Profitability in the consumer industry
I analysed the profitability (EBITDA margin) of 100 UK consumer players in the e-commerce (including omnichannel companies), marketplaces and F&B players (source: Companies House and Annual Reports).
- Just 6 players have an EBITDA Margin of over 20%. 2 paint companies are in the top ranking for profitability (Farrow & Ball, best in class, with 36% EBITDA Margin and Little Greene with 26% EBITDA Margin);
- Little Moons and GU, that manufacture great desserts, are in the top 6 for profitability;
- The top 6 companies have never received VC Money (Omlet received money from Piper PE in 2022, but the EBITDA margin reported is pre-VC Investment);
- Scale in not correlated with profitability. The biggest consumer companies in terms of revenues, AO.com and The Hut Group have EBITDA Margin in the single digits);
- Average EBITDA Margin: -7%. Median EBITDA Margin: 2%;
- 28% of the benchmark has EBITDA Margin of over 10%;
- Worst in class are navigation platforms (What3Words and CityMapper);
- In the list are included Farmdrop (-81% EBITDA Margin) and Farmison (-20% Margin) that went recently bust.