LinkedIn post14 Sep 2023 08:49
“Today is H1 2023 results day for THG. Never a dull day 😁
So here are real the highlights that you’re not likely to read in the media:
THG had a strong H1 beating all profit and cash expectations, delivering £50.1m of EBITDA, up 23% 💪 The cash performance of the Group improved by a massive c£350m compared to 12 months earlier, even after investing a further c£160m into Tech and infrastructure.
Last year we completed our major investment in THG’s global infrastructure network, and so we’re now focused on reaping the rewards from those years of investment.
Nutrition is flying, delivering record H1 Sales of £341m. Profits rose by +72% to £47m, driven by strong margin recovery in Myprotein. Last year we supported Myprotein customers through the cost-of-living crisis, reducing our margins as input costs ballooned.
This strategy is paying off for Myprotein - not only holding onto explosive 2020/2021 Covid growth, but continuing to grow through 2022 and H1 2023, despite the global re-opening of high street retail.
Sure, we always knew Beauty wouldn’t be as strong as Nutrition in H1. Sales were down 10% to £539m, delivering £11m of EBITDA. But anyone who makes the effort to read the numbers will understand why we’re super pleased with the division.
Within our Beauty division, we have a manufacturing business, split across the US & UK, which develops & manufactures products for many of the world’s largest beauty brands. Ordinarily this is a very profitable business, making £11m in H1 2022 - we're actually very good at it! But since H2 last year, many of these household brands asked to delay manufacturing orders as they looked to reduce excess stock in the global market.
These delayed orders reduced profits in our manufacturing arm to just £1m in H1 this year, a £10m reduction YoY. But this destocking program has now ended, and in H2 manufacturing volumes and profit levels are back to normal.
Aside from manufacturing, the rest of the Beauty division made H1 2023 profits of £10m, up 32% on H1 2022. Strong growth in our 2 largest own brands, Perricone MD and ESPA International, were real stand outs, while our Cult Beauty retail platform performed particularly well.
What's better is that the whole Beauty division has returned to Sales growth in H2, compared to -10% in H1. Add so THG Beauty is well set for a strong second half to 2023.
In terms of Ingenuity…..the pivot towards large, high value, complex clients is making solid progress. While the move away from smaller, existing clients impacted H1 revenue, higher margins from larger client wins meant profits from external clients were flat YoY.
A big highlight was Ingenuity being recognised in Gartner’s Magic Quadrant report. Having THG’s technology recognised by global industry experts in this way, alongside the major US tech players, is testimony to what we are building within Ingenuity.
Pic is ahead of today's 9am invest
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