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Fever-Tree celebrates ‘exceptional’ FY results
Premium tonic and mixer brand Fever-Tree has hailed an “exceptional year of growth” in 2016 after its operating profits more than doubled to reach £34.3 million (US$42.7m).
In its preliminary results for 2016, Fever-Tree saw its full-year revenues grow 73% to hit £102.2 million, thanks to “strong” sales growth across all regions, channels and flavours.
Overall, the group’s growth was bolstered by improving margins, helped by advantageous foreign exchange movements, with adjusted EBITDA increasing by 97% to £35.8m.
Diluted earnings per share climbed to 23.70 pence from 11.48 pence. A final dividend of 4.71 pence per share was recommended to shareholders, bringing the total dividend to 6.25 pence per share.
The firm outlined a “particularly notable” performance in its established UK market, where revenues increased by 118%, having been boosted by 124% growth in the second half of the year thanks to a “strong” Christmas period.
Fever-Tree noted “exceptional” results in the UK off-trade, driven by “consistently strong growth” across principal retail customers Waitrose, Tesco and Sainsbury’s, and new retailer, Asda. The launch of the 150ml can format in June 2015 – now listed on EasyJet and expanded across the entire British Airways fleet – represented 33% of sales in the sector. In total, Fever-Tree drove 92% of the value growth in the entire UK mixer category within retail in 2016.
Sales in the on-trade, where 54% of UK revenue is generated, also grew “strongly” in 2016, driven by an increasing distribution footprint, combined with underlying rate of sale growth spurred by the premium gin and tonic movement.
Sales were up 39% across Continental Europe in 2016, representing 24% on a constant currency basis, adjusting for the strengthening Euro,
despite “tough comparators” following a number of significant new retail listings in 2015. Fever-Tree hailed “notable growth” in key Western European countries, including Italy, Germany and Austria.
The group saw revenue growth of 55% in the US – adjusted to 36% for the US dollar – while sales to countries within the RoW region grew by 88%, with key territories Australia and Canada both increasing by more than 100% in 2016.
“2016 has been another exceptional year of growth for Fever-Tree, with strong results achieved across all regions, channels and flavours, emphasising the global appeal of the Fever-Tree brand,” said Tim Warrillow, Fever-Tree co-founder and CEO.
“As the pioneer and market leader of the premium mixer category, in both market share and reputation, our quality, award winning range of products continues to help drive the momentum towards premiumisation and simple long drink mixability that is transforming both the spirits and mixer categories worldwide.”
As part of the update, executive deputy chairman Charles Rolls has announced his intention to transition to non-executive deputy chairman at the AGM in May 2017.
Commenting on the transition, Warrillow said: “As co-founder of Fever-Tree, Charles’ support and advice will continue to be invaluable to the company.
“We have an excellent and growing team in place and I personally look forward to continuing to work with Charles as we further build on the success of the brand that we created together 14 years ago.”
Looking to 2017, Fever-Tree will add to its existing dark spirit mixing range. According to the group, gin accounts for 6% of the global premium spirits category, while the dark spirits category accounts for 60%.
“We believe that an exciting opportunity exists to work alongside the premium spirits brands to reinvigorate the dark spirits category, in much the same way we approached the gin category over ten years ago,” said Warrillow.
“We have had an encouraging start to 2017 and remain confident that we are increasingly well positioned to deliver further growth across the business.”