THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE TAKEOVER CODE AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER MIGHT BE MADE.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.

Trading and FSP Update and Non-Executive Director Board Change

eve Sleep (“eve”, the “Company”), the direct to consumer sleep wellness brand operating in the UK, Ireland (together the “UK&I”) and France provides an update on trading and its review of strategic and financing options, in each case since the Company’s announcement of 6 June 2022.

Trading update

Sales orders for the Group decreased by 19% year-on-year in H1, with Group revenue declining 17% year-on-year for the half, against market data suggesting an overall market drop of around 30%. Within that, the French D2C business has performed ahead of the UK, with sales orders for H1 down 2% in France year-on-year, versus a 17% decline for D2C in the UK. There are some signs of recovery in recent months with June sales orders for the Group declining just 1% year-on-year, an improving trend that has continued into July.  

eve’s recent retail partnership with DFS continues to make good progress, with an increasingly wide range of mattresses and bedframes available online across both the DFS and dwell websites and in 10 DFS stores. DFS is now eve’s largest retail partner defined by revenue.

As stated in eve’s trading update of 6 June, the recent increase in industry wide promotional activity has continued to negatively impact eve’s gross margin. The management team initiated substantial actions from May to hunker down and protect the business from current market conditions. The benefits of these savings started to come through in June and are expected to be fully realized by Q4 2022, whereupon overheads will be approximately 30% lower than Q1 2022. As at the end of June, eve’s cash position stood at £1.5m, in addition the Company had drawn working capital facilities of £0.9m. Management will continue to focus on maximizing the business’ cash runway.

FSP update

The Board of eve continues to explore the strategic and financing options available to the Company, including the possibility of a sale of the Company. This has involved engagement with both possible financial investors and strategic partners, across geographies, leading to the Board receiving a number of indicative expressions of interest. These have been carefully evaluated by the Board, with a small number currently being facilitated in their due diligence and with further information requests. Further announcements will be made as appropriate. There can be no certainty that the terms of any offer or investment received will be suitable for the Company and its stakeholders.

Non-Executive director change

The Board has also been notified by Tom Enraght-Moony that he wishes to step down from the Board, with immediate effect. Tom has taken on a number of international commitments which has made it difficult to fulfill his eve Sleep work. Tom has been a director of eve sleep since April 2017 and has played a significant part in its progress over that time. We thank Tom for his advice and support to all the team over that period. We wish him the very best in his future endeavours.

For further information, please contact:

Rule 26.1
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the Company's website at  https://investor.evesleep.co.uk/. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at  www.thetakeoverpanel.org.uk,  including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.