TIDMTHG
RNS Number : 9473D
THG PLC
25 October 2022
25 October 2022
THG PLC
Third quarter trading statement for the period ended 30
September 2022
Q3 2022 Group revenue growth of +2.1% YoY, and +3.8% across
Beauty, Nutrition and Ingenuity
+10.2% YoY Beauty and Nutrition revenue growth in core
territories [1] with localised infrastructure
Full year revenue, adjusted EBITDA and cash guidance
unchanged
THG PLC ("THG" or the "Group"), the proprietary technology
platform specialising in taking brands direct to consumers ("D2C")
globally, announces its third quarter trading update for the period
ended 30 September 2022 ("third quarter" or "Q3 2022").
Q3 2022 highlights
-- THG Beauty and THG Nutrition core territories delivered
revenue growth of +10.2%, ahead of the Group growth
rate overall of +2.1%.
-- Growth of +4.9% and +2.9% in THG Beauty and THG Nutrition
respectively reflects continued share gains in strategic
markets.
-- Consumer behaviour during the third quarter remained
stable and consistent, reflecting the resilience of
beauty, health and wellness categories, with:
stable Average Order Values ("AOVs");
-
repeat rates in line with the first half; and
-
growth in new customers acquired through Apps continuing
- to drive higher AOVs and order frequency vs non-app
sales.
-- THG Ingenuity re-positioned under CEO Vivek Ganotra
to focus on larger, higher contract value clients, leveraging
the Group's proprietary technology platform and end-to-end
proposition. Ingenuity has a strong and growing pipeline
of these opportunities in addition to expanding propositions
across the existing client base.
-- Dilutive revenues across THG OnDemand and Other divisions
scaled back in territories awaiting delivery of localised
personalisation infrastructure.
-- Positive start to Q4 with momentum expected to accelerate
as the Group enters its peak trading period.
Additional new banking facilities and guidance
-- The key terms of the recently signed incremental GBP156
million banking facility, provided equally by existing
lenders, BNP Paribas, HSBC, and NatWest, include:
three-year term;
-
pari passu ranking with the Group's existing term loan
- B;
no additional covenants; and
-
350 bps fixed margin above SONIA.
-
-- All debt facilities are covenant light, long-dated (Term
Loan B, December 2026) with fully fixed and hedged interest
costs.
-- Group stock levels are normalising following the recent
completion of the global logistics roll-out program,
resulting in a steady unwind of the working capital
investment made in the previous two years.
-- YTD Group revenue growth of +8.8% (+9.9% across Beauty,
Nutrition and Ingenuity) is in line with expectations,
supporting FY 2022 revenue growth guidance of +10.0%
to +15.0% which remains unchanged.
-- Full year adjusted EBITDA guidance is maintained between
a range of GBP100 to GBP130 million pre Software-as-a-Service
("SaaS") cost reclassification.
-- Guidance for cash on hand at year-end of c. GBP500m
remains unchanged, with an additional GBP170m undrawn
revolving credit facility available.
Q3 2022 Group Trading Performance
GBPm Q3 2022 Q3 2021 YoY [2] 2 Year
Growth Growth
-------- -------- -------
THG Beauty 259.7 247.6 +4.9% +64.9%
THG Nutrition 163.8 159.3 +2.9% +12.7%
THG Ingenuity 51.7 51.1 +1.3% +45.9%
THG OnDemand 24.5 30.1 -18.5% +2.2%
Other 18.9 19.8 -4.4% +20.2%
-------- -------- ------- -------
Group Revenue 518.6 507.8 +2.1% +37.2%
-------- -------- ------- -------
Ingenuity Commerce
Revenue 12.3 11.7 +5.9% +144.5%
-------
GBPm YTD 2022 YTD 2021 YoY 2 Year
Growth Growth
THG Beauty 812.4 708.4 +14.7% +79.3%
THG Nutrition 496.0 487.6 +1.7% +22.9%
THG Ingenuity 155.8 136.9 +13.9% +60.9%
THG OnDemand 75.6 81.6 -7.4% +27.2%
Other 55.6 52.1 +6.6% +35.6%
-------- -------- ------- -------
Group Revenue 1,595.4 1,466.6 +8.8% +51.4%
-------- -------- ------- -------
Ingenuity Commerce
Revenue 35.2 30.0 +17.6% +194.0%
-------------------- -------- -------- ------- -------
Matthew Moulding, CEO commented:
"Another strong quarter of delivery across our Beauty and
Nutrition divisions has enabled market share growth in our key
global territories. We remain committed to our strategy of
supporting our customers around the globe through investment in
price protection, without compromising on quality or choice. As
commodity prices ease further, we remain well positioned to grow
margins into 2023, whilst reducing pricing to consumers. This
positions the Group well in continuing to expand market share. As
cost of living pressures rise, customers are continuing to
prioritise beauty, health and wellness categories and, through
investing in bringing them into and retaining them within the THG
ecosystem, we are laying the foundations for our future growth.
"The fourth quarter has started positively, and we are well
positioned from a logistics and supply perspective to meet the
significant uplift in demand anticipated during the cyber period,
whilst continuing to deliver a high-quality customer
experience.
"I'm delighted to confirm the signing of the recently announced
GBP156 million of incremental capital from three long-standing
lending partners on highly attractive terms. Given the current
market environment, this is a strong endorsement of the Group's
long-term business model, alongside the recently announced
increased investment from Qatar Investment Authority."
For further information please contact:
Investor enquiries:
Kate Grimoldby, Head of Investor Relations Investor.Relations@thg.com
Media enquiries:
Powerscourt - Financial PR adviser Tel: +44 (0) 20 7250
1446
Victoria Palmer-Moore/Nick Dibden/Nick thg@powerscourt-group.com
Hayns
THG PLC
Viki Tahmasebi Viki.tahmasebi@thg.com
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 proprietary, end-to-end, e-commerce
technology, infrastructure and brand-building platform (THG
Ingenuity) to an online and global customer base. THG's business is
operated through the following businesses:
THG Beauty : The globally pre-eminent digital-first brand owner,
retailer and manufacturer in the prestige beauty market, combining
its prestige portfolio of eight owned brands across skincare,
haircare and cosmetics, the provision of a global route to market
for over 1,300 third-party beauty brands through its portfolio of
websites, including Lookfantastic, Dermstore, Cult Beauty and
Mankind and the beauty subscription box brand GLOSSYBOX.
THG Nutrition : A group of digital-first Nutrition brands, which
includes the world's largest online sports nutrition brand
Myprotein, and its family brands (Myvegan, Myvitamins, MP
Activewear and MyPRO), with a vertically-integrated business model,
supported by global THG production facilities.
THG Ingenuity: Ingenuity Commerce provides an end-to-end direct
to consumer e-commerce solution for consumer brand owners under
'Software as a Service' (SaaS) licences. The wider Ingenuity
division provides stand-alone digital services, including hosting,
studio content, translation services and beauty product development
and manufacturing.
THG OnDemand : Personalisation and customisation is a key
offering within THG OnDemand, enabling brands to offer unique
products to a vast range of consumers across THG's global
territories through websites including Zavvi, IWOOT and Pop in a
Box.
Other : Luxury D2C websites including Coggles, AllSole and
MyBag, in addition to THG Experience. The latter comprises prestige
events locations at Hale Country Club & Spa, King Street
Townhouse Hotel and Great John Street Hotel, providing deeply
experiential brand building environments, most notably in support
of THG Society, the Group's proprietary influencer marketing
platform.
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] Core territories includes the UK, US and key international
territories with attractive market sizes and THG local
infrastructure (accounting for over 50% of Group Q3 2022
revenue).
[2] YoY defined as year-on-year statutory sales growth. Numbers
and table subject to rounding.
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END
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