THG PLC

Latest Results (14.08.2024):

Revenue Performance

THG PLC reported a total revenue of £2 billion for FY 2023, reflecting a year-on-year decline of 2.8%. Despite the overall decrease, the company saw a return to growth in Q4 2023, driven by a focus on profitable sales. This performance underscores the company's strategic shift towards more sustainable and profitable revenue streams.

Gross Margin Expansion

THG PLC achieved a gross margin of 42.8% in FY 2023, an increase of 150 basis points compared to the previous year. This improvement was supported by the normalization of global commodity prices and a significant reduction in distribution costs, which fell to 13.2% of revenue from 15.8% in FY 2022.

Adjusted EBITDA Growth

For FY 2023, THG PLC reported a continuing adjusted EBITDA of £120.4 million, representing a 48.4% year-on-year increase. The adjusted EBITDA margin improved to 6.1%, up from 4.0% in the previous year. This growth was driven by operational leverage and the successful execution of the company's strategic review, which included exiting non-core categories.

Free Cash Flow Improvement

THG PLC significantly improved its free cash flow in FY 2023, achieving breakeven for the year. This was a result of better inventory efficiency and lower cash adjusting items. The company's strong balance sheet and liquidity were further supported by a net leverage ratio reduction to 1.9x from 2.8x in FY 2022.

Strategic Business Highlights

THG Beauty and THG Nutrition showed notable performance improvements in FY 2023. THG Beauty saw a return to growth in Q4 with a 2.5% increase in revenue, while THG Nutrition maintained flat revenue for the year, focusing on profit margins and FX management. THG Ingenuity continued its pivot towards higher-margin clients, contributing to the overall positive outlook for the company.