Highland Spring Group: Annual Results to 31 December 2020

Company reports resilient business performance during pandemic year demonstrating strength of brand and category

Blackford 8th October 2021: Highland Spring Group, the UK’s leading producer of natural source waters, has posted its annual results for year end to 31 December 2020. The business demonstrated resilience during 2020 and extended its position as the UK’s leading natural source water brand, against the challenging backdrop of COVID-19.

Despite overall sales volumes being negatively impacted by the pandemic, strong consumer demand for healthy hydration, as many shifted to working and socialising from home, as well as cuts in non-essential expenditure, enabled a return to a small operating profit in 2020 from continuing operations to be achieved. New products including Highland Spring flavoured cans, and a 10L hydration pack, have been successfully launched to market in response to evolving consumer trends. The ability to innovate and change pack sizes to meet these different consumer needs was testament to all at Highland Spring Group, as operations staff continued to work safely on COVID-secure sites and office-based staff adapted to remote working.

The steps taken by the business to improve operational efficiencies and reduce overhead costs through restructuring the Group has positively impacted operating profit in 2020 and is expected to do so again in 2021.

As a result, during 2020, the Group was proud that with a modest sales volume decline of around 9 million litres against a larger relative market decline, the brand performed well to retain and extend its position as the UK’s No. 1 plain bottled water brand with a healthy market share of 10.3%. Annual sales of the Highland Spring brand are over 330m litres, with Highland Spring Group’s share of the total UK Bottled Water market at 15.0%.

Environmental sustainability remains at the heart of all business activities. The Group will be carbon neutral by the end of 2021, (Scope 1 & 2 market based emissions) and will achieve their overall target of net zero emissions by 2040. The business will continue to drive forward its long-term strategy to invest in and develop innovative products which provide healthy hydration in an environmentally sustainable way, to reflect the markets projected annual growth, which according to Zenith, is expected to accelerate from 2022 to 2024.

Commenting on the annual results, Les Montgomery, Chief Executive, Highland Spring Group, said:

“Our focus in the last 12-18 months has been on protecting our employees and ensuring the long- term sustainability of the business. It is great testament to the commitment and dedication of all our staff that they adapted so well and continued to deliver strong performances.

Despite the challenges of 2020, the business has remained resilient in the face of the pandemic, and we are currently in recruitment mode to ensure we have the rights skills to meet demand as the country moves forward to a different way of life. After 36 years with Highland Spring Group, I recently announced my retirement as Chief Executive and will take up a non-Executive position in the New Year, and I would like to wish our new Joint Managing Directors, Simon Oldham and Mark Steven all the very best as they navigate the post-COVID landscape. I have full confidence that our business will continue to grow under their leadership, and through our long-term approach of continuing to promote the provenance of our portfolio, category leading expertise, focus on environmental sustainability and overall value.”