THG Sales Surpass £1bn on Continued Profit Growth and Major Investment

By The Hut Group (THG)
THG_AR Cover_v1-03

The Hut Group (“THG” or the “Group”), the Manchester-based Consumer brand & technology group, pre-eminent in Beauty & Wellness, today announces results for the year ended 31 December 2019.

Financial highlights

  • Group sales up 24% to £1,140m (2018: £916m);
  • International sales now 66% of Group sales;
  • Gross Profit increased by 22% to £511m (2018: £417m);
  • EBITDA1 up 22% to £111m (2018: £91m);
  • Continued strong growth in own brand revenues, with 50% of Group sales coming from own brands;
  • Group 3-year sales CAGR of 31% and 3-year EBITDA CAGR of 31%;
  • Agreed new financing facilities of €1bn, to drive major investments in Beauty, Nutrition, Technology and Infrastructure;
  • Over 20% of THG’s share capital has been awarded to employees since the Group was founded, demonstrating THG’s commitment to people and staff sharing in the value they help to generate; and
  • Increased capital investment across Technology & Infrastructure projects, including Manufacturing, Logistics and Offices – totalling more than £1bn since 2016.

Operational highlights

  • Strategic investment to acquire luxury natural haircare brand Christophe Robin, to complement THG’s international Beauty offering;
  • Major technology agreement signed with Nestlé Health Sciences post year-end to launch brands into 20 global territories;
  • Exchanged contracts with Airport City Manchester to develop ‘THQ’, a new global headquarters campus;
    • Located adjacent to the UK’s third biggest airport, the first phase will see the creation of cutting-edge office space totalling 288,000 sq. ft.;
    • Two further phases contracted to facilitate THG’s future growth plans to expand the campus to c. 1,000,000 sq. ft. which, on completion, will support up to 10,000 jobs.
  • Expanded experiential marketing infrastructure with two prestigious property acquisitions;
    • Eclectic Hotel Group, comprising two luxury boutique hotels: King Street Town House and Great John Street Hotel;
    • 100 King Street, an iconic 12,000 sq. ft. building in Manchester city centre;
  • Continued investment in THG Ingenuity, the Group’s proprietary technology proposition, plus further expansion of international fulfilment centres including £60m acquisition of a new facility in Poland;
  • THG’s global footprint includes operating across 40+ currencies, and is supported by 50+ payment options, delivering in 169 countries with over 150 final mile courier services;
  • Broke ground to commence construction of Icon, THG’s £135m bespoke digital content hub, set to complete in late 2020; and
  • Created 1,500 jobs during 2019, largely in the North West, taking total worldwide workforce to over 7,000 people.

THG Ingenuity

Over the last three years, THG has invested more than £600m to enhance its leading proprietary ecommerce technology engine, while significantly expanding its client base of leading international retailers. THG also continued to invest to develop its physical assets, including over £60m in 2019 on a freehold owned Polish Fulfilment Centre, which provides a full Brexit hedge and complements its facility in Cheshire, England. THG Ingenuity’s global fulfilment network now consists of 12 centres across the world, serviced by over 150 different final mile delivery options.

THG Ingenuity’s technology platform is continually enhanced by a team of more than 400 in-house technical experts, who delivered over £37m of enhancements to the platform in 2019 alone, which range from courier and payment method integrations to functionality development and security enhancements.

In April 2020, THG Ingenuity announced a major agreement with Nestlé Health Science (NHSc) to deliver a fully serviced, global ecommerce platform, to internationally scale a number of NHSc’s brands. The partnership will provide NHSc with a single service-point, through the THG Ingenuity platform, to launch and scale brands online in 20 territories across North America, Europe and Asia.

THG Experience

The Group maintained its focus on becoming a global leader in connecting content creators and influencers with brands, as part of its innovative approach to consumer engagement in both the online and offline environment.

THG continued to invest in its experiential marketing infrastructure, acquiring two prestigious Manchester property assets: Eclectic Hotel Group, which comprised the King Street Town House and Great John Street Hotel, and 100 King Street, an iconic 12,000 sq. ft. building, offering unique entertainment and event space in Manchester city centre. The properties build on THG’s existing portfolio and are used to host immersive Influencer and Brand Partnership events.

THG continued to grow its partnership network which now features more than 4,500 creators working across markets and platforms. The expanding network helps THG to drive deeper relationships and continued customer engagement with its global customer base.

THG Talent highlights

By the end of 2019, THG employed more than 7,000 people having created approximately 1,500 new roles in the year. In March 2020, the Group also created more than 500 new positions across its manufacturing and distribution sites with a particular focus on applicants in the North West who had lost their jobs as result of the economic pressures surrounding the Covid-19 outbreak.

THG continues to build upon, and invest heavily in, its diverse pool of talent. THG employs colleagues representing 108 nationalities and is on course to create a further 2,000 new jobs in 2020.

THG in the Community

The Group has a commitment to wider social responsibility and plays a pivotal role in the community, most notably in the North West of England, which has been home to the Group since its inception 15 years ago, and where the Group has created over 4,500 jobs. On 2 April 2020, THG announced a £10 million aid package to support vulnerable communities, key workers and emergency services in Manchester, the UK and other markets during the Covid-19 crisis. This was followed by an additional donation of 3.5million units of PPE to the health and care system in Greater Manchester; a project costing over £2m.

Matthew Moulding, Founder and Chief Executive Officer of The Hut Group, said: “It has been a year of significant progress across the Group. We have continued to make huge investments to develop our infrastructure, technology, brands and people, which continue to deliver substantial growth, with Group Sales of £1.1bn in 2019.

“THG has continued to develop our end-to-end technology platform, THG Ingenuity, which powers both our own brands and a growing number of major global consumer groups. We have significantly expanded our global fulfilment capability, broadening our reach to customers in 169 countries. THG has also made important investments in our THG Experience portfolio, expanding the offering of our influencer platform, bringing over 5,000 influencers currently to both our own and our partner brands.

“Our people are the key to our success, and we have continued to invest in our talented teams. The development of the THQ business campus continues at pace and demonstrates our commitment to investing in our people. THG has an excellent platform for growth with an outstanding portfolio of prestigious brands, powered by THG Ingenuity.”

The full report can be viewed here.

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