Ao World Plc · LSE:AO.
Ao World — FY2019 Earnings Presentation
28 slides from Ao World's earnings presentation, Jun 4, 2019
Slide 1: AO World PLC FY19 Final Results
AO WORLD PLC FY19 Final Results 4 June 2019 © 2018 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”) plans and its current goals and expectations relating to its future financial condition, performance and res
Slide 3: Agenda
Agenda Welcome Geoff Cooper, Chairman Financial Performance Mark Higgins, Chief Financial Officer Strategic Progress John Roberts, Founder and Chief Executive Officer Q&A 3
Slide 4: FY19 highlights
FY19 highlights • Continued revenue growth and leverage of competencies • Acquisition of Mobile Phones Direct Ltd further develops the Group’s strategic objectives • Review underway to leverage UK model into our German business • Renewed energy and mindset 4
Slide 5: UK Financial Performance
UK Financial Performance Mark Higgins Chief Financial Officer
Slide 6: FY19 financial highlights
FY19 financial highlights • UK revenue up 10.1% (5.7% on a like-for- like basis) • Europe revenue up 32.2% (on a constant currency basis) • Adjusted EBITDA: – UK profit increased to £27.4m – Europe losses increased to €31.3m – Group losses improved to £0.4m • Exceptional costs of £7.3m incurred • MP
Slide 7: Continued organic revenue growth enhanced by acquisition
Continued organic revenue growth enhanced by acquisition UK Revenue (GBPm) Europe Revenue (EURm) Group Revenue (GBPm) 900 200 902.5 900 180 173.3 ↑ 800 749.3 796.8 800 13% 680.8 ↑ 160 ↑ ↑ 700 701.3 629.7 ↑ 10% 32% 700 14% 140 131.2 600 8% 600 ↑ 120 500 55% 500 100 84.7 400 400 80 300 300 60 200 40 2
Slide 8: Gross margin
Gross margin Gross Margin % UK • Strong performance from newer categories and B2B business FY19 (1.7) has a dilutive impact on gross margin percentage 20.7 • Profit margin increases across all categories FY18 (2.5) 21.3 • MPD has dilutive effect on gross margin but with a lower cost (7.8) to serve F
Slide 9: UK SG&A cost analysis
UK SG&A cost analysis UK SG&A Expenses as a % of revenue* UK 20% 19.0% 18.3% 18.0% • Significant reduction in advertising expenditure against 18% significant investment made in prior year comparable and 16% reduction in TV advertising spend in H2 14% 10.4% 9.9% • Warehousing costs reflecting revenue
Slide 10: Europe SG&A cost analysis
Europe SG&A cost analysis Europe SG&A Expenses as a % of revenue* Europe 35% 33.3% • Advertising and marketing expenses reflective of 30% increases in acquisition costs to drive revenue but reduce as a percentage of sales 25% 19.0% 22.0% • Warehousing costs demonstrate leverage from new outbases 20%
Slide 11: EBITDA progression
EBITDA progression 30.0 UK adj. EBITDA (GBPm) European adj. EBITDA (EURm) Group adj. EBITDA (GBPm) 27.4 24.4 0.0 0.0 25.0 22.6 (5.0) (0.5) (0.4) 20.0 (1.0) (10.0) (1.5) 15.0 (15.0) (2.0) (20.0) (2.1) 10.0 (2.5) (25.0) (3.0) 5.0 (30.0) (3.5) (29.6) (3.4) (31.5) (31.1) 0.0 (35.0) (4.0) FY17 FY18 FY19
Slide 12: Cash flow
Cash flow Year ending 31 March FY19 FY18 £m • Exceptional cashflows in relation to restructuring, Adjusted EBITDA (0.4) (3.4) onerous contract and transaction fees re MPD in Exceptional cashflows (5.0) (1.4) FY19 Europe Set up costs 0.0 (0.3) Non cash movements 1.6 1.9 • Working capital outflow link
Slide 13: FY20 financial outlook
FY20 financial outlook • UK • Europe • Capex 13
Slide 14: Strategic Progress
Strategic Progress John Roberts Founder and Chief Executive Officer
Slide 15: Journey from IPO
To have the happiest cus! omers by relentlessly striving for a better way
Slide 16: The strategy remains the same
The strategy remains the same 16
Slide 17: Four areas of focus
Four areas of focus 17
Slide 18: Growth mindset
Growth mindset 18
Slide 19: UK
UK 19
Slide 20: Europe
Europe 20
Slide 21: Leveraging the eco-system
Leveraging the eco-system 21
Slide 22: Leveraging the eco-system: B2B Housebuilders
Leveraging the eco-system B2B Housebuilders 22
Slide 23: Leveraging the eco-system: Rental
Leveraging the eco-system Rental £2 23
Slide 24: Leveraging the eco-system: Logistics 3PL
Leveraging the eco-system Logistics 3PL 24
Slide 25: Leveraging the eco-system: Take Back
Leveraging the eco-system Take Back 25
Slide 26: Leveraging the eco-system: AO Mobile
Leveraging the eco-system AO Mobile 26
Slide 27: Summary
Summary 27
Slide 28: Q&A
Q&A 28