Trading Update and Board Change

• As a consequence, guidance for the current year is being reduced:

○ Revenue expectations reduced to -12% to -16% (previously -8% to -12%)

○ Adjusted EBIT expectations reduced to £2-6m (previously £8-12m)

• Nick Devlin immediately standing down as CEO, Rowan Gormley to become Executive Chairman while a successor is sought

Revised Guidance

Reflecting the outlook for the US business unit, our revised view on headline FY24 metrics is as follows:

• This guidance is provided based on FX rates of 1 GBP = 1.24 USD and 1.74 AUD.
• FY23 reported on a 52 week comparable basis

Further details will be disclosed as part of the Group's interim results due to be published in mid-December.

Trading Context

The Group reported in September 2023 that FY24 had started slower than expected, with Q1 revenue down 18% versus the prior year. This reduction was a combination of sales to new customers being 41% lower, reflecting that the comparable period was prior to our pivot to profitability and reduction in new customer investment; and sales to repeat customers being 15% lower, reflecting the smaller customer base year on year.

While Q2 trading in the UK and Australian markets has been broadly in line with the forecasts supporting prior guidance, trading in the US during Q2 and October has been weaker than anticipated. In particular, the repeat business has fallen short of targeted revenues and contribution margins. H1 revenue trends by market are shown below.

The Group ended H1 with £3m net cash and £45m of additional liquidity available through its credit facility. The Group is currently at its lowest point of forecast liquidity and continues to anticipate converting excess inventory to cash over the next 12-18 months given its materially reduced inventory commitments. As a result of the reduced revenue expectations in the US, the previous destocking timeline has extended slightly.

The Group has met all borrowing covenants to date and is projected to continue to meet all covenants under the revised guidance set out above.

Board Change

As referenced in a separate announcement, Nick Devlin has agreed with the Board that he will step down from the Board and his role as CEO with immediate effect. Rowan Gormley, founder and Chairman, will take the role of Executive Chairman on an interim basis until a successor is appointed. Nick will continue in the role of President, Naked Wines USA through the peak trading period before leaving the Group fully. The process to appoint a permanent CEO will commence immediately.

Rowan Gormley, Executive Chairman, commented:

"It is disappointing to be warning of underperformance against a recent forecast. While trading in the UK and Australia has been in line with the Board's expectations, current trading in the US has fallen well behind, both in terms of sales and margin. Customer attrition remains at historically low levels.

My view is that this shortfall is largely to do with execution, which in turn is largely due to Nick Devlin splitting his time across both the role of CEO and US President.

To resolve this situation Nick has agreed to step down as CEO and I will move to Executive Chairman while we recruit a replacement. Nick has agreed to help with the transition and stay on as US President through peak.

I am sad to see Nick go, but his legacy remains. Naked Wines revenue has grown 50% since he took the CEO role, and Nick leaves with a lot of the hard turnaround work completed, including testing some exciting improvements to our customer proposition, which we are testing at scale right now. He goes with our best wishes."