REG - THG PLC - Q3 2024 Trading Statement

THGAnnouncement

10/10/2024 17:00

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RNS Number : 7653H  THG PLC  10 October 2024

10 October 2024

 

 

THG PLC

Third quarter trading statement for the period ended 30 September 2024

 

Continuing Q3 revenue of £433.1m (-0.6% CCY)

 

Growth in Beauty and Ingenuity with improving trends in Nutrition through the
quarter

 

Full-year performance expected to be within the company consensus range

 

Submission of THG's notification to the FCA for inclusion in the Equity Shares
(Commercial Companies) ("ESCC") category

 

 

 

Q3 2024 Group Trading Performance

 

 £m                          Q3     YoY 1    CCY 2    YTD      YoY      CCY

2024
change
change
                             2024   change   change
 THG Beauty                  254.7  +2.3%    +2.8%    775.0    +5.2%    +7.3%
 THG Nutrition               134.5  -13.1%   -10.5%   434.3    -11.6%   -7.4%
 THG Ingenuity (external)    44.0   +15.0%   +16.0%   124.2    +13.5%   +16.0%
 Group (continuing) revenue  433.1  -2.0%    -0.6%    1,333.5  -0.3%    +2.7%
 Discontinued revenue        9.7    -61.3%   -61.0%   43.3     -56.2%   -55.3%
 Total revenue               442.8  -5.2%    -3.9%    1,376.8  -4.1%    -1.3%

 THG Ingenuity (internal)    98.9   -15.7%   -15.7%   324.6    -11.4%   -11.4%
 THG Ingenuity total         142.9  -8.2%    -8.0%    448.7    -5.7%    -5.2%

 

 

All comparative figures are continuing CCY unless otherwise stated.

 

·   Continued growth in THG Beauty and THG Ingenuity (external), with
improving trends in THG Nutrition during the quarter.

 

·      Solid performance in THG Beauty as it builds to peak trading with
advent calendar order run rate materially higher YoY.

 

o  Performance in the UK (over half of online Beauty revenue) was notably
strong with active customers in growth (+5%).

o  Lookfantastic also launched its first flagship retail store as part of its
targeted omnichannel strategy to enhance brand awareness, customer appeal and
aid product discovery.

 

·      Nutrition YoY revenue performance improved each month through the
quarter.

 

o  Sales have recovered from July and improved steadily through the quarter
as the effect from the Myprotein rebrand fades, with September marking the
second-best sales performance of the year, finishing the month in online
growth excluding Asia.

o  Offline revenue growth of +17% in the quarter supports our expectations of
c.25% of total brand sales coming from offline channels over the medium-term.

o  The transitionary impact from the rebrand is now behind Myprotein.

o Licencing highlights include the launch of co-branded Müller dairy
products in major UK and Ireland supermarkets in September, with a complete
nutrition ready-to-drink product also available later this month.

 

·      THG Ingenuity external revenue growth driven by existing and new
partnerships mainly within fulfilment and courier management services.

 

o  Monthly recurring revenue 3  for THG Ingenuity (external) continued to
build in September at +44.9% YoY, an acceleration on September 2023 (+7.6%
YoY).

o  Onboarding of CDS Superstores (trading as wilko and The Range) and MySale
complete with first dispatches in the quarter. Delivery options have already
been expanded for both clients enhancing their customer proposition.

o  Fulfilment efficiency is expected to improve further for peak trading this
year with the addition of Goods-To-Person robotics at the Group's Omega
distribution centre enabling faster dispatch times.

 

·     As part of the Group's ongoing portfolio management to further
streamline all three businesses and optimise margin and cash generation,
certain THG Beauty territories and non-core services were discontinued during
Q3. Please refer to the appendix for the previous quarter comparatives.

 

 

ESCC transfer

 

·      The Company's initial notification and eligibility letter for
transfer to the ESCC category has been submitted to the FCA (1(st) October
2024). The Company continues to target effecting the transfer this calendar
year and to be included in the FTSE UK Index reclassification in March 2025.

 

 

Outlook and guidance

 

·    As noted in THG's Interim Results published on 17 September 2024,
the second half of the year remains the Group's most profitable and cash
generative period with the Board expecting full-year performance to be within
the company consensus range 4 .

 

·      Seasonal weighting and continued revenue growth in Beauty and
Ingenuity gives us confidence in the outturn, albeit we continue to monitor FX
movements (Japanese Yen c.£7m ytd impact) and rising whey prices.

 

 

 

Matthew Moulding, CEO of THG commented:

 

"Today we have separately announced significant progress on our strategy to
demerge THG Ingenuity into a private company supported by major shareholders.
THG PLC will remain a listed leading consumer brands group, with our planned
transfer to the ESCC well on track.

 

"It was especially pleasing to see another solid quarter of delivery from both
our Beauty and Ingenuity businesses, rewarding the significant overhaul of
their respective operating models during 2022 and 2023. The short-term
disruption from the major rebrand of Myprotein is now behind us, and we were
pleased that in September Nutrition delivered its best sales performance since
January.

 

"We are also proud to be recognised in the top 250 companies worldwide for our
contribution and efforts in sustainability thanks to our ongoing progress
towards our net zero goals.

 

"Preparations for our busiest trading period are well advanced with
efficiencies across the network over the last twelve months delivering further
benefits for our Ingenuity clients to aid new customer acquisition."

 

 

 

Analyst and Institutional investor conference call

 

THG will host a conference call for analysts and institutional investors at
9:30am 11(th) of October (UK time) via the following link:

 

https://stream.brrmedia.co.uk/broadcast/67068e9c5c401b3f38830f49
(https://stream.brrmedia.co.uk/broadcast/67068e9c5c401b3f38830f49)

 

To ask questions, you must dial in via conference line using the below
details:

 

·     Confirmation password: THG Q3

·     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 (mailto:Investor.Relations@thg.com)

 Kate Grimoldby, Director of Investor Relations and Strategic Projects

 Media enquiries:
 Sodali & Co - Financial PR adviser                                      Tel: +44 (0) 20 7250 1446
 Victoria Palmer-Moore / Russ Lynch                                      thg@sodali.com (mailto:thg@powerscourt-group.com)

 THG PLC

 Viki Tahmasebi                                                          Viki.tahmasebi@thg.com (mailto:Viki.tahmasebi@thg.com)

 APPENDIX

 Quarterly reported revenue growth rates

                             Q1 2023  Q2 2023  Q3 2023  Q4 2023  FY 2023  Q1 2024  Q2 2024  Q3 2024  YTD 2024
 THG Beauty                  -9.8%    -8.3%    -1.6%    +1.4%    -4.1%    +11.4%   +2.6%    +2.3%    +5.2%
 THG Nutrition               +5.7%    +1.8%    -3.8%    -6.0%    -0.7%    -9.0%    -12.8%   -13.1%   -11.6%
 THG Ingenuity               -14.3%   -15.4%   -8.8%    -5.8%    -11.0%   -5.3%    -3.6%    -8.2%    -5.7%
 Inter-group elimination     -15.5%   -17.1%   -10.5%   -9.0%    -13.0%   -8.0%    10.6%    -15.7%   -11.4%
 Group (continuing) revenue  -4.4%    -4.9%    -2.5%    -0.5%    -2.9%    +2.9%    -1.6%    -2.0%    -0.3%
 Other (discontinued)        -38.1%   -48.5%   -60.1%   -53.0%   -50.0%   -54.8%   54.1%    -61.3%   -56.2%
 Group revenue               -8.3%    -10.3%   -9.5%    -6.9%    -8.7%    -2.0%    -5.2%    -5.2%    -4.1%
 Memo: External Ingenuity    -10.1%   -8.6%    -2.9%    +7.1%    -3.5%    +4.1%    +21.2%   +15.0%   +13.5%

 

  Quarterly constant currency revenue growth rates

                             Q1 2023  Q2 2023  Q3 2023  Q4 2023  FY 2023  Q1 2024  Q2 2024  Q3 2024  YTD 2024
 THG Beauty                  -12.9%   -8.5%    0.9%     +3.2%    -3.9%    +13.2%   +3.2%    +2.8%    +7.3%
 THG Nutrition               +3.8%    +2.0%    -1.4%    -4.0%    0.0%     -5.8%    -9.2%    -10.5%   -7.4%
 THG Ingenuity               -14.7%   -15.4%   -8.5%    -5.4%    -10.9%   -4.9%    -3.5%    -8.0%    -5.2%
 Inter-group elimination     -15.5%   -17.1%   -10.5%   -9.0%    -13.0%   -8.0%    -10.6%   -15.7%   -11.4%
 Group (continuing) revenue  -7.1%    -5.0%    -0.1%    +1.5%    -2.5%    +5.3%    +0.2%    -0.6%    +2.7%
 Other (discontinued)        -37.7%   -48.5%   -59.9%   -52.9%   -49.9%   -53.9%   -53.7%   -61.0%   -55.3%
 Group revenue               -11.0%   -10.1%   -7.6%    -5.3%    -8.4%    +0.3%    -3.4%    -3.9%    -1.3%
 Memo: External Ingenuity    -11.7%   -8.8%    -1.4%    +9.4%    -3.1%    +5.9%    +22.3%   +16.0%   +16.0%

 Quarterly reported revenue

£m                          Q1     Q2     Q3     Q4     FY       Q1     Q2     Q3     YTD

               2023   2023   2023   2023   2023     2024   2024   2024   2024
 THG Beauty                  227.9  259.6  249.0  360.3  1,096.9  253.9  266.3  254.7  775.0
 THG Nutrition               165.7  171.0  154.8  166.4  657.9    150.8  149.0  134.5  434.3
 THG Ingenuity (external)    35.6   35.6   38.2   44.6   154.0    37.0   43.2   44.0   124.2
 Group (continuing) revenue  429.2  466.2  442.1  571.4  1,908.9  441.8  458.6  433.1  1,333.5
 Discontinued revenue        40.1   33.7   25.0   37.6   136.5    18.2   15.5   9.7    43.3
 Total revenue               469.4  499.9  467.2  609.0  2,045.4  459.9  474.0  442.8  1,376.8

 THG Ingenuity (internal)    122.3  126.5  117.4  153.6  519.9    112.6  113.0  98.9   324.6
 THG Ingenuity total         157.9  162.1  155.7  198.2  673.9    149.6  156.2  142.9  448.7

 

 

 Quarterly constant currency revenue growth rates

                             Q1 2023  Q2 2023  Q3 2023  Q4 2023  FY 2023  Q1 2024  Q2 2024  Q3 2024  YTD 2024
 THG Beauty                  -12.9%   -8.5%    0.9%     +3.2%    -3.9%    +13.2%   +3.2%    +2.8%    +7.3%
 THG Nutrition               +3.8%    +2.0%    -1.4%    -4.0%    0.0%     -5.8%    -9.2%    -10.5%   -7.4%
 THG Ingenuity               -14.7%   -15.4%   -8.5%    -5.4%    -10.9%   -4.9%    -3.5%    -8.0%    -5.2%
 Inter-group elimination     -15.5%   -17.1%   -10.5%   -9.0%    -13.0%   -8.0%    -10.6%   -15.7%   -11.4%
 Group (continuing) revenue  -7.1%    -5.0%    -0.1%    +1.5%    -2.5%    +5.3%    +0.2%    -0.6%    +2.7%
 Other (discontinued)        -37.7%   -48.5%   -59.9%   -52.9%   -49.9%   -53.9%   -53.7%   -61.0%   -55.3%
 Group revenue               -11.0%   -10.1%   -7.6%    -5.3%    -8.4%    +0.3%    -3.4%    -3.9%    -1.3%
 Memo: External Ingenuity    -11.7%   -8.8%    -1.4%    +9.4%    -3.1%    +5.9%    +22.3%   +16.0%   +16.0%

 

 

Quarterly reported revenue

 

 £m                          Q1     Q2     Q3     Q4     FY       Q1     Q2     Q3     YTD

                             2023   2023   2023   2023   2023     2024   2024   2024   2024
 THG Beauty                  227.9  259.6  249.0  360.3  1,096.9  253.9  266.3  254.7  775.0
 THG Nutrition               165.7  171.0  154.8  166.4  657.9    150.8  149.0  134.5  434.3
 THG Ingenuity (external)    35.6   35.6   38.2   44.6   154.0    37.0   43.2   44.0   124.2
 Group (continuing) revenue  429.2  466.2  442.1  571.4  1,908.9  441.8  458.6  433.1  1,333.5
 Discontinued revenue        40.1   33.7   25.0   37.6   136.5    18.2   15.5   9.7    43.3
 Total revenue               469.4  499.9  467.2  609.0  2,045.4  459.9  474.0  442.8  1,376.8

 THG Ingenuity (internal)    122.3  126.5  117.4  153.6  519.9    112.6  113.0  98.9   324.6
 THG Ingenuity total         157.9  162.1  155.7  198.2  673.9    149.6  156.2  142.9  448.7

 

 

Above numbers and table subject to rounding.

 

 

 

 

ENDS

 

Notes to editors

 

THG PLC operate 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.

 

 

 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,
managed service fees, revenue share, fulfilment and creative services

 4  Adjusted EBITDA range of £124.4m to £141.0m as dated 07.10.24 and
available at Analyst Consensus - THG.com
(https://www.thg.com/investor-relations/analyst-consensus)

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