Fevertree Posts Mixed FY25 Results Amid US Transition and Diversification Push

Fevertree FY25: steady brand growth, near‑term profit drag, and a bigger bet on the US

Fevertree Drinks has posted a mixed set of FY25 prelims. Brand revenue edged up at constant currency, diversification gathered pace, and the US transition to Molson Coors held its underlying momentum. Profitability, however, stepped back as the new US model bedded in and an environmental levy provision weighed on earnings. Management says expectations for 2026 remain “unchanged and in line with market expectations”.

Key numbers investors should know

Metric	FY25	FY24	Change
Adjusted Fever-Tree brand revenue (CC)	£372.7m	£364.0m	+4%
Total adjusted revenue	£375.3m	£368.5m	+3%
Adjusted EBITDA	£42.4m	£50.7m	-16%
Adjusted EBITDA margin	11.3%	13.7%	-240 bps
Diluted EPS	18.62p	20.85p	-11%
Normalised EPS	24.12p	28.01p	-14%
Cash	£91.1m	£96.0m	-5%
Total dividend	17.31p	16.97p	+2%

Note: “Constant currency” strips out FX moves. “Adjusted EBITDA” is operating profit before non-cash items, exceptional costs and certain adjustments.

Regional performance: where growth came from

United States – growth maintained as the new model kicks in

US revenue grew 6% at constant currency to £131.9m, despite the operational handover to Molson Coors. The brand is now embedded across about 400 regional distributors, retail sales and value share gains were maintained, and management plans to upweight US marketing through 2026.

Profitability took a short-term hit as expected: US adjusted EBITDA fell to £8.2m (margin 6.3% vs 14.4% last year). The drag reflects transition costs and the new profit-sharing model. Most US product is currently produced in the UK, which exposes the P&L to tariffs until production is onshored over the medium term.

United Kingdom – softer On-Trade, better H2 in supermarkets

UK revenue slipped 2% to £108.4m, but performance improved in H2. Off-Trade (ie supermarkets and retail) grew 5% in H2 and 2% for the full year, with “beyond tonic” lines up 16% as consumers increasingly buy Fevertree as a premium soft drink too. On-Trade (bars and restaurants) was tough all year: revenue fell 9% amid higher costs, duty increases and weaker spirits volumes, especially gin.

Europe and Rest of World – steady gains and ginger beer strength

• Europe: +2% at constant currency, led by France and Benelux. Ginger Beer delivered double-digit growth and reinforced category leadership.
• Rest of World: +22% at constant currency, helped by Australia, New Zealand and Canada. Local production in Australia aided efficiency and service levels.

Diversification is working: 45% of revenue now beyond tonic

Fevertree’s long‑stated push beyond tonic is now meaningful, with 45% of Group revenue from non‑tonic products. Ginger Beer is the poster child: the company says it is now the largest global ginger beer brand by value, with category leadership in the US and growing traction in Europe. Its appeal spans alcoholic serves, cocktails and as a standalone premium soft drink – exactly the versatility management is trying to replicate across the range.

Innovation also ticked up: two non‑alcoholic ready‑to‑drink cans launched in the UK (a Gin & Tonic and an Italian Spritz), a new Lemon, Lime and Bitters is in development for Australia with Angostura, and the “Signature G&T” initiative in bars aims to protect the classic gin and tonic occasion at a more accessible price point.

Margins and the EPR levy: why EBITDA fell

Adjusted EBITDA declined 16% to £42.4m, with margin down 240 bps to 11.3%. Two big factors:

• US transition effect – the shift to a partnership and royalty model means Fevertree now recognises a share of US profits rather than the full operating margin. Short-term transition inefficiencies and higher marketing also weighed.
• EPR provision – adjusted EBITDA includes a £4.4m cost for the UK’s Extended Producer Responsibility levy. £1.6m relates to Off‑Trade glass. A further £2.8m provision covers On‑Trade glass formats after the Environment Agency challenged Fevertree’s view that these should be exempt as non‑household packaging. Fevertree has launched a legal challenge. Excluding the £2.8m post‑period provision, adjusted EBITDA would have been £45.2m, in line with prior guidance.

Positively, the Rest of Group margin improved to 23.6% (from 22.4%), showing underlying operational progress even as central costs rose to £23.2m due to staff and inflationary pressures.

Accounting change in the US: understanding the new look P&L

Under the Molson Coors partnership, US activity now sits in Molson Coors’ financials. Fevertree recognises a royalty linked to US sales plus sales of finished goods/ingredients to Molson Coors at cost. That is why statutory Group revenue fell to £325.0m from £368.5m even though underlying adjusted revenue rose. The company now presents “Adjusted Revenue” and splits profitability between a US segment and a Rest of Group segment to stay comparable with history.

The trade‑off is clear: a lower reported margin in the short term for a wider, more scalable US platform in the medium term, especially once US production is onshored to remove tariff friction and unlock scale benefits.

Cash generation, buybacks and dividends: signalling confidence

Working capital improved sharply to 16.7% of adjusted revenue (from 20.3%), helped by transferring US inventory and receivables to Molson Coors. Cash generated from operations was £36.8m (86.2% of adjusted EBITDA), a figure that does not fully capture the working capital transfer benefit due to how the sale of Fevertree USA Inc. was structured.

Shareholder returns were punchy: a £100m buyback was completed in 2025 (12,033,912 shares at an average £8.31), and a further £30m buyback is underway for 2026. The total dividend is up 2% to 17.31p, with a proposed final dividend of 11.34p, underlining confidence in cash generation.

Management tone and 2026 outlook

Despite a “challenging” backdrop, the outlook message is steady: expectations for 2026 are unchanged and aligned with market expectations. The plan is to lean into the US opportunity with higher marketing, continue broadening the portfolio beyond tonic, and keep building leadership in premium mixers and premium soft drinks.

My take: what’s good, what’s not, and what to watch

Positives

• Underlying brand momentum – adjusted revenue up 4% at constant currency, accelerating to +5% in H2, with share gains across regions.
• Diversification gaining real scale – 45% of revenue beyond tonic, with Ginger Beer delivering double‑digit growth and category leadership.
• US platform in place – 400 distributors, retail sales and value share gains maintained through the transition.
• Capital discipline – improved working capital, strong cash, £100m buyback completed and another £30m in progress, plus a higher dividend.

Negatives

• Profitability dip – adjusted EBITDA down 16% and US margin compressed to 6.3% due to transition costs and profit‑sharing.
• UK On‑Trade still difficult – On‑Trade revenue down 9%, reflecting sector‑wide pressures and softer gin demand.
• EPR uncertainty – a £2.8m provision has been booked for potential On‑Trade glass obligations, pending the legal challenge.

Watch list for 2026

• US onshoring timetable – removing tariff drag is a clear margin lever for the medium term.
• Marketing ROI in the US – spend is set to build; evidence of faster top‑line growth would be a strong validator.
• EPR outcome – a favourable ruling would reverse the £2.8m provision; an adverse one would crystallise the cost.
• UK channel mix – can Off‑Trade and beyond‑tonic growth offset ongoing On‑Trade softness?
• Working capital trajectory – further gains are guided as the Molson Coors model settles.

Bottom line

Fevertree delivered what you would expect in a transition year: solid brand growth and stronger H2 momentum, offset by a mechanical squeeze on margins from a new US model and one‑off costs. The prize is a bigger, more scalable US business, a broader product set with genuine consumer pull, and the cash generation to fund both investment and shareholder returns. With guidance “comfortable” for 2026, execution on US marketing and production onshoring will be the main catalysts to watch.