
Basic (pence) 20.90 13.20
Diluted (pence) 20.85 13.18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2024
2024 2023
£m £m
Non-current assets
Property, plant and equipment 20.9 23.7
Intangible assets 65.7 58.2
Deferred tax asset 0.5 1.7
Other non-current assets 4.1 4.3
Total non-current assets 91.2 87.9
Current assets
Inventories 45.8 67.6
Trade and other receivables 86.1 91.5
Derivative financial instruments 0.4 0.6
Corporation tax asset 2.4 6.2
Cash and cash equivalents 96.0 59.9
Total current assets 230.7 225.8
Total assets 321.9 313.7
Current liabilities
Trade and other payables (57.0) (55.3)
Lease liabilities (3.6) (3.4)
Corporation tax liability (0.7) (2.1)
Derivative financial instruments (0.2) -
Total current liabilities (61.5) (60.8)
Non-current liabilities
Other payables (0.5) (0.3)
Lease liabilities (8.5) (11.8)
Deferred tax liability (4.7) (3.0)
Total non-current liabilities (13.7) (15.1)
Total liabilities (75.2) (75.9)
Net assets 246.7 237.8
Equity attributable to equity holders of the company
Share capital 0.3 0.3
Share premium 54.8 54.8
Capital redemption reserve 0.1 0.1
Cash flow hedge reserve 0.1 (0.2)
Translation reserve 0.3 (0.3)
Retained earnings 191.1 183.1
Total equity 246.7 237.8
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
£m £m
Operating activities
Profit before tax 35.5 22.2
Finance expense 0.6 0.6
Finance income (3.3) (2.0)
Depreciation 6.5 6.3
Amortisation of intangible assets 3.1 1.7
Share based payments 3.3 1.7
(Decrease)/increase in impairment losses on receivables and inventories (1.0) 0.5
net of recoveries
Net exchange differences 0.6 3.2
45.3 34.2
Decrease/(increase) in trade and other receivables 5.0 (22.3)
Decrease/(increase) in inventories 23.4 (10.0)
Increase in trade and other payables 1.7 4.8
Decrease/(increase) in derivative asset/liability 0.5 (2.1)
30.6 (29.6)
Cash generated from operations 75.9 4.6
Income taxes paid (5.7) (8.4)
Net cash flows generated from/ (used in) operating activities 70.2 (3.8)
Investing activities
Purchase of property, plant and equipment (3.3) (2.6)
Interest received 3.3 2.0
Investment in intangible assets (10.8) (7.0)
Net cash flows used in investing activities (10.8) (7.6)
Financing activities
Interest paid (0.1) (0.1)
Dividends paid (19.6) (19.1)
Payment of lease liabilities (3.9) (4.0)
Net cash flows used in financing activities (23.6) (23.2)
Net decrease in cash and cash equivalents 35.8 (34.6)
Cash and cash equivalents at beginning of period 59.9 95.3
Effect of movements in exchange rates on cash held 0.3 (0.8)
Cash and cash equivalents at end of period 96.0 59.9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Preparation
The financial information contained in this results announcement has been
prepared on the basis of the accounting policies set out in the statutory
financial statements for the year ended 31 December 2024. Whilst the financial
information included in this announcement has been computed in accordance with
the recognition and measurement requirements of UK adopted international
accounting standards, this announcement does not itself contain sufficient
disclosures to comply with UK adopted international accounting standards.
The financial information set out above does not constitute the company's
statutory accounts for 2024 or 2023. Statutory accounts for the years ended 31
December 2024 and 31 December 2023 have been reported on by the Independent
Auditor. The Independent Auditor's Report on the Annual Report and Financial
Statements for 2024 and 2023 was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006. Statutory accounts for the year ended 31
December 2023 have been filed with the Registrar of Companies. The statutory
accounts for the year ended 31 December 2024 will be delivered to the
Registrar in due course.
New Accounting Policies
The following was a newly adopted accounting policy in the year:
Exceptional Items
In the consolidated financial statement, the Group has elected to disclose
'exceptional items'. Exceptional items are costs and incomes that are judged
by management to warrant separate disclosure to improve comparability of
financial performance between periods and with other market participants.
Exceptional items relate to certain costs or incomes that are significant by
virtue of their size and/or nature. In considering the nature of an item,
management's assessment includes, both individually and collectively, each of
the following:
• whether the item is unrelated to the Group's ordinary course of business;
• the specific circumstances that have led to the item arising; and
• the likelihood of recurrence.
2. Revenue
An analysis of turnover by geographical market is given below:
2024 2023
£m £m
United Kingdom 111.1 114.8
United States of America 128.0 117.0
Europe 97.2 105.4
Rest of the World 32.2 27.2
368.5 364.4
3. Earnings per share
2024 2023
£m £m
Profit
Profit used in calculating basic and diluted EPS 24.4 15.4
Number of shares
Weighted average number of shares for the purpose of basic earnings per share 116,726,190 116,632,907
Weighted average number of dilutive employee share options outstanding 289,183 197,351
Weighted average number of shares for the purpose of diluted earnings per 117,015,373 116,830,258
share
Basic earnings per share (pence) 20.90 13.20
Diluted earnings per share (pence) 20.85 13.18
Normalised EPS 2024 2023
£m £m
Profit
Reported profit before tax 35.5 22.2
Add back:
Amortisation 3.1 1.7
Exceptional Items 5.0 -
Adjusted profit before tax 43.6 23.9
Tax - assume standard rate (25%) (2023: 25%) (10.9) (6)
Normalised earnings 32.7 17.9
Number of shares 116,726,190 116,632,907
Normalised basic earnings per share (pence) 28.01 15.37
Normalised EPS is an Alternitive Performance Measure ("AMP") in which earnings
have been adjusted to exclude amortization and exceptional items. The UK
statutory tax rates in force at the year end have been applied (disregarding
other tax adjusting items for comparability). The treatment is consistent
period on period. This has been provided to assist users compare performance
period to period, without the impact of amortisation and exceptional items. As
this is an APM, this may not be comparable to other companies.
4. Dividends
Dividends paid:
2024 2023
In respect of the prior financial year
Pence per share 10.90 10.68
Total (£m) 12.7 12.5
In respect of the period ended 30 June
Pence per share 5.85 5.74
Total (£m) 6.8 6.7
Total paid in the year (£m) 19.5 19.2
The Directors are proposing a final dividend of 11.12 pence per share,
totaling £13.0m for 2024. This dividend has not been accrued in the
consolidated statement of financial position.
5. Adjusted EBITDA
Analysis within this results announcement refers to adjusted EBITDA. The Group
believes adjusted EBITDA to be a key indicator of underlying operational
performance, adjusting operating profit for exceptional items and several
non-cash items. As a consequence of these adjustments, the Group believes that
adjusted EBITDA represents normalised operating profits. Adjusted EBITDA for
the year ended 31 December 2024 is operating profit of £32.8m before
depreciation of £6.5m, amortisation of £3.1m, share based payment charges of
£3.3m and exceptional items of £5.0m. Adjusted EBITDA is an appropriate
measure since it represents to users a normalised, comparable operating
profit, excluding the effects of the accounting estimates, exceptional items
and non-cash items mentioned above. The definition for adjusted EBITDA as
defined above is consistent with the definition applied in previous years.
This measure is not defined in the International Financial Reporting
Standards. Since this is an indicator specific to the Group's operational
structure, it may not be comparable to adjusted metrics used by other
companies.
1 Constant currency
2 Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation, share based payment charges, exceptional items and finance costs
3 Nielsen 52 weeks to 28 Dec 2024
4 IRI 52 weeks To 22 Dec 2024
5 Nielsen 2024 top 12 EU markets
6 CGA MAT to 28 Dec 2024
7 Australian grocery scanner data MAT to 29 Dec 2024
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