Trading update and change to results date
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
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For Immediate Release |
2 August 2022
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REVOLUTION BEAUTY GROUP PLC
("Revolution Beauty", the "Group" or the "Company")
Trading update and change to final results announcement date
Revolution Beauty Group Plc (AIM: REVB) the multi-channel mass beauty innovator, announces a change to its full year results announcement date and a trading update.
Final results for the year ended 28 February 2022
The Company will now report its final results for the year ended 28 February 2022 ("FY22") on 30 August 2022. This is due to additional time required to complete the Company's audit. Management is not aware of any material issues that have been raised by the auditors during the audit process to date. The annual report will be sent to shareholders and made available on our website on the 31 August 2022.
Trading Update and Guidance
Despite the unprecedented macroeconomic backdrop in the first half of 2022, Revolution Beauty has continued to make progress on its strategy to grow a global brand and is now in c.15,000 stores worldwide.
Despite this progress, we have seen short-term challenges as a result of post Covid retailer updates during Q1 FY23 (notably in the USA), cost inflation, supply chain issues and the war in Ukraine.
As such, we now expect the first half of the year to deliver low single digit revenue growth versus H1 FY22, resulting in a small adjusted EBITDA loss for the six month period ending 31 August 2022. For the full year to 28 February 2023, we now expect between £215m - £225m net sales and adj. EBITDA of between £18m - £20m.
As at 31 July 2022, the Group had net debt of £21.2m driven by an increase in stock, working capital and capex requirements. The Group has a £40m revolving credit facility which the directors believe provides sufficient liquidity for the future.
Sales and profitability during H1 FY23 is being impacted by three factors:
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Post-pandemic, US retailers have adopted temporary changes to sales and buying strategies to reset stock levels which has impacted sales growth. We expect buying strategies to normalise as we move into the second half. Meanwhile two of the Group's key growth markets, Russia and the Ukraine, immediately ceased trading from the end of February, having a c.£9m impact on annualised revenue;
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The Group experienced cost inflation across operations, particularly in logistics and freight. It has also experienced increased staff costs as a result of direct and indirect wage inflation; and
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As consumers return to pre-pandemic habits and shop in-store rather than online, we have seen a number of our digital partners reduce their stockholdings below industry norms. This has had a material impact on sales growth across our DTC channel in the first half so far. |
As we approach the seasonally stronger second half, and actively manage costs across the business, we will benefit from leveraging our overhead base in line with previous years. Confidence in the second half is underpinned by significantly increased retailer distribution in H2 FY23 versus H2 FY22.
Adam Minto, Revolution Beauty CEO, commented:
"While the Group has been impacted by near-term economic and political headwinds, we remain confident in the strength of our long-term strategy and the significant growth opportunities open to us. In particular, we remain focused on innovation and the development of new categories while continuing to further build brand awareness, especially in the US.
"This has been a period in which we have strengthened our market position and built sales across geographies, despite the unprecedented macro-economic backdrop. We have continued to deliver against our omni-channel strategy and are now in 15,000 stores worldwide. We secured a second UK retail partner with Boots and launched into 2,800 Walgreen stores. This has been achieved by providing our customers with the highest quality beauty products at the best possible price."
For further information please contact:
Revolution Beauty Investor Relations
Elizabeth Lake / Nic Wing investor.relations@revolutionbeautyplc.com
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J oint Corporate Brokers
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Zeus (NOMAD): Nick Cowles / Jamie Peel / Jordan Warburton Liberum: Clayton Bush / Edward Thomas / Miquela Bezuidenhoudt
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Tel: +44 (0) 161 831 1512
Tel: +44 (0) 203 100 2222
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Media enquiries:
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Headland Consultancy Rosh Field / Will Smith / Marta Parry-Jones |
Tel: +44 (0)20 3805 4822 |
About Revolution Beauty
Revolution Beauty is a global mass beauty and personal care business which operates a multi brand, multi category strategy and sells its products both direct-to-consumer (DTC) via its e-commerce operations, and in physical and digital retailers through wholesale relationships.
Today, the Group has a retail footprint of c.15,000 doors across leading retail chains in the UK, USA and other international markets. Revolution Beauty has access to a wide customer base, predominantly aged between 16 and 35, through its digital partners and own DTC platform. It has established and invested to streamline its supply chain with its own manufacturing facility in the UK, and third-party warehousing facilities across the UK, USA and Australia. The Group has offices in the UK, USA, New Zealand and Germany. Revolution Beauty currently employs 411 people.
The total mass beauty market was worth $219bn in 2019 and is expected to grow to $274bn over the next 3 years, driven by a new marketing era dominated by Social Media and influencers. Revolution Beauty has been a leading innovator building a significant global following across social channels, enabling it to spot trends and respond quickly to consumer demand.
Revolution Beauty strategy
Revolution Beauty Group is disrupting the traditional beauty market through products that are more accessible to more people. Through its digital-first strategy, Revolution Beauty brings trend-led products to market faster than competitors. We invest in innovative marketing strategies designed to appeal to a wider audience, and offer products combining quality, inclusivity, innovation and affordability.
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