INTERIM RESULTS PERIOD ENDED 30 th JUNE 2016 Charles Rolls – Co-founder and Executive Deputy Chairman Tim Warrillow – Co-founder and CEO Andrew Branchflower – Finance Director
HIGHLIGHTS Momentum continued from 2015, exceptional growth in H1 2016 Net revenue and growth by region – H1 16 £m H1 16 H1 15 Growth Growth Revenue 40.6 24.1 69% 108% Growth Gross profit 22.3 12.1 83% 42% Gross margin 54.8% 50.5% Growth 59% EBITDA 12.4 7.2 72% EBITDA margin 30.7% 30.0% Growth 73% Continuing to deliver to strategy • Strong growth across the regions, particularly UK • Improved gross margins through forex upside and • continuation of H2 15 operational efficiencies No notable change in competitive landscape • • Robust balance sheet with net cash of £18.6m at year end • Interim dividend of 1.54 pence per share
REGIONAL HIGHLIGHTS Regional highlights (i) • 39% of total revenue generated in UK • Growth of 108% • 57% of revenue is generated in On-Trade. Increased footprint to 10k outlets; strategic focus on partnership with key wholesalers • Notable growth in the Off-Trade, however, tougher comparatives in UK H2 16. New distribution wins in period, notably Asda in May16, and continued impressive rate of sale growth • 150ml can has performed particularly well since launch in June15, 24% of Off-Trade sales mix in H1 16. March16 airline listing with Easyjet and expanded to full fleet at British Airways from July16 • 33% of total revenue generated in Continental Europe • Growth of 42% across region aided by strengthening Euro; 33% growth on a like for like basis Continental • Continued impressive sales growth in Western Europe driven by the Europe premium gin and tonic trend gaining momentum across the region • Significant retail listings from 2015 are performing well with some additional new listings in H1 16
REGIONAL HIGHLIGHTS Regional highlights (ii) • 23% of total revenue generated in USA • Growth of 59%, aided by strong USD; like for like growth of 46% • Continued strong Ginger Beer and Tonic flavours growth, both are USA 40% of sales mix and growing at 60% • 2015 retail listings performing well, with further new listings and range extensions achieved in H1 16 • 5% of total revenue generated in RoW region • Growth of 73% RoW • Key territories remain Australia, Canada and Colombia • No new territories added in H1 16
FINANCIAL REVIEW Income statement (i) – Overview £m H1 16 H1 15 Growth Revenue of £40.6m • Revenue 40.6 24.1 69% Growth of 69% on H1 15 Gross profit 22.3 12.1 83% Gross profit margin of 54.8 % • Gross margin 54.8% 50.5% Vs 50.5% in H1 15 EBITDA* 12.4 7.2 72% EBITDA of £12.4m at a margin of • EBITDA margin 30.7% 30.0% 30.7% Net revenue split by region – H1 16 Vs 30.0% in H1 15 RoW 5% USA UK 23% 39% Continental Europe 33%
FINANCIAL REVIEW Income statement (ii) – Forex : like for like analysis Reported Like-for-Like £m H1 16 H1 15 Growth H1 16 Growth Revenue 40.6 24.1 69% 39.0 62% Gross profit 22.3 12.1 83% 20.9 72% Gross margin 54.8% 50.5% 53.5% EBITDA 12.4 7.2 72% 12.4 72% EBITDA margin 30.7% 30.0% 31.9% • Revenue of £40.6m • EBITDA of £12.4m at a margin of 30.7% FX upside as Euro has strengthened by 7% Reported operating expenses include a £1.4m and Dollar has strengthened by 8% on unrealised loss on outstanding forward average across H1 16 contracts Additional £1.6m of revenue generated due On a like-for-like basis EBITDA margin in H1 16 to FX upside, without which growth would is 31.9% have been 62% • Gross profit margin of 54.8% On a like for like basis, H1 16 GP% is 53.5%, this underlying improvement vs H1 15 is a continuation of the from product cost and logistics efficiencies in H2 15
FINANCIAL REVIEW Income statement (iii) – Other costs Finance expenses Reported • £m H1 16 H1 15 Bank debt refinanced in Jan16 resulting in reduced finance expense going forward EBITDA 12.4 7.2 Depreciation (0.1) <(0.1) LTIP Charges • Amortisation (0.4) (0.4) It is expected that these will build going forward following May16 LTIP grants LTIP charges (0.1) <(0.1) • EPS and dividend Operating profit 11.9 6.8 Basic EPS of 8.18 pence in H1 16, growth Finance expenses (0.1) (0.2) of 83% on H1 15 Profit before Tax 11.8 6.6 Interim dividend of 1.54 pence per share Tax (2.4) (1.4) Profit after Tax 9.4 5.2 Basic EPS (pence) 8.18 4.48
FINANCIAL REVIEW Balance Sheet Cash flow £m H1 16 H1 15 £m H1 16 H1 15 PPE 0.8 0.4 EBITDA 12.4 7.2 Intangibles 43.5 44.2 Working Capital mvmt (0.6) (1.3) Stock 5.9 5.4 Operating Cash flow 11.8 6.0 Receivables 20.4 10.8 Conversion 95% 82% Derivatives (1.4) 0.4 Tax (1.8) (0.8) Cash 24.7 14.0 Capital expenditure (0.3) (0.2) Bank loan interest and (0.1) (0.3) Creditors (10.7) (7.0) repayment Corporation tax (2.3) (1.4) Dividends paid (2.6) (0.3) Gross debt (6.1) (6.1) Net Cash flow 7.0 4.4 Deferred tax (2.5) (2.6) Operating Cash flow conversion of 95% • Net Assets 72.3 58.1 Working capital profile at end June less consistent Net cash of £18.6m • than at year end Expected that operating cash flow conversion will Cash of £24.7m offset by £6.1m of gross revert towards historic levels by year end debt
STRATEGIC CONSIDERATIONS • Strengthening premiumisation and mixability trends Capitalising on • Co-promotional activity market trends Strengthening • Appointment of new importers in Spain, Netherlands distribution in and Singapore existing markets • On-going review of international distribution and expanding partners into new markets • Primary bottling partner’s investment in new site to double capacity Outsourced • Flexibility in model – bottling/canning across four locations business model in UK and Europe • Currently reviewing international bottling opportunities and logistics solutions • New bespoke embossed bottle New product • Aromatic Tonic launch in June16 development • Launch of Clementine Tonic with Sergio Herman in Belgium • Launch of 150ml Elderflower can in UK
SUMMARY & OUTLOOK Continued strong performance driven by implementation of core strategy • Revenue & EBITDA growth underpinned by robust margins, both on a reported • and constant currency basis • Momentum in all four main regions Significant growth opportunities remain in both On & Off Trade • Board confident of outlook for 2016 and beyond •
APPENDIX Introduction • Key strengths •
INTRODUCTION TO FEVER-TREE Launched by Charles Rolls and Tim Warrillow in • 2005 Simple premise: • A significant and long term growth in premium spirits Not matched by any premium offering in mixers category Fever-Tree was launched at ideal moment to provide a quality mixer range to fill the vacuum The world’s leading premium mixer brand with • 135 million bottles sold in 2015 Now in over 55 countries worldwide, with 65% of • sales overseas “No brand commands its category like Fever-Tree. Its grip on the world’s best bars has only tightened since last year” Drinks International 2016 Brands Report
KEY STRENGTHS Market leading • First mover advantage brand with • Leading premium mixer brand around international reach the world Clearly • Ingredients, taste, packaging and story differentiated • Acclaimed product proposition premium product Proven business • Scalable outsourced business model model and • Strong founder-led management team management team • Global mixer market in early stages of Significant growth premiumisation opportunities • Potential addressable market of approx £1.6bn RSV (EY, 2014) Growth underpinned by • Higher cash and % margin for the trade strong margins and spirits partners throughout value chain
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