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Good morning, everyone, and thank you for taking the time to join us this morning. I'm Matt Moulding, Chairman and CEO of The Hut Group, and I'm joined this morning by John Gallemore, Group CFO; Steve Whitehead, Group Commercial Director; and Matt Rothwell, Deputy Group CFO. I'm going to take you through the key messages from this morning's peak trading update, and then we will take Q&A, which you can submit via the webcast.We are really pleased with how the group has performed during the peak trading season, supported by very strong performances over Singles Day, Black Friday and Cyber Week. New customer acquisition trends have further accelerated into the fourth quarter, and we added over 1.7 million customers in November with almost 900,000 in Cyber Week alone. Both customer retention rates and average spend per customer have also seen continuing positive trends underpinning the strong performance in this key trading period. These positive trends, which have been across all brands and territories have resulted in us upgrading our guidance for the full year today.Q4 revenue growth is expected to be between 40% and 45%, which is up from 16% to 25% previously. This means that full year revenue growth for 2020 is now expected to be between 38% and 40%, up from 30% to 33% previously. This implies revenue for the full year of between GBP 1.57 billion and GBP 1.6 billion. As previously guided, we continue to expect adjusted EBITDA margins to be stable, and our medium-term revenue growth guidance of 20% to 25% each year is unchanged. The momentum within ingenuity commerce continues to be strong, and we've today announced the selection of new contracts across a range of verticals, including Retail, Gaming, Licensing and Beauty. Included in these is a contract with Microsoft, who have launched their rare merchandise website using THG Ingenuity, drawing on its capabilities to ensure rapid turnaround of print on-demand merchandise. As part of a wider franchise agreement, we have announced Ingenuity's first project with Frasers Group, a full end-to-end e-commerce solution for Jack Wills. The deal covers the U.S., Australia and Asia Pacific allowing the British brand to expand its presence in key international territories. And lastly, Note Cosmetique, who have agreed a D2C partnership to build the U.K. and U.S. digital presence. The end-to-end contract spans merchandising, trading, fulfillment, hosting, translations and brand development. With regards to Brexit, since 2016, we have undertaken significant infrastructure investment to mitigate any potential negative impacts, including opening an 800,000 square foot manufacturing and distribution center in Poland from which the vast majority of our European customers are serviced. While the full extent of Brexit terms remain unknown, we are very well positioned to minimize any possible future disruption. So in summary, we have delivered a very strong performance during the peak trading period and are well positioned to deliver a very good result for the full year. We have a strong balance sheet with significant cash reserves, and we'll continue to focus on our strategic priorities, which will deliver long-term growth. Thank you for listening. And now we will open up for questions, which can be submitted via the webcast.
Thank you, Matt. Our first question relates to the upgrade in revenue guidance on which divisions were the biggest drivers of the upgrade.
As we touched on there, all divisions really performed very strongly. It is fair to say though that the Beauty division has seen an acceleration in growth rates. So there were some questions over the Q3 numbers as to whether we were seeing a slowdown across Beauty. As we pointed out at that time, you do get some variances in the trading calendar, which can impact on quarter-on-quarter performances. What we've seen now in Q4 is a strong pickup across the beta division, in particular, but we have had a solid performance across all divisions.
Thank you. And how much pull forward of sales from Christmas do you think there was?
I mean, look, a key trading period online for us is October and November. December is a relative nonevent. It's a normal month of the year for us. And so you don't essentially see a pull forward, but what you do see each year now is an increase in importance of the October and November contribution to the year's performance. So I wouldn't necessarily say there's a pull forward. It's just reiterating the strength of October and November as 2 key months for us, and hence, the timing of this trade update today.
Thank you. With regards to margins, you've reiterated your margin guidance. Is it fair to assume that you did see some operating leverage along with the stronger top line?
And wherever we would see operating leverage, we should really be doing our best to try and reinvest that into the business to underpin medium- to long-term growth. So just to remind people, we've made serious investments this year in a number of areas, the first of which would be in people alone. We've created 3,000 new roles within the group, taking us from 7,000 staff to 10,000 staff. And that's despite the fact that we've been spending a lot of time with offices closed, and it's been quite difficult to integrate people in that period. But it's been key to make those investments for the future. At the same time, we've opened distribution centers all over the world and invested in those areas. And then as we've pointed out here, in some of the customer numbers, you can see we've invested in building new customers for the future. And so 1.7 million new customers in the month of November alone and almost 1 million in Cyber Week alone. That's where we should be making our investments rather than trying to deliver increasing operating leverage. So we're more focused on delivering for the medium to long term.
Thank you. It was a great quarter for many online platform. Is it possible to give a view on whether you gained market share over the last few weeks?
Yes, we believe we've gained market share generally. Obviously, there are some market dynamics, which are favorable across various sectors, obviously, in the Beauty industry. Maybe with some of the changes that are happening across the world around department stores positioned across the beauty industry favors online players. So you're clearly gaining market share in those areas. But generally speaking, market share, we've been successful in gaining market share, both within the industry as a whole, but also against online players.
We got a couple of questions submitted from Rob Joyce of Goldman Sachs. Please, can you comment on the behavior of customers acquired during the first lockdown? Have they been sticky? And are they behaving in line with previous cohorts?
Yes. I mean, look, we've seen some strong performances across all of our customers' behavior. So we are seeing an increasing trend on stickiness. So what we see is retention rates and repeat purchase rates continue to improve. But some of our initiatives are driving this as well. So we haven't put it in the release, but we've put a lot of work into apps this year. The start of the year, I think we had as little as around 50,000 downloads of our group apps. Where we are today, we're probably at around 2.3 million, possibly 2.4 million. And that becomes a key driver and an ability to be able to engage with your customers alongside all of our other marketing channels.So we are seeing an increasing trend in that regard. But equally, in respect of a specific period of just one lockdown, we're more interested in what happens next year or the year after in terms of customer behavior.
Thank you. And a follow-on question from Robert, Goldman Sachs. Please, can you update on size of the Ingenuity sales team and their core focus?
John, would you like to take that?
Yes, sure. I mean the key development in the Ingenuity sales team since we last spoke is that we've now put together our outbound lead generation team of 16 people. I think previously, we've advised that we've had a sales team of 25 people. So we've nearly doubled the size of that team in the last quarter. That means we can be much more efficient in generating leads in balance so our enterprise salespeople can focus on then, converting those leads into sales.
And a question from David Green at Boldhaven. In terms of the new contract wins within Ingenuity, how many were end-to-end?
Sure. I mean, look, in terms of -- all of these contracts that we now see are end-to-end and that they are taking advantage of our fully vertically integrated platform. For example, a key feature of what's coming out in these releases is, first of all, the print on demand and personalization capability that we've developed in-house over a number of years. You can see that some of the gaming licensing holders are now taking advantage of that. But then in respect of our infrastructure, you're not the geographical territorial spread of the contracts that we've announced. These are examples of where it's not just technology that we're selling to the clients, but its access to the full global reach by our fulfillment centers and access to final mile carriers globally.
Thank you. And a follow-up question from Dave Green. Within Ingenuity, can you give us a feel for the length of the contracts?
Yes, sure. I mean our typical entry point contract length will be 3 years. And then what we expect to happen as we develop the relationship with that client, that contract length will then extend. And that's what we typically do find. So we've got a number of high-profile contracts that are at 10 years now. I think what you'll find in the majority of these contracts as well is our London expand capability. So we tend to start with one type of business that we do for a client. We may then expand into different territories or we may expand into different brands. I think given the disruptive nature of our pricing, I think our clients are very keen to lock those types of arrangements into longer-term deals, which is why we then see progression in terms of contract length.
Thank you. A couple from Annie at Liberum, could you please comment on customer acquisition costs during October, November? And did you invest more to acquire the additional 1.7 million customers in November?
So our spend as an average per customer is very stable. So we didn't go into the market and spend more per customer to acquire them. What we did -- what we were very successful in doing though was bringing a significant increase in overall numbers beyond what we would have expected. And so our spend on bringing customers onboard would have been more elevated, but the spend per customer was very much in line with our normal rates.
Thank you. And a follow-on question, in terms of very strong discounts, particularly on Myprotein during the Cyber Week, how does that impact your guidance for margin for the year?
Actually, margins are very stable, if not slightly improving in the gross profit line. So that's -- we're pleased with where we are at that level. So the overall EBITDA margins remain very much stable. We're not seeing pressure on the gross profit line in any way. But what we are keen to do is to keep reinvesting. And as we keep reinvesting on bringing new customers onboard, just to remind people, a couple of years ago, we made the decision to build our own influencer platform, and that's a very key channel. We made the investments back then. Again, we'll continue to evolve those customer investment initiatives, and that's what drives the holding firm on the EBITDA margin as we continue to invest in customer growth.
Thank you. And that comes to the end of all the submitted questions today. Thank you very much for your time on the team. And any further questions, please do not hesitate to reach out by our Investor Relations website. Thank you all for joining.
Thanks, everybody.