Brand Architekts : Annual Report 2022

33.5%

-340 bps (2021: 36.9%)

• Underlying gross profit margin is calculated before exceptional items included in costs of sales (further information in Note 3 of the financial statements).

• Underlying operating (loss)/profit is calculated before exceptional items, share-based payments and amortisation of acquisition-related intangibles.

• Group sales for FY22 were down
  10% to £14.3m (2021: £15.9m) as the Group navigated the challenging external environment and the impact of reduced consumer confidence on demand. Excluding the contribution from InnovaDerma, which was successfully acquired on 31 May 2022 and which delivered £0.8m of sales in June, Group sales decreased 15% on the prior year.

• Underlying gross profit margins fell
  3.4% to 33.5% (2021: 36.9%) driven by product cost inflation, in particular in relation to inbound freight charges for products sourced from China.
• Given the challenging trading environment the Group generated an underlying operating loss of £1.8m, £1.5m higher than the prior year (2021: £0.3m).

• The Group retains a net cash position of £11.3m at the year end, after the payment of the £2.0m cash consideration to acquire InnovaDerma and the majority of the associated transaction costs (£0.8m).

Contents

Business Overview

Brand Architekts Group plc  Annual Report & Accounts 2022

Who we are

Brand Architekts Group plc offers a portfolio of challenger brands, sold throughout the UK and in the international beauty space.

Although our range is a broad church, which enables us to flex with changing consumer behaviour, given recent macroeconomic uncertainty, Brand Architekts has reclassified

its 18 brands into three categories: Invest, Nurture and Harvest.

Skinny Tan

Skinny Tan was created by real women, for real women. With thousands of five-star reviews and a loyal global community, it's become the tan loved by women for the flawless, streak-free, natural looking results it provides - every single time. Vegan friendly, cruelty- free, a 'skinny' up to 99% naturally derived ingredients list and packed with moisturising factors. Skinny Tan believes in body confidence, not body perfection - because everyone feels better with a tan! Skinny Tan is a true omnichannel brand, with

a strong offline and a direct-to- consumer (DTC) presence.

Super Facialist

Be your own Super Facialist

No one knows more about the individual traits of their skin than consumers themselves; how it looks, feels and changes at different times and in varying conditions. With Super Facialist, they're equipped to be their own facial expert at home.

The brand's range of six science- based regimes for women addresses skin brightening, hydration, anti- blemish, anti-ageing, firming and sensitive skin. There is also a further regime for the particular needs

of male skin. The brand is sold in Boots, Sainsbury's, Waitrose, Tesco, Morrisons and multiple e-com sites, as well as in Ireland.

The Solution

The Solution provides hard- working, radiance-revealing body formulations developed by a team of scientists and skincare experts. Using the power of proven active ingredients at efficacious levels to target your skin concerns, it not only feels luxurious on the skin but brings back body confidence. Our entire range is 100% vegan-friendly and cruelty free. The Salicylic Acid Body Gel is the number one product on Amazon for 'backne'. The Solution is sold on Amazon, Ireland and recently launched in DM stores in Hungary, Serbia, Romania and Bulgaria.

Each category has a specific investment and resource profile, in line with the business objective of driving higher profitability. We will be focusing on brands and products that engender high levels of consumer loyalty and reflect the redefined Company purpose of focusing on high- performance, problem-solving, solution led brands.

Our brands are available on the high street in leading pharmacy and drugstore chains; in national grocery stores; on the platforms of global e-tailers; and through our own e-commerce websites.

A few of the brands are detailed below:

MR. Jamie

Stevens

Born out of a need for results driven products that don't sacrifice style, MR. is the ultimate men's haircare system designed to help combat the challenges of thinning hair and provide everyday grooming staples to keep hair strong and healthy. MR. is sold in Boots and Amazon.

Harvest

Dirty Works

Good clean fun,

in a bathroom near you

Not taking itself too seriously has turned Dirty Works into a serious business. This fragrance-fest of bathroom escapism includes scrubs ('Foam at Last'), fizz bars ('Cube Tropicana') and bath bombs ('And on That Bombshell'). The brand covers all kinds of washing and bathing, skincare, accessories and gifting and is sold in 34 countries.

Dr SALTS+

Wellness solutions

The Dr SALTS+ range helps consumers overcome the stresses and strains of everyday by harnessing the wellness benefits of premium essential oils and pure epsom salts, to provide a restorative influence on mind and body. There are four specific regimes, the brand is vegan friendly and combines 100% natural essential oil fragrances with 100% pure mineral salts. The new improved packaging is 100% recyclable, with salt barrels made from FSC approved cardboard as well as shower gel tubes made from 30% recycled plastic.

Dr SALTS+ is available in Tesco, Waitrose, Amazon, Feel Unique and has recently launched in Ireland, New Zealand and Scandinavia.