Science in Sport plc

("Science in Sport", "the Company" or the "Group")

Pre-Close Trading Update

Science in Sport, the premium performance nutrition company serving elite athletes, sports enthusiasts, and the active lifestyle community, is pleased to announce a pre-close trading update for the financial year ended 31 December 2022.

Trading

Against the tough economic and supply chain environment throughout the year, the Group performed broadly in-line with expectations. Group revenue growth of 1.5% to £63.5m (FY2021: £62.7m) was achieved.

A stronger margin performance in H2 due to the new Blackburn site delivering significant logistics efficiencies, coupled with the delivery of sustainable cost savings across the business, delivered margins in line with expectations. This world-class asset is planned to be the bedrock of further improvements and strategic advantage in the global sports nutrition sector from 2023 onwards.

Operational Developments

We have executed a wide-ranging restructuring of the business, including strategic investment, setting ourselves up for success in 2023 and beyond -

·    A state-of-the-art protein bar line has been commissioned this month in Blackburn and is fully operational. This asset eliminates proposed substantial 2023 co-manufacturing cost increases and will contribute significantly to profitability. In addition to a transformation in margin, the new line underpins major innovation projects which are expected to deliver incremental revenue in 2023.

·    Our USA business this month transferred to The Feed, the leading online distributor of endurance nutrition brands in the region. As well as accessing our core consumer market, the deal results in a strong improvement in expected cash generation for 2023.

·    A strategic partnership has been agreed for our already strong Marketplace business with Flywheel Digital, the global leader in Amazon growth delivery. 2023 sales to consumer are showing good growth, and we expect to see outperformance from March because of the new partnership.

·    People costs for 2022 were significantly under budget and we expect to hold this cost flat in 2023, despite wage inflation. 2023 will also see a solid reduction in overheads versus 2022. Capital expenditure will be at an all-time low, given we have exited the strategic investment phase in supply chain and technology.

Outlook

Management is optimistic about the prospects for 2023. Macro factors including COVID-19 in China and Amazon global inventory reduction are alleviating. Retail in all regions is in line with our expectations for growth, and the UK had a strong start to the year. Margins are strongly improved due to initiatives including the above items, and a second wave of price increases beginning to contribute.

For further information:

Notes to Editors:

About Science in Sport plc

Headquartered in London, Science in Sport plc is a leading sports nutrition business that develops, manufactures, and markets innovative nutrition products for professional athletes, sports and fitness enthusiasts and the active lifestyle community. The Company has two highly regarded brands, PhD Nutrition, a premium active-nutrition brand targeting the active lifestyle community, and SiS, a leading endurance nutrition brand among elite athletes and professional sports teams.

The two brands sell through the Company's phd.com and scienceinsport.com digital platforms, third-party online sites, including Amazon and Tmall, and extensive retail distribution in the UK and internationally, including major supermarkets, high street chains and specialist sports retailers. This omnichannel footprint enables the Company to address the full breadth of the sports nutrition market, worth $42.9bn in 2022 and forecast to grow CAGR 7.4% from 2023 to 2030.¹

PhD is one of the UK's leading active nutrition brands with a reputation for high quality and product innovation. The brand has grown rapidly since its launch in 2005. The range now comprises powders, bars, and supplements, including the high protein, low sugar range, PhD Smart. PhD brand ambassadors include leading endurance and strength athlete Ross Edgley and influencer Gabby Allen. 

SiS, a leading endurance nutrition business founded in 1992, has a core range comprising gels, powders and bars focused on energy, hydration, and recovery. SiS is an official endurance nutrition supplier to over 320 professional teams, organisations, and national teams worldwide. SiS supplies more than 150 professional football clubs in the UK, Europe, and the USA.  

SiS is Performance Solutions partner to Ineos Grenadiers cycling team, and Tottenham Hotspur and CGC Nice football clubs, as well as Official Nutrition Partner to the Milwaukee Bucks, 2021 National Basketball Association Champions. We provide our Performance Solutions service to Gotytom Gebreslase, the World Champion women's marathon runner.

For further information, please visit phd.com and scienceinsport.com

¹ Grand View Research (2022)