23
April 2024
THG PLC
First quarter trading
statement for the period ended 31 March 2024
Group revenue growth
acceleration to +4.5% (Q4 2023: +1.1%)
Growth progression in each of
the past five consecutive quarters
Standout performance in THG
Beauty +11.1% (Q4 2023: +2.6%)
Q1
2024 Group Trading Performance
|
Q1 2024
|
£m
|
Q1
2024
|
YoY[1]
change
|
CCY[2]
change
|
THG Beauty
|
267.6
|
+9.3%
|
+11.1%
|
THG Nutrition
|
150.8
|
-9.0%
|
-5.8%
|
THG Ingenuity (external)
|
37.0
|
+4.1%
|
+5.9%
|
Group (continuing) revenue
|
455.4
|
+2.1%
|
+4.5%
|
Discontinued revenue[3]
|
4.5
|
-80.6%
|
-80.1%
|
Total revenue
|
459.9
|
-2.0%
|
+0.3%
|
|
|
|
|
THG Ingenuity internal revenue
|
112.6
|
-8.0%
|
-8.0%
|
THG Ingenuity total
|
149.6
|
-5.3%
|
-4.9%
|
|
All comparative figures are continuing CCY unless
otherwise stated.
·
|
Overall Group sales continued to
strengthen, with improvements made in each of the past five
consecutive quarters. Notable strong momentum in Beauty offsetting
continuing currency headwinds and previously announced rebrand
transition in Nutrition.
|
|
|
·
|
The strategic focus on higher-margin
sales through FY 2023 has been rewarded, with continuing revenue
growth of +4.5%, building on the +1.1% growth achieved in Q4
2023.
|
|
|
·
|
THG Beauty delivered a standout Q1
performance with growth of +11.1% (Q1 2023: -12.4%), following
targeted changes to geographic strategy through 2023, focusing on
more profitable customers and territories closest to our global
distribution hubs.
|
THG
Beauty Q1 highlights
Key Performance
Indicators
|
Q1
2023
|
Q1
2024
|
LTM
Q1 2024
|
YoY change
|
LTM
change
|
Continuing revenue (£m)
|
244.7
|
267.6
|
1,194.6
|
+9.3%
|
-0.5%
|
CCY growth
|
-12.4%
|
+11.1%
|
|
|
|
Active
customers[4],[5] (LTM) (m)
|
8.8
|
8.6
|
|
-2.8%
|
|
Total orders (LTM) (m)
|
16.9
|
17.0
|
|
+0.5%
|
|
Average order values (LTM)
(£)
|
64
|
63
|
|
-1.0%
|
|
·
|
Positive momentum continued into Q1
with all channels in growth. THG Beauty channels are comprised of
Retail (c.80% of revenue), own-brand (c.10%) and manufacturing
(c.10%).
|
|
|
·
|
Performance in the UK (over half of
online Beauty revenue) was notably strong, ahead of the overall
Beauty business at +11.1% growth.
|
|
|
·
|
App participation grew to 24% of
online revenue (Q1 2023: 15%), with particularly strong
participation in the UK at 35%. Increased app revenue participation
supports deeper relationships with our customers, providing
valuable first party data and lessening the reliance on paid
marketing channels.
|
|
|
·
|
THG Beauty further increased market
share in the UK total premium beauty market[6], and further enhanced its
fragrance credentials with 10 new brand launches.
|
|
|
·
|
Customer health remains robust with
active customer numbers back in growth (FY 2023: 8.5m), driven by
UK and MENA territories, largely reflecting the success of our
loyalty program which now has c.2.3m members, having launched in
2022.
|
|
|
·
|
Biossance was migrated onto the
Ingenuity platform in January. Early signs are positive and we are
confident that Biossance will scale to become one of our largest
own brands, with prominence in the US, both online and across major
retailers.
|
|
|
·
|
Manufacturing performance was robust
through Q1, delivering sales growth through a materially reduced
cost base following the savings initiatives completed in
2023.
|
THG
Nutrition Q1 highlights
Key Performance
Indicators
|
Q1
2023
|
Q1
2024
|
LTM
Q1 2024
|
YoY
change
|
LTM
change
|
Continuing revenue (£m)
|
165.7
|
150.8
|
643.0
|
-9.0%
|
-4.3%
|
CCY growth
|
+3.7%
|
-5.8%
|
|
|
|
Active customers (LTM) (m)
|
6.9
|
6.7
|
|
-2.8%
|
|
Total orders (LTM) (m)
|
13.0
|
12.6
|
|
-2.7%
|
|
Average order values (LTM)
(£)
|
51
|
48
|
|
-5.3%
|
|
·
|
Myprotein continues to be the
fastest growing sports nutrition brand across UK retailers with the
brand's Q1 retail GMV more than doubling YoY[7]. We extended distribution by over 1,000 stores in
Q1 with launches across sports nutrition and vitamins ranges in
Asda, Boots and Tesco taking UK retail doors to c.
5,000[8].
|
|
|
·
|
The Myprotein rebrand roll-out, the
biggest in its 20-year history, made good progress through Q1, with
c.40% of products available now under the new branding in the UK
and Europe. Early results from the rebrand are very promising, with
strong brand awareness growth in the UK, moving from 48% (Aug'23)
to 52% (Mar'24)[9], supported by the launch
of high-performance range 'Origin'. Elevating the brand in this way
will position it well for global offline and licensing
opportunities.
|
|
|
·
|
Q1 Nutrition revenue growth was held
back by a c.16% devaluation of the Japanese Yen YoY (15% of THG
Nutrition revenues), as well as expected availability gaps as the
product range transitions to the new branding.
|
|
|
·
|
Continued devaluation risk with the
Japanese Yen is being addressed with the launch of local
manufacturing in H2, as well as through licensing agreements, where
local partners recognise full revenue value and THG receives a
percentage as a royalty.
|
|
|
·
|
Local manufacturing in India
successfully launched in Q1, allowing products to be more quickly
tailored to the needs of the local market, while reducing lengthy
supply chains in the movement of goods from the UK to India. We
expect India to become a key market for Nutrition over the next
three years.
|
|
|
·
|
We further expanded our category
reach with Iceland and our UK licensing partnerships with
ready-to-drink (Jimmy's coffee) and chilled goods (Bakeaway).
Physical customer touchpoints supporting UK brand awareness now
includes c.1,500 retail doors via licensed products, enabling us to
enter new in-store locations.
|
|
|
·
|
Internationally, a physical presence
through c.20,000 stores across Europe, Japan and the US is expected
to help drive the mix of total GMV from brand sales towards 25%
offline over the medium-term.
|
|
|
·
|
The contribution from licensing partnerships improved THG
Nutrition's total GMV in Q1 2024 to -3.5%, with UK total brand
sales +6.2% YoY.
|
|
|
·
|
Overall customer numbers in growth
since December 2023, underpinned by the store channel performance
with online active customer numbers in-line with year-end, with
notable growth in UK, India and MENA.
|
THG
Ingenuity Q1 highlights
|
Q1 2024
|
£m
|
Q1
2024
|
YoY
change
|
CCY
change
|
External revenue
|
37.0
|
+4.1%
|
+5.9%
|
Internal revenue
|
112.6
|
-8.0%
|
-8.0%
|
Total THG Ingenuity
revenue
|
149.6
|
-5.3%
|
-4.9%
|
·
|
THG Ingenuity external revenue: Monthly recurring revenue[10]
continued to build in March at +26.3% YoY, an acceleration on
December (+14.7% YoY).
|
|
|
·
|
The first dispatches under the
Holland & Barrett partnership completed in March as part of an
eight week phased migration project, demonstrating speed and
accuracy of execution while maintaining full stock availability and
a full suite of delivery services.
|
|
|
·
|
During Q1 THG Ingenuity delivered
numerous contract wins, including a partnership with fashion and
lifestyle brand White Stuff on their brand re-launch into Germany.
Through a fully localised technology, digital marketing and
fulfilment strategy to better serve White Stuff's growing German
customer base, the relaunch delivered +75% YoY revenue growth
(Feb'23 to Feb'24).
|
|
|
·
|
Our fulfilment network is becoming
increasingly optimised through automation and AI to drive
best-in-class delivery and customer service (86% of THG brand
Trustpilot reviews rated 5* in Q1).
|
|
|
·
|
THG Ingenuity internal revenue: The Group implemented profitability improvement plans through
2022 and 2023, which included the discontinuation of non-profitable
categories in addition to the sale of OnDemand. As both Beauty and
Nutrition return to growth, internal revenue will also benefit,
albeit at a slower rate than external sales, given anticipated
volume of contract wins.
|
Outlook and guidance
·
|
Expectations for FY 2024 and
medium-term guidance remain unchanged from the FY 2023 Preliminary
results statement on 10 April 2024, with a continued focus on
revenue growth, margin progression and cash generation.
|
|
|
·
|
Group revenue growth in H1 is
anticipated to be in the range of +2.0% to +5.0% on a continuing
basis (-1.0% to +2.0% reported), moving towards high single digits
in the second half, reflective of the onboarding of new contracts
within Ingenuity, growth in offline sales within THG Nutrition and
full Myprotein rebrand product availability.
|
|
|
·
|
Following developments in the Middle
East, the Group continues to monitor the situation, with Israel
accounting for c. 1% of Group sales, weighted towards
Nutrition.
|
Matthew Moulding, CEO of THG commented:
"Following the Group's return to revenue growth in Q4 2023,
it's pleasing to report an acceleration in Q1, which is testament
to the hard work and dedication of our people, who've remained
focused on the task in hand despite the tough macro-economic
backdrop.
"It's also clear that the accelerated infrastructure
investments made during 2019-2022, specifically into our fulfilment
network and tech capabilities, are playing a significant part in
delivering competitive advantage. With this major capex program
behind us, these investments will continue delivering meaningful
savings, which accelerate further as new Ingenuity partners are
onboarded.
"The Q1 performance of our largest business THG Beauty, is
especially encouraging. The operating model changes made throughout
2023, including focusing on more profitable territories and
customers, temporarily impacted growth for much of last year,
however, since Q4, we are seeing tangible benefits from these
actions. This is reflected in THG Beauty's loyalty membership
reaching 2.3m people at the end of Q1, less than two years after
launch.
"Beauty delivered double digit growth in the quarter, with a
high-quality, loyal customer base bringing greater profitability
per order across a more efficient cost
base.
"Ingenuity, having pivoted towards larger, multi-service
partners, is now also seeing the benefits of its own model changes.
Another quarter of solid external revenue growth at +5.9%, is
underpinned by monthly recurring revenue growth of
+26.3%.
"The response to the Myprotein elevation rebrand has been
fantastic. While these changes naturally impact short term revenues
as old and new branded products are swapped out, the strong
positive response from online consumers and offline retail partners
alike underpins confidence once full product availability is
restored."
Analyst and Institutional investor
conference call
THG will today host a conference
call for analysts and institutional investors at 8:30am (UK time)
via the following link:
https://stream.brrmedia.co.uk/broadcast/6620e6b140524def7b49c88e
To ask questions, you must dial in
via conference line using the below details:
·
Confirmation password: THG Q1 Results
·
UK dial in: +44 (0) 33 0551 0200
· US
dial in: +1 786 697 3501
For
further information please contact:
Investor enquiries - THG PLC
|
|
|
Greg Feehely, SVP Investor
Relations
Kate Grimoldby, Director of Investor
Relations and Strategic Projects
|
Investor.Relations@thg.com
|
|
Media enquiries:
|
|
|
Powerscourt - Financial PR adviser
|
Tel: +44 (0) 20 7250 1446
|
|
Victoria Palmer-Moore/Nick
Dibden/Russ Lynch
|
thg@powerscourt-group.com
|
|
THG
PLC
Viki Tahmasebi
|
Viki.tahmasebi@thg.com
|
|
APPENDIX
Quarterly reported revenue growth rates
|
Q1 2022
|
Q2 2022
|
Q3 2022
|
Q4 2022
|
Q1 2023
|
Q2 2023
|
Q3 2023
|
Q4 2023
|
THG Beauty
|
+21.2%
|
+22.1%
|
+4.1%
|
-8.1%
|
-9.3%
|
-8.4%
|
-2.6%
|
+0.8%
|
THG Nutrition
|
+11.3%
|
-5.0%
|
+4.0%
|
+4.9%
|
+5.7%
|
+1.3%
|
-3.8%
|
-6.0%
|
THG Ingenuity
|
+17.9%
|
+11.1%
|
-2.5%
|
-14.1%
|
-14.3%
|
-15.4%
|
-8.8%
|
-5.8%
|
Inter-group elimination
|
+10.6%
|
+10.2%
|
-4.2%
|
-14.0%
|
-15.5%
|
-17.1%
|
-10.5%
|
-9.0%
|
Group (continuing) revenue
|
+19.8%
|
+11.0%
|
+4.1%
|
-5.1%
|
-4.3%
|
-5.0%
|
-3.1%
|
-0.8%
|
Other (discontinued)
|
-19.2%
|
-11.0%
|
-18.2%
|
-34.1%
|
-51.0%
|
-63.3%
|
-77.2%
|
-79.2%
|
Group revenue
|
+14.9%
|
+8.6%
|
+1.6%
|
-8.3%
|
-8.3%
|
-10.3%
|
-9.5%
|
-6.9%
|
Quarterly
constant currency revenue growth rates
|
Q1 2022
|
Q2 2022
|
Q3 2022
|
Q4 2022
|
Q1 2023
|
Q2 2023
|
Q3 2023
|
Q4 2023
|
THG Beauty
|
+25.4%
|
+18.4%
|
-3.3%
|
-13.3%
|
-12.4%
|
-8.5%
|
-0.3%
|
+2.5%
|
THG Nutrition
|
+14.8%
|
-8.0%
|
-2.0%
|
+2.0%
|
+3.7%
|
+2.0%
|
-1.4%
|
-4.0%
|
THG Ingenuity
|
+18.2%
|
+10.6%
|
-3.3%
|
-14.9%
|
-14.7%
|
-15.4%
|
-8.5%
|
-5.4%
|
Inter-group elimination
|
+10.6%
|
+10.2%
|
-4.2%
|
-14.0%
|
-15.5%
|
-17.1%
|
-10.5%
|
-9.0%
|
Group (continuing) revenue
|
+23.7%
|
+7.8%
|
-2.6%
|
-10.1%
|
-7.0%
|
-5.1%
|
-0.8%
|
+1.1%
|
Other (discontinued)
|
-19.2%
|
-11.0%
|
-18.2%
|
-34.2%
|
-51.0%
|
-63.3%
|
-77.2%
|
-79.2%
|
|
|
|
|
|
|
|
|
|
|
|
ENDS
Notes to editors
THG PLC operates three distinct
businesses in Beauty, Nutrition and Ingenuity, each scaled from the
UK to hold global leading positions in their respective
sectors.
Cautionary Statement
Certain statements included within this announcement may
constitute "forward-looking statements" in
respect of the group's operations, performance, prospects and/or
financial condition. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words and words of similar meaning as "anticipates", "aims", "due",
"could", "may", "will", "should", "expects", "believes", "intends",
"plans", "potential", "targets", "goal" or "estimates". By their
nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may
differ materially from those expressed or implied by those
statements. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. No responsibility or
obligation is accepted to update or revise any forward-looking
statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a
profit forecast. This announcement does not constitute or form part
of any offer or invitation to sell, or any solicitation of any
offer to purchase any shares or other securities in the Company,
nor shall it or any part of it or the fact of its distribution form
the basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other
securities of the Company. Past performance cannot be relied upon
as a guide to future performance and persons needing advice should
consult an independent financial adviser. Statements in this
announcement reflect the knowledge and information available at the
time of its preparation.