Ao World Plc · LSE:AO.
Ao World — H1 FY23 Earnings Presentation
21 slides from Ao World's earnings presentation, Nov 22, 2022
Slide 1: FY23 Interim Results
FY23 Interim Results John Roberts, Founder and Chief Executive Officer Mark Higgins, CFO 22nd November 2022 © 2021 AO World All Rights Reserved
Slide 2: Welcome
Welcome John Roberts Founder and Chief Executive Officer
Slide 3: 3
3
Slide 4: Strategic Progress
Strategic Progress
Slide 5: Macro-economic context
Macro-economic context • Tough macro-economic conditions • MDA market volume expected impacting consumer confidence with to decline by 18% in 2022 volatility remaining into medium term • MDA market expects marginal • Core MDA category proven more resilient growth in '23 and '24 providing over time o
Slide 6: Strategic Realignment
Strategic Realignment Solid progress against strategic realignment: • Focus on cash and profit generation • Simplification and refocus our operations to achieve this • Reduce overheads • Removal of all international costs 6
Slide 7: Revenue strategy
Revenue strategy • Deliberate removal of some sales that no longer fit our priorities; Tesco trial and housebuilder market exit • Actions underway to ensure every product contributes positively to cash and profit generation • Range rationalisation, delivery and return charges • Profitability and cas
Slide 8: Cost reduction actions
Cost reduction actions • Achieved further operational efficiencies in H1 • Removed warehousing space • Rationalised vehicles • Reduced office footprint • Senior and middle management restructure completed • £30m run rate overhead costs removed • Benefit to begin to be realised in H2 and fully into F
Slide 9: Germany progress
Germany progress • Decision to close June 2022 • Managing orderly closure of the business • Ceased trading on 1 July 2022 • Operations mostly ceased on 1 August • Total cash costs for closure expected to be materially nil versus original estimate of up to £15m • Key risks mitigated Bergheim property
Slide 10: Summary
Summary • Remain mindful of macro-economic context • Actions delivering expected results with solid progress being made • Less complexity and greater efficiencies in our model • Continue to put customers first • Thanks to AOers and manufacturer partners 10
Slide 11: Financial Performance
Financial Performance Mark Higgins CFO
Slide 12: FY23 Revenue Highlights
FY23 Revenue Highlights • Pivot to cash and profit has impacted revenue • Volatile period following robust growth during Covid • Online MDA penetration is holding at around 53%, up c11% ppt vs pre-Covid levels (H1 FY20)1 1 GfK MDA data
Slide 13: UK Gross margin
UK Gross margin • UK margins in FY23 affected by inflationary pressures in a number of areas, specifically in delivery costs. • Inflationary costs offset by • increased product pricing • Introduction of delivery charges • Fuel price agreement which runs until Feb 2024 13
Slide 14: UK SG&A costs
UK SG&A costs • Cost base set up for higher sales • Move away from large advertising and marketing campaigns • Rightsizing warehousing and office space • Fixed energy price cap until 2024 • No benefit from overhead savings in H1 numbers Certain financial data have been rounded. As a result of this r
Slide 15: UK Adjusted EBITDA
UK Adjusted EBITDA • Exceptional costs - £3.6m • Further cost savings expected in H2 * For the 12 months ending 31 March 2022 Certain financial data have been rounded. As a result of this rounding, the total of data presented may vary slightly from the arithmetic totals of such data Excludes impact
Slide 16: UK Working Capital
UK Working Capital Values and number of days is at 31 March and as at 30 September
Slide 17: UK Working Capital
UK Working Capital Values and number of days is at 31 March
Slide 18: Cash flow & liquidity
Cash flow & liquidity • Placing in July restored liquidity levels to historical norm relative to revenues • Net debt (pre IFRS 16) of £19m excluding operating leases • Low capex • RCF facility of £80m remains in place until April 2024
Slide 19: FY23 financial outlook
FY23 financial outlook • Consumer markets continue to be affected by cost of living challenges and volatility • Sensible strategic pivot to profit and cash generation with growth in medium term • Guidance FY23: • Group Adj. EBITDA £20m – £30m • Revenues £1bn to £1.25bn • Capex of £5m • Medium term o
Slide 20: Thank you
Thank you
Slide 21: Questions
Questions