Ao World Plc · LSE:AO.
Ao World — H1 FY2024 Earnings Presentation
19 slides from Ao World's earnings presentation, Nov 21, 2023
Slide 1: FY24 Interim Results
FY24 Interim Results John Roberts, Founder and CEO Mark Higgins, Group CFO 21st November 2023 © 2023 AO World All Rights Reserved
Slide 2: Forward-looking statements disclaimer
Forward-looking statements disclaimer This presentation contains oral and written statements that are, or may be, “forward-looking statements” with respect to certain of AO World PLC’s (“AO” or "Company") plans and its current goals and expectations relating to its future financial condition, perfor
Slide 3: Welcome
Welcome John Roberts Founder and CEO
Slide 4: Financial Performance
Financial Performance Mark Higgins Group CFO
Slide 5: HY24 Financial Summary
HY24 Financial Summary • Increase in liquidity - £99m (FY23: £89m) • Increase profitability – PBT £13m (2.7% of revenue) • EPS at 1.64p (HY23: 2.14p loss) • Revenue £482m – impacted by the Pivot *Image generated by AI 5
Slide 6: Revenue Highlights
Revenue Highlights YoY £m FY24 H1 FY23 H1 Change Product revenue 370 433 -14% Services revenue 30 23 31% Commission revenue 57 66 -14% Logistics revenue 13 13 3% Recycling revenue 11 12 -5% 482 546 -12% • Pivot to cash and profit produced expected impact on revenue • Annualisation of delivery charge
Slide 7: UK Gross margin
UK Gross margin UK Gross Margin • Against the same period in the previous two years we see the compounding benefits of: HY24 23.5% • Range rationalisation • Removal of discount codes • Delivery charging HY23 19.5% • Continued uptake in our extensive service offering HY22 for customers 19.8% • Inflat
Slide 8: UK SG&A costs
UK SG&A costs UK SG&A Costs (£m) • Annualisation of cost base reset and 140 relentless control of costs 120 100 • HY Cost savings of £19m (YoYoY 80 60 saving of £36m) 40 20 • Change in marketing spend strategy:- 0 HY22 HY23 HY24 • increased investment in direct marketing Marketing Warehouse Other ad
Slide 9: UK Adjusted EBITDA and PBT progression
UK Adjusted EBITDA and PBT progression H1 adjusted EBITDA H2 adjusted EBITDA 6.2% 40.0 40.0 35.0 35.0 30.0 5.6% 30.0 36.6 • Strategy is delivering 25.0 26.9 25.0 profitability £m £m 20.0 20.0 15.0 1.6% 1.6% 15.0 1.7% • Cost structure appropriate for ongoing 10.0 10.6 10.0 11.9 8.8 5.0 5.0 0.0 0.0 bu
Slide 10: UK Working Capital
UK Working Capital Debtors and contract assets (GBPm) 250 43 41 200 37 22 27 20 150 84 75 71 100 50 89 93 94 Stock (GBPm) 100 0 94 HY22 HY23 HY24 UK payables 90 HY22 HY23 HY24 80 0 Contract asset - PPP Contract asset - Mobile 70 68 70 Trade receivables Prepayments (50) 60 (149) (170) (100) (195) 50
Slide 11: Cashflow and liquidity
Cashflow and liquidity • Efficient management of working capital 44 days • Capex spend of £4m including £3.5m 56 days on the purchase of recycling site – further c£3m expected in H2 • Revolving Credit Facility undrawn at 40 days the period end 34 days 34 days 11
Slide 12: FY24 financial outlook
FY24 financial outlook • Consumer markets continue to be affected by cost of living challenges and volatility • Continued focus on profit and cash generation with growth in medium term • Updated Guidance FY24: • Group Adj. PBT £28m to £33m • Revenues c.- 10% • Capex of £7m • Medium term operating am
Slide 13: Strategic Progress
Strategic Progress
Slide 14: HY24 continued progress
HY24 continued progress • Actions delivering what we expected • Pivot to profit materially complete • Solid increase in PBT • Resilient model underpinned by distress market • Operational gearing with growth delivers margin opportunity *Image generated by using an old one 14
Slide 15: How we will grow
How we will grow • Compounding effect of scale and operational excellence • Continued brand investment – spontaneous awareness at an all time high • 11.6m customers transacted to date • Our difference is how we do it, not what we do *Image generated by using genuine drivers15and Dan’s mum (she only
Slide 16: Who do customers trust?
Who do customers trust? Data taken Mon 13/11/23 16
Slide 17: How we will grow
How we will grow • c500k AO Finance customers are around 10% of retail sales. £700m available to spend • B2B has doubled over the last three years • Continued, disciplined innovation for customers • Artificial Intelligence offers medium term productivity gains through our vertically integrated model
Slide 18: Summary
Summary
Slide 19: Questions
Questions