Supreme Plc Regulatory News (SUP)

29 January 2024

Supreme plc

("Supreme" or the "Company" or the "Group")

Market and Trading Update and Share Buyback

- Trading now significantly ahead of current FY 2024 market expectations1

- Supreme fully supportive of recently published Vaping Review

- FY 2025 outlook unaffected by proposed changes

- £1 million proposed share buyback programme underpins confidence

Supreme PLC (AIM: SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer goods, is pleased to provide an update on the Groups trading performance for the nine months ending December 31, 2023 ("Q3 2023"), alongside its strategic outlook in response to recent regulatory developments and announces a proposed share buyback.

FY 2024 Trading Update

Supreme has delivered an excellent trading performance across the Group during our historically busiest quarter. It is now expected that FY 2024 will significantly outperform market expectations1, with revenue projected to be at least £225 million and Adjusted EBITDA2 anticipated to reach at least £38 million - a doubling from FY 2023's Adjusted EBITDA2. This success highlights the Group's continued strategic development and record levels of organic growth across its core business divisions, including Vaping and Sports Nutrition & Wellness. The ElfBar distribution opportunity is now expected to significantly exceed previously issued guidance3 in FY 2024.

UK Government's Proposals to Ban Disposable Vapes

Supreme notes the UK Government's proposal to ban disposal vape devices as part of a number of initiatives announced today to seek to mitigate underage vaping. As a business, Supreme welcomes this clarity and as a responsible business remains ahead of the curve, having already implemented a number of proactive measures, including narrowing and re-naming of flavours and tailoring packaging, as part of an ongoing commitment to eradicate underage vaping and continuing to support adult smokers by providing an affordable, sustainable, safer alternative to smoking.

Supreme remains confident that vaping is, and will continue to be, the most credible and effective alternative to cigarettes. Supreme has an established suite of fully compliant rechargeable pod systems, produces over 60 million 10ml bottles of e-liquid annually and has already become a principal supplier to the UK Government's "Swap to Stop" scheme. None of these revenue streams are expected to be adversely affected by the changes proposed by the Government earlier today.

Proposed Share Buyback Programme

Building on our operational success and strategic response to regulatory changes and the Board's ongoing confidence in the business, Supreme proposes to launch up to £1 million share buyback programme over the next three months. This initiative reflects the Board's confidence in the Company's future value and our dedication to enhancing shareholder returns.

FY 2025 Outlook

The Company expects that approximately £75 million of its revenue (33%) and £9 million of Adjusted EBITDA2 (23%) will be derived from disposable vapes in FY 2024.

Looking to FY 2025, the Board believes that the anticipated ban on disposable vapes by the end of 2025 is expected to cause a temporary increase in revenue as retailers roll-out replacement vaping devices such as pod-system vaping devices ("Pods") and refillable vape kits ("10mls"). The Company expects that more than half of disposable vape activity will permanently transition to alternative forms of vaping such as Pods and 10mls, and Supreme will work closely with its retail partners to manage this seamlessly. The Board will continue to evaluate the ongoing impact of new regulations within the UK e-cigarette market as more clarity, particularly in respect of timing, is published.

Sandy Chadha, Chief Executive Officer, commented:

"Supreme is at the forefront of the UK vape market, consistently innovating and expanding our reach. The UK Government's latest proposals, many of which Supreme has already proactively embraced, support our strategic direction and focus. As a responsible vaping supplier, we welcome changes that help prevent underage vaping and will work with our various stakeholders to work through the proposed legislation. Our early initiatives and strong customer partnerships are testament to our resilience and long-term vision.

We remain extremely excited by the future and believe we are ideally placed to continue to expand both our operational and financial footprint across our key growth markets. The buyback proposed today reinforces the confidence we have in the business across the long term."

1 Company-issued guidance immediately before this announcement for the year ending 31 March 2024 was revenue of £210-225 million and Adjusted EBITDA2 of £32-35 million.

2 Adjusted EBITDA means operating profit before depreciation, amortisation and Adjusted items.

3 Current guidance for the ElfBar opportunity is around £60 million of revenue and around £7 million of Adjusted EBITDA2.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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About Supreme

Supreme supplies products across five categories; Batteries, Lighting, Vaping, Sports Nutrition and Wellness, and Branded Distribution. The Company's capabilities span from product development and manufacturing through to its extensive retail distribution network and direct to consumer capabilities. This vertically integrated platform provides an excellent route to market for well-known brands and products.

The Group has over 3,300 active business accounts with retail customers who manage over 10,000 branded retail outlets. Customers include B&M, Home Bargains, Poundland, Tesco, Sainsburys, Morrisons, Amazon, The Range, Costcutter, Asda, Halfords, Iceland and HM Prison & Probation Service.

In addition to distributing globally-recognised brands such as Duracell, Energizer and Panasonic, and supplying lighting products exclusively under the Energizer, Eveready, Black & Decker and JCB licences across 45 countries, Supreme has also developed brands in-house, most notably 88Vape and has a growing footprint in Sports Nutrition and Wellness via its principal brands Sci-MX and Battle Bites.

https://investors.supreme.co.uk/