Slide 1: Preliminary FY 2022 Results
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S 18 April 2023
Slide 2: FY 2022 highlights and strategic progress
FY 2022 highlights and strategic progress • Record sales of over £2.2 billion with growth broad-based across core divisions • Significant investment in price strategy to support long-term customer retention, alongside new customer acquisition in established and emerging markets • Lower level of prof
Slide 3: Decisive cost action undertaken supporting profit improvement
Decisive cost action undertaken supporting profit improvement Strategic review • Simplification of the Group leading to a strategic review of loss- making categories and territories Payroll reducing as a % of revenue • Labour inflation a headwind in 2022 • Group-wide headcount reduction of c. 2,000
Slide 4: Group Financial Review
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S Group Financial Review 4
Slide 5: FY 2022 revenue performance
FY 2022 revenue performance YoY[1] 2 Yr £’m FY 2022 FY 2021 Growth Growth Revenue by Division 9% 8% THG Beauty[2] 1,235.0 1,181.5 +4.5% +54.1% 54% 7% 55% 7% THG Nutrition 675.1 659.5 +2.4% +20.1% FY21 FY22 THG Ingenuity[3] 159.6 146.3 +9.1% +78.9% 30% 30% Core divisional revenue 2,069.7 1,987.3 +4.1
Slide 6: FY 2022 profitability
FY 2022 profitability % £’m FY 2022 FY 2021 Change • Gross margin investment primarily in consumer price protection against inflationary pressures, driving customer Revenue 2,239.2 2,179.9 +2.7% retention and underpinning future growth Cost of sales (1,313.7) (1,205.5) -9.0% • Distribution costs as
Slide 7: Adjusting items
Adjusting items £’m FY 2022 FY 2021 • Cash items continuing to reduce in line with guidance and Cash charge (45.1) (65.5) will continue to do so into FY 2023 Other adjusting Items (300.1) (64.3) • International delivery costs, predominantly in Asia, remained elevated due to the absence of traditiona
Slide 8: THG Ingenuity inter-segment revenue following divisional reorganisation
Following the divisional reorganisation, THG Ingenuity now comprises inter-segment revenue for the provisions of services across Technology, Operations and Digital FY 2022 FY 2022 Ingenuity Arrow Films Other[2] FY 2022[3] (Q4 22 Beauty £’m Statement) restatement[1] THG Ingenuity (External) 208.1 (66
Slide 9: Segmental reporting
Segmental reporting FY 2022 Segmental Summary THG THG THG Other[1] Central[2] Inter group Continuing Discontinued FY 2022 £’m Beauty Nutrition Ingenuity elimination Total categories Total Revenue 1,235.0 675.1 159.6 50.9 - - 2,120.6 118.7 2,239.2 Inter-segment revenue - - 597.4 - - (597.4) - - - Tot
Slide 10: Cashflow summary
Cashflow summary Undrawn £170m RCF 24 • Strong liquidity position with cash and facilities of over 64 Undrawn £170m £640m at year end RCF 537 • Net debt of £181m is ahead of earlier guidance with 156 474 the Group’s senior bank facilities long-dated. £50m of free cash flow generated in H2 2022 -176
Slide 11: Long-dated senior debt facilities
Long-dated senior debt facilities All debt fully hedged against interest rate risk Term Revolving 2022 Loan B Credit Facility Term Loan • €600 million • £170 million • £156 million • Matures December 2026 • Matures December 2024 • Drawn in October 2022 • Undrawn since IPO • Matures October 2025 • Ca
Slide 12: Profit Enhancement
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S Profit Enhancement 12
Slide 13: Key levers to improved profitability in FY 2023
Key levers to improved profitability in FY 2023 Commodity prices reducing meaningfully 1,800 1,600 • Sweet whey commodities prices continue to trade 1,400 down[1] 1,200 € per ton • Q1 buy prices have fallen by >20% year on year 1,000 800 • Vertically integrated operations facilitate accelerated 600
Slide 14: Strategic review
Strategic review • Reporting simplified to THG Beauty, THG Nutrition and £’m FY 2022 FY 2021 % Change THG Ingenuity • Strategic review commenced of trading activities outside Other revenue (continuing) 50.9 46.1 +10.4% of THG Beauty, THG Nutrition and THG Ingenuity • Other (continuing) consists of T
Slide 15: Continuing operations EBITDA bridge FY 2022
Continuing operations EBITDA bridge FY 2022 £2m £100m £9m • Discontinued categories: EBITDA impact of discontinuing certain categories, primarily within THG OnDemand £15m £89m • Stock clearance: Accelerated write-down of stock from continuing operations £10m • Ingenuity strategic pivot (pro-forma):
Slide 16: Strategic Priorities: THG Beauty
Strategic Priorities Brand proposition EBITDA margin is expected to reach ~6.0% over the medium-term as and awareness achieved in 2021. Medium- Key market prioritisation term FY 2021 FY 2022 Category growth and buying optimisation 5.9% 2.7% International Buying Commercial Free/Paid Operational Custo
Slide 17: Strategic Priorities: THG Nutrition
Strategic Priorities Broader wellness focus EBITDA margin is expected to reach ~12.0% over the medium-term as achieved in 2021 Cash generative with low capital expenditure requirements Emerging markets Medium- FY 2021 term FY 2022 Category expansion 11.6% 7.7% Input Freight Local Marketing Operation
Slide 18: EBITDA margin targeted to reach ~7.5% over 5 years
EBITDA margin is targeted to reach ~7.5% over a 5-year period[1] • Following the divisional reorganisation, THG Ingenuity now includes inter-segment revenue from internal services provided to THG Beauty and THG Nutrition FY 2022 revenue 5-year revenue target • Historically, external Ingenuity operat
Slide 19: Q1 2023 revenue performance
Q1 2023 revenue performance YoY[1] 2 Yr • Performance in line with management expectations, given £’m Q1 2023 Q1 2022 Growth Growth • Lapping Omicron comps THG Beauty[2] 253.9 284.4 -10.7% 4.9% • Continuation of courier strike disruption into January, and THG Nutrition 167.9 160.6 4.5% 14.8% • Strat
Slide 20: Outlook and guidance
Outlook and guidance • Low to mid single digit revenue growth across continuing divisions in FY 2023 • Improving profitability into the second half of 2023 and 2024 with a proportion of cost savings reinvested in demand generation and offsetting general inflationary pressures • Adjusted EBITDA is ex
Slide 21: A clear path to free cash generation by FY 2024
A clear path to free cash generation by FY 2024 Return towards 9%+ Commodity pricing improvements, automation, operational adjusted leverage and discontinuation of loss-making categories EBITDA margins Strong liquidity of £640m Cash on hand at Annual capex of Warehouse network investment stage large
Slide 22: Divisional Strategic Highlights
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S Divisional Strategic Highlights 22
Slide 23: THG Beauty
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S 23
Slide 24: THG Beauty: Active Customers
+32.9% CAGR +28.2% CAGR Digital strategic at the centre £1,182m £1,235m of global beauty 17.1m 17.5m £801m 13.1m £1,235m Total Orders Total Sales £527m 8.3m SALES IN FY22 +4.5% YOY FY19 FY20 F21 FY21 FY22 FY19 FY20 FY21 FY22 • Resilient performance delivered in the face of a challenging consumer ret
Slide 25: THG Beauty retail operates in a highly attractive and defensive market
THG Beauty retail operates in a highly attractive and defensive market The online beauty market has a number of highly attractive characteristics: • High purchase frequency categories • High average order values • Low returns rates World’s #1 online First-to-market US leading online • Influencers pl
Slide 26: THG Beauty is well positioned to benefit from long-term beauty trends
THG Beauty is well positioned to benefit from long-term beauty trends Premiumisation of Growth in Emerging beauty Evolution of brand discovery beauty offer e-commerce brands Prestige beauty is growing ~5% p.a., Online prestige beauty market Emerging beauty brands are winning Consumers increasingly u
Slide 27: Broad customer appeal
Broad customer appeal Gen Z (35%) Millennials (43%) Gen X (18%) Baby boomers (4%) Our Gen Z base typically have Our largest cohort of Gen X have a high propensity We capture their essential beauty a budgeted income for customers. They have to consume luxury and spend on a monthly basis, Audience Ove
Slide 28: THG Nutrition
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S 28
Slide 29: THG Nutrition: Active Customers
+17.8% CAGR +14.9% CAGR The world’s largest 13.9m online sports nutrition brand[1] 13.2m £675m 12.3m £660m Total Revenue 8.7m £675m £562m Total Orders £413m SALES IN FY22 +2.4% YOY FY19 FY20 F21 FY21 FY22 FY19 FY20 FY21 FY22 • THG Nutrition’s performance in the year was driven by growth across the M
Slide 30: Expanding brand equity through retail
Expanding brand equity through retail • Having built Myprotein into a category-leading online brand, we are now leveraging the unrivalled brand equity we have developed through expansion into traditional retail channels to build profitable brand awareness • In the UK, Myprotein products are being so
Slide 31: Myprotein x Iceland strategic partnership
Myprotein x Iceland strategic partnership • In 2022, Myprotein signed a five-year partnership with Iceland Foods to launch a wide range of frozen nutritional products • The products launched in 1000+ Iceland stores and online • The new range was jointly developed by Myprotein and Iceland and provide
Slide 32: New product innovation driving revenue and customer growth
New product innovation driving revenue and customer growth • Myprotein is renowned for being first to market with new products and formats, as we research, develop and manufacture products ourselves • Product offering spans a range of high growth categories • Step change in internal snack bar innova
Slide 33: We're in the midst of a perfect storm
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S We’re in the midst of a perfect storm “Retailers and digital direct-to-consumer businesses are strapped for staff, forced to move faster than ever, and heavily reliant on technology. That reliance, coupled with lightning-fast changes to consumer expecta
Slide 34: Brands will make significant investments in commerce solutions
Brands will make significant investments in commerce solutions in a fight to win customer engagement and consolidate legacy ecosystems Reinforcing marketing Anywhere Reclaiming brands Investment in cloud Sustainability will fuel fundamentals Commerce from marketplaces spend to triple a market revolu
Slide 35: Ingenuity is a complete commerce solution
Ingenuity is a complete commerce solution with 3 clear anchors in Tech, Core Data & Commerce Analytics Digital & Operations Commerce Academy Infrastructure, Security & Hosting We provide our clients with: • A unified, modular and flexible ecommerce platform with Influencer Sustainability almost 20 y
Slide 36: New client partnerships focus on key markets and larger deals
New client partnerships will focus on key markets and a shift to larger, transformational deals Key categories Maturing our commercial model and services Retail Beauty CPG Right to win • Global expertise in ecommerce • Technology and platform has been built to cater for the Beauty, Health & Wellness
Slide 37: Building a network of alliance partners
Building a network of alliance partners to bolster new market entry and accelerate platform reach across new audiences A THG Ingenuity alliance enables partners to extend their customer offering in four key areas delivering incremental revenue and building new sales pipeline for Ingenuity: White-lab
Slide 38: Summary
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S Summary 38
Slide 39: Substantial progress as we continue to build a global platform
Substantial progress as we continue to build a strong, sustainable global platform supporting THG brands and Ingenuity clients • Strong performance in a challenging market • Strategic review focused on streamlining the business to prioritise profitable products and markets • Significant opportunity
Slide 40: Appendix
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S Appendix 40
Slide 41: Ingenuity investment strategy to scale a global network
Ingenuity investment strategy to scale a global network………. In 2020 we commenced a global investment project in fulfilment and manufacturing capacity to support our own-brands and Ingenuity clients: • Expansion of global warehouse footprint by >30%[1] • Network of integrated courier services increas
Slide 42: Serving our dedicated following of global customers
Serving our dedicated following of global 15% beauty, nutrition and wellness customers IMPROVEMENT IN GROUP TRUSTPILOT S CO RE S [2] Customer dynamics remain strong, supported by optimisation of marketing mix [1] 16.2m • 42% increase in Beauty and Nutrition new customers acquired vs 2019 ACTIVE BEAU
Slide 43: Non-financial KPIs
Non-financial KPIs FY 2022 FY 2021 FY 2020 FY 2019 THG Ingenuity Number of websites[1] 206 187 89 21 THG Beauty[2] Active customers (millions)[3] 9.2 9.2 6.9 4.1 Number of orders (millions)[4] 17.5 17.1 13.1 8.3 Average order value (£)[5] 63 60 55 51 THG Nutrition Active customers (millions) 7.0 7.2
Slide 44: Quarterly results reconciliation 2022
Quarterly results reconciliation 2022 Q1-21 Q2-21 Q3-21 Q4-21 FY-21 Q1-22[1,2,3] Q2-22[1,2,3] Q3-22[1,2,3] Q4-22[1,2,3] FY-22[1,2,3] Reported RNS THG Beauty 220.8 240.0 247.6 409.4 1,117.8 264.7 288.1 259.7 373.2 1,185.6 THG Nutrition 146.3 182.1 159.3 171.9 659.5 160.6 171.5 163.8 176.5 672.4 THG I
Slide 45: Quarterly results reconciliation growth 2022
Quarterly results reconciliation growth 2022 Q1-22[1] Q2-22 Q3-22 Q4-22 FY-22 Reported RNS THG Beauty +19.9% +20.0% +4.9% (8.9%) +6.1% THG Nutrition +9.8% (5.8%) +2.9% +2.7% +2.0% THG Ingenuity +28.6% +15.0% +1.3% (8.9%) +7.1% THG OnDemand (3.7%) +1.9% (18.5%) (33.7%) (17.0%) Other +31.0% +0.9% (4.4
Slide 46: Glossary
Glossary Terms Meaning A&A means Acheson & Acheson manufacturing Adjusted EBITDA means the non-GAAP measure which is defined as Earnings Before Interest,Taxes, Depreciation, Amortisation and adjusting items AOV means Average Order Value Board means the Board of Directors of the Company (or its subsi
Slide 47: Important Notice
IMPORTANT NOTICE: THIS PRESENTATION IS NOT AN OFFER OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES. This presentation may include "forward-looking statements" in respect of the operations, performance, prospects and/or financial condition of THG PLC (the "Company"). Forw
Slide 48: Preliminary FY 2022 Results
P R E L I M I N A R Y F Y 2 0 2 2 R E S U LT S 18 April 2023