Welcome. I'm Thomas Ryder, the founder and CEO of Applied Nutrition. We're here today to cover our FY 2025 full-year results. Today, I've got with me my COO, Steven Granite, and CFO, Joe Pollard. Most of you may know us, but for those who don't, I'm going to spend a couple of minutes talking you through the ingredients of our business. Firstly, we operate in a rapidly growing market, and whilst we continue to grow, we're only just scratching the surface. Applied Nutrition truly is a global business, selling into over 85 countries, including Asia, the Middle East, the U.K., Europe, and many more. Our B2B business model, utilizing distributors, allows us to access new markets whilst growing in existing markets, whilst delivering market-leading margins. The supplement industry is not just for bodybuilders anymore.
It encompasses everybody, from your elite athlete all the way to somebody that just wants to make a health-conscious choice. In order to cater for this broad consumer base, we have developed a wide range of products that cater for the requirements of all users. Finally, we are proud of our roots in Knowsley, where we have our headquarters. We employ over 270 people. We have our in-house manufacturing, our warehouse, and our logistics. Our first full year as a listed company has once again demonstrated our ability to deliver, with a year of continued momentum and opportunity. Joe will cover the numbers in more detail, but our strong trading has enabled us to deliver full-year results ahead of market expectations. The performance reflects the strength of our strategy, disciplined execution, and growing traction in the market.
We've continued to make strides in line with our strategy, increasing sales with existing customers. We've won new customers, and we've entered into new geographies. In the year, we have deepened our relationship with our existing partners and secured new partners across both existing and new geographies, all while continually broadening our ranges, our flavors, and our formats. Looking ahead, we've had a strong start to FY 2026, a continuation of what we saw in Q4 FY 2025. However, given that the financial year is still in its early stage, we are maintaining our current FY 2026 market expectations. Finally, as we continue to grow within this growing market, we've decided to invest to expand our manufacturing capabilities and capacity to cater for this growth. I'll now hand you over to Joe to talk through the numbers.
Thanks, Tom. I'm now going to discuss our FY 2025 financial results. As an overview for our FY 2025 results, we've delivered over the targets we set at IPO, and we'll discuss these metrics in more detail in the coming slides. Revenue has increased by 24% as we added over GBP 20 million of revenue across existing and new customers compared to FY 2024, and we have seen growth across all geographies. Gross profit and adjusted EBITDA both increased by around 19%. This has resulted in an adjusted EBITDA margin of 29%, which is in line with the guidance we provided at IPO. Free cash flow conversion was strong as a result of careful working capital management despite the revenue growth.
Net cash at the end of the year was GBP 18.5 million after the pre-IPO dividend, leaving the group in a strong net cash position and with the ability to use its balance sheet strength going forwards. Overall, total group half- two revenue was strong, delivering circa GBP 60 million, which is up 25% on half- one. As we consider the geographic split of revenue, growth in the U.K. was particularly strong as we continue our channel diversification strategy and deepen our relationships with key partners. Europe also saw significant growth across key territories such as France and Spain. While the year-on-year growth presented for our international sales shows 3% growth, excluding the sales to the exited distributor we noted in our half- one results, international sales were up 13%, and there was significant momentum in half- two with international sales 20% above half- one.
Overall, total group half- two revenue was strong, delivering around GBP 60 million and up 25% on half- one. While gross margin has decreased slightly, this was not unexpected as a result of significantly higher than historic whey protein prices. However, whey protein represents only around 19% of the group sales, and therefore, despite significantly higher purchase prices, the impact on margins has been muted. Carriage, logistics, and import duty costs provided a small headwind as a result of shipping prices from China being slightly higher in FY 2025 than FY 2024 on average. The investment we made in new production capacity at the start of FY 2025 resulted in efficiencies and a benefit to our gross margin from staff costs. Overall, gross margin for the year remained higher than FY 2022, FY 2023, and the average of the FY 2022- FY 2025 financial years.
As we have previously discussed, we consider our product sales mix to be well-balanced. Currently, our largest product group is whey protein. However, this accounts for only 19% of our sales. The significant diversity and balance in product mix provides the group with a level of protection against gross margin volatility and means we are not overly reliant on any one product or product group. In FY 2025, the average price of whey protein purchased was 30% above the FY 2024 cost. However, we have a proven track record of being able to maintain margin stability despite such changes with the current year included. Some secondary effects of high whey protein prices have resulted in some consumers looking for alternatives such as beef protein, which has a more stable input cost base.
From a foreign currency point of view, the group continues to have an exposure only to U.S. dollars and euros at a material level. In terms of administrative expenses, as a percentage of revenue, these decreased by 0.6 percentage points as a result of efficiency as we scale. In addition, the group invested in its staff overhead base during early FY 2024 as we looked to ensure the group was well placed to be able to complete an IPO. Adjusted EBITDA margin was 29%, which was in line with our IPO guidance. The 1 percentage point decrease from FY 20 2024 being driven primarily by an increase in costs as a result of being a listed business. All adjustments to FY 2025 related to the costs of the IPO process, and we do not anticipate any further IPO-related costs in FY 2026.
Free cash flow generation in the year was GBP 16.5 million, which is 72% conversion on an after-tax basis, leaving a year-end closing cash balance of GBP 18.5 million. The largest effects of this were a pre-IPO dividend of excess cash, a GBP 7.3 million increase in working capital. However, this represented an increase slightly below the increase in revenue as a result of careful working capital management. Tax paid of GBP 6.3 million. The company will continue to be a very large company for the purposes of corporation tax and therefore be expected to pay all of its estimated corporation tax related to the financial year within that financial year. CapEx of GBP 1 million as we expanded our production capabilities to an estimated GBP 200 million of revenue.
In FY 2025, while working capital usage grew at a lower pace than revenue, as we continue to expand geographically and with larger customers, there is a possibility that there may be periods where we strategically choose to accept growth opportunities that might increase working capital usage at a higher rate than revenue. Customer concentration of the group continues to be low, and in FY 2025, we did not have any one customer that was greater than 10% of the revenues of the group. The top five customers represented 38%, and the top 10 customers represented 51% of group revenue. Management do not consider revenues to have been materially affected by customers placing a first pipefill order as the largest new customer during the year had sales of less than GBP 2 million.
We have shown that over time, customers tend to grow with us, as illustrated here by showing the average relationship length for customers by size of revenues, and this relationship length increases as revenues get larger. We consider this to be a future benefit as there are a significant number of customers with smaller revenues with us that can be grown over time. Here, we have set out our capital allocation policy. In terms of our policy of driving shareholder returns, we have delivered results for FY 2025 that are above market guidance. While we will consider dividends and share buybacks at the appropriate time, we do not envisage any will be made before FY 2027. We continue to look to invest in organic growth and to optimize our operations, having extended our manufacturing capacity to circa GBP 200 million during FY 2025.
Tom and Steve will shortly discuss our plans for investment over the next 24 months. As noted earlier, our cash position of GBP 18.5 million at the year-end maintains our strong balance sheet. We also continue to assess earnings-accretive opportunities where it makes sense to do so, for instance, where it might give us access to new markets.
Thanks, Joe. I'm now going to talk about the market opportunity. Sports nutrition is no longer for bodybuilders and professional athletes. It's part of an everyday routine for a much larger pool of consumers, such as the fitness enthusiast who might train three or more times per week and the health-conscious consumer who is making healthier choices, for example, increasing protein in their diet, taking a multivitamin, or consuming creatine for the many well-documented benefits. We recently surveyed 2,000 people, and 80% said that supplements are not a luxury but now a necessity in their diet and lifestyle. Also interesting was that 64% of people said they are switching nightclubs and bars for running clubs and gyms.
As a result of the expansion of the traditional sports nutrition user into sports nutrition, health, and wellness consumers, we have capitalized on the shift by extending our range to appeal to these new category consumers with products such as Collagen Stick Packs, Greens Powders, Berberine Capsules. We've softened our designs. We've bought out smaller packs of key products to target new channels such as grocery, which is where they are shopping. Sports nutrition, health, and wellness is now becoming a consumer staple in their basket and is no longer considered a luxury spend.
I'm now going to talk you through the progress that we've made against our strategic priorities. FY 2025 has seen us once again deliver against our multi-pillar global growth strategy, existing customers, deepening engagement with all major retail partners, expanding our presence in retail, U.K. and internationally, additional listings in specialist channels across U.K. and Europe. We have seen total placements across grocery and high streets increase by 95% versus last year. For new customers, it has seen us expand to new geographies including Eastern Europe, Latin America, and Asia. We also have an exciting opportunity in Canada, working alongside one of Canada's largest distributors. Now looking at our D2C, we've launched the Applied Nutrition app, and we've also enabled the subscription option via our app and website.
Thanks, Tom. During FY 2025, we announced a new joint business plan with the U.K.'s largest health and wellness retailer, Holland & Barrett. The JBP was focused on giving Holland & Barrett early access to new innovative products and giving Applied Nutrition a trusted platform to sell our wide range. This was a multi-year JBP, and we are very pleased with the outcome of year one, which ended in September 2025. We are now executing the agreed plan for FY 2026 and have some exciting launches planned, including a campaign featuring Jamie Carragher and Michael Owen to promote our 40-plus range, which will be listed in Holland & Barrett nationwide. As a result of this joint business plan, you will now find a lot more of our products in a lot more Holland & Barrett stores nationwide.
Now looking at NPD, this slide is a great example of how we look at new product development. We look at it from three different pillars. Example, keeping products fresh. If you look at the Critical Whey, that's a product that's been within our range since 2015. We've recently reformulated this product, making it taste much better, undergoing informed protein. Now every single gram of protein is validated by a third-party tester. It's now delivering more protein per serving, and it's been received really, really well from the market. Innovation. If you look at the Protein Sparkling Water, we were the first company to bring a carbonated collagen sparkling water to the market. Again, it's been received really, really well. You look at market trends. If you look at Creatine + Hydration, we took two trends in products, creatine, hydration.
We brought them together as consumers generally would use both of those. Again, it's been received really, really well. We also look at different formats for hydration, for instance, stick pack , effervescent, as well as the powder. NPD really is the heart of Applied Nutrition, and it's what's driving a lot of our growth.
Thanks, Tom. We are delighted to announce that due to the continued growth of the business, we have plans to occupy a new 84,000 sq ft warehouse and headquarters across the road from our existing two buildings in Liverpool. This new site will increase our internal storage capacity for pallets by 180%. Whilst we release the site, we expect CapEx in the region of GBP 3.5 million-GBP 4 million for the fit-out and equipment to operate the site efficiently. This will include very narrow aisle racking and forklift trucks to maximize the storage capacity. Currently, our two warehouse buildings are full, and we are storing products in three third-party warehouses in the local area. Having stock in four different locations creates inefficiencies, particularly when you have to collect several different ingredients and packaging from multiple locations to make a single finished product.
The new site will enable us to bring all of the site-stored products back into one location. Our existing finished goods storage warehouse will become a warehouse for all raw ingredients and packaging. The current building, which houses the production facility, will house more production space with a small area for stock to feed the production lines for the next day. The new building will then become finished goods, e-com fulfillment, and our new head office, which better reflects the global business that we are today. This is a significant milestone in our company's history, which will drive efficiencies and unlock much-needed capacity to enable further growth. Before IPO, we installed phase two of production, which was two new semi-automatic high-output lines. We expected this to enable us to grow to GBP 160 million of revenue.
Since installation, we've successfully implemented several initiatives and processes that have further improved our productivity and enabled us to increase capacity to circa GBP 200 million of sales. Also, in late FY 2025, we purchased a stick- pack- filling machine to enable us to bring this function in-house as we see demand for stick packs increasing and our NPD pipeline has several products in a stick pack form. We have not yet operated this machine as we need to extend the factory internal footprint first. For clarity, this is not included in the GBP 200- million capacity mentioned. During late FY 2025, we also installed an additional and faster capsule- filling machine due to the growing demand for these products. However, due to the continued successful execution of our multi-pillar strategy, we now need to push the button on phase- three expansion of our production facility.
During the next 12 to 24 months, we will extend the production footprint into phase three in order to house an additional gel- making machine as we are getting close to capacity on the existing machine, an automatic bagging line to increase capacity and efficiency. Several products listed in the grocery channel are in bags, so we need now to invest in this machine to ensure we can continue to efficiently fulfill the growing demand. Also, an automatic tubbing line, which is the same as we currently operate on line four, to give us more capacity for hero products such as creatine, ABE Pre-workout, and collagen. We expect these three machines and the factory extension to cost between GBP 2 million and GBP 2.5 million and should be completed within one year. This would then give us a new sales capacity of circa GBP 300 million.
Finally, we are also considering the purchase of an automatic effervescent tablet machine due to the increased demand for the endurance range. One of the drivers behind this is the Vimto Hydration Tablets, which are now the number one hydration tablet in the whole of U.K. grocery. This will cost circa GBP 2.5 million and payback is currently four years. If volumes continue to grow, then clearly the payback periods would reduce. We do have more products going into an effervescent and format such as Collagen and Debloat, and we are concerned that our external manufacturer may not keep up with our growth. Therefore, the board's preference is to take this process in-house, subject to signing off on a business case.
Okay, so now we'll look at marketing. Since 2014, we've been hell-bent on driving trust and credibility with global consumers, signing ambassadors like Paddy The Baddy and exhibiting at global fitness shows. I've personally just got back from the Dubai Muscle Show, where I was able to meet tens of thousands of consumers who tested our products, tasted our products, gave us real-time feedback, which allows us now to go back to the drawing board and become an even better brand. Now moving on to Outlook. The strong acceleration in growth in the final quarter of FY 2025 has continued into the first quarter of the new financial year. We move into FY 2026 with positive trends in market share across key channels, with a clear opportunity to capture further share in both the U.K. and internationally. We're also investing to further increase our capacity and manufacturing capabilities to support our continued growth.
Finally, despite a strong Q1 FY 2026, given that the financial year is still at an early stage, the board believes it's prudent to maintain current market expectations for FY 2026. Now let's look at the investment case. Hopefully, we should have covered this off within our presentation, but these are the real reasons why we believe Applied Nutrition is a good investment. We have significant market opportunity. We are a trusted brand with broad consumer appeal. We operate a successful B2B business model. We've got scalable in-house manufacturing capabilities. We've got an impressive financial profile. We have multiple pillars of growth, and we've got a really, really ambitious team ready to take on all of the opportunities that lay ahead of us. Thank you all for listening, and now we're ready to take questions.
Thank you. We've had a number of questions pre-submitted and submitted live, the first one being, what market would be a big win internationally in the next 12 months
Would you be referring to a new market or penetration into the existing market?
I think cover both because there's not context around new or existing.
Okay. For me, we've recently just signed with a new Mexican distributor. Given the size and scale of Mexico, given how they are avid users of supplements and my knowledge of what other brands are actually doing in Mexico, I think Mexico is a huge opportunity and really, really excites me.
Thank you. What area of sports science or nutrition research excites you most for the future?
For me personally and for our team, we're just embedded completely and utterly in sports nutrition and ingredients. As more and more research comes from ingredients brands, we absorb that information. We love utilizing new ingredients, especially when there's been extensive amounts of capital spent on the research for them. If you notice, a lot of our latest NPD, we implement new trademarked ingredients that do carry that kind of research. We're constantly, it's a never-ending thing. When we're supplementing ingredients, it's absolutely our life, and it's a never-ending day of learning, by reading more about the benefits of ingredients. I'll give you an example with creatine. Creatine has been around forever, ever, never, 20 years. Now, the last 18 months, all the new benefits of creatine, which were unheard of 20 years ago, of cognitive function, overall health and wellness.
You can never stop learning about ingredients, and I think that's what really excites us and our team the most.
Thank you. The next question is, given global supply chain disruptions, how are you managing your supply chain?
We've got a solid supply chain. Our supply chain is absolutely robust. It's something that we've worked on since 2015. Since we started manufacturing in-house, we go direct to all manufacturers. We do have a, we always have a backup supplier and a third backup supplier also, but I'd like to think that our supply chain is absolutely robust.
The next question is, what drove that H2 acceleration? Any specific geographies, channels, or product lines?
Generally, we saw growth pretty much across the board. Within this presentation, we provided a breakdown by geography, so you will have seen that the U.K., where we've continued our strategy of channel diversification, has been very successful, and obviously, we'll look to build that out into our international markets as well. From a product point of view, health and wellness and creatine are probably two areas during the year where we've seen good growth as they've been extremely popular with consumers.
Thank you. The next question is, a good net cash value reported, what are you going to use this for? Growth investment, M&A, debt reduction?
I suspect this question was raised before the presentation where we've obviously discussed at quite some length the CapEx that we're going to do over the next 18-24 months. Outside of that, obviously, we keep an eye on any investment opportunities that we have, be that CapEx or otherwise, so we'll keep it on the balance sheet for that. Yeah, sorry. To be absolutely clear, the net cash position as of 31st of July was net cash of GBP 18.5 million. The company doesn't have any drawn-down debt.
Thank you. Could you expand on production innovation and the production pipeline?
Yeah. Innovation is literally the heart and engine of the company. It's something that we absolutely strive for perfection on. It's something that we do different, I think we do different to a lot of our competitors. It never ends. Innovation's constantly evolving, and our NPD also never ends. Like I said, that is the difference between us and our competitors. What was the second part of the question? Sorry.
Sorry. The second part of the question was production pipeline.
In terms of capacity or in terms of NPD? It's probably worth mentioning that we're vertically integrated. We've got good capacity within our production facility. Any NPD that we bring to market, we can turn something around very fast. We're very agile as a business. Our lines are quite flexible in terms of the production size that we would need to do. From a production perspective, we can turn NPD around very, very quickly and bring new products to market as and when we need to.
Thank you. How should retail investors think about dividend policy or capital returns given your growth ambitions and strong cash position? Are you still prioritizing reinvestment over returns, or will shareholders begin to see payouts?
Obviously, I suspect this question came before we outlined our CapEx and investment plans. We have come out specifically to say that we will not pay a dividend during FY 2026. As we get closer and closer to FY 2027, that is something we will keep under review. Ultimately, we want the power to make investments as and when we believe they are relevant. At the right time, we will give money back to shareholders.
Thank you. The next question is, is the future of nutrition more about performance or prevention?
Good question. It depends absolutely who the consumer is. If you're a performance athlete, it's all about performance. If you're a health and wellness consumer, it could be about prevention. Good thing is Applied Nutrition caters for all consumer requirements.
Thank you. The next question is, by expanding your product range, is there a danger that you will lose your focus?
Not at all, no. I've heard that. It's a fair comment, but I've heard that for years. For us, we are a sports nutrition health and wellness brand. As more and more consumers enter the sports nutrition health and wellness space, we want to appeal to them. No, I do think that having a wide range of products that appeal to a wide range of consumers is what Applied Nutrition stands for.
Thank you. Also on products, with NPD, how do you test the products given the large range of people that you're targeting?
I think we test them extensively. Once we're happy with a formula, with a recipe, it goes into lab trials. Once we're happy with the lab trials, it then goes off to our partners. It goes off to specific athletes. It goes off to influencers, ambassadors. We collate all of that feedback, see what the benefits, the pros, the cons were, and then we make a decision then whether the formula needs tweaking. Sometimes a flavor might need tweaking, let alone an ingredient, it might need increasing. We take a view on, is this right for us? Is this right for what we're trying to market to? Is this right for the consumer it's intended to go to? Then we release it.
Thank you. What are the biggest risks to your growth plan, and how are you mitigating them?
I think space and capacity would be the biggest, but we're already on with addressing those as per the presentation. They are nice problems to have, and we're on with the plans to make sure that do not hinder us.
Thank you. Earlier, you mentioned research. How much do you do as a company, and how much is from third-party sources?
A lot of our research is from third-party. Actual science-backed research, a lot of it comes from third-party. A lot of our research in terms of what's trending, what people are searching for, why they're searching for it, a lot of that's done also in-house, whether that's information that's collated from Amazon searches, website searches, some of our partners' website searches, social media searches. A lot of our teams will filter a lot of information into a funnel where we'll make a decision on the direction of NPD, for instance, or what a consumer is looking for and why, what products they're looking for, what ingredients they're looking for, and why. We look at EFSA, European Food Safety Authority, who have got multiple amounts of data that back up certain ingredients.
Thank you. How do you maintain pricing power in an increasingly competitive market with private label entrants?
I think we can maintain price and power because 99% of ingredients are quite stable in terms of price. It's the exception of whey protein that's quite volatile. We've been managing that whey protein increase for the last two years, so it isn't anything new to us. In terms of new on-label coming to market, that's nothing new. We've seen on-label coming to market. I've seen it for 20 years. What we do find is on-label products don't last very long. We find that consumers do want to put quality into their bodies. There is a consumer base that do buy via price. We do cater for that price sensitive consumer also with our BodyFuel range. The majority of consumers from all the surveys that we've done is people would rather buy quality. I'll give you an example.
When we first started going into Grocer in the U.K., on-label was the biggest loser. Now, I don't think any Grocer has any on-label now from the top of my head because consumers are just not picking it up.
Thank you. You mentioned ambassadors and influencers earlier. Is Applied Nutrition considering adding any new ones to its books?
Yeah. We're always looking. We're always engaging with ambassadors, influencers, whether it's short-term, medium-term, long-term. Yeah, I think before Christmas, we'd probably be announcing another one.
Thank you. With the size of the global market opportunity being so large, do you see many competitors coming into your space?
Good question. Yeah. Nothing that we haven't seen, no more than what we've seen over the years. Like I said before, new competitors tend to be on-label. You don't really see many new brands entering the space. Yeah, nothing more than what we've seen for many, many years.
Thank you. There are currently no further questions on the webcast, so I'll hand back for any closing remarks. Thanks.
Thank you. So yeah, guys, I'd just like to close off by saying thank you for the call. FY 2025 was, it really was a milestone year for Applied Nutrition. We continue to deliver strong, profitable growth ahead of the market expectation. We expanded globally with key existing and new partners. I think we undoubtedly cemented our position as one of the most trusted sports nutrition, health, and wellness brands in the world. We finished off FY 2025 very, very strong with a lot of momentum. We continued that momentum into the first quarter of 2026, and we're sitting here very, very confident of the year ahead.
Thank you to the management team for joining us today. That concludes the Applied Nutrition Investor Presentation. Please take a couple of moments to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar. Thank you.
Thank you very much, guys. Take care.