Eve Sleep plc: Review of Strategic Options, Formal Sale Process and Trading Update

Eve Sleep plc (EVE) Eve Sleep plc: Review of Strategic Options, Formal Sale Process and Trading Update 06-Jun-2022 / 07:00 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE MADE OR THE TERMS ON WHICH SUCH AN OFFER MIGHT BE MADE. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. eve Sleep plc Review of Strategic Options, Formal Sale Process and Trading Update eve Sleep plc ("eve", the "Company"), the direct to consumer sleep wellness brand operating in the UK, Ireland and France announces the launch of a review to explore the strategic and financing options available to the Company, including the possibility of a sale of the Company, and an update on trading for the year to date. Strategic and financing options review Having delivered a third consecutive year of growth in revenues and marketing contribution in our core UK & Ireland (" UK&I") business in 2021, and cognisant of current trading conditions, the Board now wishes to accelerate eve's push into the wider sleep wellness space. In order to deliver our objective of creating the first digital sleep wellness retailer, the Board considers that eve would benefit from additional investment. The Company has recently been in discussions with a US-based investor with respect to a strategic investment in the Company. These discussions developed into that party making a preliminary expression of interest in making an offer for the Company. Discussions with the US based investor have since lapsed and the party has withdrawn its interest. However, the Board believe that it is now in the best interests of all the Company's stakeholders to explore all possible strategic and financing options for the business. In addition to further external investment in the business, these options may include a potential sale of the Company. The Board has decided to undertake this review under the auspices of a "formal sale process" as defined in the Takeover Code (the "Formal Sale Process" or "FSP") and to take advantage of the dispensations that follow, as set out below. The Board believes that the FSP framework will, in the context of the Company's status as a publicly listed company, best facilitate engagement with potential partners and the assessment of any expressions of interest that may emerge. The Board will assess the merits of those expressions of interest as are received pursuant to the FSP but wishes to be clear that there can be no certainty any offer will be forthcoming or that the terms of any such offer will be suitable for the Company and its stakeholders. Parties having an interest in participating in the FSP should, as more fully set out below, contact finnCap. Takeover Code dispensations The UK Takeover Panel (the "Takeover Panel") has granted the Company a dispensation from the requirements of Rules 2.4 (a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the Formal Sale Process will not be required to be publicly identified as a result of this announcement and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code for so long as it is participating in the Formal Sale Process. Following this announcement, the Company is now considered to be in an "offer period" as defined in the Code and, amongst other provisions, the dealing disclosure requirements set out below will apply. The Company intends to conduct a targeted process, focused on those parties who understand and value the full potential of the Company. The first phase of the process is expected to be based on public information and management interaction only and interested parties will be invited to submit non-binding indicative offers to finnCap on the Company's behalf. The Company will undertake its own procedures so as to establish the credibility of any such parties and their commitment to the Company's wider stakeholder group, after which finnCap may then provide selected interested parties with additional preliminary information on the Company, following which those parties may be invited to submit further proposals to the Company. Interested parties will be required, at the appropriate time, to enter into a non-disclosure agreement with the Company on terms satisfactory to the Board. Further announcements regarding timings for the FSP will be made when appropriate. The Board reserves the right to alter any aspect of the process outlined above or to terminate it at any time. The Board also reserves the right to reject any approach or to terminate discussions with any interested party or participant at any time (without liability to any person) and in such case, will make an announcement as appropriate. Trading Update eve has now essentially completed the three year rebuild strategy, aimed at positioning the business for sustained growth across all of its geographic and product markets. This was built on a planned 10% year-on-year UK&I revenue growth in 2022 with our direct to consumer business performing well ahead of this. eve continues to outperform a market which is estimated for the first four months of 2022 to be down 29% year-on-year in the UK (source: IMRG Capgemini) and down 37% year-on-year in France (source: FEVAD). Over the five months to 29 May and against challenging year-on-year comparatives, eve's direct to consumer sales orders in the UK&I are down 15% and down 3% in France. Good progress continues on the business fundamentals. The retail partnership with DFS, which initially launched in March solely on the dfs.co.uk website, has been extended to cover some of the store estate and with an increased product range. In May, eve launched its new CBD sub-brand 'Well Slept' with its own website. The plan to enable selling into the Belgium market is on track to complete this month. Trading is benefitting from the C4 sponsorship, which runs for 12 months from April 2022 on 'late nights on 4.' As a result of this recent progress, sales orders for the direct to consumer business for the last three weeks have grown 2% in the UK year-on-year, and 40% in France. At the Group level, eve has achieved year-on-year sales growth in each of the last three weeks. However, eve is, like all direct to consumer businesses, exposed to ongoing weaknesses in the economy, declining consumer confidence and rising inflation, both in the wider consumer landscape and in input prices. These headwinds are slowing eve's progress toward its strategic and financial goals. Based on the first five months of trading, and its expectation that the cost of living crisis is set to continue for some time, the Board does not now expect to meet its previous revenue expectations for the current year, with additional promotional activity also having an impact on gross margins. This will have a consequential impact on the Company's anticipated cash balances as the year progresses. Cheryl Calverley, CEO of eve said: "eve has the opportunity to become the first digital sleep wellness retailer given our award winning mattress ranges, strong brand and suite of wellness products, including our new CBD sub-brand 'Well Slept' in the on trend and rapidly growing global sleep economy. However, in order to fully achieve this long term potential, particularly in the face of weakening consumer confidence, there is a need for additional investment. Recent inbound investor interest has led the Board to conclude that the optimum way to build shareholder value and realise the opportunity in sleep wellness is to launch a strategic review to secure either a new owner or a major strategic investment partner." For further information, please contact:

eve plc                                                                                    via M7 Communications LTD 
Cheryl Calverley, Chief Executive Officer 
Tim Parfitt, Chief Financial Officer 
finnCap Ltd (Financial Adviser, Nominated Adviser and Broker)                             +44 (0)20 7220 0500 
Matt Goode / Henrik Persson / Teddy Whiley / Fergus Sullivan - Corporate Finance 
Alice Lane / Charlotte Sutcliffe - Equity Capital Markets 
M7 Communications LTD                                                                     +44 (0)7903 089 543 
Mark Reed MAR The information contained within this announcement is considered by the Company to constitute 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. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain. Rule 2.9 In accordance with Rule 2.9 of the Code, eve confirms that it has in issue 274,742,418 ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares") admitted to trading on the AIM Market of the London Stock Exchange. The International Securities Identification Number for eve Ordinary Shares is GB00BYWMFT51. 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%

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