THG (THG) H2 2024 earnings summary

Executive summary

• Achieved revenue of approximately GBP 1.9 billion in 2024, with adjusted EBITDA up 1% to GBP 123.1 million and free cash flow neutral post-demerger.

• Completed the demerger of Ingenuity, refocused on Beauty and Nutrition, and entered the FTSE 250 Index.

• Over 40 million customers served, with more than 50% of revenues from overseas markets.

• Q1 2025 revenue was GBP 371.4 million, down 6.1% YoY, but Nutrition returned to growth and Beauty showed resilience in core markets.

• Strategic focus on profitable customers, regions, and product categories, with ongoing cost discipline.

Financial highlights

• Group revenue of nearly GBP 1.7 billion from Beauty and Nutrition; Beauty contributed GBP 1.1 billion with 3.3% sales growth year-over-year.

• Gross profit reached GBP 704.8 million with a margin of 41.7%.

• Adjusted EBITDA was GBP 92.1 million (5.5% margin), or GBP 123.1 million on a continuing basis pre-demerger.

• Capex reduced to GBP 33.4 million and net leverage improved to 2.2x.

• Equity raise in October 2024 generated GBP 93.3 million; GBP 89.0 million cash outflow with Ingenuity demerger.

Outlook and guidance

• Maintains mid-single-digit revenue growth guidance for 2025, supported by prestige beauty demand and nutrition recovery.

• Expects Group-adjusted EBITDA margins around 9% medium-term, with nutrition targeting a return to 12% margin.

• Anticipates improved free cash flow due to lower capital expenditure and lease costs post-demerger.

• Gross margin expected to improve in H2 2025 as whey protein costs normalize.

• FX tailwind expected for 2025, especially from the Japanese yen.