Fevertree Drinks : Annual Report and Notice of Annual General Meeting 2020

ANNUAL REPORT AND ACCOUNTS

for the year ended 31 December 2020

OUR

PURPOSE

OUR CULTURE

FEVER-TREE WAS FOUNDED ON THE BELIEF THAT THERE HAD TO BE A BETTER WAY, TO NOT COMPROMISE OR ACCEPT THE STATUS QUO.

OUR CULTURE CONTINUES TO BE FOSTERED BY

THE ENTREPRENEURIAL VALUES OF THE GROUP'S

CO-FOUNDERS, ENABLING ALL OUR TEAM,

REGARDLESS OF LOCATION, DEPARTMENT OR

LEVEL, TO MAKE A REAL DIFFERENCE TO THE

BUSINESS AND, IN DOING SO, GROW TO THEIR

FULL POTENTIAL WITHIN THE COMPANY AND BE

PART OF ITS ONGOING SUCCESS.

#1 GLOBAL PREMIUM MIXER BRAND

FAVOURABLE MARKET

HIGHLY DIVERSIFIED IN

RESILIENCE DURING

SUSTAINABLE AND

TRENDS DRIVING

GEOGRAPHY, CHANNEL

UNCERTAINTY

AGILE BUSINESS MODEL

PREMIUMISATION AND

MIX AND PRODUCTS

LONG MIXED DRINKS

Read more in The Global

Read more in Fever-Tree

Read more in

Read more in Our

Opportunity Ahead

At A Glance

Our Key Strengths

Pioneering Approach

on page 12 to 13

on pages 6 to 7

on page 2

on pages 14 to 15

FEVER-TREE DRINKS PLC / OVERVIEW

This remains central to everything Fever-Tree does. Whether it be going to the
ends of the ear th for the highest quality ingredients, continuing to innovate in		CONTENTS
terms of our products and packaging, challenging ourselves to make a meaningful
difference in the fight against climate change or how we build direct, sustainable
relationships throughout our supply chain, we want our approach to have a positive		OVERVIEW
impact, inspiring and engaging our colleagues, our par tners and our consumers in		Highlights	1
the pursuit of the best.
		Our Key Strengths	2
							Resilience during uncertainty case study 4
							Fever-Tree at a glance	6
							Chairman's statement	8
		HIGHLIGHTS			STRATEGIC REPORT	14
				Our Pioneering Approach
							The Global Oppor tunity Ahead	12
							Our Strategy	16
		FINANCIAL			Strategy in action case study	18
			Chief Executive's Review	20
		REVENUE	ADJUSTED EBITDA		Sustainability Review	26
		£252.1M	£57.0M		Sustainability case study	34
							Financial Review	36
		(2019: £260.5m)		(2019: £77.0m)		S.172 and Stakeholder Engagement	41
							Principal Risks and Uncer tainties	46
		CASH
					GOVERNANCE
		£143.1M
				Board of Directors	54
			Corporate Governance
		(2019: £128.3m)			Statement	56
							Audit Committee Repor t	59
			Read more in Financial			Nomination Committee Repor t	63
			Remuneration Committee Repor t	64
			Review on pages 36 to 40
							Directors' Repor t	77
		OPER ATIONAL			Statement of Directors'
				Responsibilities	79
		BOTTLES SOLD	CANS SOLD		FINANCIAL STATEMENTS
		370M	176M		Independent Auditor's Repor t	82
							Consolidated Statement
							of Profit or Loss and Other
							Comprehensive Income	88
							Consolidated Statement
							of Financial Position	89
							Consolidated Statement
							of Changes in Equity	90
							Consolidated Statement
							of Cash Flows	91
							Notes to the Consolidated
							Financial Statements	92
							Company Statement of
							Financial Position	118
							Company Statement of
							Changes in Equity	119
							Notes to the Company
							Financial Statements	120
		Footnote: Analysis on pages 1 to 77 of this front end of the Annual Report		OTHER INFORMATION
		refers to adjusted EBITDA.The Group believes adjusted EBITDA to be a key		Company Information	124
		indicator of underlying operational performance, adjusting operating profit for
		certain accounting estimates and non-cash items and is an important metric		Notice of Annual General Meeting	125
		for the Group's various stakeholders. Adjusted EBITDA for the year ended 31
		December 2020 is operating profit of £51.3m before depreciation of £2.7m,		Notice of Annual General Meeting -
		amortisation of £1.1m and share-based payment charges of £1.9m. Adjusted		Explanatory Notes	128
		EBITDA is an appropriate measure since it represents a normalised, comparable
		profit, excluding the effect of accounting estimates and non-cash items.
							Stock code: FEVR	01

Annual Report and Financial Statements for the year ended 31 December 2020

OUR KEY STRENGTHS

1

AWARD-WINNING, HIGHEST QUALITY PRODUCTS WITH GLOBALLY SOURCED INGREDIENTS AND PREMIUM PROVENANCE

• We use only the highest quality ingredients in our products, sourced from around the world.
• In our effor ts to source these ingredients we spend time with the growers to fully understand how local climates and growing techniques affect the ingredients and contribute to their flavour.
• This approach has allowed us to forge long- standing relationships with our suppliers, creating a clear differentiator from Fever-Tree'smass-market competition and is key to our product quality and brand image.
• For quality and environmental considerations, Fever-Tree drinks are not sold in plastic bottles.

3

PROVEN INNOVATION TRACK RECORD

• Innovation is - and has always been - at the hear t of our brand and business.
• We remain the pioneers, continuing to lead the way within premium mixers, creating original and exciting products for unrivalled drinking experiences and meeting the evolving needs of our consumers around the world.
• Alongside new flavours and ranges, we continue to evolve our format mix to reflect changing purchasing behaviour, such as the successful introduction of the 15x150ml can pack in the UK during the year.

5

DIVERSIFIED OPERATIONS

• We are a globally diversified business selling in over 75 countries globally.
• Notwithstanding the impact of the pandemic on our On-Trade sales, our revenue, and global oppor tunity ahead, is well diversified across geographies, channels, customers and products.

2

A STRONG DISTINCTIVE BRAND WITH FIRST MOVER ADVANTAGE AHEAD OF SIGNIFICANT GLOBAL OPPORTUNITY

• Fever-Treeis the leading premium mixer brand internationally.
• The brand has been voted the no.1 best-selling and no.1 trending tonic water for the seventh year running by the world's best bars in Drinks International's Annual Brand Repor t.
• Fever-Treewas the first mover and innovator of the global premium mixer category, which enriches the brand's authenticity and attractiveness to the industry's leading bar tenders and trade influencers.

4

SCALABLE AND AGILE BUSINESS MODEL

• Our largely outsourced business model, underpinned by strong, well-established relationships with suppliers, bottlers and distributors, allows for scalability and operational flexibility whilst maintaining the highest quality control, without the requirement for major capital commitment.
• We continue to increase our footprint of outsourced production and manufacturers with seven different par tners across the UK and Europe, and we commenced production with our new US bottling par tner in December 2020.

6

STRONG FINANCIAL POSITION

• We ended 2020 in a strong financial position; debt- free, with £143.1m of cash on the balance sheet.
• This robust platform underpins our ability to continue to invest and make strategic progress despite the uncer tainty seen in 2020.

02 www.fever-tree.com

FEVER-TREE DRINKS PLC / OVERVIEW

Stock code: FEVR	03