FDBusiness.com

Fever-Tree, the UK-based supplier of premium carbonated mixers, has reported a 10% increase in revenue to £260.5 million for the year ended 31 December 2019, driven largely by strong US growth. However, adjusted EBITDA declined by 2% to £77.0 million compared to the outcome in 2018, reflecting ongoing investment for future growth, and profit after tax fell by 5% to £58.5 million. The gross profit margin slipped from 51.8% in 2018 to 50.5% during the past year.

Despite a highly competitive UK market, Fever-Tree retained its category leadership in both the on- and off-trade channels. The company also increased its geographic spread during 2019, with a very positive performance in key growth markets including the US, Germany, Australia and Canada.

Further operational capability was added in the US as Fever-Tree signed its key first bottling partner in the region. During 2019, Fever-Tree continued to invest behind the brand for the longer term, most notably in its growth regions.

Tim Warrillow, co-founder and chief executive of Fever-Tree, comments: “The group delivered good growth in 2019 despite a more subdued UK market, with double-digit growth across our international regions. We strengthened our global leadership position and in doing so continued to build a strong platform to deliver long term, sustainable growth. We made a solid start to the new financial year, with group trading in the first two months in line with the board’s expectations. The US in particular started the year strongly and we have been encouraged by the response from our key customers to the US price optimisation.”

The scale and impact of COVID-19 crisis is posing some significant challenges for Fever-Tree across its regions in the current financial year. “While we will not be unaffected by the current situation, especially in the on-trade, Fever-Tree is well positioned to manage our way through this situation. We are a global business with revenue diversified across regions, channels and customers,” he explains.

Tim Warrillow elaborates: “Financially the group is very secure. We are debt free, with a strong cash position. The group’s unique asset light, outsourced business model means we have a low fixed cost base, a small, dedicated team and the flexibility to manage the current challenges. The wider long-term trend towards premium spirits and premium long mixed drinks continues and we are confident the group will be well placed once the current period of disruption and uncertainty ends.”