Fevertree Drinks : 2023 Interim Results Statement

12th September 2023

Fevertree Drinks plc

FY23 Interim Results to 30 June 2023

This announcement contains inside information

FY23 Interim Highlights

• Revenue growth of 9% year-on-year, with a standout performance in the US of +40% growth (+32% constant currency) which is now the Group's largest region by revenue contribution.
• Strong market share performance globally, achieving our highest ever market share by value in the UK.
• 670 bps reduction in gross margin is in-line with our expectations, driven by product cost headwinds, partially offset by efficiency projects.
• Adjusted EBITDA margin of 5.8% reflects the lower gross margin and phasing of overheads, maintaining our strategy of investing for growth. We therefore expect to drive an improvement in the second half of the year.
• £3.3m exceptional item relating to a production issue in the US. The issue did not impact customer relationships or our ability to supply the market.
• Recommending an interim dividend of 5.74 pence per share, an increase of 2% year-on-year.

£m	H1 FY23	H1 FY22	Change
Revenue
UK	53.8	53.5	1%
US	56.1	40.1	40%
Europe Fever-Tree brand revenue	50.5	46.5	9%
Europe total*	56.1	52.3	7%
ROW	9.6	15.0	(36)%
Total*	175.6	160.9	9%
Gross profit	53.8	60.1	(11)%
Gross margin	30.7%	37.4%	(670)bps
Adjusted EBITDA1	10.2	22.0	(54)%
Adjusted EBITDA margin	5.8%	13.6%	(780)bps
Diluted EPS (pence per share)	1.20	12.08	(90)%
Dividend (pence per share)	5.74	5.63	2%
Cash	75.8	100.0	(24)%

*includes GDP's portfolio brands

Strategic highlights

• Very strong revenue growth in the US across all categories, extending our leadership position in Tonic Water and Ginger Beer, with continued positive contribution from our product innovation.
• Fever-Treeextended its clear market leadership in the UK with its highest ever value share and encouraging initial performance from our range of cocktail mixers and adult soft drinks.
• Many of the Group's European markets performed well against strong comparators, growing our leadership position to two thirds of the premium mixer category across the region.
• First half revenue for ROW region reflects a one-off inventory buy-back as part of the transition to our new subsidiary set-up in Australia, positioning us to further drive the opportunity ahead in that market.

1Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment charges, exceptional items and finance costs

12th September 2023

• Good progress on key operational initiatives and softening inflationary headwinds underpins our confidence in significant year-on-year margin recovery in 2024.

Outlook and guidance

Whilst we expect to deliver continued good growth in FY23, most notably in the US, our sales performance since period-end has been impacted by the unseasonably poor weather in the UK which has subdued the wider category over the key summer trading period. Therefore, alongside the impact of the inventory buyback in Australia, we now expect to deliver FY23 revenue of between £380m to £390m.

We are making good progress with the mitigation of inflationary cost challenges and are reiterating our gross margin guidance of 31% to 33% for FY23. We remain committed to investing in the substantial future opportunity for the brand across our regions and expect overheads to be in the range £88m to £92m resulting in FY23 EBITDA guidance range of c.£30m to £36m.

Looking ahead to 2024, due to a combination of softening inflationary headwinds and the benefit of the actions we are taking this year, we are confident of delivering significant margin improvement, setting up the Group for strong, profitable growth going forward. Reflecting the momentum in our key growth regions, we are comfortable with current market revenue growth rate expectations for 2024 and expect to deliver an improved FY24 EBITDA margin of c.15%, which is ahead of current market expectations.

Tim Warrillow, CEO of Fever-Tree, commented:

"Fever-Tree delivered good revenue growth in the first half of 2023. We had a standout performance in the US where the brand continues to go from strength to strength, extending our leadership position in the Tonic and Ginger Beer categories. This reflects how well established the brand is becoming in the world's largest premium spirit market.

In the UK, despite the challenging macro-economic conditions, we ended the first half with our highest ever value share of 45%, which is over 50% higher than our nearest competitor. I have been hugely encouraged by the response to our new innovation, specifically our range of cocktail mixers and adult soft drinks, as shown by the significant and growing listings across both channels. Our European business is growing in depth and breadth and the recent step changes we have made in our route to market across Australia, Canada and Japan reflect the growing potential we see in our Rest of World region.

Whilst the vagaries of the British summer weather have impacted sales since period end, contributing to our revised guidance for the full year, the Group still expects to deliver good growth in the reminder of 2023. Looking ahead to 2024, with a stronger global market position than ever before, a broader product portfolio and our confidence in delivering significant margin improvement, the Group is well set up for strong, profitable growth going forward."

There will be live audio webcast on Tuesday 12th September 2023 at 10:00am BST. The webcast can be accessed via:

Fever-Tree FY23 Interim Results webcast

For more information please contact:

Investor queries

Ann Hyams, Director of Investor Relations I [e-mail] [phone]

Media queries

Oliver Winters, Director of Communications I [e-mail] [phone]

Nominated Advisor and Broker - Investec Bank plc

David Flin I Alex Wright I [phone]

Corporate Broker - Morgan Stanley & Co, International plc

12th September 2023

Andrew Foster I Jessica Pauley I [phone]

Financial PR advisers - FGS Global

Faeth Birch [phone]; Anjali Unnikrishnan [phone]

This announcement contains inside information. The person responsible for arranging the release of

this announcement on behalf of the Company is Andy Branchflower, CFO

				12th September 2023
Strategic update
£m	H1 FY23	H1 FY22	change	constant currency change
Revenue
UK	53.8	53.5	1%
US	56.1	40.1	40%	32%
Europe Fever-Tree brand revenue	50.5	46.5	9%	5%
Europe total*	56.1	52.3	7%	4%
ROW	9.6	15.0	(36)%	(35)%
Total*	175.6	160.9	9%	6%

Fever-Tree delivered revenue of £175.6m, an increase of 9% year-on-year, with particularly strong growth in the US driven by continued distribution gains and innovation. Whilst our UK sales have been impacted since period end by the effects of the unseasonably poor weather on the wider category, the first half saw the brand continue to grow its market share and deliver very encouraging early signs from the launch of our range of cocktail mixers as well as increasing distribution of our adult soft drinks. Good momentum continues in Europe, and whilst the Rest of World revenue was impacted by the one-off inventory buyback as part of the change in distribution model in Australia, this is not reflective of underlying performance or the confidence we have in the region moving forward.

As well as our focus on topline growth, we are continuing to take proactive steps to mitigate cost headwinds and drive efficiencies. As previously announced, whilst we are experiencing significant margin dilution in the current year, most notably due to materially elevated glass costs, we are confident that we will see margin improvement in the second half and are reiterating our gross margin guidance for the full year. Furthermore, the steps we are taking this year, alongside softening inflationary headwinds, will ensure that we drive material margin improvement in 2024.

We have recognised a £3.3 million exceptional cost in the first half results which relates to issues during US production which arose towards the end of the first half. This was ring-fenced to specific production batches and has not impacted customer relationships or our ability to supply the market. Going forward, we are confident that our US supply chain strategy is robust with appropriate flexibility and contingencies in place.

We are very pleased with our underlying strategic performance. Innovation remains the cornerstone of the brand and is driving growth across all our regions. Adult soft drinks are gaining distribution and starting to contribute to total growth in the UK, cocktail mixers are showing positive signs following their launch in the UK and US earlier this year, and Blood Orange Ginger Beer has been our fastest growing new product since its US launch in Autumn 2022, extending the category into exciting new flavours. We continue to evolve our route to market to capture current and future growth markets. Over the past twelve months we have announced the set-up of our own subsidiary operation in Australia and new distribution partnerships in Japan and Canada.

The Group has continued to make good progress across its sustainability initiatives in the first six months of 2023. We have finalised our UK product carbon footprint for 2022 which has shown a reduction in both absolute and per litre emissions, reflecting our on-going focus on reducing the impact our products have on the environment throughout our supply chain.

2023 also marks the tenth year of our partnership with Malaria No More UK. The fight against malaria remains at the very heart of the Fever-Tree brand given the role quinine plays in anti-malaria medication and the fact many of the communities where Fever-Tree sources its ingredients also experience the devastating effects of malaria. We are proud to have supported the incredible work undertaken by Malaria No More UK for a decade and are focused on sponsoring initiatives that are making a difference to those communities most impacted by the disease.

UK I Broadening the portfolio and extending our leadership of the mixer category

Fever-Tree delivered UK revenue of £53.8m in the first half of the year, an increase of 1% year-on- year, driven by a slight increase in On-Trade revenue and flat Off-Trade revenue. Despite the

12th September 2023

challenging macro-economic environment, crucially, we have extended our clear leadership position of the UK mixer category, with c.45% value share across the On- and Off-Trade combined, over twenty times the nearest premium mixer brand, and over 50% higher than Schweppes2.

Fever-Tree is outperforming the mixer market in the On-Trade, growing value share by more than 5% since 2019 to over 53%3 of the total On-Trade mixer value, our highest ever share. As the number one mixer brand in the UK, Fever-Tree is best placed to capitalise on continued spirit category growth and premiumisation, and we are increasingly engaging with spirits companies through co- promotions across a greater number of spirit and mixer occasions, with our broad, diversifying portfolio.

In the Off-Trade,Fever-Tree's sales were flat year-on-year as we lapped tough comparators during the first quarter. The brand has maintained its number one value share position, c.1% ahead of Schweppes and significantly ahead of the next largest premium brand4. In fact, Fever-Tree now accounts for over 90% of total premium mixer sales in the Off-Trade5, highlighting our strong position in this category.

Over the last year we have extended into two exciting adjacent categories. Firstly, adult soft drinks, where we have established over 9,000 points of distribution at UK retail, delivering value growth of 55% in the first half of the year5 as we outperform established brands to grow our share within the category.

The first half of the year also saw the launch of our range of cocktail mixers. The initial response has been highly encouraging and we have already secured over 3,000 points of distribution across Tesco, Sainsbury's, Waitrose, as well as a good presence on Ocado, and a significant number of listings with some of our largest On-Trade customers, including Mitchells & Butlers and Young's.

US I Innovation and distribution gains driving growth

Fever-Tree's revenue for the first half of the year increased by 40% to £56.1m (+32% at constant currency). The brand's strong growth has been driven by gains across all categories and we have extended our number one position in the Tonic Water and Ginger Beer categories in the first half of the year.

Fever-Tree is seeing strong growth in the On-Trade, which is now back, post-COVID, to almost 20% of total US sales. The brand continues to win new mandates and distribution across hotels, dining, sports and nightlife venues, contributing to a 21% increase in our number of On-Trade accounts as we extend our position as the premium mixer of choice in this channel.

Fever-Tree also performed well in the Off-Trade during the first half of the year. Our retail sales increased by 23% year-on-year and by 200% over the last four years, compared to 20196. Value growth is being driven by Tonic and Ginger Beer in absolute terms, as we outpace these two categories, as well as being the fastest growing Grapefruit and Club Soda brand. Consequently, we continue to gain share of the total mixer category, extending our position as the clear premium market leader and driving category growth.

Our multiple drinks strategy has driven our innovation agenda and this remains a critical part of our US growth as we leverage our consumer insights to ensure we are creating mixers to elevate everyday drinking experiences with fast-growing, premiumising spirits. The launches of both our Sparkling Sicilian Lemonade, aimed at Bourbon and Vodka occasions, as well as our Blood Orange Ginger Beer to extend this popular mixer category, have demonstrated the power of our unique approach to innovation.

1. IRI 52 Wks to 09/07/2023; CGA MAT to 17/06/2023
2. CGA
3. IRI 13 weeks to 09/07/2023
4. IRI YTD to 09/07/2023

6 Nielsen 26 weeks to 17 June 2023