THG (THG) H2 2025 earnings summary

Executive summary

• Delivered strong FY2025 results, exceeding guidance and market consensus with adjusted EBITDA of £76.6m and operating profit swinging to £8.1m from a prior year loss of £147.9m.

• Achieved full-year revenue growth of 2.3% after a strategic transition, with strong H2 and Q4 momentum; completed demerger of Ingenuity, now focused on Beauty and Nutrition.

• Significant deleveraging with net debt reduced by £71m to £233m, supported by the sale of Claremont, equity raise, and debt facilities extended to 2029.

• THG Beauty delivered its strongest Q4 growth since 2021, while THG Nutrition saw growth in all quarters, driven by online recovery and retail expansion.

Financial highlights

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

• Adjusted EBITDA reached £76.6m for FY2025; margin 4.5% (down 30bps YoY); gross margin: 40.7% (down 80bps YoY).

• Nutrition segment delivered four consecutive quarters of growth; Myprotein achieved nearly 10% revenue growth in H2.

• Free cash flow was negative £51.8m, impacted by working capital outflow and strategic investments; CapEx held steady at £21.1m.

• Activewear category delivered over £50m in revenue for 2025 and now represents 12% of online sales.

Outlook and guidance

• Guiding for mid-single-digit group revenue growth and gross profit margin improvements in 2026; FY2026 revenue and adjusted EBITDA expectations reaffirmed.

• Free cash flow generation of £25m–£50m targeted; net debt expected to reduce to £110m–£130m before any strategic asset disposals, supported by VAT repayments and cash generation.

• Expecting meaningful EBITDA progression from sales growth, margin improvement, and OpEx savings, including AI-driven efficiencies.

• Anticipate significant margin improvements in nutrition from VAT treatment and falling whey prices, with benefits expected to materialize over the next 12–18 months.

• Guidance assumes no material escalation in geopolitical disruption; revenue exposure to affected Middle East regions was <1.5% in FY2025.