The Hut Group Stock

Good morning and thank you for joining us for our H1 2026 results. We've delivered a very strong first half with good revenue growth, a significant step-up in profitability, and a much-improved free cash flow position. Just as importantly, we're seeing clear evidence that the changes we've made to the group over recent years are now delivering. This morning, I'll take you through the H1 performance, the progress we're making on margins and cash flow, and the key trends shaping both Nutrition and Beauty. I'll then finish with the outlook for the remainder of the year before we take questions.

Before getting into the numbers, I think it's worth spending a moment on how we've arrived here. Over the past few years, we've made some significant changes to THG. Since 2022, we've materially simplified the group. We've sold non-core businesses, reduced our geographic footprint, and focused our resources on fewer larger markets where we have a proven right to win. The demerger of THG Ingenuity at the start of 2025 was a major milestone in that journey.

It's transformed THG from a CapEx-heavy, cash-consumptive operating model into a capital-light group focused on 2 market-leading global businesses, THG Nutrition and THG Beauty. We've also demonstrated the significant unrecognized value within the group. The sale of Claremont Ingredients for GBP 103 million last year is a good example of this, and we continue to consider similar opportunities where they make sense.

Alongside this simplification, we've been relentless on costs. Over the past 18 months alone, group headcount has reduced by approximately 25%. We continue to scrutinize our supplier base and increasingly use AI and robotics to drive efficiency across the business. But what's particularly important is that none of this has come at the expense of growth. We fundamentally reshaped the group while continuing to grow the top line and invest behind our strongest opportunities.

So today, THG is a much simpler business. We have 2 market-leading digital-first businesses operating in attractive global growth markets. A lot of the heavy lifting has now been done. We are now firmly in execution mode. And that brings me to the H1 results.

Group revenue increased by 7.2% to GBP 828.7 million reflecting strong momentum across the business. In Nutrition, our omnichannel strategy continues to deliver. We grew revenue across both online and offline channels, creating a broader and increasingly resilient business. In Beauty, we continue to take market share across our core territories. In the U.K., Lookfantastic and Cult Beauty delivered exceptional growth of 6.7%.

But the most important feature of H1 is the quality of that growth. Revenue growth, combined with the operational efficiencies we've delivered across the group, drove a significant improvement in profitability. Adjusted EBITDA reached GBP 42.8 million, more than double the prior year when adjusting for the disposal of Claremont Ingredients. And that improvement in profitability is increasingly translating into cash.

We delivered a significantly improved free cash flow position in H1, giving us confidence in the Group's ability to generate sustainable positive free cash flow from here on. Cash generation remains one of our key priorities. The changes we've made to THG have fundamentally improved the cash characteristics of the Group. Following the Ingenuity demerger, capital expenditure and lease payments have reduced substantially.

We've refinanced our debt facilities through to the end of 2029, disposed of selective assets, reduced leverage, and lowered our cash interest costs. As a result, we enter H2 with real confidence in our ability to deliver GBP 25 million to GBP 35 million of positive free cash flow for the full year. That confidence is underpinned by the H1 delivery of GBP 42.8 million Adjusted EBITDA with LTM EBITDA of GBP 95.4 million.

We also expect the normal seasonal working capital inflow in H2, supplemented by further initiatives to optimize stock holdings and improve working capital across the Group. I also want to briefly update you on THG Nutrition's VAT claim. HMRC has informed us that it is dealing with a significant volume of industry-wide claims covering more than 300 products across nearly 100 brands. As a result, HMRC requires additional time to assess the accuracy of those claims and now expects to provide us with an update by the end of October 2026.

Turning to Nutrition. The sports nutrition market is going through a major structural shift. What was once a category predominantly focused on dedicated athletes has rapidly moved into the mainstream. Consumers are increasingly focused on protein, health, and active lifestyles. Wearable technology is accelerating that trend, and GLP-1 usage is creating another significant driver of protein consumption.

Against that backdrop, we believe Myprotein is exceptionally well positioned. And the scale the brand is now achieving globally is significant. During H1, we sold approximately 58.5 million Myprotein branded products worldwide. That compares with approximately 37.2 million in H1 last year. We believe this makes Myprotein the world's #1 sports nutrition brand by unit volume and, by some distance, selling at least twice the number of products of our nearest global competitor.

And there's another important point. Despite already operating at this scale, Myprotein grew branded unit volumes by 57% in H1. We believe that makes Myprotein not only the largest sports nutrition brand globally by unit volume, but also the fastest growing amongst the established global competitor set. That combination of scale and growth is incredibly powerful, and it reflects the work undertaken during 2023 and 2024 to reposition and globally rebrand Myprotein.

We are now seeing the benefits of that work across multiple channels and categories. We've launched new products designed to help consumers manage the impact of whey inflation. Our expansion into adjacent categories is delivering strongly, with activewear producing another standout performance in H1. Licensing also continues to grow rapidly. The strength and recognition of the Myprotein brand is enabling us to establish 2-way licensing partnerships with some of the world's largest consumer groups.

There is plenty more to come. We have a strong pipeline of new products and licensing partnerships progressing through H2, which we'll announce in due course. At the same time, we've had to navigate an extraordinary whey inflation cycle. Since 2021, whey protein costs have increased approximately 5x. That creates obvious pressure both for consumers and for industry margins. But our response has been to adapt the business rather than simply absorb those pressures.

We've expanded into licensing, new categories, and trade retail while developing new cost-focused products to give consumers greater choice. And despite further whey inflation during H1, we still delivered solid margin progression. We are now also beginning to see signs of change in the whey market. Significant new supply is entering the market, and we're finally seeing evidence of stabilization together with indications of forthcoming price reductions.

If that continues, it would provide a meaningful tailwind as we move into 2027. Combined with the structural changes we've already made to the Nutrition business, this gives us increasing confidence in the trajectory towards our targeted 12% EBITDA margin.

Turning to Beauty. We are fortunate to operate in another attractive global growth market, but the way consumers discover and buy beauty is changing rapidly. Premium beauty continues to grow, while online continues to take share from traditional bricks-and-mortar retail. At the same time, live shopping, social commerce, and now agentic commerce are fundamentally changing product discovery.

That plays directly to our strengths. Beauty brands increasingly need digital partners capable of reaching and engaging with younger consumers across these emerging channels. And THG Beauty is already demonstrating its leadership here. I'm pleased to confirm that Lookfantastic is recognized as the #1 multi-brand beauty retailer on TikTok Shop for 2026.

That matters not simply because of the sales generated directly through TikTok. Our presence across TikTok and other social platforms also drives brand awareness, attracts new customers, and ultimately generates incremental traffic back to our own websites. It creates a powerful customer acquisition engine. And we intend to stay at the forefront of how the market evolves.

And so I'm also pleased to announce a new partnership with Google with THG Beauty participating in 3 pilot programs over the next 6 months. These pilots will help ensure we remain at the forefront of how beauty products are discovered and purchased in an AI-first world. We're also benefiting from other rapidly developing consumer trends. K-Beauty continues to grow strongly, while GLP-1 medication is beginning to influence beauty and wellness regimes.

Being early to these trends allows us to bring new customers onto our platforms and strengthen our relevance with brand partners. During H1, we added more than 50 new brands across our sites, including the recent addition of prestige brand, Clarins. Our proposition is increasingly differentiated. We combine deep relationships with premium global brands, leading digital capabilities, AI, social commerce expertise, and market-leading global fulfillment.

Our focus in H2 is simple: continue taking share and ensure THG Beauty remains at the forefront of the digital beauty market. There is another important part of the Beauty business that is sometimes less visible, our manufacturing operations. We have significant beauty manufacturing businesses in both the U.K. and the U.S., developing and manufacturing products for some of the world's leading prestige beauty brands.

These operations not only generate revenue and profit, they give us valuable insight into emerging brand and product trends and deepen our relationships with global beauty partners. Our U.K. operation is the country's largest prestige beauty manufacturer. It delivered a stellar H1, supported by new contract wins and continued cost discipline.

In the U.S., the new business pipeline remains strong. However, the business experienced delays in receiving packaging components as a result of the Hormuz Strait issues, which constrained dispatches during H1. Those orders haven't disappeared. They've merely been delayed. As that backlog is dispatched, we expect a strong Q4 from the U.S. manufacturing business.

Finally, turning to the outlook. The strong H1 performance means LTM Adjusted EBITDA to June now stands at GBP 95.4 million, leaving us well positioned to deliver full year expectations. Looking at Q3, across our core brands and markets, trading has remained encouraging with approximately 5% revenue growth achieved in July and August.

However, we did see some softness in other parts of the business, including from the impact of introduction of EU duties, which we are in the progress of mitigating as well as some phasing of own brand sales. Encouragingly, September has started well. The gifting season is now underway, and we've seen a positive early customer response, including to our all-important advent calendars, where we expect to sell over 250,000 units this year.

For Q3, we expect constant currency sales growth of approximately 2% with earnings and cash remaining robust. For Q4, we expect revenue growth to accelerate to approximately 6% to 7%. Within Nutrition, Myprotein's branded unit volumes are expected to continue their rapid growth trajectory. Following 58.5 million units sold in H1, Myprotein remains on track to sell approximately 130 million branded units for the full year of 2026.

And alongside that growth, our focus on cash remains absolute. We remain on track to generate GBP 25 million to GBP 35 million of positive free cash flow in the full year while continuing to grow market share and progress margins. Looking further ahead, the combination of EBITDA growth and improving cash flow through '26 and '27, together with the conclusion and receipt of the HMRC VAT claim, should see Group net debt reduced to approximately 1x leverage for full year 2027.

And there is potential upside beyond that. Following the GBP 103 million sale of Claremont last year, we continue to receive third-party interest in a number of non-core assets. Should any meaningful transaction materialize over the year ahead, the Group would move into a net cash positive position by the end of full year '27.

We also remain confident in the sustainability of our baseline divisional EBITDA margins of more than 6% for THG Beauty and more than 12% for THG Nutrition. For Nutrition specifically, improving visibility on whey costs and continued diversification of revenues provide confidence in returning to those medium-term margin levels.

So stepping back, the direction of travel is clear. We have simplified THG. We have 2 market-leading global businesses. We are growing revenue and taking market share. And at the same time, margins are expanding. Cash generation is improving materially. And at the same time, the balance sheet is strengthening.

A lot of the hard work and restructuring is now behind us, and our focus from here is on execution, delivering profitable growth, sustained positive free cash flow, and the significant value we believe exists within THG. Thank you all for joining us today. We would now be happy to take your questions.

[Operator Instructions]

We'll now take our first question from John Stevenson from Peel Hunt.

I'll start on licensing, if we can on Nutrition. Obviously, going really well, particularly in the U.K. and particularly with both new agreements coming on stream and the existing ones are scaling well. Can you talk about the opportunities that exist to take either existing licenses into European and other territories or indeed some new relationships for licenses moving into Europe and other territories?

Second question, just on those GLP-1 trends and how they impact the business. Can you talk a little bit more about what's coming through in NPD as a direct consequence of this and sort of shopping trends, both online and offline directly down to GLP-1? Just a quick 1 on the acquisition actually on the mic. Just can you talk about the state of play, any potential disposals, please?

I missed the last question there, sorry, the state of play on disposals.

Any potential disposals...

Yes, sure. Look, not easy to answer the first 2, particularly because of sort of certainly the first 1 around licensing just around, a, some of the confidentiality that we have; and b, giving competitors a heads up sometimes on some of the actions that we're doing. That said, you're absolutely right that quite often what we would do with a licensing agreement, in fact, more often than not, any major licensing agreement typically starts in 1 territory and then gets expanded beyond that into other territories as we see the given success.

So what I would say is some of the major ones that you will have seen that we've announced in the past 6 months or more have seen really good success, right? So the licensing part has been particularly strong for Myprotein and it's strong for all parties that are involved. So we bring new customers. We've got obviously a very big global following. These brands want to access these types of consumers. And so by partnering together, we're bringing our customer base to their products.

And so we've done that typically in the markets that were strongest. We almost always start in the U.K. Sometimes in the U.S. as well, we've got some U.S.-first partnerships, particularly. And even in Asia, we have a few that are Asia specific. But certainly, with the U.K. and the U.S., once we've launched there, we would then typically -- once we've proved the success to both parties, we'll then go and roll that out.

So that's why you can get really good confidence in the volume growth that we're seeing around some of these licensing deals. And that's both ways. So where we license the brand, our brand out or where we license these big brands in. So you're seeing really good progress on some of the dairy products that we have in grocers across the U.K. at the moment. So you shouldn't be surprised to see if that expands into other territories, even with other brands, including existing brands.

And then similarly, we've got some really big major global confectionery brands that we're going to some territories with and we should be set to expand them to. So there's a lot more of that coming. Some really interesting things as well around the licensing side where -- we're targeting specific channels. So we look at it from how do we get into that channel. We think that's a really good marketing opportunity for us and a revenue opportunity and people touch those areas every single day.

So convenience is a key focus for us, but -- and that can then go to things like coffee shops, et cetera. So you'll have seen maybe that we've done a deal with Five Guys where Myprotein product goes into the shakes in Five Guys, but that's just the start really scratching the surface that you should see some pretty substantial expansion across the coffee market and which is a really, really good touch point for us. So we're looking at all of those channels and licensing deals are 1 of the key ways that we'll get into that. And we'll keep you posted on -- we'll announce them as we expand some of these major partnerships.

Second question you asked was on GLP-1 products. Look, I think your key focus on GLP-1 is just driving mainstream into the protein market. So I think to a degree, yes, we launched GLP-1 focused products, but actually, it's the education point. So if you're a mainstream consumer and you're coming in, you're being advised you need to take protein because you're going to be deficient in it, then actually, it's the education that you need because we sell -- we have lots of products that all products that we sell would pretty much fit a GLP-1 consumer.

So they just need the education process of what best suits their needs. So we don't sit there and directly say, that's a perfect GLP-1 product. What we'll do is say this is something that a GLP-1 consumer in the mainstream can understand quite readily and we'll address it in that kind of fashion. So it's educating the mainstream market is a real focus of ours as opposed to here's that product.

And then the final thing on assets doing another Claremont. Look, the truth is we've had a number of bids against a number of assets, which would be deemed as non-core to some people. We've always got strategic reasons as to why we have these things. But if the valuation is correct, then, of course, we -- and it makes sense to us, then we'll go and do that. And so look, there's no progress that I would give an update on here. To date, we've said no to all offers that have come in for any of our assets so far because we just don't deem that they're a fair reflection on the strength and value of them. But that doesn't mean that at some point in the near future, we might come with some different news on that.

[Operator Instructions]

There are currently no further questions. With this, I'd like to hand the call back over to Matt for closing remarks.

Well, listen, thank you, everybody.

Apologies. We have a pop-up question from -- a follow-up question from John Stevenson from Peel Hunt.

I've got 1 more, please. Just on AI and Beauty. Obviously, GenAI is still pretty nascent, but it seems to be a lot more prevalent in Beauty -- can you just talk a little bit about the sort of trends you're seeing there? And I guess, I don't know if there any more detail you can give on the Google trials.

Look, I'll let Lucy because we've got Lucy here. She can answer on the -- on some of the trends that we're seeing around agentic and the things that we're introducing. But I think just to touch on the Google trials, obviously, PLC plugs into Ingenuity, and they've got a big partnership with Google and Google have got a stake in Ingenuity. So as they're launching products, obviously, their first preference is to go to a scale player like PLC and get those guys live, but I'll let Lucy touch on that.

Yes. We're actually not -- there's not much more we can disclose on the Google partnership and betas right now, but there'll be something coming in the next couple of months. In terms of where we're using AI within our own infrastructure and to build out the customer experience, we recently launched our Beauty assistant or Beauty adviser across both sites, and we are seeing over 1% of customers engaging with that right now and the customers who do engage with that are 7x more likely to go on and purchase.

So really exciting stats, but a lot of work for us to do to -- we've got lots of exciting things in the pipeline as we start to build that out. We've done various testing on customer tools for things like makeup try-on, skin diagnostics, which we will look to integrate into that beauty adviser in the coming months.

In terms of what we are seeing from LLMs and how that's changing the customer journey in beauty, up to half of customers now do a lot of their research via LLMs ahead of coming to the website. We're seeing a 4x uplift in traffic to the site that is coming referred by LLMs, albeit it's still a fairly small proportion of overall traffic.

And we're really well positioned as -- with our digital heritage and as a natively digital retailer with all the work we've done over the many years in traditional SEO, we're really well positioned for GEO to be 1 of the kind of #1 mentioned retailers within the assistants and LLMs when people are asking for where to buy beauty products and beauty recommendations.

With this, I'd like to hand the call back over to Matt for closing comments. Over to you, sir.

Okay, everybody. Well, thank you very much for taking the time this morning, and thanks to all of our stakeholders for their support over the past 12 months. Really appreciated, and we look forward to updating you on our Q3 and Q4 performances ahead.

Good morning, everyone, and thank you for joining us today for our full year 2025 results presentation. It's a pleasure to be here reporting on what has proved to be a landmark year, our first as a consumer-focused group packed with a large number of important initiatives. We delivered a strong full year 2025 performance ahead of both our guidance and market consensus with adjusted EBITDA of GBP 76.6 million, setting a solid base for meaningful progress again in the year ahead.

And on the balance sheet, we've deleveraged meaningfully. Our debt facilities are now extended out to the end of 2029, and we ended the year with over GBP 330 million in cash and available facilities, giving us real financial flexibility going forward.

At the start of the year, we completed the demerger of THG Ingenuity. And with that, THG became what it is today, a focused consumer-led group built around 2 leading businesses in their respective markets, THG Beauty and THG Nutrition. For the first time since COVID, both businesses delivered full year revenue growth in 2025, with Nutrition delivering 4 consecutive quarters of growth in the year.

The group's momentum in the second half was especially encouraging with Q4 delivering our best performance of the year at 7% revenue growth. In THG Beauty, we had a record year for new brand launches and a standout performance in our home territories, particularly Lookfantastic U.K., where we took share in established and high-growth segments.

In THG Nutrition, our multi-model strategy is delivering meaningful market share growth and Myprotein delivered nearly 10% revenue growth in H2 despite the model changes across Asia and India initially reducing sales in those regions. A combination of new partnerships, growing offline and licensing channels and category diversification are all contributing to a more balanced and resilient revenue base.

We have also seen significant progress regarding our VAT claim, which now totals around GBP 78 million following the prudent treatment of protein, collagen and supplement products over the years, while some of our competitors' 0-rated products.

We expect a resolution later this year, which, along with the meaningful free cash flow generation could broadly halve net debt by year-end. So turning to THG Beauty, a business which has seen a significant overhaul to the business model in recent years, which has created a strong and unique platform for our revenue and active customer growth.

We had our biggest ever year for new brand launches on the platform. We are firmly the destination of choice for the world's leading beauty brands, and that was very evident in 2025. Our biggest ever new product launch was the Huda Beauty Contour lip stain, a fantastic exclusive that drove enormous engagement and traffic.

Beyond this, our advent campaign in peak trading set new records, while THG Beauty had its biggest ever year for exclusive product launches, which is so important for differentiation in a competitive market. THG Beauty also became the biggest U.K. beauty retailer on TikTok Shop, a channel we see as strategically important for reaching the next generation of beauty consumers.

And on the own brand side, our biggest launch was the Biossance Eye Serum, which further strengthens our margin-accretive brand portfolio, where we have invested during the year to repackage and reformulate to remain relevant and compelling to beauty regimes.

Moving to THG Nutrition and Myprotein specifically. Myprotein is the world's #1 sports nutrition brand with an enviable level of engagement in a rapidly growing and evolving health and wellness demographic. This position of market leadership continues to strengthen. Brand awareness hit record levels this year, achieving our highest ever unaided awareness score in the U.K., where we are clear market leader.

Myprotein's aided awareness also reached a record high, further supporting the success of the major rebrand undertaken in 2025. Over half of our target demographic now recognizes the Myprotein logo, which speaks to the scale and effectiveness of our marketing investment and our multi-model approach. Myprotein's progress in offline and licensing expansion has been exceptional with over 43 million products now licensed and sold into global retail.

The launch of our Mars products this week serves to build on the uniqueness and quality of the Myprotein brand with the world's largest brands keen to work in partnership and gain access to the Myprotein community. This channel is still early in its growth journey. And when combined with the wider B2B retail partnerships, it's clear why we are confident about the medium-term trajectory for this business despite the well-documented commodity price pressures.

Outside of protein powders, activewear is a category to watch. It's a structurally attractive margin-accretive category, and our expectation is this will be delivering a run rate of GBP 100 million in sales within 12 to 18 months after delivering over GBP 50 million of revenues for the full year of 2025. So turning to the outlook. On the full year expectations, we are guiding towards mid-single-digit group revenue growth with gross profit margin improvements year-on-year despite the current record high commodity pricing.

We expect to deliver meaningful EBITDA progression, not only from continued sales growth and improving margins, but also from the benefit of significant OpEx savings as we annualize headcount savings while continuing to deliver new savings in utilizing AI.

Looking at each business, THG Beauty entered 2026 with strong underlying growth, particularly in the U.K. and U.S., our 2 largest markets. After a slower start to the prior year, the U.S. is performing really well, and our new brand and product pipeline remains very healthy.

For Nutrition, we are seeing strong progress across channels with clear actions in place to improve mix and profitability alongside a defined strategy to manage whey price volatility through procurement, diversification and disciplined pricing. Once commodity pricing starts to fall from record highs, hopefully before the end of the year, then we expect this to have a marked impact on profitability growth beyond 2026.

On cash, we expect to deliver free cash flow of GBP 25 million to GBP 50 million with CapEx running broadly flat year-on-year, working capital inflows following last year's temporary investment in stock and a reduction in financing costs.

Our results demonstrate our continued progress against our strategic vision of becoming the leading destination for prestige beauty and sports nutrition. This alignment between strategy and delivery underpins the strong momentum carried into 2026 in fundamentally strong end markets. So the team are here with me today, and we'll be happy to take some questions. And thank you once again for all your support.

[Operator Instructions] Our first question this morning is from John Stevenson of Peel Hunt.

I've got 2 or 3 questions, but I'll try and maybe I'll keep it to 2. But I think start with the VAT claim. And just on the VAT claim, you're still treating sales as being standard rated at the moment and paying that over to HMRC. And then secondly, assuming HMRC confirms that protein powders are going to be 0 rated, does this go into cheaper pricing for consumers, do you think?

Second question is then on Nutrition's margin recovery prospects this year. There's obviously a lot of moving parts. There's strong growth in apparel. We've got offline licensing the [indiscernible] sales. Can you just sort of chat through the drivers of how you see things panning out this year? And then maybe finally for throw in the last one. Obviously, you sold claim of last year. What are your thoughts on potential of further sales of noncore assets? I guess, what do you consider to be noncore?

So on progress with the back claim more generally then, look, I think we've got a bunch of claims in with the revenue that totaled about GBP 78 million. And you're absolutely right. The revenue have lost their appeals against the vast majority of the items in there. And so now -- but there have been competitors now for a number of years that took that approach anyway.

So naturally, we took a very prudent approach where we continued to hand over VAT monies to HMRC and then follow the situation closely. Now in terms of the treatment of VAT, this year, clearly, we'll be changing that treatment. It's probably an ideal time as well really to be changing that treatment because whey pricing is not only on record highs, it's on explosive highs as there's been a number of market forces that have just caused almost a tulip moment in the commodity.

And so naturally, we're in a really good position to be able to absorb that versus our competition, especially now as we've got the benefit of the 0-rated VAT to be able to apply. In terms of what that means for consumers, I think over time, naturally, consumers are going to see some benefit. But given that THG has been operating already by subsidizing the products that's -- whilst our competitors have 0 rated or some of them have done, then as a result, we've already taken that competitive position.

So we would expect to see significant margin improvements, both from falling whey prices and from the VAT treatment. So they are 2 significant tailwinds that we look forward to unlocking whilst whey pricing sits at the levels that it sits at today, we're probably not going to see the true benefits of that for a number of months, but we are looking forward to that feeding through.

In terms of your question on margin progression for Myprotein, naturally, there are a good number of opportunities ahead that set the scene for a very strong margin recovery, not least whey pricing, but put that one to one side. You've then got VAT, so we can put that one to one side. But as we touched on in the presentation, we've sold 43 million products through licensing and offline into global retail last year, which is bigger than any other nutrition brands total product sales globally.

So that's just our licensing and offline business model. Now the licensing side of that is pure profit, so that's great for margins. But the off-line retail sales, we've entered that market on a low-margin basis, almost running that channel at a breakeven to slightly negative to slightly positive, depending on the given period.

Now as we've now built a significant installed base, we will continue to build that base because we're seeing fantastic opportunities. But then naturally, there's going to be a really strong period where we can start to make significant improvements in that margin stack as well.

And then other points I touched on, I think, just in the opening intro there. You may have heard categories, new categories that we've entered into, such as the activewear is really accretive. I mean, to give you an idea of just the trading margin on that, that trading margin in that category has evolved from 42% trading margin on a much lower sales number just a couple of years ago to where currently we're trading margin around 60% in that category on a much greater scale.

So as categories like that, creatine and other collagens and various other products that we've launched expand, then become a greater part of the sales mix, we'll see significant margin progression through the Myprotein division. Factors we can't control, just explosions in whey pricing will naturally cause some near-term volatility from time to time, but we are very confident that the underlying factors driving that volatility will pass, and there will be a much more normalized market at some point in the not-too-distant or 12 months, 18 months at the very latest because there is so much new supply coming into the market, too.

And then the final question, I think, was around other assets that we have. The group is full of really high-quality small businesses that don't get much recognition outside of the group. We have had bids against a number of those businesses, not least one of those divisions or one of those small businesses at the end of last year, we had an approach on it didn't meet our valuation, which would have been a very significant number.

But we're not -- we have no interest in letting assets go high-quality assets that are trading incredibly well, whilst they might not necessarily be at the forefront of what the market sees THG as, we see great value in them. So unless we're going to get a proper valuation, we won't let them go. But again, this year, there are other assets, different assets, again, where we've had significant interest posed to us.

But each and every time, we're very clear, we don't waste any time. We know what assets are worth like you saw with Claremont. If someone wants to pay a proper price and it's the right thing for the group, then naturally, we would do that. Should we do one of those this year, I suspect that would take us to net debt-free given the VAT point and the size of the value that we'd be looking at for one of those small businesses.

[Operator Instructions] there is another questions came in at this time, the question will be coming from Grace Gilberg calling from Jefferies.

I have a few, if I may. The first one around Nutrition. Can you -- I mean, you already actually answered a little bit on the previous question, but can you speak a bit more about some of the cross-selling opportunities in that division and how you'll be able to consistently defend that segment or within Myprotein against some of the more specialized players out there.

So whether it's around athleisure or other nutrition brands, that would be really helpful. And then the last 2 I have are also on Beauty. So obviously, Beauty is another -- a larger component of the group and becoming more and more critical to the business. Can we speak a little bit more about the growth targets outside of the U.K. and how you're consistently defending the Beauty proposition there outside the U.K.?

And then my last one is probably a bit more general. But it would be helpful to understand a little bit more of the mix shift within Beauty and how we're thinking about moving between makeup and skin care. Obviously, skin care such a huge boom in the pandemic. We've seen that come back a little bit. But how do you think about your beauty businesses being working between both of those segments that would be really helpful.

Nutrition, how does it defend against specialist players, et cetera. I think one of the key things is we do have a significant community not only at the consumer level, but also at a marketing level. So the strength of the brand, the quality of the product that we put into the marketplace means that as long as we execute well, we can really work well with the Myprotein community. The strength of that community is reflected for online retailers.

So if you were to ever speak to any of the people that have taken Myprotein into store, you'll see that we have a big impact on traffic going to offline retailers into certain product categories. So I think we've talked in the past about Iceland with the Myprotein partnership there and the quite material impact that's had on their footfall and customer demographic.

But even if you go to major retailers such as the scale of Tesco's, you'll go into there, and we'll be one of -- literally the only player in the market that can bring together in retail, in a big retailer like that, one big branded bay, which is pulling together multiple product categories. And it will -- then when you look at the Greencore proposition we've had, the number of people we will -- the brand will bring to the lunchtime meal deal aisle in a retailer will dramatically change because there's Myprotein products that are positioned in there. So what that's telling you is the community that we're operating in is passionate about the brand, there's trust in the brand. And we can -- as long as we deliver real quality, we can put new areas into them. And just the likes of the partnership with Mars, et cetera, does show you that the scale of recognition that there is across the wider industry of the power of the brand that we've got.

And then if you looked at the athleisure wear progress we've got there just because that's one that you mentioned, we've been able to increase margins by 50% in absolute terms on the product. We've been able to move our price point significantly and -- but it's all been supported by an incredible level of quality.

So if you were to go and try the product, et cetera, you will see that the quality of the design as well as the marketing that's going behind it is exceptional. So the influencer community globally can relate to the Myprotein product on so many different levels in their life that they can become true, true brand ambassadors rather than one day pushing a bit of Myprotein and the next competitor 2, 3, 4 and 5, they can actually live the brand. I think then we got on to Beauty. Did we go straight into Beauty then? Yes. And I've got Lucy here with me. And actually, instead of me answering that, I should let Lucy have a word, it's her specialism and.

Grace. So in terms of our focus outside of the U.K., you'll remember a number of years ago that we did choose to exit some of our other territories that we operated in. So we fully exited Asia, and we significantly pulled back and rightsized the business in Europe. Now we do still have a small business in Europe.

But in terms of where our focus and investments are going at the minute, that is solely on the U.K. and the U.S., where we believe there is plenty of headroom for us to make significant gains in each of these markets over the next few years. The U.S. is performing strongly for us. We have quite a nice defensible proposition in the U.S. where the focus is on high-value clinical skin care, which is quite different to what the likes of Ulta and Sephora and Amazon are offering. It's very much regime-based. So we have mixed baskets and there's a lot of interaction with the consumer to help them figure out what skin care regime is right for them.

And then your next question, I think, was around category and what dynamics we're seeing within the category. And we're actually fairly broad in terms of our category mix across beauty, the category for us is around the same size as skin, hair and makeup with fragrance being the smallest for us on the contrary to what the overall beauty category sees.

So we've been able to take advantage of growing our fragrance portfolio ahead of the market over the last couple of years, and that has driven a significant amount of growth. We're actually seeing really healthy growth within cosmetics. And like you said, while skin care growth has tailed off coming out of the pandemic, it's actually still been relatively strong for us.

And then in terms of hair care, that's seen a huge boom in the category over the last couple of years. Actually, that's well looked fantastic came from. So there was a time where Lookfantastic held around 80% market share in professional hair care online. Naturally, as some other players have come online into that category, that has diminished somewhat.

So hair care for us is about defending our kind of stewardship and leadership in that category. So we've actually seen fairly broad brush positive growth across all of those categories over the last 12 months or so and into this year. And we don't see the skin care dropping off to be a huge problem for us, albeit the trends within skin care are evolving every day.

Our next question is a follow-up question from John Stevenson, calling from Peel Hunt.

Just a couple more. You've opened your second look fantastic store, I think, down in sort of Bristol Way. How has that gone? What's that done for the sort of the online halo and you got any plans for more this year?

And then second follow-up, just on the licensing pipeline within Nutrition, both in terms of existing partnerships and potential for new ones, if you could chat a little bit about what's to come this year?

Look, I think I'll answer this one for Lucy because Lucy would love to open 10 or 12 stores and put some CapEx into doing that. And logic says we get quite a fast payback on some of these stores, right? I think when we open a store, we get a payback depending on how much support we get in various areas, but you'd be talking a 2-year payback on opening a store.

Obviously, offline is a challenged market more generally for the longer term structurally, but beauty is a category that's in material growth. So as a result, we will be opening more stores. There'll be a steady, relatively slow progress of opening stores physically if that will be solo our brand. But that said, we will -- there's actually an increasing chance we're going to do partnership with other players where we will take over the running of their stores and rebrand them into ours. So -- which is a lower CapEx. They've already got the traffic footfall. We bring a lot to the offering.

So as a result, that's something that we are actively exploring to. Now if we did that, that would accelerate the number of stores that we would have out there quite materially. So look, I think every store that you open broadly adds a couple of million quids worth of revenue. So -- it's in the grand scheme of our beauty business of, what, GBP 1.2 billion, GBP 1.3 billion of revenue.

It's not massive, but it's -- what we do see is real brand value, marketing value, et cetera, in having a small estate. But we won't be rushing to open 10 more in the next 12 months, but there will be steady progress. Yes. Sorry, yes. So look, Neil, do you want to touch on a couple of -- I mean, we can't name them, but just some ideas around the licensing progress.

From a licensing standpoint, you'll see us continue to roll out our Mars partnership. So you'll see -- it's been mentioned already, but the Mars product has been launched this week, and that's took off to a great start. You'll see more of the Mars partnership come to life throughout the year.

And you'll see -- continue to see more partnerships in the flavor profile space and probably more leaning towards the U.S. market. From a licensing out standpoint, you'll see the rollout of the Greencore and further rollout of -- in the food to go area. And then you'll also see us playing in new spaces like ready-to-drinks as well.

Any other one, John, while we got yet.

No, that's good for now. Thanks, no.

All right.

As we have no further questions at this time, I'll turn the call back over to Matthew Moulding for any additional or closing remarks.

Okay. Well, thanks, everybody. Just a big thank you to all the team in making this happen. It's a pretty been a lively year, much appreciated, and I appreciate the support of all the shareholders and stakeholders. All the best.

Hello, and welcome to THG's Q4 Trading Update. We are joined this morning by Founder and Chief Executive Officer, Matthew Moulding, and members of the executive team. [Operator Instructions].

I will now hand the call over to Matthew Moulding.

Good morning, everybody, and thank you for joining us this morning. I'm delighted to report.

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2025 on a high, delivering our strongest quarter of the year and a record H2 that was 14% ahead of the top end of our guidance. This means that we enter 2026 with significant momentum. Our performance is a direct result of the strategic focus on core categories and territories and the incredible dedication of our teams.

For the fourth quarter, the group delivered revenue growth of 7%, driven by a successful trading period over Cyber that saw revenues climb by around 8% across November and December. The strong half 2 means we've delivered our first full year growth since 2021, a testament to the business' response to a tough macroeconomic backdrop these past few years.

THG Beauty delivered an outstanding performance with Q4 revenue growth of 6.4%, well ahead of our guidance. This was powered by exceptional results from Lookfantastic in the U.K. and Ireland, which grew by an impressive 16.2%. Our loyalty members continue to grow alongside spend per account with customer retention rates at all-time highs, demonstrating the health of our customer base and the quality of the proposition supporting repeat purchases.

Our strategy to focus on core, high-margin prestige brands, enhancing the customer experience with new partnerships like Uber Eats, and expanding on brand visibility through retail collaborations is now clearly delivering.

THG Nutrition also had an encouraging quarter, delivering revenue growth of 8.5%. Myprotein maintained its position as the world's #1 sports nutrition brand, and our off-line expansion strategy continues to bring our innovative products to a wider audience through exciting collaborations and new retail listings. Whilst whey and commodity prices have remained elevated year-on-year, we continue to diversify our channel and category mix with high-margin categories like our activewear range, delivering excellent growth in 2025 and is set to exceed 15% of Myprotein's revenue mix in 2026.

At group level, this strong underlying performance was achieved alongside taking decisive actions to streamline our operations. The strategic changes in less rewarding beauty markets alongside the disposal of noncore assets has now largely been annualized, setting us up for a cleaner comparison and a strong start to the new year as well as further illustrating the hidden value in the group.

Looking ahead, our goal is to build on this strong foundation. We have high confidence in our trading momentum as we begin 2026. In THG Beauty, we will continue to accelerate our digital leadership, using AI and virtual tools to enhance personalization. For THG Nutrition, we will continue to drive our global off-line expansion with new range expansions for major U.S. retailers like GNC and Kroger set to launch in the first half of the year.

Across the group, we entered the new year with a clear focus on delivering unparalleled quality, value and innovation for our customers, all built on a more streamlined and efficient business.

We've now got some time for a few questions. Thank you.

[Operator Instructions] We'll now take our first question from Andrew Wade from Jefferies.

First one for me on the nutrition side of things, obviously, very strong performance in the U.K. or excluding Asia, I should say. Could you just talk through sort of the shape of how Asia performed within that and also a bit about price volume, if you can as well? That's the first one.

Yes, sure. Look, so I think just to give you the breakdown in the numbers, it was 12.2% for nutrition when you take Asia out of the question -- out of the equation. And so we reported 8.5%. Asia is our second biggest market. What we don't do is give every single territory and try and break that down, as you know, Andrew.

Well, I think just to give you some clarity around Asia, the proposition and the brand strength throughout Asia is really good and really strong. Well, for anyone that follows currencies, you'll be aware that the Japanese yen, in particular, has suffered, what, another 5% just in the last couple of months devaluation. So it's really struggling as a currency. We've got loads of actions and initiatives that we're working on throughout Asia and especially within Japan, where we are switching to a licensing model in some areas as well, which will actually have a bit of an impact in those numbers at the same time because more revenue has gone through the licensing aspect of that model than it would have been in the previous year as we steadily progress to try and sort of derisk ourselves from that position. So it's a slightly more complex number than just a straight line revenue figure on there. But to give some clarity and confidence, the brand strength across Asia is in a really good position.

And then I guess, probably this is on the nutrition side of things as well. I mean, across the group, your top line number came in a bit ahead of the top end of the guidance. But we're sort of looking at the overall EBITDA being sort of consistent with where we were before. Is that to do with sort of continued elevated whey prices? And how should we be thinking about that into FY '26? Is it going to be a sort of slightly higher revenue environment, but with margin rebuild being a little bit slower than previously thought?

Sure. Look, a couple of factors to take into account here. Naturally, we're pricing when it's going up, and it's been going up, it's been incredible, the demand for whey products across the globe. That has an impact on your numbers. And so there's an element that feeds into that, yes, you're right. The other thing to take into account, though, is we have seen an opportunity in marketing. And so actually, we've invested more heavily into marketing. I think there's probably about GBP 3 million of additional investment going into marketing during Q4, probably, I think just that quarter. And I think that splits about GBP 2 million into Beauty and GBP 1 million into Nutrition, if you were to do the rough maths on it. And that's because with the changes that we've made to the business model over the last couple of years, as we've gone into a real focus of high profit territories for us and pulled away from the lower profit territories, then there's been a real opportunity to spend more in marketing.

So the customer dynamics and the data is really strong. And what we wanted to do is to underpin the next year, but the years ahead. So it's not a simple answer that I can say to you, it's a higher revenue and the EBITDA position going to stay static, something for the future now. It's a live situation.

What I can say is, though, is if whey pricing does fall considerably, then obviously, that will have a dramatic impact on return to profitability of -- or an increase to profitability. And so I think I did a LinkedIn post and I even mentioned it on the call to put things into perspective for people. I think the math we did around Q3 was GBP 65 million of annual profitability has been temporarily taken from us since the IPO date just because of whey pricing. It will come back down because that's what happens with commodities over time. But the market has seen explosive growth, which is a good factor as we see it.

On the one hand, we are seeing demand for protein across the globe reaching new highs. Supply is struggling to catch up, but it will catch up. But that does mean we've got a far, far bigger market in which to play into now as well.

Yes, absolutely. Okay. Well, sounds like you're well set up for next year with that additional marketing investment as well. So my last one was on the HMRC VAT side of things. Any update on progress there?

Yes, sure. So in terms of -- for those, as a recap, the HMRC lost the case. They made an application to appeal for the case and were denied. And so they've now, albeit somewhat late, made another appeal to a higher court for the opportunity to appeal. So there's a lot of appealing and appeals going on, but this -- we'll find out in due course whether that's in a few weeks or a few months, we'll find out whether they've been denied on that.

For now, what we've chosen to do is to not change our position on the VAT. So we're still paying over the VAT to HMRC even though some of our competitors aren't doing so and so that makes an unfair sort of market position, but it's a very -- it's a prudent way to take this, and we'll get that money back in the future anyway once that HMRC, if they were to lose, they have the right of appeal, that comes back to us, and that's quite a material number. To put it into perspective for you, today, I think when we first notified the market on this last year, it was about GBP 30 million that we were due. That number is now at GBP 55 million. So it's a sizable chunk, and we just prefer to take this position, keep increasing the value that's due to us. And then that way, we've got the strongest position should the outcome there become clear in the weeks ahead.

We'll now take our next...

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Dues coming. If that VAT comes back to you from HMRC, would you be, in any case, required to refund some of that to the end consumer because they're probably the ones who eventually paid that money as part of the pricing they paid for the product?

Sure. So short answer is online is in good growth. So it's certainly not in decline. That's in good growth. In terms of the answer for the VAT money, no, that stuff -- that money is for THG plc and nothing related to consumers. How we are accounting for this is the consumers, we're suppressing our margins by doing this. And so yes, that money comes back to us. So as and when we get success on that and then that will be a value payable to THG plc.

We'll now take our next question from Lara Simpson from JPMorgan.

I just wanted to touch on free cash flow actually. I mean you obviously saw a much stronger momentum in the second half of the year, both on Beauty and Nutrition. So interested if you could just talk about how that translates into free cash flow generation in Q4 2025? And then maybe just run through some of the sort of operational working capital factors that influenced conversion through the year. And then maybe just first thoughts on 2026, how you're thinking about sort of CapEx and cost discipline to drive cash generation in the year ahead?

Sure. Look, I'll let Matt or Steve go into the detail for you around the sort of the levers for free cash flow for next year. But just to give you -- you've always got to look at our free cash flow over a period of, let's say, 12 months rather than just even Q4. Q4 is obviously a great period for us, and we generate a good deal of cash there. But at the same time, when you see opportunities and you invest in your marketing, what we will do as well is, from time to time, we'll take different positions around working cap. So we may take on more stock if brands have got opportunities that they want to put to us or we feel that there's an opportunity to come out of the traps faster in Q1. So there are from month-on-month, quarter-on-quarter, some variances, but obviously, Q4 was a really strong cash generation period for us.

But Matt, I don't know if you want to talk about it.

Yes, I think you covered the [indiscernible] on point, Matt. So you would always have to look at it over a full year. Q4 generates a strong cash inflow, but that's more a bit of seasonality within the year and offsets Q1, Lara.

As Matt touched on, the really strong momentum we saw ourselves was particularly in Beauty that we took a little bit more stock cover just to ensure that we could make sure that we took full advantage of that sales momentum, that means that working capital is slightly heavier in the year than we anticipated, but that's purely phasing. And as you go into FY '26 with the EBITDA where consensus currently sits around the GBP 100 million mark, you'd expect to be generating in the region of GBP 20 million to GBP 25 million of free cash flow next year.

And then just a follow-up on the Beauty side. You've obviously done a lot of work on sort of portfolio optimization. I know you've had the luxury sale and sort of withdrawals from some of your areas in Europe and Asia. Are we now going to be sort of back to business as usual? Or should we expect a little bit more portfolio optimization on Beauty over the next sort of 12 to 18 months?

Look, I think portfolio optimization is done. So the pullback in some of the areas of Asia and the Europe that you're seeing, that annualized now. So that's how the portfolio optimization is done.

And we'll now take our final question today from John Stevenson from Peel Hunt.

I need to improve my speed on the buzzer, obviously. But I'll stick to Beauty, actually. I've got 3 questions. Can you put some numbers behind the performance improvements in the sort of beauty brand portfolio? And are we entering sort of 2026 in growth?

Second question, I don't know if you can talk about the learnings from the Lookfantastic store. I think it's been over about a year now. How has that panned out? And have you got plans for more? And I don't know if there's any more we can do on the KPIs for Lookfantastic. You mentioned obviously great retention, but can we talk a little bit about what's happening on active baskets and sort of general spend levels because it's clearly a really, really strong performance that's carrying to the year ahead.

Sure. Look, I think in terms of -- look, I'm going to go off the top of my head here, John, because I've not got it in front of me. They're granular details. So forgive me for this. But when you look at the own brand, the beauty side of things, to give you an idea of the scale of impacting half 1 even of just the Perricone brand, right? Fantastic brand, Perricone. The first doctor brand that was out there, really do -- it really is a high-quality brand. But it had some timing issues around some of its order flows into retail and various other points that were causing some challenges. And that swung that business from being a tiny profit business to -- I think it probably lost somewhere in the order of about GBP 4 million in half 1 of negative EBITDA. So you've got a swing there of, I don't know, GBP 5 million, GBP 6 million of EBITDA in 1 half on that. A lot of those issues have obviously been addressed now.

Second half, I don't think it was quite a complete reversal. Well, it has seen massive improvement. And then as we come into half 1 for this year, you'll see that, that swings back. So that's a nice profit lever for us for half 1 because we've dealt with some of the challenges that, that brand brought to us. But it's obviously a sizable revenue business with sizable margins that are attached to it. So it does get impacted. And look, I'm sure if you wanted to speak to Matt, Damian or the team afterwards, they'll give you the granular detail on that. That's me talking off the top of my head, but it won't be a million miles away.

Spot on, and the growth in [ X brands ] is about 150 basis points better because of that playing through. So exactly as you said now.

Yes. And then I missed your other questions, John, because I was scrambling in my head to think about Perricone.

Yes. Second question was the store -- how the store has done? The impact you've had in terms of halo? And then any plans for more stores?

Look, the store is bloody epic. I've got to say I hate stores as a general rule because it's completely outside of my personal wheelhouse. So it's not something I can quite comprehend that well. But it's traded incredibly well, this store that we have in Altrincham in Manchester. So we are going to roll more out. We've got one coming in Bristol. There's just been various delays on various things, issues with fit-out or whatever, but that's coming as well.

So look, if I could press a button today and have a portfolio of a dozen stores across the U.K., that would be a lovely place to be in. And they just take quite a bit of work to get done to make them roll out. I think at the same time, you want the industry to help fund these. You can open a store anywhere tomorrow and throw a CapEx at it, but it will be your CapEx. Whereas if you work in partnership with brands, they will share the CapEx on it. And so we're not rushing into this head over heels, what we're doing is a steady approach. We'll probably open maybe the Bristol one plus another one this year, and then we'll just steadily way -- work our way through it and do it with the brands.

But so far, so good. I mean, look, the beauty sector and industry is having a real purple patch right now. And I do think that market is outpunching pretty much any other market. So look, I think you'd have to be careful that you don't run in and open 40 stores and find that the market changed in 5 years' time or something, but it's been really positive so far.

And that positivity reads through into the sort of the overall online piece as well? And you get a halo around the store, yes?

Yes, indeed. It does, yes. You get a really good halo effect. We see it. You can see the data, the benefits. If you looked at the likes of Boots, you can imagine the huge benefit that you get on their beauty portfolio from their store portfolio across the world and there's no doubt by having that, it's a marketing tool at the same time. So our approach when we were trialing this first store was, well, look, let's assume it loses a little bit of money and we'll just get the halo effect off the back of it. Actually, it's been miles better than that. And so you sit there going well, and we can see and track the halo effect at the same time. So it has been a real positive.

Fantastic. Brilliant. And then just finally, I don't know there's any else behind the KPIs that look fantastic just in terms of sort of active basket spend levels, obviously, some big drivers this year.

Yes. Look, I think, look, it's a big business. The beauty retail divisions, GBP 1 billion of revenue. So there's a lot of different factors that make up its performance. What I can say is we've completely -- we've had a really, really strong time on things like LED devices. We can obviously lean into these things when the market and the trends come that way. There's been some good brand performances at the same time. The app has been a great success for us as well, keeping people on there. The loyalty schemes have played a key part at the same time, and we launched those about 2 years ago.

So there's a whole host of things that you need to be right on. But at the same time, I think the market is really positive as well, right? I think TikTok's had a real impact on the market, the youthful side of it, the customer demographic has changed where the market has shifted from 20 years ago being from 40s to 60 years of age to now being probably 14 years of age to 70 years of age. So the market is growing in lots of different ways, and we're just trying to make sure we play our part on that through all these different initiatives.

With this, I'd like to hand the call back over to Matthew for closing remarks. Over to you, sir.

Okay. Well, listen, thanks, everybody, and thanks for jumping on the call at short notice as well. And more importantly, thanks for the support from everybody from THG staff to all the stakeholders and investors, and look forward to speaking to you in a few months now. Cheers.

Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.

Good morning, and welcome to THG's Q3 2025 Trading Statement. We are joined today by THG's Chief Executive Officer, Matthew Moulding, and members of the executive team. [Operator Instructions]

I would now like to hand the call over to Matthew Moulding. Please go ahead.

Good morning, everyone, and thank you for joining us for THG's trading update for the third quarter of 2025. As we announced in the statement this morning, trading momentum has continued to improve with organic growth hitting its highest rate since COVID. THG Beauty and THG Nutrition are now both in growth with the group delivering revenue growth of 6.3% in the quarter, reflecting payback on the business model changes made throughout 2024 and earlier.

Now looking at our businesses in more detail. In THG Beauty, a return to growth was supported by a strong advent calendar launch and solid momentum in U.K. retail, including double-digit revenue growth for Lookfantastic, demonstrating the strength of our online retail proposition. After a weaker start to the year, performance in the U.S. was much stronger with increasing loyalty through subscriptions and category growth outside of our core in prestige skincare. In THG Nutrition, Myprotein achieved revenue growth of plus 10% with growth in both online and offline channels. Social commerce and marketplace channels are delivering particularly well, and we're increasingly launching exclusive products on platforms such as TikTok, including the recently launched Myprotein and Jimmy's Iced Coffee Impact whey protein.

These exclusives drive engagement and demand for the brand, helping to capture new audiences. Within offline, our global retail footprint has expanded significantly as we launched clear whey protein into 2,500 U.S. CVS stores and secured our first ever retail presence in the Middle East through a multi-category partnership with Spinneys Supermarkets. Our strategy of partnering with leading brands continues to deliver market-leading results. Our Müller collaboration was the U.K.'s #1 protein dessert despite the collaboration only launching 12 months ago. In leisure, a new partnership with Everlast Gyms will see 60 in-gym Myprotein kitchens across the U.K. and Ireland, embedding our brand directly into the daily lives of the fitness community.

Now let's look ahead. We're well positioned as we enter the group's busiest, most profitable and cash-generative quarter. At H2 results, we gave group growth guidance of between plus 3.9% to plus 5.9% for H2. Q3 performance of plus 6.3% positions the group favorably against this guidance as we now commence our peak trading period. With both operating model changes and additional cost efficiencies proving successful, we remain confident in the outlook for both 2025 and into 2026. So in summary, Q3 was a solid performance. Our focus remains on driving sustainable growth, strengthening our market positions and deepening customer engagement and loyalty.

And with that, we will now open the lines for questions.

[Operator Instructions]

The first question today comes from the line of John Stevenson from Peel Hunt.

I've got one question on Beauty and 2 on Nutrition. I will start with Beauty. Lookfantastic U.K. is now into double-digit growth. And can you give a little bit of insight behind the customer KPIs behind that in terms of what you're seeing in U.K. engagement activities and anything else? I appreciate Advent has launched and gone well, but interested in the sort of drivers behind on the customer side. And then on Nutrition, obviously, a lot going on. Can we talk about some of the growth drivers and category performance behind that? Hydration is obviously accelerating. I think apparel is still one of your fastest-growing categories. Is there anything else you'd like to call out?

And finally, on Matt within subscriptions, I mean, massive growth against the first half. I'm not sure if that's pricing driven, if there's any sort of sense of how sticky those subs customers are.

Sure. I think on subscriptions, there are benefits to being a subscriber. So there's definitely a pricing advantage for people to do that, which generates the stickiness and gives the demand for people to sign up. So we're very focused on that, and that's an initiative that the Myprotein team have been building out now for the past 12 months and seen some good success. I think to call out some other things within Nutrition, I think we touched on it at the half 2 results as well, John. You're right that the sportswear category is seeing exceptional growth and also really strong margin progression as well to such an extent, it's quite quickly becoming our highest gross profit category at this rate. It's right up there pushing the likes of vitamins, which is a very high gross profit margin. So it's a deliberate strategy that we're building upon where, obviously, whey protein as a core category remains super important for the consumer, but it's one of the lower margin categories, especially when you consider potential for whey volatility.

Now there's a number of ways we've been tackling that over the past couple of years. And clothing is one of those, the bitumen build-out is another. The offline partnerships, the licensing as well is really key. And so you recall as well, we've had some FX pressures, which haven't really gone away yet either. If you look at the yen, it's still at around 200 level. And when we IPO-ed, it was at 135, and that was our second biggest territory. So the devaluation of the yen has been quite painful for us to achieve through. And that's also led to us developing some of the model out as well around the licensing arrangements and localized manufacturing in different territories.

And so you'll see more of that where -- especially around offline, I think we announced the deal that we've done with a major Korean conglomerate where they're going to be dealing with the offline channel for us, and they'll do the manufacturing, and they've obviously got all the relationships with all the retailers, and they'll be putting into stores. We'll then get a license fee off the back of that. But at the same time, then still big -- quite a strong market for us. We'll be dealing with the online model as we already would do. So we're developing the model for nutrition to different markets in different ways to suit what's the right way of us trying to crack success over there.

But generally, the offline has gone very well. We're obviously looking forward to a time when the whey protein prices start to fall, and that would bring us some great progress. But there are some other areas where you're seeing really good commodity progress, the likes of creatine, which is a key category these days in the health and wellness space, you're seeing that, that commodity pricing is near record lows. And so you've got an ability to lock that in for a sustained period of time into the future. You took up to 12, 18 months, you can lock that pricing in and say, well, that's enough for that business model to be a great success for us.

And we're looking at doing that across various commodities. You obviously wouldn't want to do that in whey protein right now when it's at record highs. So there's a lot of progress going on in the Nutrition business. It was an eventful year last year. The rebrand, I think I think someone called it out as being the worst rebrand in history. I think we probably -- it doesn't motivate when you hear things like that, but I think we're pretty pleased with the progress that we're making there and super proud of the rebrand and the results that is delivering. So I think that's probably the main kind of call out that I would give.

I mean the other question you had around some of the beauty customer dynamics, look, John, I've got to be honest with you. I'd be starting to get out of my depth if I get into the real macro details of some of the data points within the beauty consumer behavior. What I can tell you is from my level, what I focus on is the number of app users we've got, and that's at record highs. Obviously, we've got really strong following across the app users. I also then look at the loyalty schemes that we operate as well and the loyalty schemes have been a real success. And actually, I was quite resistant to those loyalty schemes. So that really is one for the management team where they pulled me into doing them.

But we are seeing real good stickiness across the consumer. It's very volatile within beauty within which brands are successful. As you may have seen in some of the big corporates out there where brands that have been successful for the past 5 years suddenly aren't anymore. But that's the beauty of our model where we bring these new brands to market and put them in front of customers and helping some of that shift to happen from time to time. But yes, we're pleased with it. I think the one thing to call out in Beauty as well Lookfantastic is doing it especially well. Last year, it was lagging a little bit where you've still got a drag on the business right now is the brand piece has been choppy, various initiatives we've had going on in there, but that should now start to ease as well.

So we'll be [indiscernible] update our own brands. I put a post on LinkedIn this morning around one of our smaller brands, Christophe Robin. So I think that one will be back in growth pretty quick given [ Taylor Swift ] is an avid user of it. But trying to get that brand business into a much stronger position. And so that stops to be a drag is also a priority in Beauty, but I think we're in reasonable success there now on the go forward.

[Operator Instructions] The next question comes from the line of Andrew Wade from Jefferies.

A couple from me. First one on Nutrition. It sounds like most of the growth in there driven by price. But I think that sort of belies the volume growth that you're driving from the offline piece. So obviously, you're going to get the licensing sort of smaller revenue proportion on that. Could you just talk a bit around that, sort of how much more product is out there given what you're doing offline and sort of how you're using that to build the customer base? That's the first one. And then second one on -- you touched on own brand there. How should we be thinking about the phasing of investments in that and sort of the timing of disruption and benefits in terms of your investment in the own brand?

All right. So in terms of answering the nutrition question on how much extra product is out there. I think to give you a small fact on that, the Müller as an example, had the sell-in to retailers in Müller now. I think we're on our third month of 2 million Myprotein units into retail in a month for 3 consecutive months. So I know it's certainly to -- I'm expecting the third month when I see the data to come through with the same as well. Now the sellout is a bit different, but obviously, we're interested in the selling just as much. So but 2 million units just in protein yogurts under the Müller partnership. That gives you an idea of the extent of the touch points that we have in that -- if you were to look at Iceland as a retailer, we're probably doing in the region of about GBP 70 million a year of frozen meals with Iceland across 2 different types of ranges that we have with them.

Now the average meal is somewhere in the region of about GBP 3.50, GBP 3.50, I think, given all the average product. There are some cheaper products in that we sell. So you get an idea there, there's GBP 20 million of products probably going out the door just in frozen foods, and that's pretty much limited to Iceland. There are some other distribution points, but it's very successful for them. So they do control distribution of that, and they do have an exclusive on that range of products in there.

Then when you look at the other things that we're doing in as far as Japan, we've had this partnership for a long time with ITOCHU, where they do in retail stores, they will provide ready-to-drinks, just a small range of flavors. And that's in -- I think it's like 200,000 stores now over there. It's been expanded from just being in the 7-Eleven stores or whatever it's called. And so in every store, they're selling 1 or 2 units a day. So it's huge volumes that you would see going out on touch points, but that won't necessarily represent itself on the revenue line. So when something like that doing GBP 70 million worth of frozen meals, we're taking a good percentage of that. But obviously, it's less than 10%, but it's more than a few percent. So it's really, really good for us, but we don't recognize the revenue or anything similar with the licensing deals all over the world. And with Müller in the last, we're only taking a percentage of that revenue. So it is a large-scale operation that's taken a few years to build out, but super pleased with the progress that we're making there.

Offline by comparison, though, we are largely delivering that ourselves across all the retail stores, and we will be recognizing the revenue -- you're right to say, well, there's obviously some price benefit going into the whey protein side, but it is worth noting that things like creatine, creatine was at a record high explosive high for a period of 2 years and now it has come back down quite significantly, and that's true of quite a few commodities. So it's not that all nutrition products they are operating at elevated pricing at the moment.

And then the final point to say on your volumes as well is that last year, we were discontinuing the entire brand and packaging of the Myprotein range as we move to the new branding. As a result of that, then you've got a huge amount of volume that you've got to get through and you do that through discounting. So you have got quite a bit of volume that you comping versus the prior year through that, which is worth taking into account. So there's a lot going on, a lot of moving parts. But generally speaking, as you touched on there, we focus on how much -- where is the touch point, how is the brand health? Are we doing the right things with the right retailers. And even if we're only recognizing a small part of that, but it becomes -- it feels like it's a really key brand expansion initiative, then we're more than happy to do it.

The effort that goes into it and the rest of Beauty is -- the own brand business is a really solid business. It's like everything, right? When things are a bit choppy, everyone quite rightly questions, is it worth the effort or what are you doing? Beauty as an entire division was put under that microscope a couple of years ago from external parties. But just a reminder of some of the brands that we have in there, we have a really good brand called ESPA, which is if you enter any of the real high-end spas across the world, it's in those spas. It's in the palaces across the Middle East, most of them are built by ESPA and ESPA products in there. It's a really, really solid brand. We paid, I think, about GBP 80 million, GBP 90 million for that brand a good few years ago. So we're pleased with the direction of travel of that brand.

We have Perricone MD, which is the first real doctor brand in the U.S., really high price point, multi product. I think we paid $50 million for that during COVID. And that brand, in particular, is the one that caused a few drag points as some of the orders that have got into its major retail channels has been a bit more volatile this year, but that's much more positive now, and those orders are flowing again. So we expect that drag to come to an end.

Then other brands that we've got in there, Christophe Robin, which is the Taylor Swift one, which is a hair care brand. I think we paid about GBP 30 million for that, something of that order, that kind of level. And again, that's a really good French hair care brand. But -- and they require some work. But ultimately, they are high margin. And last year, they were working really well to the collective. This year, we've had some choppiness. And next year, I've got no doubt that they'll be in a really strong position and will have been worth the effort across the team in some of the changes we've made.

The next question comes from the line of Lara Simpson from JPMorgan.

I actually just wanted to come back to portfolio optimization. I know it was a talking point at H1, you obviously continued with sort of business exits and closures. We've had the Claremont disposal. But you did talk about sort of, I think it was GBP 300 million that was still invested in sort of stand-alone Beauty and Nutrition manufacturing facilities. Can you just give us a bit of an update on your review across the portfolio, how you're thinking about the core assets in Beauty and Nutrition and if we could expect any more disposals in the foreseeable future?

Sure. Look, as you would expect, since we've announced the sale of Claremont, there's obviously a lot of interest in the background as to some of our other manufacturing assets in particular and the performance of that. And it would be fair to say we've had formal approaches on some of those assets. We're pretty clear as to how we stand on these things, which is the private market valuations, as we saw with Claremont are robust. So if we receive interest in an asset where we believe we can make a deal work for us without in any way negatively impacting the existing business models that we have in nutritional Beauty, then sure, we will entertain that and derive a fair valuation for one of those assets, especially if it's a material value, right? So if it's something that's like with Claremont, it was GBP 100 million plus consideration.

So then sure, we would do that, especially given the valuations that are on at THG and the wider PLC market today. So I think that's probably as deep as I should go into that. I think we've been pretty frank and open to say, look, we could quite readily put an RNS out at any point to say we've done a transaction. It would be something that's relatively noncore at a fair market value that delivers something that we're pretty pleased with. And -- but how long will that be before we do that? Who knows? It will depend on achieving the right price point if those prices arrive. But that's probably as much as I can say right now.

There are no further questions. So handing back over to Matthew for closing remarks.

All right. Well, thank you, everybody. I think a big thanks -- I did say on the LinkedIn this morning, a big thanks to the team involved, and we're really pleased with the quarter that's gone by, special moment to have both of those businesses in growth. And I just want to say thanks to the team.

Thank you for joining today's call. You may now disconnect.

Good morning, everyone, and thank you for joining us for THG's half year results presentation. As I said in the statement this morning, trading momentum continues to build positively with the strategic changes implemented last year across both THG Beauty and THG Nutrition now bearing results. H1 was a performance of 2 halves. We entered the year following a period of focused execution, implementing significant strategic initiatives and model changes across the group, including the completion of the demerger of our Tech and Robotics division, Ingenuity.

In THG Beauty, we disposed of some of our smaller operations, commenced the cycle of investment in our portfolio of own brands and took the decision to prioritize retail trading in the U.K. and the U.S. In THG Nutrition, the Myprotein global rebrand was a major talking point last year, and it's been important to gauge sentiment from existing D2C customers, new consumers and our developing network of retail and license partners.

It's clear the positive reaction to the new positioning of Myprotein is starting to speak for itself with accelerating sales growth and a rapid rollout across offline retail. In a dynamic consumer environment, our results demonstrate the resilience of our digital-first model. And as we move through Q3, I'm pleased to say the group is delivering positive growth across both our businesses.

Three key achievements from H1 stand out. First is the successful return to growth for our THG Nutrition division, which delivered 3% revenue growth, driven by a return to growth in new customers as well as significant expansion of our off-line retail offering across Europe, the U.S. and Asia.

Secondly, in THG Beauty, we delivered a resilient trading performance despite a slower start to the year. While strategic changes impacted the headline number in the second quarter, we saw our U.K. Beauty retail business grow at its fastest rate since Q1 2024, proving the strength of our market-leading platforms and active database quality.

And finally, we've strengthened and de-geared our balance sheet by extending facilities to December 2029 and reducing gross debt by GBP 374 million. Alongside the refinance, following an unsolicited approach in half 2 2024, the group sold Claremont Ingredients, a small manufacturing business within THG Nutrition.

The proceeds have been received, which accelerates our plans to move the group towards a net cash position. Claremont is the U.K.'s leading independent flavor manufacturing lab for sports nutrition and was acquired in late 2020 for GBP 52 million to accelerate Myprotein's product development and global licensing ambitions.

The disposal for over GBP 100 million marks a significant return on that investment with Myprotein supply chain protected through a long-term supply contract, ensuring we continue to benefit from Claremont's capabilities while also gaining access to the broader international expertise of the Nactarome Group. These actions, combined with remaining focused on cost-saving initiatives have laid a strong foundation for the second half of the year and beyond.

Okay. So let's turn to the headline financial performance for half 1. Group revenue was GBP 783 million, which was 2.6% down on the prior year, reflecting the significant strategic actions we've taken, particularly within THG Beauty. The majority of Beauty's H1 revenue decline can be attributed directly to the planned discontinuation of certain operations and disposals as well as the effect of withdrawing from certain sales activity in Europe and Asia.

Encouragingly, Beauty is back in growth in Q3 as expected, reflecting the benefits made from last year's model changes. THG Nutrition's return to growth in both Q1 and Q2 reflected the positive response to the global rebrand, helping to drive new customer growth as well as a rapid rollout of our offline model.

As previously announced, group adjusted EBITDA for the period was GBP 24 million at an EBITDA margin of around 3.1%. Despite strong sales growth, continued high input costs in Nutrition weighed on margin performance for the business during H1. Myprotein has a much shorter supply chain than peers, and so sharp movements in commodities are felt sooner.

The wider market has now caught up, allowing Myprotein's vertically integrated D2C model to return to strength with both sales and margins now returning to growth. Beauty Retail, the largest part of our Beauty division, performed well in Half 1, especially in Q2, supported by a strong and resilient U.K. beauty market.

In our Beauty Own Brands division, the timing of large orders into major customers has fallen later this year, which impacted profitability of our Perricone MD brand during Half 1. An improved order pipeline is in place across our key beauty brands for H2, including for Perricone.

Turning to our balance sheet and cash flow. Our financial health remains robust with cash and available facilities of around GBP 270 million at Half 1, which is prior to the Claremont disposal proceeds and prior to our seasonally strong cash generative period for the year. We maintained strong capital discipline with capital expenditure materially reduced, helped by the demerger of Ingenuity.

Looking at our businesses in more detail. THG Beauty revenue stood at GBP 480 million with U.K. performance a real highlight, gaining market share in the second quarter. This is reflected in our brand health metrics with prompted awareness for Lookfantastic reaching its highest level in Q2 this year.

We've launched over 70 major new brands on site and refined our product listings to keep our proposition fresh. The underlying health of our Beauty customer base is strong, and our loyalty programs continue to grow, now reaching well over 3 million members. These customers purchase more frequently and have a higher spend per account.

Revenue from returning customers has increased, reflecting the success of these loyalty programs. Average order values and conversion rates via our apps continue to grow as well, and there remains a significant opportunity to enhance app functionality to deliver an even more personalized experience for our customers.

In THG Nutrition, we returned to growth, delivering revenue of GBP 304 million for the half. D2C new customer growth returned in the first half, reflecting a shift in marketing investment to open funnel campaigns to build brand equity following the rebrand.

Our offline retail expansion across all key geographies, including the rollout of Myprotein products in U.S. Walmart stores also supported both revenue growth and brand awareness. Product innovation remains a core strength where we've successfully launched over 200 products across 4 very different categories.

These launches use multi-touch campaigns that help expand our category-leading ranges and meet changing consumer preferences. Our nutrition customer metrics tell a positive story. Myprotein is clearly the U.K.'s most preferred sports nutrition brand, leading the category in brand consideration.

Our offline performance has been exceptional with more customers purchasing the Myprotein brand than ever as our offline channels rapidly expand. We now sell over 750 different product lines across 5 distinct categories through the offline retail channel, and our products are already available in over 34,000 doors globally.

Now let's look ahead. The second half of the year has started well, and we are now entering the key trading weeks of the second half with THG Beauty back in growth, helped by strengthening home market demand. The launch of our advent calendars has been the strongest in our history, and we expect gross profit margins to remain at our medium-term target levels, supported by improving performance from our own brands.

To prioritize long-term market share gains and customer loyalty, Myprotein will limit price increases, underpinning further acceleration of its installed base in global offline retail as well as supporting D2C new customer growth. We are confident in this strategy to protect long-term market share and loyalty. Our guidance for the full year 2025 remains unchanged, while our performance and strategic actions give us confidence in our medium-term targets.

So in summary, THG has delivered a resilient first half performance, underpinned by a pleasing Q2 performance. Both businesses are now back in growth as we enter the key trading period of the year, and we've opted to deleverage the balance sheet with cash from a strategic high-return disposal.

Thank you again for joining us this morning, and we will now open the floor for questions.

[Operator Instructions] First, we have Patrick Folan from Barclays.

Just a couple for me. How should we think about the Nutrition margin going forward as you find the balance between margin improvement and top line growth while whey prices hang in the balance? Then secondly, looks like we're in a time period where protein is the most invogue category in the consumer world.

Can you maybe share with us any expectations you have on your Walmart launch? And if there's anything else you are excited about within your portfolio, especially considering the second half top line guide for Nutrition? And if I can squeeze one more in. Can you update us on the U.K. VAT situation regarding protein powders?

Okay. Look, so 3 questions there. The guys will prompt me on what they were, Patrick. But the first one was around the margins. How should we look at that given whey pricing remains elevated at record highs. I mean, look, stability is always a good thing for our business model. So what's the problem for us is when you get sharp movements. Obviously, sharp movements down in pricing are attractive because we will see the benefit of that quicker than anybody else and sharp movements up, we'll see the adverse impacts of that quicker than anybody else.

And that's all driven by our supply chain. We're a vertically integrated D2C business with a short supply chain. So on average, we're probably carrying no more than -- when we get the raw materials into our warehouse, that's probably starting to be in the customers' hands within 9 weeks, whereas for offline channels, you can imagine that's probably more like 9 months. And so there's a much greater delay in raw materials feed into our supply chain so much sooner than everybody else.

Now we are in a sustained period now of where pricing is stuck where it has really at these kind of record levels, and we are comping that with the prior year now as well at the same time. So that stability means that all of our peers have got that in their supply chain. And so as a result, our business model starts to operate well.

And as a result, we're seeing our online D2C margins grow quite considerably year-on-year. And I wouldn't -- I can't disclose, I guess, the specifics of it, but it's hundreds of basis points better and nothing's changed in particular in the supply chain. But pricing is going up in the market as the peers are pushing their prices up, having to deal with this.

Now so we're in a very strong position with that. As then you will see that why pricing starts to fall at some point, then if it's a very gradual fall, great, it doesn't matter. We're all in a level playing field. If it's a fast fall, then we'll see the benefit very quickly in terms of that. And so what I would say is we've then looked at the off-line retail opportunity, and we have been pricing to go into the offline retail opportunity at a very competitive rate.

So if you were to go into any of the off-line channels, you will see that you've got Myprotein as the highest quality product on the market, priced at an incredibly cost efficient for the consumer. And as a result, we're leading the category quite typically. When we go into offline retail with a retailer, Myprotein will typically lead that category from the off, especially in the U.K., I mean, almost certainly in the U.K., that would be the case.

As you then talk about, I think you mentioned Walmart, you look at places like Walmart. Obviously, U.S. is a very, very big market, and Myprotein doesn't have the same position in the U.S. as it does in the U.K., where we're clearly the #1 in the U.K. That said, the sales that have gone through Walmart so far, we've been very pleased with, and I believe everyone is very pleased with. And we have got that disruptive model at the same time that goes into it.

We will continue to be disruptive. I think we announced that with the Claremont deal. We want to get that installed base across the world way beyond the 34,000 doors that we're currently. I think we're at about 45,000 by the end of the year. We've pre-released in the past that we know about. Obviously, we're targeting 100,000, and that would give us an incredible position from a standing start only a couple of years ago.

So we are investing some of that D2C margin growth to a degree in the offline channel, where we're running that broadly at a breakeven for now tight position, which is a very sensible place to be as we then get category leading in all those retailers, we naturally can then push our pricing up and do push our pricing up, and we'll be doing that accordingly, which then further enhances your margins, especially into 2026.

So that was the margin question, Patrick. I'll let you come back in a second to see if there's any further questions on that. The other 2 questions you had, one was on the VAT position. As we understand, well, we do understand that HMRC have been refused their right of appeal against the decision. And as a result, they've now got, I don't know, another week or so left, 2 weeks left maybe to come back and see whether they're going to try and fight this in the highest courts or not.

I think we pre-released that there's a GBP 30 million contingent asset for us there. If that was to come to pass, that's actually looking more like GBP 45 million. We've obviously put our claim in accordingly and protected our position and that then continues to grow going forward. We still continue to charge VAT on the products as a matter of prudence. And even though the HMRC has lost the case because it's a position we've now been operating in for a period of time and just think that's the right thing to do.

So look, let's see, but it's quite an interesting position with, at the moment, a GBP 45 million potential asset to come back into the business there. And then -- the Walmart launch Yes, the Walmart launch. So -- and we're doing -- across the U.S., we're making some really good progress there. I'm super pleased with what the team are delivering on the offline retail across the U.S. and the U.K. I think you asked are there any other interesting partnerships to come.

We've -- in the detail of what we've released today, you will see a couple of licensing deals, which are quite exciting. We can't name them specifically, but you'll see that the success of the Muller has been really good. The Iceland deal is great. These are millions of products a month going into consumers' hands with serious retail value attached to them at the same time. We're now moving into the ready-to-go lunch market with a major player in the -- for the U.K., which will hopefully expand into Europe pretty quick as well, which would see us have millions of more products in consumers' hand in high protein lunchtime provisions.

And then the other thing is one of the largest confectionery groups in the world, we've done a deal where we're licensing those brands in from Myprotein products, and they should be in consumers' hands, hopefully, the first of them in time for Black Friday and Cyber Week as well. But the licensing side of the business is a fantastic pipeline of licensing in and licensing out.

Our next question now comes from Andrew Wade from Jefferies.

A couple from me. The first one, you mentioned Beauty orders impacted by focus on active customer mix. Could you give us a little bit more detail on that? Is that reflecting sort of territory pullback? Or is that another factor as well? That's the first one. Shall I fire all of or do you want to answer?

Fire all off, Andrew. The guys are writing notes in case I forget.

Nice one. So that was the first one. Second one, you talked a little bit about the investment cycle in your own brands. Could you talk about what the catalyst has been for that and sort of what impact you're expecting from that sort of period of investment? And then the last one on Claremont. Clearly, a valuable asset that you've monetized from within the group, but many haven't been thinking about. Could there be other opportunities like that within the THG table?

All right. So there was the Beauty life cycle, any other Claimants in the group? And the first one again...

First one was Beauty and the...

Active customers. Yes. So look, so on the Beauty side of things, it's -- as you say, really, it's really around pullback in certain territories where we're not seeing immediate levels of profitability. I think we flagged it a while back. Our focus -- we've got real strength in the U.K. and U.S. and we've got a fantastic distribution across Europe, but it comes from Poland. And so what we've done is we focused on making sure that those customers that can deliver the requisite level of return for us on day one in key territories is where we've put our energies and focus. And so that's been the key factor there.

The second question around Catalyst for the own brand. Yes. So look, the truth is as any brand owner would know, maybe not everyone talks about it, but you go through cycles with brands. You've just seen it with Myprotein, where we've had a hell of a year last year with Myprotein, and we're now reaping the rewards of that. And so quite often, the catalyst with any brand is as much as looking forward and thinking, well, do we need to tweak the path of it or something like that.

We're always doing that. Beauty brands are a little bit slower, I've got to say, than nutrition. So you don't ever need to do dramatic big moves ordinarily with the Beauty brand. It's around tweaking, changing direction a little bit, et cetera. What we're really talking about here with the Beauty brands is more about the timing of some of the big customer orders. So some of the strategic things we might do is put less focus into certain channels and new focuses into other channels.

But there are -- the real factors that have been affecting the brands or Perricone in particular, has been around some large orders that were in the first half of last year and fall into the second half of this year, principally. Net-net, actually, there's a bit less volume order going through it with some of those customers as there's been some volatility with some of those customer channels. But that's the principal reason for it.

But we are always tweaking our brands and Beauty is just less of a requirement for major overhaul than more of your fast-moving consumer brands like Myprotein. The final point, I think, was, Andrew, around what have you got in your group that we're not thinking about, but it was an unsolicited approach that came to us in second half of last year for Claremont. We've got lots of assets in the group similar.

We spent hundreds of millions through the years building additions to our business model. So even in Nutrition, we have a bar manufacturer that manufactures for some of the biggest brands in the world as well as for ourselves. We paid GBP 55 million, I think, for that 5, 6 years ago. We have a drinks manufacturing business where we similarly drinks for ourselves and other people, et cetera. In Beauty, we have the U.K. manufacturing business. We have the U.S. manufacturing business. Those businesses combined, we've probably spent the best part of GBP 250 million on getting those in position.

What we've done with all of these assets, and there's others as well, but we've done with all of those assets is they're just part of the concept of how do we make the mothership a better, stronger business and the mothership would be in Nutrition, Myprotein, in Beauty, it would be Cult Beauty, Lookfantastic in particular, being the biggest in derm store in America. And everything else we do around that is at that point in time, we're just trying to make those businesses stronger and have more competitive advantage.

Naturally, if at some point, we sit there and think there's a reason or a value or an unsolicited approach that needs serious consideration, then we'll do that. But long-winded way of saying, Andrew, we've got plenty of these things in the business, and we could do one of those, just a small one of those, win the VAT and you're probably pretty much at net cash, right? So without too much change to your business model, people wouldn't even notice a change in our business model, but that's how we've built the group.

[Operator Instructions] And next, we move to a question from John Stevenson from Peel Hunt.

Again, 3 questions again. On Retail Media, obviously been around for a while, and you look to formalize your approach to the creation of THG Beauty Media. Can you talk a little bit about how that's going to accelerate the benefits of Beauty and sort of what you're doing there?

On apparel, obviously, showing really strong growth through the first half. Can you give a bit more detail behind that sort of rate development and future plans? And then finally, on Nutrition, looking at progress in convenience in particular, if you get to the ready-to-eat ready-to-drink. You talked about, I guess, some of that with the licensing deals. Again, can you sort of rate your progress into convenience and how much that's going to change over the next 12 months?

All right. Look, the ones I remember, I'll start with straight away, if that's all right. The -- in terms of athleisure wear, clothing under the Myprotein, I mean, look, it's been a journey. I don't mind admitting because when you're -- there's no other sports nutrition brand in the world that's moved into serious athleisure wear. And I think what we've proven is that we've gone from doing spring vest that you buy that the average weight lifter would buy with a bag of protein now to a serious proposition of very high-quality leisure wear, gym wear, et cetera.

And a point at the minute, it's triple-digit growth in there. And that's principally driven by females as well, right? So you're also bringing a lot of female customers into the ecosystem that maybe 5, 6 years ago was a bigger challenge to do. And that's been particularly pleasing. Look, I think the model itself, we have a big customer base on Myprotein globally. We have a great influencer roster of all different types of people as well.

And then we have this full range from bars, snacks, all these other product categories by -- it almost just all helps itself in the flywheel because if you're somebody that wants to make a living out of being in health and wellness and being an influencer, that actually, if you work with Myprotein, you're not just pushing one product every day. You've got this whole plethora of your lifestyle in which you can push, which includes really top quality clothing at the same time.

And then add to that, things like Hyrox, where we've become the global partner there, which has gone particularly well. And all of our athletes are competing in there. It's really just started to gain some real traction this year. The rebrands played a big part as well. Women don't necessarily want to walk around with big logos and things like that. And you've got -- we've now got the Micon product quality is outstanding.

So I just think it's a whole long list of factors that are coming together as ever with these things, right? What we've got to do then is keep the momentum going on top of that? It's no good just growing by 100% one year and then being flat the next year or down a bit to go forward a bit, so on and so forth. So there's a lot of focus in the background on that.

The other -- Retail Media and Beauty. Yes. Retail Media and Beauty. Look, it's something Amazon has led the world on this hasn't it? They're a fantastic media business with ads there. We're a big data business ourselves. And so as a result, we've seen incredible success from rolling that out through the years. And we just know there's much more for us to be able to do working with the brands in this regard, and we can show people fantastic returns by saying spend the money here on the marketing, and this is the return you get the other side.

So we're just following through that consistently. One of the exciting areas actually in the years to come, we'll be able to put that into Myprotein where obviously, we've launched this brand hub where lots and lots of health and wellness brands now operate on there, and that should expand quite significantly. It's only launched in the U.K. currently. But as we expand that globally, we'll also want to put the Retail Media through there and be able to show those brands, listen, if you invest here, this is the return you're going to get.

So it's just been a consistent deliver for us year after year since we launched it a few years ago, and we're just getting stronger and better at it. So that's the simple kind of mechanic that we've got there. The...

This progression into convenience, nutrition.

How would you rate it? Look, I think it's been pretty outstanding in the U.K. I think we can do better in Europe. And the U.S., we're in the offline model, but we're not doing much in the way of licensing across the U.S. and the move in that regard. So I think from the U.K. perspective, we've nailed it. Still lots and lots more to go reflected in the announcement we've mentioned today around the lunchtime, but we've got the rest of the world to really get on with here. And Europe is somewhere where we're making progress, but there's -- we're scratching the surface really there.

That concludes today's Q&A session. So I'd like to hand the call back over to you, Matt, for any additional or closing remarks.

All right. Well, I think everyone will be fed up with my voice, but thank you very much. And I'd like to thank the staff in particular. It's been a brutal sort of 12, 18 months of hard work and dedication, but I think they can see the rewards from that now. So thank you.