Slide 1: Preliminary FY 2023 Results
10 April 2024 Preliminary FY 2023 Results N U T R I T I O N T H G B E A U T Y I N G E N U I T Y T H G T H G FY 2023 Strictly privileged and confidential
Slide 2: FY 2023 highlights
PRELIMINARY FY 2023 RESULTS REVENUE (4) FY 2023 highlights £2bn, -2.8% YoY • Revenue performance reflects focus on profitable sales with a return to growth in Q4 2023 (1) GROSS MARGIN 42.8%, +150bps YoY • Gross margin expansion • Continued optimisation of fulfilment network, significantly lowering d
Slide 3: Group Financial Review
Preliminary FY 2023 Results Group Financial Review
Slide 4: FY 2023 revenue performance
GROUP FINANCIAL REVIEW FY 2023 revenue performance YoY(2) CCY(3) £’m FY 2023 FY 2022 Change Change • Group continuing revenue £2bn, -2.8%(1) THG Beauty 1,171.7 1,226.0 -4.4% -4.2% • THG Beauty built momentum throughout the year, delivering Q4 THG Nutrition 657.9 662.7 -0.7% 0.0% revenue growth of +2
Slide 5: FY 2023 profitability
GROUP FINANCIAL REVIEW FY 2023 profitability % £’m FY 2023 FY 2022 Change • Gross margin expansion supported by normalisation of global Revenue 2,045.4 2,239.2 -8.7% commodity prices Cost of sales(1) (1,169.3) (1,336.7) +12.5% • Notable currency headwinds observed primarily in Japan impacting THG Nu
Slide 6: Cash flow summary
GROUP FINANCIAL REVIEW Cash flow summary £’m FY 2023 FY 2022 Company free cash flow • Cash generation significantly stronger YoY, driven by: • Improved EBITDA delivery EBITDA 114.1 64.1 • Strong working capital management with over £70m reduction in stock YoY Working Capital 59.4 23.5 • Capex discip
Slide 7: THG Beauty financial highlights
GROUP FINANCIAL REVIEW THG Beauty financial highlights YoY CCY £’m FY 2023 FY 2022 Change Change • Executed planned strategy to improve profitability with a strong THG Beauty revenue 1,207.5 1,285.9 -6.1% -6.0% performance in largest market (+9.3% growth in Q4) Continuing revenue 1,171.7 1,226.0 -4.
Slide 8: THG Nutrition financial highlights
GROUP FINANCIAL REVIEW THG Nutrition financial highlights YoY CCY £’m FY 2023 FY 2022 Change Change • Strong margin progression delivered following previous pricing THG Nutrition revenue 664.3 675.1 -1.6% -0.9% decision to support customers Continuing revenue 657.9 662.7 -0.7% +0.0% • Local manufact
Slide 9: THG Ingenuity financial highlights
GROUP FINANCIAL REVIEW THG Ingenuity financial highlights YoY CCY £’m FY 2023 FY 2022 Change Change • Successfully executed strategic pivot towards larger, higher-value THG Ingenuity revenue 673.9 757.0 -11.0% -11.0% clients with longer sales cycles External revenue(1) 154.1 159.6 -3.4% -3.1% • Mont
Slide 10: Exited non profitable categories
GROUP FINANCIAL REVIEW Exited non profitable categories % £’m FY 2023 FY 2022 Change • Following the sale of the THG OnDemand division and ProBikeKit Revenue 61.7 191.0 -67.7% earlier in 2023, the Group completed its strategic review of non- core categories in H2, resulting in the discontinuation of
Slide 11: Outlook and guidance
GROUP FINANCIAL REVIEW Outlook and guidance • As we enter FY 2024, overall Group revenue trends continue to improve, with notable momentum in Beauty following the strategic changes made during 2023. Whilst the Yen has weakened further in Q1 2024 impacting THG Nutrition, the Group’s start to the year
Slide 12: Attractive long-term margins and high cash conversion
GROUP FINANCIAL REVIEW Attractive long-term margins and high cash conversion 2 - 3 year £m FY 2022 FY 2023 mid-term target Comments Group revenue growth +2.7% (8.4%) Sustainable growth across all three businesses Gross profit margin 41.3% 42.8% In line with historical average Reducing % of revenue t
Slide 13: Business Operational Review & Strategic Priorities
Preliminary FY 2023 Results Business Operational Review & Strategic Priorities
Slide 14: THG Beauty
THG BEAUTY THG Beauty A disruptive, leading digital-first prestige beauty retailer, brand owner, and manufacturer, aiming to become the global partner of choice across the beauty industry • Retailer of prestige beauty brands through online retail websites, Lookfantastic, Cult Beauty and Dermstore (c
Slide 15: THG Beauty retail customer health
THG BEAUTY THG Beauty retail customer health +20.9% CAGR +107.3% FY19 vs FY23 +102.4% FY19 vs FY23 +25.5% FY19 vs FY23 1,285.8 9.2 9.2 £63 £64 1,227.5 1,206.7 17.1 17.5 £60 8.5 16.8 Active Customers (m)(1)(2) £55 £51 Average Order Value(4) 6.9 13.1 832.4 Total Orders (m)(3) Total Sales (£m) 565.3 4.
Slide 16: Stable, loyal, high-repeat beauty customer
THG BEAUTY Stable, loyal, high-repeat beauty customer 9.5m Revenue from returning customers(1) SOCIAL MEDIA COMMUNITY 14.1% 2.0 2.0 2.0 2.0 83% (FY 2022: 10.0%) 1.9 1.9 1.9 438m WEBSITE VISITS IN 2023 App participation Order frequency 47% : 53% FREE : PAID MARKETING MIX FY19 FY20 FY21 FY22 FY23 • 20
Slide 17: Acquisition of Biossance
THG BEAUTY Acquisition of Biossance • In December 2023, THG Beauty welcomed US-based beauty brand Biossance to its owned-brand portfolio • Curated skincare range centred on ingredient technology and commitment to sustainable product and packaging • Currently stocked in 1,600 stores globally, includi
Slide 18: THG Beauty outlook and strategic priorities
THG BEAUTY Key market prioritisation THG Beauty outlook and strategic priorities • Global premium market set to expand at a CAGR of 6.7% between 2023 – 2027(1) • Online penetration accelerating throughout 2024 in key markets, the UK and US(2) • Beauty partner of choice for leading retail brands, bui
Slide 19: THG Nutrition
THG NUTRITION THG Nutrition Led by the world’s largest online sports nutrition brand Myprotein, leveraging its customer proposition and product development capabilities to capitalise on the long-term trend of consumers becoming increasingly health-conscious • Premium sports nutrition brand with cate
Slide 20: Elevating Myprotein to a premium performance and wellness brand
THG NUTRITION Elevating Myprotein to a premium performance and wellness brand PERFORMANCE WELLNESS Activewear for technical performance and lifestyle MYPROTEIN MYVEGAN MYVITAMINS CORE ORIGIN PRO WELLNESS Formulated for our Created for high- Accessible health and Focus on highly nutritious Beauty Acc
Slide 21: THG Nutrition online customer health
THG NUTRITION THG Nutrition online customer health +12.6% CAGR +55.8% FY19 vs FY23 +57.1% FY19 vs FY23 +2.1% FY19 vs FY23 7.2 7.0 6.7 13.9 13.2 12.8 £50 659.5 675.1 664.3 6.3 12.3 £49 £48 £47 £46 562.3 Active Customers (m)(1) Average Order Value(3) 4.3 8.7 412.9 Total Orders (m)(2) Total Sales (£m)
Slide 22: Stable, loyal, high-repeat Nutrition customer
THG NUTRITION Stable, loyal, high-repeat Nutrition customer 10.5m SOCIAL MEDIA COMMUNITY Revenue from returning customers(1) 17.4% 2.0 2.0 84% (FY 2022: 13.7%) 1.9 1.9 1.9 201m WEBSITE VISITS IN 2023 App participation Order frequency 56% : 44% FREE : PAID MARKETING MIX FY19 FY20 FY21 FY22 FY23 3 AVE
Slide 23: Evolution of trading strategy through retail and licensing
THG NUTRITION Evolution of trading strategy through retail and licensing Enhanced customer reach through retail, gyms and experiences – with a focus on breaking down barriers to entry and appeal to a broader demographic of consumers Growing brand presence through licensing out: • Margin potential of
Slide 24: THG Nutrition outlook and strategic priorities
THG NUTRITION Broader wellness focus THG Nutrition outlook and strategic priorities • Total addressable market expected to grow at 9% CAGR between 2023 – 2028(1) with online segment growth historically outpacing this • Product pipeline remains strong driven by consumer insights, following transition
Slide 25: Evolution of apps driving higher customer value
APP PERFORMANCE Evolution of apps driving higher customer value • 18 million THG brand downloads since launch • More than 20% of sales now coming via app(1), growing year on year • Effective owned marketing channel creating higher value customers • App AOV and AOF significantly outperforming web • E
Slide 26: THG Ingenuity
THG INGENUITY THG Ingenuity Comprising leading digital marketing, technology and fulfilment capabilities, Ingenuity utilises its experience in building category-leading digital brands to offer end-to-end ecommerce solutions for brand owners and retailers • Ingenuity provides e-commerce solutions to
Slide 27: Global disruptive fulfilment and courier services
THG INGENUITY Global disruptive fulfilment and courier services Investing in world-class automation in key locations “Our three-year partnership with THG Ingenuity will mean • c.50% of global orders to be processed using robotics and automated we can continue to grow at pace with a partner who are t
Slide 28: THG Ingenuity outlook and strategic priorities
THG INGENUITY Bolstering long-term partnerships THG Ingenuity outlook and strategic priorities • Increasing value from existing customer base, bolstering long-term partnerships • New customer growth across FMCG, beauty and retail, scaling presence in target markets the UK, Europe and US • Indirect r
Slide 29: Summary
Preliminary FY 2023 Results Summary
Slide 30: FY 2023 summary
PRELIMINARY FY 2023 RESULTS FY 2023 summary • Achieved strong Group EBITDA performance with efforts on cash preservation and higher-margin sales rewarded • Beauty proved resilient, exiting in positive growth • Nutrition delivered substantially higher profitability - the evolution of Myprotein into b
Slide 31: Appendix
Preliminary FY 2023 Results Appendix
Slide 32: Key Investment Highlights
PRELIMINARY FY 2023 RESULTS Beauty Key Investment Highlights • Three distinct businesses in Beauty, Nutrition and Ingenuity, with leading market positions in their respective sectors • Substantial, long-term opportunity within significant addressable markets that are economically resilient • Resilie
Slide 33: Non-financial KPIs
Non-financial KPIs FY 2023 FY 2022 FY 2021 FY 2020 FY 2019 THG Ingenuity Number of websites(1) 211 206 187 89 21 THG Beauty(2) Active customers (millions)(3) 8.5 9.2 9.2 6.9 4.1 Number of orders (millions)(4) 16.8 17.5 17.1 13.1 8.3 Average order value (£)(5) 64 63 60 55 51 THG Nutrition Active cust
Slide 34: Quarterly results reconciliation 2023
Quarterly results reconciliation 2023 Quarterly reported revenue, adjusted for additional discontinued categories(1) Q1-22 Q2-22 Q3-22 Q4-22 FY22 Q1-23 Q2-23 Q3-23 Q4-23 FY23 THG Beauty(2) 269.9 300.9 271.1 384.2 1,226.0 244.7 275.8 263.9 387.3 1,171.7 THG Nutrition 156.7 168.0 161.0 177.1 662.7 165
Slide 35: Quarterly results reconciliation growth 2023
Quarterly results reconciliation growth 2023 Quarterly reported revenue growth rates, adjusted for additional discontinued categories Q1-22 Q2-22 Q3-22 Q4-22 FY22 Q1-23 Q2-23 Q3-23 Q4-23 FY23 THG Beauty +21.2% +22.1% +4.1% -8.1% +6.8% -9.3% -8.4% -2.6% +0.8% -4.4% THG Nutrition +11.3% -5.0% +4.0% +4
Slide 36: Quarterly results CCY growth 2023
Quarterly results CCY growth 2023 Quarterly reported revenue growth rates, adjusted for additional discontinued categories Q1-22 Q2-22 Q3-22 Q4-22 FY22 Q1-23 Q2-23 Q3-23 Q4-23 FY23 THG Beauty +25.4% +18.4% -3.3% -13.3% +3.1% -12.4% -8.5% -0.3% +2.6% -4.2% THG Nutrition +14.8% -8.0% -2.0% +0.2% +0.5%
Slide 37: Segmental reporting
Segmental reporting FY 2023 Segmental Summary THG THG THG Inter group Continuing Discontinued FY 2023 £’m Beauty Nutrition Ingenuity Central(1) elimination Total categories Total Revenue 1,171.7 657.9 154.0 - - 1,983.7 61.7 2,045.4 Inter-segment revenue - - 519.9 - (519.9) - - - Total revenue 1,171.
Slide 38: Glossary
Glossary Terms Meaning Adjusted EBITDA means operating profit before depreciation, amortisation, share-based payments, other operating expense - non-cash loss on disposal of freehold assets and adjusted items AOF means Average Order Frequency AOV means Average Order Value Board means the Board of Di
Slide 39: 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 40: Preliminary FY 2023 Results
10 April 2024 Preliminary FY 2023 Results N U T R I T I O N T H G B E A U T Y I N G E N U I T Y T H G T H G FY 2023 Strictly privileged and confidential