Bottles of Fever-Tree mixers on sale in Los Angeles, California, United States, 6 February 2020. Credit: The Image Party / Shutterstock

Fever-Tree today (25 January) reported a 6% rise in annual revenues, a level of growth below the guidance the UK mixers business set out in September.

In a trading update ahead of the publication of Fever-Tree’s full financial results in March, the company posted 2023 revenue of £364.4m ($464.1m), up 6% on a reported basis and at constant currencies.

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However, Australia and markets in Europe, “most notably” Germany, weighed on Fever-Tree’s top line, which compared to the group’s September guidance of £380-390m.

Fever-Tree did not disclose full profit figures but said it expects to record adjusted EBITDA of “circa £30m”. In September, the company forecast annual adjusted EBITDA of £30-36m. The consensus forecast among City analysts was £32m.

The group said its UK revenue was “ahead of guidance, reflecting good trading in Q4, particularly in the on-trade”.

It reported a 22% rise in revenue in the US, a market that became the company’s “largest region” in 2023, CEO Tim Warrillow said.

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In Europe, revenue generated from the Fever-Tree brand grew 6% but the company said its growth “was impacted by subdued consumer sentiment in several markets”, especially Germany.

Meanwhile, revenue from the company’s Rest of the World reporting region dropped 14% as the group changed its set-up in Australia.

Fever-Tree said the division was “in growth”, excluding Australia, where the move to a “new subsidiary set-up” led to a one-off “inventory buy-back” and hit sales.

Warrillow said: “The Fever-Tree brand has performed well in 2023, growing our market share in all of our key markets, despite a challenging macroeconomic environment. Despite recession in Germany impacting our European performance and the one-off effect of the transition to our new subsidiary in Australia, we remain confident of driving good growth in those regions in 2024.”

He added: “Importantly, we have driven a significant increase in our EBITDA margin in the second half of the year and are confident that the operational efficiencies we have implemented, alongside a reduction in inflationary cost pressures, will drive a doubling of EBITDA in 2024 and provide a strong platform for profitable growth going forward.”

Shares in Fever-Tree were down 1.19% at 1,000p at 10:20 GMT.

In a note to clients, Stifel analyst Mark Irvine-Fortescue said: “A lower base and non-brand restructuring means 2024 guidance implies a circa 7% downgrade to consensus revenue and circa 6% to EBITDA. We are ‘buy’ rated because we think margin headwinds are reversing and Fever-Tree no longer has to ‘shoot the lights out’ in the US to justify high near-term valuation multiples.”