REG - Fevertree Drinks PLC - FY24 Interim Results to 30 June 2024
12/09/2024 07:00
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RNS Number : 8546D Fevertree Drinks PLC 12 September 2024
Fevertree Drinks plc
FY24 Interim Results to 30 June 2024
FY24 Interim Highlights
· The Fever-Tree brand delivered revenue growth of 2% year-on-year at
constant currency, against a subdued consumer backdrop and poor weather in the
second quarter across the UK and Europe.
· Strong summer trading post period-end with growth of +13% for the
Fever-Tree brand in July and August.
· Continued good growth in the US, extending our market share and
number one position in Tonic Water and Ginger Beer categories, driven by
distribution gains and flavour and format innovation.
· Significant operational progress driving 520 bps of gross margin
improvement and c.80% increase in Adjusted EBITDA as we begin to deliver
substantial Group margin recovery.
· Recommending an interim dividend of 5.85 pence per share, an increase
of 2% year-on-year.
£m H1 FY24 H1 FY23 Change Constant Currency Change
Revenue
UK 50.9 53.8 (6)%
US 60.3 56.1 7% 10%
Europe Fever-Tree brand revenue 44.5 50.5 (12)% (10)%
ROW 14.9 9.6 56% 57%
Total Fever-Tree revenue 170.6 170.0 0% 2%
GDP brand revenue 2.3 5.6 (59)%
Total Group revenue 172.9 175.6 (2)% 0%
Gross profit 62.0 53.8 15%
Gross margin 35.9% 30.7% 520bps
Adjusted EBITDA 1 (#_ftn1) 18.2 10.2 79%
Adjusted EBITDA margin 10.5% 5.8% 470bps
Diluted EPS (pence per share) 6.49 0.94 590%
Dividend (pence per share) 5.85 5.74 2%
Cash 65.9 75.8 (13)%
Strategic Highlights
· Growing market share in all of our key regions, demonstrating the
strength of the Fever-Tree brand.
· Continued diversification of the portfolio to cater to evolving
consumer preferences across drinks categories. Non-Tonic products now comprise
over 40% of global revenues, driven by strong growth of Ginger Beer and a
growing position in cocktail mixers and adult soft drinks.
· Good progress on key operational initiatives and softening
inflationary headwinds underpin our confidence in further margin recovery in
the second half of the year. The Group remains on-track to deliver c.600 bps
of gross margin improvement for the full year, as well as ongoing improvement
over the medium term.
· Strong Balance Sheet, which is a significant competitive advantage
over many of our premium mixer competitors globally and enables the
opportunity to invest for growth. The Group anticipates being in a position to
return surplus cash to shareholders during FY25.
Outlook and Guidance
The Group has made a strong start to the second half of the year across all of
our regions. We expect to deliver brand growth for the second half of c.7% to
c.10%, resulting in revenue growth of c.4% to c.5% across the full year for
the Fever-Tree brand.
We continue to make significant operational progress and are on track to
deliver c.600bps of gross margin improvement. We will continue to invest
behind the brand with c.£90m of overhead spend over the full year, in-line
with expectations.
Tim Warrillow, CEO of Fever-Tree, commented:
"The Fever-Tree brand performed well against a tough market backdrop. We
continued to deliver double digit revenue growth in the US at constant
currency, as well as a strong performance in our ROW region. The first half
performance in the UK and Europe was impacted by unseasonable weather at the
start of summer alongside distributor order phasing in Europe, but we have
seen a strong improvement in these regions as the summer belatedly arrived.
Whilst the first half was challenging, we are controlling the controllables.
We have delivered substantial margin improvement, resulting in a c.80%
increase in EBITDA year-on-year, as well as driving share gains against the
competition across all our regions, demonstrating the growing strength of the
Fever-Tree brand.
We're optimistic of an acceleration of growth across the second half of the
year and have seen a much more positive trading performance in July and
August.
Looking further ahead, our continued investment in the brand and focus on
innovation in recent years ensures we are better positioned than ever to
capitalise on the long-term drink trends, both in terms of continued spirit
growth and premiumisation but also as adults continue to seek out a broader
range of premium drinks, both with and without alcohol."
There will be live audio webcast on Thursday 12(th) September 2024 at 10:00am
BST. The webcast can be accessed via:
Fever-Tree FY24 Interim Results webcast
(https://www.investis-live.com/fever-tree/66963b13f2793f310000e529/khgd)
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
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
Strategic Update
£m H1 FY24 H1 FY23 change constant currency change
Revenue
UK 50.9 53.8 (6)%
US 60.3 56.1 7% 10%
Europe Fever-Tree brand revenue 44.5 50.5 (12)% (10)%
ROW 14.9 9.6 56% 57%
Total Fever-Tree brand revenue 170.6 170.0 0% 2%
The Fever-Tree brand delivered revenue of £170.6m, an increase of 2%
year-on-year at constant currency, against a challenging consumer backdrop.
The Group has continued to make strategic progress, increasing the brand's
market share across all key markets, as well as delivering strong margin
improvement in the first half of the year.
In the US, ongoing distribution gains and market share increases delivered
double-digit growth at constant currency in the first half of the year, and
underlying growth alongside the lapping of the transition to our own
subsidiary in Australia enabled the Group to deliver 57% constant currency
growth in the Rest of World region. In the UK and Europe, the first half
performance was impacted by unseasonable weather in the second quarter, as
well as differences in the phasing of European distributor orders
year-on-year.
The Group delivered a significant gross margin improvement of 520 bps
year-on-year in H1, driven by improved glass bottle pricing, the contracting
of more favourable trans-Atlantic freight rates, alongside net price increases
with customers across our key markets. We are on track to deliver c. 600 bps
of gross margin improvement over the full year and remain well-placed to
continue to drive gross margin improvement in 2025 and beyond.
The Group's innovation continues to target a broader range of adult drinks and
occasions. As a result, 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.
US I Fever-Tree is growing share and outperforming the market
Fever-Tree's US revenue for the first half of the year increased by 7% to
£60.3m (+10% at constant currency) as the brand extended its leadership
position in both Tonic Water and Ginger Beer, growing ahead of every
competitor in both categories 2 (#_ftn2) .
Fever-Tree had another strong performance in the Off-Trade, with retail sales
growth of 19% year-on-year(2), driven by continued distribution gains, as well
as the flavour expansion and success of our 150ml can format which grew by
more than 50% year-on-year.
The On-Trade also performed well, delivering strong growth as we remain
focused on not only expanding the accounts we're present in but also
increasing the number of products we have per account. To this end, we've
increased our number of points of On-Trade distribution by c.16% year-on-year,
with significant new wins with Hilton and Marriott Hotels, Soho House and STK
Steakhouse.
The brand has a significant opportunity to continue to drive growth through
flavour and product innovation as we leverage our unrivalled knowledge of
mixing trends and consumer insights to create new mixers across a range of
different spirit categories. Three of our newest products, Margarita, Light
Margarita and Bloody Mary, have gained good traction in the market and we are
also excited to be introducing Espresso Martini in the US later this year.
We have also continued to increase the scale and breadth of our marketing and
activations, including our PGA Tour partnership and high-profile bar
takeovers, whilst we have successfully trialed our first connected TV
campaign.
UK I Fever-Tree remains the mixer of choice despite a tough market backdrop
Fever-Tree's revenue declined by 6% in the UK to £50.9m, as the wider
On-Trade channel remained challenged, with poor weather and a soft Gin
category impacting performance. Despite these difficult conditions, Fever-Tree
performed well relative to the category, and remains the clear number one
mixer brand by value 3 (#_ftn3) , with a higher household penetration than
any other mixer brand 4 (#_ftn4) .
In the Off-Trade, Fever-Tree's sales were broadly flat year-on-year despite
declines in the wider mixer category. As a result, we gained c.0.7% value
share over the last year(3) as we continue to be the mixer of choice for
consumers. The brand also remains the clear leader of the premium segment,
with a rate of sale roughly seven times faster than any other premium brand
on-shelf(3).
Despite a challenging On-Trade environment over the last few years, Fever-Tree
remains the largest brand by value across all mixer sub-categories 5 (#_ftn5)
, highlighting the strength of the brand for multiple drinking occasions. This
is particularly important as consumer preferences continue to evolve and
ensures Fever-Tree is best placed to offer solutions across the most popular
serves for bars, pubs and restaurants.
Innovation remains central to the brand and is supporting our growth beyond
Tonics in both the On- and Off-Trade. Rum, Vodka and Tequila have been the
spirit categories gaining the most share over recent years 6 (#_ftn6) , and
have guided our new product development towards Flavoured Sodas, Cocktail
Mixers, as well as driving growth of our well-established Gingers.
Consequently, while our Tonics remain our best-selling product, our non-Tonic
categories are gaining share and driving growth, increasing their sales value
by approximately 10% during the first half of 2024 and gaining c.3.6
percentage points of value share 7 (#_ftn7) . One of the most exciting parts
of our innovation beyond Tonics has been the introduction of our new cocktail
mixers last year, which have gained good distribution at UK retail and are
encouraging younger consumers to discover and purchase the brand to create
more exciting drinks at home.
Our marketing programmes in the UK have focused on demonstrating the
versatility of the brand and how our range of mixers can be used with various
spirits, or on their own. Cocktail mixers were showcased as part of an
out-of-home campaign, highlighting the simplicity of creating a perfect
cocktail, and we continue to use radio, podcasts and social media channels to
ensure the brand remains top of mind for different social occasions.
Europe I Depletions ahead of sell-in as Fever-Tree continues to grow market share
The Fever-Tree brand declined by 12% (a 10% decline at constant currency).
This result was impacted by the phasing of distributor orders, with depletions
in market c.1% up year-on-year; a more representative reflection of our
underlying performance in a region which was impacted by poor weather in the
second quarter.
The On-Trade was particularly impacted by the weather, as well as low consumer
confidence. However, Fever-Tree continues to gain distribution, positioning
the brand well for the longer-term, as we expand our range to ensure we are
offering accounts the opportunity to mix with Ginger Beer, Pink Grapefruit, as
well as our range of flavoured Tonics and Sodas.
In the Off-Trade, Fever-Tree remains the number one premium mixer and
continues to gain value share to drive premiumisation across Europe. The brand
gained 1.6% value share within the premium mixer category, with significant
gains in Southern Europe, particularly France, and the Nordics 8 (#_ftn8) .
The brand is gaining distribution through a broad range of products as we
continue to diversify. Key wins in the first half of this year included gains
in Pink Grapefruit, and our Mojito and Margarita cocktail mixers. We have
supported these launches through press engagement and co-promotions with Vodka
and Tequila brands, with a focus on creating excitement around the Paloma
serve.
And while Tonics remain the majority of our sales, our Ginger Beer is growing
at pace, with 19% sales growth year-on-year in the first half of the year, 14%
ahead of the market(8) as we extend our lead of this category and encourage
its growing popularity, both as a mixer and as an adult soft drink.
In addition, the introduction of our Pink Grapefruit and Ginger Beer in 250ml
cans in Benelux and Switzerland has presented new opportunities to sell the
brand across more occasions and in more locations, with dedicated Fever-Tree
branded fridges increasing the brand's visibility as an on-the-go option at
petrol stations, in convenience stores, and at airports.
RoW I Strong growth following Australian subsidiary set-up last year
The Group increased sales in the Rest of the World region by 56% (57% at
constant currency) to £14.9m, delivering good underlying growth whilst
lapping the inventory buy-back in Australia during the transition to our new
subsidiary set-up last year.
We have spent the last year building our capabilities in Australia across all
key channels, with a focus on marketing, sales and distribution. This has
enabled the team to strengthen relationships with our customers, reset
activation plans and accelerate the brand's progress in the market. In
addition, we are on track to begin local production at the start of 2025,
reducing lead times, inventory holdings and logistics costs in market.
Fever-Tree is growing ahead of the mixer category in Australia. The brand grew
retail sales by 9% in the first half of the year, with significant growth from
our Sodas and Ginger Ale. Fever-Tree gained value share in every core mixer
category and now has c.17% value share of the total mixer category at grocery,
and more than 80% value share of the premium category 9 (#_ftn9) .
Another key market within the Rest of World region is Canada, where the brand
is becoming more well-known and well-distributed across the country,
increasing our household penetration by 30% year-on-year 10 (#_ftn10) ,
despite a tough backdrop as consumers are being more cautious with their
discretionary spend. Fever-Tree has also continued to grow ahead of the
competition and now has more than 30% value share in both Tonic and Ginger
Beer categories 11 (#_ftn11) .
The brand continues to make good progress in a number of other markets within
the Rest of World, particularly in Japan through our distribution partnership
with Asahi Breweries, as well as through our work with the high-end On-Trade
and spirit partners across Asia more broadly.
Sustainability Update
The Group has continued to make good progress across its sustainability
initiatives in the first six months of 2024. Notably, we have conducted a
global carbon footprint analysis and are excited to be developing our first
net zero roadmap during the second half of the year. In addition, as part of
our "Communities branch", we have updated our Human Rights Charter, engaging
directly with priority ingredients supply chains on human rights and
responsible sourcing practices. We have also made great strides within our DEI
agenda as part of our Colleagues branch, rolling out new events, training and
employee resource groups to better support our fantastic team.
Financial Review
The Group has made good progress in driving margin recovery and improvements
in operating cash flow in the first half of 2024.
Due to its global footprint and glass-led product mix the Group was
disproportionally affected across 2022 and 2023 by the impact of elevated
global shipping rates, and increased European energy costs on glass bottle
pricing, alongside the wider impact of inflationary pressures across all cost
categories. During that period, the Group took a number of proactive measures
to mitigate those headwinds and to ensure it had an appropriately robust
operational platform for the growth ahead. The re-tendering of UK and European
glass bottle requirements, the contracting of improved trans-Atlantic shipping
rates, a focus on driving efficiencies across our network, and pricing actions
in key markets have combined to deliver a 520 basis point improvement in gross
margin to 35.9% in the first half of 2024 (H1 2023: 30.7%). Operational
efficiency and optimisation initiatives are on-going and we expect to deliver
further improvements in gross margin in the second half of 2024 and into
2025.
Alongside gross margin improvements, the Group has maintained investment
behind the brand, with stable levels of operational expenditure contributing
to a 79% increase in EBITDA to £18.2m (H1 2023: £10.2m) at a margin of 10.5%
(H1 2023: 5.8%). Whilst working capital has increased compared to the first
half of 2023, it has reduced since December 2023, reflecting the collection of
elevated receivables and reductions in inventory levels as we start to
leverage our new technology platform. As a result, we have seen a return to
positive cash flow, with cash generated from operations of £25.4m, 140% of
adjusted EBITDA (H1 2023: -£5.6m; -54% of adjusted EBITDA). The Balance
Sheet remains strong and the Board is recommending an interim dividend of 5.85
pence per share, an increase of 2% year-on-year.
£m H1 FY24 H1 FY23 Change
Fever-Tree Brand Revenue 170.6 170.0 0%
Fever-Tree Group Revenue 172.9 175.6 (2)%
Gross profit 62.0 53.8 +15%
Gross margin 35.9% 30.7% 520bps
Adjusted EBITDA 18.2 10.2 +79%
Adjusted EBITDA margin 10.5% 5.8% 470bps
Operating profit 12.2 0.6
Profit before tax 13.2 1.4
Cash 65.9 75.8 (13)%
Gross Margin
Gross margin of 35.9% represents a significant improvement on the 30.7% gross
margin reported in the first half of 2023. This was in line with expectations
following proactive steps taken by the Group including the re-tender of UK and
European glass supply, contracting of improved trans-Atlantic freight rates
and pricing actions taken with customers across regions. The first half of the
year included the unwinding of the opening Balance Sheet, which held inventory
at 2023 costs, to the income statement. As such we will see further recovery
in gross margin in the second half as we recognise a full period of the
improved 2024 product and logistics costs.
We continue to focus on margin improvement initiatives, building a strong,
resilient operational platform to deliver further margin recovery in 2025 and
to underpin profitable growth over the medium term. Over the second half of
this year we are bringing new UK canning capacity on-line and we will be
commissioning local Australian production in early 2025. We are also working
to optimise our existing production footprint, working with our primary UK
bottling partner to reduce complexity and increase run size.
We remain committed to building our local US bottling footprint over time and
have made good progress with our new East Coast bottling partner. We are
also continuing to identify procurement opportunities across our cost base and
have worked with our glass partners to secure appropriate levels of energy
hedging for 2025. Finally, our technology programme is helping to identify
and drive further efficiency, cost saving and working capital improvements as
we look forward.
Operating Expenditure
Underlying operating expenses of £43.8m were broadly flat compared to the
first half of 2023 (H1 2023: £43.6m) increasing marginally as a percentage of
Group revenue to 25.3% (H1 2023: 24.9%).
Our marketing spend in the first half of the year was 9.6% of Fever-Tree brand
revenue (H1 2023: 9.9%) as we continue to invest behind the brand. Staff
costs and other overheads increased marginally by 2.0%, reflecting limited
increases to headcount since the establishment of the Australian subsidiary in
2023.
The recovery in gross margin, coupled with broadly flat operating expenditure,
has resulted in an improved adjusted EBITDA margin of 10.5% (H1 2023: 5.8%).
As a result, the Group generated an adjusted EBITDA of £18.2m, a 79% increase
compared to the first half of 2023 (H1 2023: £10.2m).
Depreciation marginally reduced to £3.2m (H1 2023: £3.3m), offset by a
marginal increase in amortisation to £1.0m (H1 2023: £0.8m). Share-based
payments reduced to £1.8m (H1 2023: £2.2m) reflecting a valuation adjustment
based on the achievability of certain long term incentive plan targets. The
prior period included a £3.3m provision made against quarantined US inventory
disclosed as an exceptional item.
As a result of these movements, adjusted EBITDA of £18.2m translates to
operating profit of £12.2m (H1 2023: £0.6m).
Tax
The effective tax rate in H1 is 42%, reflecting an adjustment to the corporate
tax asset relating to years prior to 2023. Excluding this adjustment, the H1
effective tax rate is 25% (H1 2023: 22.0%).
Earnings Per Share
The basic earnings per share for the period are 6.51 pence (H1 2023: 0.94
pence) and the diluted earnings per share for the period are 6.49 pence (H1
2023: 0.94 pence), an increase of 590%.
In order to compare earnings per share period on period, earnings have been
adjusted to exclude amortisation, exceptional items and the UK statutory tax
rates have been applied (disregarding other tax adjusting items). On this
basis, normalised basic earnings per share for the first half of 2024 are 7.37
pence (H1 2023: 3.52 pence), an increase of 109%.
Balance Sheet and Working Capital
Working capital of £96.3m (H1 2023: £89.4m), representing 26.7% of the last
twelve months' revenue, is marginally elevated compared to the first half of
2023 (H1 2023: 24.9%). Inventory levels have reduced by 20% compared to H1
2023, reflecting efficiencies delivered following the implementation of our
global operations technology programme, as well as the lower cost of goods
held compared to 2023, most notably in glass. However, this improvement has
been offset by a 26% reduction in trade payables, reflecting production
phasing alongside the lower cost of goods this year.
Whilst working capital levels are marginally elevated compared to H1 2023,
they have improved since year end (FY 2023: 28.5%), following the collection
of the elevated level of trade receivables held at December 2023, and we
expect to see further improvement in working capital as we proceed through the
year.
The improvement in working capital since December 2023, alongside the 79%
increase in adjusted EBITDA in the first half of the year has driven strong
cash generation from operations of £25.4m, 140% of adjusted EBITDA (H1 2023:
-£5.6m; -54% of adjusted EBITDA). An improving working capital profile,
alongside an improving adjusted EBITDA margin will continue to drive strong
operating cash flow conversion in the second half of the year.
Cash and Dividend
The Group returned to positive cash growth in the first half of 2024 and
retains a cash position of £65.9m.
As a reflection of our continued confidence in the financial strength of the
Group the Directors are pleased to declare an interim dividend of 5.85 pence
per share, 2% ahead of the 2023 interim dividend. The dividend will be paid on
18 October 2024, to shareholders on the register on 27 September 2024.
Our strong Balance Sheet imparts a competitive advantage over many of our
premium mixer competitors globally. It provides the platform to remain agile
and invest behind opportunities as they arise whilst allowing the Group to
focus on making the correct strategic choices for the long-term health of the
Fever-Tree brand and success of the business.
The Group's capital allocation framework remains unchanged. We intend to
retain sufficient cash to allow for significant investment against the
opportunity ahead and primarily foresee this investment taking the form of
operational expenditure, including upweighted marketing spend across our
growth regions at the appropriate stage. Whilst not a priority or an essential
component of the Group's plans, we also remain vigilant with regards to
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, as demonstrated
historically by the payment of a £50m special dividend in 2022. As such,
considering the Board's confidence in on-going margin improvement and strong
cash generation, the Group anticipates being in a position to return surplus
cash to shareholders in 2025 and will announce full details of this at the
full year results.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
Notes Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
£m £m £m
Revenue 2 172.9 175.6 364.4
Cost of sales (110.9) (121.8) (247.4)
Gross profit 62.0 53.8 117.0
Administrative expenses (49.8) (49.9) (96.2)
Adjusted EBITDA 1 18.2 10.2 30.5
Depreciation (3.2) (3.3) (6.3)
Amortisation (1.0) (0.8) (1.7)
Share based payment charges (1.8) (2.2) (1.7)
Operating profit before exceptional items 12.2 3.9 20.8
Exceptional items - (3.3) -
Operating profit after exceptional items 12.2 0.6 20.8
Finance costs
Finance income 1.3 1.1 2.0
Finance expense (0.3) (0.3) (0.6)
Profit before tax 13.2 1.4 22.2
Tax expense (5.6) (0.3) (6.8)
Profit for the period / year 7.6 1.1 15.4
Items that may be reclassified to profit or loss
Foreign currency translation difference of foreign operations (0.6) (1.2) -
Effective portion of cash flow hedges (0.1) 1.1 0.3
Related tax - - -
(0.7) (0.1) 0.3
Comprehensive income attributable to equity holders of the parent company 6.9 1.0 15.7
Consolidated Statement of Comprehensive Income (continued)
For the six months ended 30 June 2024
Earnings per share for profit attributable to the owners of the parent during
the year
Basic (pence) 4 6.51 0.94 13.20
Diluted (pence) 4 6.49 0.94 13.18
Consolidated Statement of Financial Position
As at 30 June 2024
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£m £m £m
Non-current assets
Property, plant & equipment 22.6 24.0 23.7
Intangible assets 60.1 54.1 58.2
Deferred tax asset 1.8 1.6 1.7
Other financial assets 4.0 - 4.3
Total non-current assets 88.5 79.7 87.9
Current assets
Inventories 59.9 75.6 67.6
Trade and other receivables 81.7 75.7 91.5
Derivative financial instruments - 1.4 0.6
Corporation tax asset 0.8 0.8 6.2
Cash and cash equivalents 65.9 75.8 59.9
Total current assets 208.3 229.3 225.8
Total assets 296.8 309.0 313.7
Current liabilities
Trade and other payables (45.3) (61.8) (55.3)
Derivative financial instruments (0.7) - -
Corporation tax liability (1.2) - (3.4)
Lease liabilities (3.5) (3.4) (2.1)
Total current liabilities (50.7) (65.2) (60.8)
Non-current liabilities
Other payables - - (0.3)
Deferred tax liability (3.0) (1.5) (3.0)
Lease liabilities (10.1) (12.7) (11.8)
Total non-current liabilities (13.1) (14.2) (15.1)
Total liabilities (63.8) (79.4) (75.9)
Net assets 233.0 229.6 237.8
Equity attributable to equity holders of the company
Share capital 0.3 0.3 0.3
Share premium 54.8 54.8 54.8
Capital redemption reserve 0.1 0.1 0.1
Cash flow hedge reserve (0.1) - (0.2)
Translation reserve (2.1) (1.5) (0.3)
Retained earnings 180.0 175.9 183.1
Total equity 233.0 229.6 237.8
Consolidated Statement of Cash Flows
For the six months ended 30 June 2024
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
£m £m £m
Operating activities
Profit before tax 13.2 1.4 22.2
Finance expense 0.3 0.3 0.6
Finance income (1.3) (1.1) (2.0)
Depreciation of property, plant & equipment 3.2 3.3 6.3
Amortisation of intangible assets 1.0 0.8 1.7
Share based payments 1.8 2.2 1.7
Non-cash movements on working capital 1.5 3.5 -
Increase in impairment losses on receivables and inventories net of recoveries - - 0.5
Net exchange difference - - 3.2
Exceptional items - 3.3 -
19.7 13.7 34.2
Decrease/(Increase) in trade and other receivables 12.1 (2.4) (22.3)
Decrease/(Increase) in inventories 6.4 (25.9) (10.0)
(Decrease)/ Increase in trade and other payables (14.2) 11.7 4.8
Decrease/(Increase) in derivative asset/liability 1.4 (2.7) (2.1)
5.7 (19.3) (29.6)
Cash generated from / (used in) operations 25.4 (5.6) 4.6
Income tax paid (1.2) (0.6) (8.4)
Net cash flows from / (used in) operating activities 24.2 (6.2) (3.8)
Investing activities
Purchase of property, plant and equipment (2.1) (1.1) (2.6)
Interest received 1.3 1.1 2.0
Investment in intangible assets (3.0) (1.8) (7.0)
Net cash used in investing activities (3.8) (1.8) (7.6)
Financing activities
Interest paid - (0.1) (0.1)
Dividends paid (12.7) (12.4) (19.1)
Payment of lease liabilities (1.9) (1.7) (4.0)
Net cash used in financing activities (14.6) (14.2) (23.2)
Net increase/ (decrease) in cash and cash equivalents 5.8 (22.2) (34.6)
Cash and cash equivalents at beginning of period 59.9 95.3 95.3
Effect of movement in exchange rates on cash held 0.2 2.7 (0.8)
Cash and cash equivalents at end of period 65.9 75.8 59.9
Notes to the Consolidated Financial Information
For the six months ended 30 June 2024
1. Basis of preparation and accounting policies
The principal accounting policies adopted in the preparation of the interim
financial information are unchanged from those applied in the Group's
financial statements for the year ended 31 December 2023 which had been
prepared in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006. The accounting policies
applied herein are consistent with those expected to be applied in the
financial statements for the year ended 31 December 2023.
This report is not prepared in accordance with IAS 34. The financial
information does not constitute statutory accounts within the meaning of
section 435 of the Companies Act 2006. Statutory accounts for Fevertree Drinks
plc for the year ended 31 December 2023 have been delivered to the Registrar
of Companies. The auditor's report on those accounts was unqualified, did not
draw attention to any matters by way of emphasis and did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
Adjusted EBITDA has been used throughout the interim financial information.
The Group believes adjusted EBITDA to be a key indicator of underlying
operational performance, adjusting operating profit for several non-cash
items. As a consequence of these adjustments, the Group believes that adjusted
EBITDA represents normalised corporate profits. Adjusted EBITDA for the period
is operating profit of £12.2m before depreciation of £3.2m, amortisation of
£1.0m and share based payment charges of £1.8m. Adjusted EBITDA is an
appropriate measure since it represents to users a normalised, comparable
operating profit, excluding the effects of the accounting estimates 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. Adjusted
EBITDA is not intended to be a substitute for metrics determined in accordance
with International Financial Reporting Standards.
On-going macroeconomic and geopolitical volatility that resulted in
considerably high input costs have been reflected in the Directors' assessment
of the going concern basis of preparation. This has been considered by
modelling the impact on the Group's cashflow for the period to the end of
December 2025. In completing this exercise, the Directors established there
were no plausible scenarios that would result in the Group no longer
continuing as a going concern.
The Directors have concluded that the Group has adequate resources to continue
in operational existence for at least the 12 months following the publication
of the interim financial statements, that it is appropriate to continue to
adopt the going concern basis of preparation in the financial statements, that
there is not a material uncertainty in relation to going concern and that
there is no significant judgement involved in making that assessment.
Notes to the Consolidated Financial Information (continued)
For the six months ended 30 June 2024
2. Revenue by region
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
£m £m £m
United Kingdom 50.9 53.8 114.8
United States of America 60.3 56.1 117.0
Europe 46.8 56.1 105.4
Rest of the World 14.9 9.6 27.2
Group 172.9 175.6 364.4
3. Dividend
The interim dividend of 5.85 pence per share will be paid on 18 October 2024
to shareholders on the register on 27 September 2024.
4. Earnings per share
Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
£m £m £m
Profit
Profit used to calculate basic and diluted EPS 7.6 1.1 15.4
Number of shares
Weighted average number of shares for the purpose of basic earnings per share 116,727,468 116,605,028 116,632,907
Weighted average number of employee share options outstanding 297,133 192,288 197,351
Weighted average number of shares for the purpose of diluted earnings per 117,024,601 116,797,316 116,830,258
share
Basic earnings per share (pence) 6.51 0.94 13.20
Diluted earnings per share (pence) 6.49 0.94 13.18
4. Earnings per share (continued)
Normalised EPS Unaudited 6 months to 30 June 2024 Unaudited 6 months to 30 June 2023 Audited year to 31 December 2023
£m £m £m
Profit
Reported profit before tax 13.2 1.4 22.2
Add back:
Amortisation 1.0 0.8 1.7
Exceptional items - 3.3 -
Adjusted profit before tax 14.2 5.5 23.9
Tax - assume standard rate (25%) (5.6) (1.4) (6.0)
Normalised earnings 8.6 4.1 17.9
Number of shares 116,727,468 116,605,028 116,632,907
Normalised earnings per share (pence) 7.37 3.52 15.37
Normalised EPS is an APM in which earnings have been adjusted to exclude
amortisation and the UK statutory tax rates in force at the interim financial
statements date 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. As this is an APM, this may not be comparable to other
companies.
1 (#_ftnref1) Adjusted EBITDA is earnings before interest, tax,
depreciation, amortisation, share based payment charges, exceptional items and
finance costs
2 (#_ftnref2) Nielsen 26 weeks to 15 June 2024
3 (#_ftnref3) IRI 52 weeks to 7 July
4 (#_ftnref4) Kantar 52 weeks to 9 June 2024
5 (#_ftnref5) CGA MAT to 15 June 2024
6 (#_ftnref6) CGA to H1 to 15 June 2024 & Nielsen MAT to 16 Jun 24
7 (#_ftnref7) IRI H1 to 30 June 2024
8 (#_ftnref8) H1 2024 Nielsen top 12 EU markets (BE, NL, FR, SP, IT, AT, CH,
DK, ROI, NO, SE, DE)
9 (#_ftnref9) Australian retail sanner data
10 (#_ftnref10) Nielsen IQ panel 2024
11 (#_ftnref11) Nielsen 52 weeks to June 2024
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