Welcome to the THG Q1 2024 Trading Update Q&A Session. If you would like to ask a question, please press star one on your telephone keypad. My name is Saskia. Good morning, everyone, and thank you for joining us this morning. It's a short update today given the proximity to the full-year results. I think it might have been last week or the week before that we delivered. As you'll have seen from this morning's announcement, I'm delighted to report an acceleration in Q1 sales growth, which follows the return to growth that we saw in Q4 last year. It's worth pointing out that's the fifth consecutive quarter of improving revenue trends, so it feels like the strategies we implemented over the last 18 months to two years are starting to bear fruits for us now. You will have seen that Beauty is the standout performer. It's the largest business within THG. It's over half of our revenue, so that's particularly pleasing. Double-digit growth, given where we were this time last year, is a fantastic achievement, and it shows that the business model changes are really coming into effect. Nutrition, we're really pleased with the progress on the rebranding there and the repositioning of the brand. The feedback to date has been outstanding. It's obviously worth just reminding everyone, there is a phasing out of old products into new products, which causes some form of availability as you do that, but what that does mean with that approach is we avoid big stock write-offs as you move one stock line into a new stock line, so we think it's a very sensible approach to be taken. We're doing this just as a reminder that we're positioning the brand for a big push in the offline and licensing arena, and we're seeing really strong appetite there from partners in terms of doing that. Ingenuity, I think just to point out there, the growth has continued since Q4 right through into Q1, so we're really pleased with that performance. In the detail there, you'll see there's been a real meaningful update in the MRR, seeing 27% growth in the recurring revenue every month there, which is strong. The Holland & Barrett partnership, which we announced a while ago, is now fully operational and has gone very smoothly. Finally, as I mentioned in the release, it's clear that the accelerated investments that we've made in the infrastructure through 2019 - 2022 have really started to come into effect. The fulfillment network and our tech capabilities have moved on considerably, and these are obviously playing a significant part in the competitive advantage that our brands are seeing in the market at the moment. This CapEx is obviously behind us now, or the vast, vast majority of it will continue to be doing other CapEx projects, but they're the big ones that are behind us. And then we should see greater efficiencies as Ingenuity now onboards more and more clients as we've got that fixed infrastructure in place. So that's really the overview from me. I think there's no point laboring it. I think let's just go straight to Q&A if that's okay, please. Thank you. As a brief reminder, that is star one for your questions today. Our first question comes from John Stevenson of Peel Hunt. Please go ahead. Well, good morning. I wanted to have a few questions to get us going. Just on Beauty, there's obviously been a fairly sizable leap in app usage. I think you're quoting 15% at Q4, it's 24% after Q1. U.K. is obviously even stronger. Can you use sort of reminders on the behavioral and KPI differences between a sort of an app user and non-app user? And I guess there's no reason why this cohort would be any different. Second question following on from that, I guess, is how material is the marketing benefit of getting people onto the app? And then I don't know if you can comment on the impact of local manufacturing as well in terms of what that's having on it and if in nutrition. Thank you. Sure. Look, it's about building an ecosystem there, John, with app users, but also building in the loyalty. So there's another stat in the numbers there in terms of the loyalty scheme and the impact that's having. So we launched our loyalty scheme in Beauty about two years ago, and I think we're in terms of customers at the moment, I think we've put 2.3 million users in the loyalty scheme within the last 12 months. So that's super powerful because the vast majority of those people will be doing that within the app. So what we're doing is creating that sort of environment where people go into the app, they're using their loyalty, and then that really makes them a better customer for THG, and it's a much better experience for them as well. Then to add to that, obviously, if you looked at the service you get in Beauty when shopping on our Beauty websites, the response times are incredible. I mean, I placed an order yesterday at 7:30 P.M., and before 8:00 A.M., that order had been dispatched, and that would have been done at an incredible fraction of the cost that any of our competition would be able to do that given the investments that we've made. And so all round, it's a really good ecosystem for the consumers to operate in. In terms of then, what does that mean for the behavioral side of it? The loyalty scheme plays a big part. So as you move through the loyalty scheme, depending which one of our fascias you're operating on, then the behavior in terms of the frequency of shopping really moves through the gears. So people that are in the loyalty scheme, as you become higher tier, you see just an incredible improvement, not just like people buying twice as much or three times as much. You're talking five, six, seven times as much a year, which given then you've already got them on your ecosystem, there's no additional cost of particularly bringing them back to site, etc. That's a real win for that business. So then another question you had there linked to that was around what's the cost sort of dynamics between the app and other ways? I mean, look, broad maths would be that a user coming to an app, it's 70%-75% come for free. So they're going direct to the app or coming through free channels to do that. The rest of it would be through paid ways of doing that. So that's a really efficient free-to-paid mix as well. So then if you can get them on a cheaper basis into your app, into your ecosystem, onto the loyalty scheme, through a low-cost and rapid fulfillment network with automation, then you've got a really disruptive business model. It is worth saying, though, that that is an essential part of the model. So anybody who follows the U.S. tech guys or you look at consumer-facing businesses in the U.K., you'll see that marketing spend is always on the up because that's the model, right? So Google need to make more money, Facebook do, etc. So the cost per click and the cost per acquisition is always going to trend upwards. And so it's really essential that we build this competitive advantage and have this if we're going to be able to sort of differentiate ourselves from everybody else. It is an essential thing, but it's super cost-effective. Okay, brilliant. And can you comment on India as well, please, Matt? Sorry, Steve just wanted to say something now. I was just. Just picking up, John. Hey, Steve here. On your final point around local manufacturing impact on nutrition, on that different topic, so I guess the key callout for this quarter will be local manufacturing going live to support our Indian D2C business. We've built a meaningful presence through a B2B model in India two or three years ago. It was a small drag in last year's numbers when we pivoted that model to we stopped the B2B revenues into the territory, went local on production, local on JV structure, the local partner, and then went live in the quarter with a D2C into India. That will be an important part of the growth story for year to go for nutrition, which is one of the building blocks for, I guess, the shape of the year for nutrition, how we feel about Q2 being better than Q1 and every quarter thereafter improving. Okay, that's great. No, perfect. Thank you, guys. Thank you. From Citi, we have Monique Pollard with our next question. Please go ahead. Hello. Morning, everyone. A couple of questions from me, if I can. The first was, and Matt, you highlighted it, and it's in the statement, that really strong growth, return to revenue continues we're seeing in Ingenuity in March. Just wondering, given that strength, whether we should expect sort of continued improvement or acceleration in the Ingenuity growth as we go through the year. And then we've seen really strong standout performance from Beauty in the first quarter. I guess a couple of questions on that. Firstly, was Biossance meaningful in the growth in Beauty in the quarter? And secondly, what are their sort of headwinds and tailwinds as we go through the rest of the year in terms of the Beauty growth extra comp effect? Sure. So Ingenuity to start with there, Monique. Okay. On Ingenuity, yes, I think it is fair to assume that you'll see good, strong momentum continue through the year. There's no major strategy business model disruption plans that we have in place there. We dealt with an awful lot of that over the past 18 months, so we should start to see continued benefit from that. In terms of then other things to support that, clearly, the rate of client wins onboarding, not just winning them, but getting them onboarded, will also play a key part in the rate of that. So you might see some quarters where that steps on faster than other quarters just purely because of the onboarding program. But yes, we should see that continue for Ingenuity. In terms of Beauty, just answering your Biossance point, not so to be clear, the 11.1% isn't down to Biossance. It did play a part, but you'd be talking low, low single-digit contribution from Biossance to that revenue number. But we are super pleased with the Biossance integration. It's fully live, and it's performing very well, and we do think it's going to be a very meaningful brand. I think it will become increasingly meaningful as we progress through the year. What else was there on Beauty? Sorry, Monique. Oh, it was just if you could point out any sort of specific tailwinds and headwinds as we go through the year, I guess to give people some confidence that the strength in Beauty can continue? Yeah, sure. Look, I think, look, we should see we have had five quarters of consecutive improvement across the piece, and Beauty's been probably the key factor in that. So I don't see any particular things that we haven't seen yet. So unless something new comes along, there's a new world war somewhere or anything, we're not expecting any particular tailwinds or headwinds coming either way. We just think real, solid, steady momentum. Sure, there might be given different quarters, there might be a couple of percentage movements either way, but nothing too dramatic. It's just very steady. And in terms of the growth that we're seeing, it's been in the key markets and across all of the areas of the business. So whether you looked at the manufacturing business, which was causing a few challenges this time last year as we supported the consumers there, whether you looked at the U.K. market, I mean, the U.K. market grew slightly ahead of that 11.1%. I think it's about 13%. So clearly, we've got a really strong and growing position in the U.K. market. U.S. is performing particularly well for us, and that's a big market for THG as a whole, but certainly for Beauty. So it's a pretty steady blend across the group. Sure, there might be something that comes along in one of those areas that either causes a tailwind or a headwind, but nothing that we can see right now. Excellent. Thank you very much. Monique, just to answer that, it's Damian here, Damian Sanders. And I suppose I would say hi. Basically, last year, we had the significant headwinds being the destocking within Beauty. And we also had we actually moved away from the lower margin sales as well. So what I would say is that leading into this year, not so much headwinds to come, but the fact that we've addressed the headwinds, the significant ones we had last year, and the business is in a much better shape to move forward. And clearly, we've got we have a record of addressing headwinds as they come and will obviously take advantage of tailwinds. Perfect. Thank you. Thank you. Up next, we have Wayne Brown from Liberum. Please go ahead. Morning, gents. So, one question, if we can just in reference to Beauty and nutrition, respectively. Can we talk about products? So, I know there's lots of moving parts in nutrition, but from an NPD perspective, what's working well, what isn't working well, and how's the core products performing within nutrition? And same question really for Beauty. What's working? What's selling through quite strongly? How's skincare performing relative to haircare, etc.? And are you seeing any weakness at particular price points, or are there any semantics around product performance as such? Sure. I think, look, we're slightly sensitive to giving too much away on the nutrition side given that there's a competitive nature to that. But I'll start with the Beauty to begin with because we're less sensitive there because we're working with all the brands in the world, in effect. So look, on the Beauty side of it, sure, you see some variances based on time of year, based on brands that are particularly successful, brands that are fading away. If you were to look back, say, two years ago, you would have had a brand like Olaplex, which was just everywhere, and that was a particularly powerful brand. That one's not quite as popular right now, being briefly honest. But there are new brands like K18, which has been bought by Unilever and others as well. Sol de Janeiro is obviously a big brand right now. So that's one of the benefits of our beauty model, which is we get to partner and help brands build their brands in different territories across the world given what trends we're seeing online, and we become really key major partners for them in that process. Then as you get to this time of the year, fake tan, actually, believe it or not, becomes a massive product for everybody. But it's actually, I read a lot of the commentary on the beauty industry, and I've got to say it's strong across the piece. Fragrance is a particularly fast-growing area for us, and I think a lot of people are calling out fragrance as well. But there's no real category that I would say that is under pressure. There's a mini-boom at the moment in devices, LED devices in particular, where every man and his dog is launching an LED device, and there's been a lot of installation of those into households across the U.K. Whether that will be the case in 12 months' time, we'll see, but it's certainly an area that's quite popular right now. So we've just seen a really good broad base across the whole beauty business. When we come to the nutrition side of it, look, I think without giving too much competitive away, where we see particular strength is always in good-quality partnerships. So if we can work together, put our brand with another brand, whether that's a flavoring brand or a chocolate brand, or it really does. Even we've launched one recently with Disney around the Marvels. They have really good effect because it's a unique product to us that brings multiple customer bases together. So we see great success in partnerships. We've got a strong licensing team that we've built under Steve Whitehead in recent years as well. And so we see that trend continuing and think that that's a really powerful way of operating across markets as well because there are variances in different markets. But if you get good, strong global brands and you put them together with your brand, actually, that can become quite neat as a product that cuts across many, many markets. Bars and snacks remain really popular as people look for fast ways of nutrition, taking it onboard. But also the offline side of it is probably the most interesting at the moment because clearly, we've got a super powerful brand. Lots of people want to partner with us. The key reason behind the rebrand has been to sort of elevate it and put it in this position for offline and licensing. We've got some big licensing deals, I think, that we'd expect to be able to announce in the weeks ahead, which will further cement that position of the brand, and that will bring some interesting product categories that we don't currently operate in. So there's a lot going on across the nutrition business, but that's probably as much detail as I should give from a competitive tension perspective. Sure. No, no, that color is helpful, so thank you. Thank you. And now our next question comes from James Lockyer from Peel Hunt. Please go ahead. Yes, sorry. Good morning, guys. Thank you for taking my questions. And just on the Holland & Barrett deal, as I understand it, you'll be able to extend the deadline for next-day delivery for them. Yes, my question is, what was the deadline previously, and what is it now? And I assume those extra hours aren't just a nice-to-have. How financially important could they be? And then on the White Stuff deal, given this is outside your core verticals, was the deal incoming from their end, or was this outreach from yours, and therefore, is it an expansion of your focus areas? And what was the rationale that they had from switching from their existing solution to what you're doing now? So James, John Gallemore will be itching to answer this one, so I'll hand over to him. Morning, James. Yeah, it's John here. Look, so as you're aware, THG offers a 12:30 A.M. cut-off on our next-day orders. Look, and just to put some detail why we think that's so important, 30% of our next-day business happens after 10:00 P.M. So there's a huge dominance in the later hours when perhaps some of our competitors that aren't offering that. So we do think it's a real competitive advantage, the ability to ship orders so late into the night for the following day. Holland & Barrett currently offer a lower cut-off than that. It's 8:00 P.M., but we would fully expect them to take advantage of our performance there when we're fully up to speed, which should be in the next couple of weeks. Just your question on the White Stuff. We've launched their proposition into Germany. It was an e-commerce and fulfillment proposition, taking them back into territory. Then as a consequence of that, there's sort of a 75% uplift. But it's down to the better focus and being able to serve your local markets more effectively with the more dedicated technologies, the language, the payment mechanisms, and then a more localized delivery. It benefits that local performance. Thank you. Sorry, I forgot to ask my third question. Actually, just around retail media. So that's nothing mentioned in the RNS, but I'm wondering if you had any thoughts on the industry and where that could go to and whether or not you're dipping your toe in it. No, look, I think it comes back, actually, James, to the question we had earlier around apps and marketing spend and the fact that the cost of marketing is only ever going to go one way in terms of and so you've got to look for more efficient ways in which to do it. So actually, no, we see this as a very serious area for us to be partaking in. And whilst people have got the visibility of quite a small piece for us in City A.M., actually, the tech that we have around this, around the sponsored ads that you would have across the beauty websites, etc., where we're charging brands for positioning through searches and appearances on the website, those kind of initiatives are really key and substantial at the same time. So we continue to look at this as an area. We built our own influencer platform many years ago, and that's a really substantial influencer platform. We sell those services to other people at the same time, and that's a good profitable area for us. But we continue to look at the retail media space as well, and we would definitely be considering pieces of M&A in that space that we think would further cement that position for the long term around both our Ingenuity clients and our own sites, getting good value, access to consumers. So it's a very serious space for us to be able to play in. That's great. Thank you so much. Thank you. And our last question for today comes from Andrew Wade at Jefferies. Please go ahead. So I've got a couple of questions around the nutrition side of things, Matt. First of all, on the offline side of things, I mean, some pretty eye-catching stuff in the statement today around the year-on-year growth and also that sort of medium-term target on GMV. There's clearly been a big move on in your thinking of the scope and opportunity on the offline side. So just interested to sort of know what the catalyst has been for that. Has it been dipping your toe in and it being successful? Has it been people approaching you? Has it been looking at what the opportunity is there? Just interested in how your thinking has changed and what's been behind that. And the second part on offline, to what extent do you think it's incremental? So those are the ones on offline. Then the second part is on the rebrand, on nutrition rebrand. You talked to a fantastic response. Just interested if you could give any more color around that. On the availability side, what sort of quantum of impact are you seeing from availability, and how long should we expect that to continue for? Sure. So look, so coming back to what have been the triggers to lead to the acceleration in the offline piece, I think, look, the success we've seen on licensing has been far, far greater than we anticipated. So coming back to the retail media questions that we've had, the key reason for doing the licensing was around brand marketing. That's the honest answer, right? So when we approached this and set up a licensing team, this was about getting the brand in places across the world which would strengthen it but not really make a particularly big difference to ourselves. But it was considered to be free marketing in many ways, that when we could control that experience and that supply chain, what we've seen is the response has been far greater than we could have anticipated. Now, the reason for that when we've got into it, obviously, is it is such a big global brand, and so people have got a lot of love for the brand. And so then, as we do these careful expansions, we've seen an incredible response. And you've seen that in the GMV that we're creating in licensed sales. Obviously, we don't record that revenue. We just take a margin share of it. But they're pretty chunky numbers from a standing start to be delivering tens and tens of millions of GBP worth of GMV in product categories we had no right to operate in. And so then, as we've looked at further licensing opportunities in bigger markets with bigger partners, then the appetite there has been substantial, and suddenly, this is becoming much more meaningful. We've always then been operating and tinkering in the offline space, but we will always be a digital-first. Digital-first is so hard to do, right, as everyone's found over the last couple of years. It's an incredibly difficult space to do, to build a brand in a digital arena as we have done. What we see now is, well, actually, the offline opportunity is something that that road has already been laid for us to walk down. What we're seeing is, as we've launched small, unique product ranges into retail, we've seen great success. Do we see a crossover with our own website? We shouldn't see any cannibalization, in reality, and we've been careful to ensure that can't happen. So when you go into stores across the U.K., these are typically non-core products. I don't mean that in a negative way. What I mean is, these are complementary products but not the big revenue drivers for the DTC piece that you'll be able to buy in retail across the world. So we don't see any real cannibalization. What we then have discovered as well through the years has been and we've always been aware of this as being the fact that the big geography countries, the likes of Australia, the likes of America, being digital-only is quite a difficult space to be the number one player. So if we really want to take on and really scale those markets, then actually, we do need to broaden to offline and serve the major retailers. And that's what we're doing now across the U.S. We're rolling out into various major retailers. What that should do then is, you do need a different strategy for those countries, and we think that's going to have a meaningful effect on that as well. So it's not something that we see as a cannibalization, and we're certainly not going to be changing and moving away from a digital-first strategy. We actually just think it's all entirely complementary, and the success we've seen has been better than we anticipated. In terms of the brand response that you talked to, I mean, look, I think you'd be hard-pushed to find anybody who'd turn around and say they aren't impressed with the look and the feel and the rebrand, and they aren't pleased with it. So we know that's the case. We know it's a major move on. And where it really matters in some respects is in that offline strategy where it's been really well embraced by retailers and potential licensees alike. So we know that that's been received well. We know the demand is strong with those. Obviously, then there are other things we can look to, like consumer stats. I think we put one in there to say, "We're already the biggest brand in the U.K. by some distance. We already had 48% awareness, and now we're at 52," which is fine. It's not the key reason, really. What I'm more interested in is, let's really understand what the feedback of retailers, licensees, and general consumers on the high street, and that's been good. And then you talked to disruption, I think, as well. How long for this disruption? How material is it? I mean, look, there are two reasons for the disruption. Let's be clear on this. It's not just the change of old brand to new brand. Sure, that saves a huge amount of wastage and the rest of it and the way that we're doing it, and it has an impact. But we talk about it. Yen has been a massive thing, right? We've seen the biggest devaluation in yen in my history of having THG, right? And that's just in one quarter. So that's having a big impact on there. Sure, we take that out on a constant currency calculation, but if the yen moves by 20% in a quarter, then we're 20% less competitive because we haven't put our prices up by 20%, but they are 20% more expensive to the consumer there. So those are the two factors. I would say that there's always a plethora of small things, but they are in total, in equal proportion, in my mind, probably the two factors behind why that revenue just comes back for now. Look, I don't know the answer on yen apart from the fact that we've built our own. We've got local supply chain there. We've just launched in India, as Steve touched on. That's gone well. We will be live probably by the end of this quarter in Japan. So as a result of that, sure, that problem is being dealt with. Whatever happens with the yen, it just becomes a reporting issue from there on. We have that localized supply in all the major countries of the world. That is being dealt with on the yen side of it. On the rebrand, we'd expect to have worked through that pretty much through this quarter. Obviously, there can be a few delays. We've got the majority of the products now that are in the new branding, and it's not something that causes us big concern. It's the right decision and the right strategy is how we feel. Great. So thanks, very much. Thank you. With that, I'd like to hand the call back over to you, Matt, for any additional or closing remarks. Okay. No, I think, look, everyone's heard enough of us now for the past two or three weeks, so I don't think there's any need for any more other than to say thank you very much, and we look forward to updating you on any developments in the weeks ahead.