TIDMTHG
RNS Number : 3011Q
THG PLC
17 October 2023
17 October 2023
THG PLC
Third quarter trading statement for the period ended 30
September 2023
Q3 2023 Group revenue performance of -4.4% (-2.1% CCY), +480bps
improvement on Q2 CCY
Group returned to CCY revenue growth in September at +3.2%
(-0.3% reported)
Positive free cash generation of +GBP5m over LTM
Full year revenue and adjusted EBITDA guidance unchanged
Q3 2023 Group Trading Performance
GBPm Q3 YoY [1] CCY [2] YTD YoY CCY
2023 change change 2023 change change
------ -------- ------- --------
THG Beauty 272.0 -4.4% -2.0% 810.7 -8.5% -8.9%
THG Nutrition 156.2 -4.6% -2.3% 496.9 0.2% 0.4%
THG Ingenuity 155.7 -8.8% -8.4% 475.7 -13.0% -13.0%
Inter-group elimination -117.4 -10.5% -3.9% -366.3 -14.5% -7.7%
------- -------- --------
Group (continuing)
revenue 466.5 -4.4% -2.1% 1,417.0 -5.5% -5.7%
------------------------- ------ -------- ------- -------- --------
Quarterly Revenue Performance
Group (continuing) Q4 Q1 Q2 Q3
revenue change
2022 2023 2023 2023
------- ------- -------
Reported -6.3% -5.6% -6.5% -4.4%
Constant currency -11.3% -8.1% -6.9% -2.1%
--------------------- ------- ------- ------- -------
Q3 2023 highlights
-- Best quarterly revenue performance in the last year: -4.4% on
a continuing basis (-2.1% CCY).
-- Performance improved each month in the quarter, with the
Group returning to CCY growth in September (-0.3% reported, +3.2%
CCY). Full year revenue guidance of 0% to -5% remains
unchanged.
-- Each division continues to make progress against its stated
strategy to return to sales growth and rebuild margins:
o The impact of global de-stocking on our beauty manufacturing
business has eased, supporting a return to growth for THG Beauty in
September (+1.7%, +5.1% CCY). The strategy of focusing on higher
margin sales while reducing orders that do not deliver an immediate
return has supported a much-improved Q3 margin performance.
o THG Nutrition revenue performance reflects the rebrand launch,
temporarily reducing new product launches while the new branding is
being rolled out. Notwithstanding this brief interruption, the
division delivered a record Q3 adjusted EBITDA, reaping the rewards
from the investment in pricing strategy made during peak
inflation.
o Whilst Enterprise sales cycles have been longer than
anticipated in THG Ingenuity, progress is reflected in September
sales performance (-2.3%), from H1 (-14.9%). Monthly recurring
revenue [3] continued to build in September at +7.6%, an
acceleration on June's +6.2%, underpinned by growth in existing
clients, and new business.
-- Growth in UK active customers in THG Beauty and THG Nutrition
was supported by investment in the customer proposition with
extended next day delivery cut offs and UK delivery times at their
fastest ever level (17% quicker than Q3 2021).
-- Group stock levels have continued to normalise whilst
retaining improved availability, supporting another quarter of
strong cash performance [4] , contributing to a GBP5m inflow for
the LTM [5] .
-- Revenue, adjusted EBITDA and cash generation guidance remains unchanged for FY 2023.
-- Successful completion of the Group's three-year global
infrastructure roll-out, and the strong efficiencies these
investments are delivering, means we now anticipate FY 2024 capex
spend will be c.GBP30m less than previously guided at GBP100m to
GBP110m (FY 2023 guidance c.GBP135m).
-- In addition, we continue to monitor the FCA listing regime
review in respect of the move to the Premium segment, with our
preparation and focus on the implementation of the outcome when the
conclusion is announced.
Matthew Moulding, CEO of THG commented:
"Q3 has been another strong quarter of progress across the
Group, with each division delivering improved performances. The
pivots made within each division to ensure they thrive in a high
inflation global environment are bearing fruit.
"The momentum with which we exited Q3 was especially pleasing,
with the Group returning to positive constant currency revenue
growth of +3.2% in September, driven by a strong performance across
our Beauty division.
"We remain focussed on restoring margins to pre-inflation levels
while continuing to focus on cash generation. This is reflected in
a best ever Q3 profit performance from our Nutrition division. Our
cash discipline has been excellent, reflected in delivering
positive free cash flow of GBP5m, despite making c.GBP140m of capex
investments, over the last twelve-month period. The steps we have
taken will further underpin the future cash generation of the
Group.
"Both our operations and inventory are well positioned ahead of
peak trading, with the benefits of our investment in UK and US
automated fulfilment centres enhancing the customer proposition
through accelerated delivery times, positively influencing customer
contact rates and overall satisfaction.
"The Group is exceptionally well invested with a strong balance
sheet, with each division well positioned to grow market share in
any market conditions."
Analyst and 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/650d93e739ad9f961be9df87
To ask questions, you must dial in via conference line using the
below details:
-- Confirmation password: THG - Q3 Update
-- 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 Investor.Relations@thg.com
Kate Grimoldby, Director of Investor
Relations and Strategic Projects
Media enquiries:
Powerscourt - Financial PR adviser Tel: +44 (0) 20 7250
1446
Victoria Palmer-Moore/Nick Dibden/Nick thg@powerscourt-group.com
Hayns/Russ Lynch
THG PLC
Viki Tahmasebi Viki.tahmasebi@thg.com
APPIX
Reported revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3
change % 2022 2022 2022 2022 2023 2023 2023
------- ------ ------- ------- ------- -------
THG Beauty 16.7% 19.2% 3.0% -9.4% -10.7% -10.2% -4.4%
THG Nutrition 9.8% -5.8% 3.0% 4.2% 4.5% 0.2% -4.6%
THG Ingenuity 17.9% 11.1% -2.5% -14.1% -14.3% -15.4% -8.8%
Inter-group elimination 10.6% 10.2% -4.2% -14.0% -15.5% -17.1% -10.5%
------- ------ ------- ------- ------- ------- -------
Group (continuing)
revenue 16.6% 9.4% 3.0% -6.3% -5.6% -6.5% -4.4%
------- ------ ------- ------- ------- ------- -------
Other (Discontinued) -10.1% -2.7% -17.6% -34.9% -58.8% -76.3% -97.6%
------- ------ ------- ------- ------- ------- -------
Group revenue 14.9% 8.6% 1.6% -8.3% -8.3% -10.3% -9.5%
------------------------- ------- ------ ------- ------- ------- ------- -------
Constant currency Q1 Q2 Q3 Q4 Q1 Q2 Q3
change % 2022 2022 2022 2022 2023 2023 2023
------- ------ ------- ------- ------- -------
THG Beauty 21.5% 15.2% -4.7% -14.5% -13.8% -10.5% -2.0%
THG Nutrition 12.4% -8.5% -3.1% -1.2% 3.1% 0.3% -2.3%
THG Ingenuity 18.2% 10.7% -3.4% -14.7% -14.6% -15.4% -8.4%
Inter-group elimination 10.6% 10.2% -4.2% -14.0% -9.7% -9.2% -3.9%
------- ------ ------- ------- ------- ------- -------
Group (continuing)
revenue 20.5% 6.1% -3.9% -11.3% -8.1% -6.9% -2.1%
------- ------ ------- ------- ------- ------- -------
Other (Discontinued) -10.9% -2.7% -17.9% -35.0% -58.8% -76.3% -97.6%
------- ------ ------- ------- ------- ------- -------
Group revenue 18.2% 5.7% -4.8% -13.0% -10.9% -10.4% -7.4%
------------------------- ------- ------ ------- ------- ------- ------- -------
S
Notes to editors
THG is a vertically integrated, digital-first consumer brands
group, retailing its own brands in beauty and nutrition, plus
third-party brands, via its complete digital commerce solution,
Ingenuity, to an online and global customer base. THG's business is
operated through the following divisions:
THG Beauty: A digital-first brand owner, retailer and
manufacturer in the prestige beauty market, with a portfolio of
own-brands across skincare, haircare and cosmetics. Through its
retail websites, including Lookfantastic, Dermstore, Cult Beauty
and the beauty subscription box brand GLOSSYBOX, it is a route to
market globally for over 1,300 third-party premium brands. THG
Beauty also operates prestige spa and experience venues, in
addition to luxury clothing and homeware D2C sites.
THG Nutrition: A group of digital-first Nutrition brands, which
includes the world's largest online sports nutrition brand
Myprotein and its family of brands (Myvegan, Myvitamins, MP
Activewear and MyPRO), with a vertically-integrated business model
supported by global THG production facilities.
THG Ingenuity: Ingenuity provides a complete digital commerce
solution for consumer brand owners across its three pillars of
technology, digital marketing and operations. Being part of the THG
group, Ingenuity is uniquely placed to bring relevant, practical
and international expertise in every area of commerce.
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.
[1] YoY defined as year-on-year statutory sales growth.
([2]) CCY defined as constant currency basis
[3] Monthly Recurring Revenue comprises software-as-a-Service
license fees, monthly brand building fees, infrastructure service
fees, revenue share, translation and creative services.
[4] Group free cash flow is calculated after working capital,
net capital expenditure, adjusting items, tax and financing (prior
to debt capital repayments and consideration on acquisitions).
[5] Last twelve month period ending September 2023.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTNKABKKBDBAKD
(END) Dow Jones Newswires
October 17, 2023 02:00 ET (06:00 GMT)
Thg (LSE:THG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Thg (LSE:THG)
Historical Stock Chart
From Apr 2023 to Apr 2024
