TIDMFEVR
RNS Number : 8775O
Fevertree Drinks PLC
04 June 2020
June 4(th) , 2020
Fever-Tree Drinks plc
AGM STATEMENT & COVID-19 UPDATE
Fever-Tree, the world's leading supplier of premium carbonated
mixers, is holding its Annual General Meeting ("AGM") today at
11.30am BST.
At the AGM, Bill Ronald, Chairman of Fever-Tree, will make the
following statement:
"As highlighted at the Group's preliminary results in April,
although we have been impacted by the COVID-19 crisis, we are well
positioned to manage our way through the current situation. We have
a fantastic team across the globe who have been working incredibly
hard alongside our key customers, suppliers and distribution
partners. Our asset light business model continues to support our
secure financial position with a FY19 net cash position of GBP128
million and we benefit from a strong brand portfolio with
well-balanced revenue streams across regions, channels and
customers.
While the On-Trade remains fully or partially closed across many
of our regions, the Group's performance across the Off-Trade
continues to be very encouraging. Management remain focused on
delivering our long-term strategy and we are confident the Group
will be well placed once the current period of uncertainty
ends."
COVID-19 Update
UK
On-Trade sales typically represent 50% of UK revenue and
continue to be severely impacted by the lockdown. Conversely, our
Off-Trade performance has been strong. Sales in the first full
month of lockdown were up 24%(1) year-on-year and we have seen
continued positive momentum since, reflecting increased at home
consumption during the period. The core tonic range has performed
particularly well, and there has also been notable growth in the
convenience channel as consumers increasingly supplement or
substitute their trips to large grocery stores.
US
The US market is naturally weighted to the Off-Trade, which
typically contributes 70% to the Group's US revenue. Since the
start of lockdown, while On-Trade sales have been severely
impacted, Off-Trade sales have grown extremely strongly. Nielsen
data, which covers just under half of Fever-Tree's Off-Trade sales
in the US, reported 98%(2) growth year-on-year for the four weeks
to 18(th) April and 96%(2) in the four weeks to the 16(th) May.
Whilst this performance reflects the benefit of incremental
distribution that was secured over the course of H2 2019, along
with increased at-home consumption during lockdown, it also
highlights the growing strength of the Fever-Tree brand, supported
by the continued trend towards premium, long drinks. In addition,
the Group's US pricing and format optimisation has been very well
received by distributors and retailers, with implementation
beginning to be seen on-shelf between March and June 2020.
Europe
The impacts from COVID-19 have varied across countries within
Europe. While Northern Europe is naturally weighted to the
Off-Trade and has therefore been more robust, Southern Europe is
more reliant on the On-Trade, causing it to be more significantly
affected. However, we remain confident in building our momentum in
this region over the medium and long-term as premiumisation
continues to gain traction. Fever-Tree is the only premium brand
with scale across the entire region, with a category leading
position in many markets.
ROW
While On-Trade challenges have also been evident across the ROW,
we are delivering strong Off-Trade sales and continued distribution
gains, most notably in Australia and Canada.
Operations and Employees
Our unique asset light, outsourced business model has provided
the Group with the flexibility to react to the challenges that
COVID-19 presents. We continue to work closely with our suppliers,
partners and customers across our supply chain and although there
have been some challenges, we continue to maintain continuity of
production and supply, as well as the quality of our products.
Fever-Tree continues to support and provide job certainty to all
our employees, as well as supporting key workers and the
communities in which we operate. We have not furloughed any of our
employees regardless of their role and the team remains focused on
identifying opportunities that will put us in a strong position as
we look to 2021 and beyond. We are also continuing to work closely
with our On-Trade partners across our regions, offering support and
assistance where relevant as they prepare to re-open.
FY20 outlook
Given the uncertainty and dynamic nature of the situation, it
continues to be hard to predict how sales will evolve both during
and as we emerge from the lockdown period. The easing of
restrictions and the pace at which the On-Trade re-opens will vary
between regions, but it is becoming increasingly likely that this
process will be gradual and cautious, with social distancing
measures remaining in place for some time.
As highlighted at the Group's preliminary results in April,
COVID-19 will have a material impact on FY20 trading, with
headwinds on gross margin due to changes in channel and territory
mix . However, we remain committed to continuing to invest through
this period of uncertainty as opportunities arise, particularly in
marketing, enabled by the Group's strong balance sheet and
conviction in our ability to deliver long-term sustainable
growth.
For more information please contact:
Investor queries
Ann Hyams, Director of Investor Relations I
ann.hyams@fever-tree.com I +44 (0)7435 828 138
Nominated Advisor and Joint Broker - Numis Securities
Garry Levin I Matt Lewis I Hugo Rubinstein I +44 (0)20 7260
1000
Joint Broker - Investec Bank plc
David Flin I Alex Wright I David Anderson I +44 (0)20 7597
5970
Media queries
Oliver Winters, Director of Communications I
oliver.winters@fever-tree.com I +44 (0)770 332 9024
Brunswick Group I fevertree@brunswickgroup.com I +44 (0) 207 404
5959
(1) IRI 4 weeks ending 19 April 2020; (2) Nielsen 4 weeks ending
18(th) April & 16(th) May
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END
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