Fevertree Drinks (FEVR) H2 2024 earnings summary

Executive summary

• Achieved 4% constant currency growth in 2024, with strong U.S. and Rest of World performance, and resilience in Europe and the U.K. despite challenging conditions.

• Entered a transformational partnership with Molson Coors in the U.S., expected to drive significant revenue growth, operational efficiencies, and brand reach, with guaranteed U.S. profits and lower working capital requirements.

• Expanded share buyback program to GBP 100 million for the year, reflecting strong cash generation and balance sheet strength.

• Continued to diversify product portfolio, with non-tonic products now comprising almost 30% of U.K. sales and a strong innovation pipeline across alcoholic and non-alcoholic categories.

• Maintains #1 premium mixer brand globally, with strong innovation and distribution capabilities.

Financial highlights

• FY24 brand revenue reached £364.0m, up 4% at constant currency; total group revenue was £368.5m, up 3% at constant currency.

• Adjusted EBITDA increased by 66% year-over-year to £50.7m (margin 13.7%, +530bps YoY), driven by margin recovery and operational improvements.

• Gross profit rose 18% to £138.4m, with gross margin improving to 37.5% (+540bps YoY) due to lower glass and freight costs, pricing actions, and procurement efficiencies.

• Operating cash flow conversion reached 150%, resulting in a 60% increase in net cash to GBP 96 million.

• Incurred GBP 5 million in exceptional costs, mainly related to U.S. bottler exit and advisory fees for the Molson Coors deal.

Outlook and guidance

• 2025 guidance: low single-digit group revenue growth, with short-term EBITDA impact due to U.S. transition.

• 2026: double-digit group revenue and EBITDA growth expected as U.S. marketing spend normalizes.

• From 2027, uplift in group revenue and EBITDA anticipated as Molson Coors partnership benefits are fully realized, with guaranteed profit element for 2026–2030.

• Non-U.S. business expected to deliver further gross margin improvement in 2025, targeting a 200 basis point increase.

• Potential U.S. tariffs could impact 2025–2026, but expected to be mitigated from 2027 via local production and profit guarantees.