Climate Change Data

Environmental Metrics

Environmental Achievements

• Introduction of a Reef safe policy
• Publication of all Revolution Beauty banned and restricted materials
• Implemented certified paper packaging
• Established the Revolution Academy, to provide opportunity for those from ethnic minority groups or with a registered disability to enter the beauty industry

Social Achievements

• Increased door numbers to 14,000, increased major ULK retailer footprint, new partnerships with key US drugstore retailers
• No.1 mass market beauty brand on key online retail site
• 7m social media followers, most popular British beauty brand on TikTok
• Key innovations such as Miracle Cream
• Forma lised flexible working and introduced early finish Friday
• Wellbeing warrior group trained and established

Governance Achievements

• Following the Independent Investigation a number of changes to business processes have been implemented to improve financial and corporate governance.
• Restructuring of the Board to bring in members with listed company experience and ensure corporate governance is top of the agenda.
• Key senior management structure in place, incentivised to deliver the Group strategy and results.
• Introduction of processes around stock to ensure there is an exit route for excess stock, that the stock in the pipeline is forecast more accurately using available data, and the correct level of provisioning is applied.
• Reduction in the level of New Product Development (NPD) to focus on fewer, better product launches.
• Introduction of more rigorous processes for cash collection and payments to suppliers, providing a partnership basis to these relationships.

Climate Goals & Targets

Environmental Challenges

• Serious delays to the publication of the Company’s annual report, a suspension of its shares and the departure of previous management
• Several serious concerns identified during the FY22 audit regarding, amongst others, the Group’s ability to provide sufficient and accurate audit evidence in respect of a number of key audit areas and the validity of certain commercial arrangements entered into by the Company.
• Accounting, governance and control issues identified.
• Material movement in the stock provision, and exceptionally high freight costs due to pandemic related global freight issues.
• Significant additional inventory provision for FY22 of £11.3m and an adjustment to opening reserves as at 1 March 2021 of £27.2m.
• High freight costs due to pandemic related global freight issues c.£3.1m
• Irregularities around supplier rebates recognised in FY19 and then capital support payments to the same two suppliers in FY21.
• Sales of approximately £9.6m made in February 2022 to three distributors did not represent revenue as they did not satisfy all elements of IFRS15
• Personal loans had been made by Directors to two distributors, certain of the Group’s Non-Executive Directors (at the time) and a number of senior managers. None of these loans were disclosed to the Board at the relevant time.

Mitigation Strategies

• Recruitment of a new Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
• Appointment of Macfarlanes LLP and Forensic Risk Alliance to commence an independent investigation into the matters raised by BDO and any other matters that may become relevant during the course of their review.
• Formation of an investigation committee to lead the process with the independent advisers.
• Addressed specific issues while continuing to improve corporate governance and internal controls across the global business.
• Implemented a zero tolerance policy of pulling forward revenue.
• Cash collection is monitored daily and customers with substantial overdue balances are put on hold until their accounts are back to operating to terms.
• Revised inventory provisioning methodology has been adopted by the Group.
• Introduction of more rigorous processes for cash collection and payments to suppliers, providing a partnership basis to these relationships.
• New banking covenants agreed with banking partners to secure the Group’s cash requirements
• Review of the Group’s profitability to identify loss making sub categories and brands, and action the exits.
• Cost savings initiative to right size the business cost base to align better with revenue growth.

Supply Chain Management

Responsible Procurement

• Supplier manual to which suppliers have agreed to abide by

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Code 2018

Third-party Assurance: BDO LLP

Environmental Metrics

ESG Focus Areas

• Sustainability
• Human Rights
• Ethical Sourcing
• Corporate Governance
• Employee Well-being

Environmental Achievements

• Implemented certified paper packaging
• Introduced a “Reef Safe” policy
• Published all Revolution Beauty banned and restricted materials
• Streamlined energy and carbon reporting

Social Achievements

• Best New Skin Brand in the Marie Claire Skin Awards 2022
• 7.7m social media followers
• Increased door numbers to c.17k
• Offer paid 12-month placements
• Work with two charities, Switchboard LGBT+ helpline and Footprints Foundation

Governance Achievements

• Restructuring of the Board to bring in members with listed company experience
• Key senior management structure in place
• Introduction of processes around stock
• Introduction of more rigorous processes for cash collection and payments to suppliers
• New banking covenants agreed with banking partners

Climate Goals & Targets

Environmental Challenges

• Limited brand awareness in North America
• Failure of new product introductions
• Environmental risks related to ingredients and packaging
• Key personnel risk
• Supply chain risks
• Inflationary impacts
• IT, systems, and cybersecurity risks

Mitigation Strategies

• US brand agency appointed to assist in developing marketing and PR strategy
• New USA Country Head of Sales appointed
• Planograms being developed to maximise sales
• Processes introduced to ensure new product development only when there is demand
• Closely monitoring trends and working with large retailers
• Working closely with product and packaging suppliers to reduce environmental impact
• Successful introduction of new CFO and CEO
• Flexible working and wellbeing initiatives
• Share-based incentive plans
• Competitive salary and benefits packages
• Formal contracts with key suppliers
• Flexible, agile and scalable supplier base
• Monitoring the situation in the UK and globally and making changes to the supply chain
• Increasing holding of safety stock
• Strong relationships with suppliers to keep costs down
• Further investment in technology and digital innovation
• Periodic security testing
• Software systems regularly updated
• Leveraging cloud-based technology
• Ongoing roll-out of IT policies and procedures and awareness training
• Cyber insurance coverage
• Periodic auditing of third-party data processes

Supply Chain Management

Responsible Procurement

• Supplier manual with code of conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Code

Third-party Assurance: BDO LLP

Awards & Recognition

• Best New Skin Brand in the Marie Claire Skin Awards 2022

Environmental Metrics

ESG Focus Areas

• Sustainability
• Human Rights
• Ethical Sourcing
• Diversity & Inclusion
• Governance

Environmental Achievements

• Implemented certified paper packaging
• Maximised sea freight for imported goods

Social Achievements

• Implementation of Group wide bonus scheme for all employees
• Introduction of performance contracts across the Group
• Offer paid 12-month placements

Governance Achievements

• Board restructuring
• Improved financial policies, procedures and controls
• Establishment of a Risk Committee

Climate Goals & Targets

Environmental Challenges

• Limited brand awareness in North America
• Failure of new product introductions
• Environmental risks related to ingredients and packaging
• Supply chain risks
• Inflationary impacts
• IT, systems and cyber security risks

Mitigation Strategies

• Appointment of US President, CEO with US experience, and VP of Sales
• Enhanced processes for new product development
• Collaboration with suppliers to reduce environmental impact
• Flexible and scalable supplier base, direct supply to US distribution centers
• Strong supplier relationships, cost control measures
• Investment in technology and digital innovation, security testing, software updates, cyber insurance

Supply Chain Management

Responsible Procurement

• Supplier code of conduct
• Agreed regular payment plans with key inventory suppliers
• Developed request-for-quote process

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Code 2023

Third-party Assurance: MHA