THG (THG) H2 2025 Pre Recorded earnings summary

Executive summary

• Completed the demerger of Ingenuity, simplifying the Group and refocusing as a consumer brands business with improved agility and cash generation potential.

• Achieved first full-year revenue growth since 2021, with Group revenue up 2.3% year-over-year, driven by strong H2 performance and standout Beauty segment recovery.

• Strategic shift towards higher margin home territories and more profitable customer channels, especially in the U.K.

• Ongoing lifecycle investments in own brand portfolios and digital innovation underpin long-term growth.

• Sale of Claremont completed, accelerating progress toward a net cash balance sheet.

Financial highlights

• Group revenue: £1,717.0m (+2.3% YoY); THG Beauty: £1,107.9m (+0.2% CCY); THG Nutrition: £609.1m (+6.4% CCY).

• Adjusted EBITDA: £76.6m (4.5% margin), ahead of consensus; Operating profit: £8.1m vs. prior year loss (£147.9m).

• Operational efficiencies improved payroll and distribution costs by 100 and 80 basis points, respectively.

• Working capital outflow of GBP 23 million due to strategic inventory investment in Beauty.

• Net debt reduced by £71m to £233m; strong liquidity with £183m cash and £150m undrawn facility.

Outlook and guidance

• FY 2026 revenue and adjusted EBITDA expectations reaffirmed, with free cash flow generation of £25m–£50m targeted.

• Margin expansion expected, primarily driven by Nutrition through category and channel diversification and protein innovation.

• Net debt expected to reduce to £110m–£130m before any strategic asset disposals, supported by VAT repayments.

• Mid- to high-single-digit revenue growth expected for both Beauty and Nutrition segments in the medium term.

• Guidance assumes no material escalation in geopolitical disruption; minimal revenue exposure to affected Middle East regions.