THG’s results for the first six months of the year showed adjusted EBITDA and cash generation ahead of the top end of its guidance, although the Beauty operation took a hit from one-off industry destocking in manufacturing.


The company said that group revenue overall fell 9.3% to £969.3 million, although this was up 1.1% on a two-year basis. The dip was partly caused by THG Beauty revenue dropping 10.4% to £538.7 million (but up 6.3% over two years). 

The Nutrition division was ahead by a few percent and THG Ingenuity – the company’s big technology-based e-commerce solution – saw revenue down 14.9% at £320 million. It was also down 3.4% over two years. However, the company has been refocusing that division on bigger, more valuable clients, and this has affected the operation in the short term.

On a continuing basis, group revenue fell 6.1% to £950.6 million with discontinued categories accounting for £18.7 million of the revenue total.

Continuing adjusted EBITDA rose 22.9% to £50.1 million, despite the company, having guided for a range between £47 million and £50 million. And the margin was 5.3%, up from 4%.

The company said the successful exit of loss-making discontinued categories and non-core assets generated a one-off non-cash charge of £26.2 million, increasing the operating loss to £99.5 million from £89.2 million a year ago. But without this charge, the operating loss improved by £15.9 million.

As mentioned, the Beauty operation was hit by that destocking issue, but the company said that excluding this, its adjusted EBITDA rose to £9.7 million from £7.3 million. And since the start of August, the division has returned to growth.

CEO Matthew Moulding said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months. Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit. This is reflected in the strong H1 results we’ve posted today, across adjusted EBITDA and cash. The cash performance of the group has been strong in H1, but also over the last 12 months.

“Recent progress within our Beauty division has been encouraging, underpinned by strong performances in the group’s Perricone MD and ESPA brands, as well as across Cult Beauty. Margin improvements have steadily built through H1, as focus shifted to orders that deliver immediate profitability, where we benefit from the economies of scale associated with our local distribution hubs.

“Finally, Ingenuity’s pivot to larger, more complex enterprise clients is gaining momentum, reflected in some key client wins and a strong pipeline.”

Those clients now include L’Oréal Group, US-based L-Fashion Group, Asda in the UK, and beauty specialist Maximo Group.

The company also said overall sales trends are gradually improving into the second half, with Q3 continuing revenue anticipated to be marginally ahead of Q2 and “a notable step-on” in THG Beauty and THG Ingenuity.

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