Ao World Plc · LSE:AO.
Ao World — FY2023 Earnings Presentation
19 slides from Ao World's earnings presentation, Jul 5, 2023
Slide 1: FY23 Results
FY23 Results John Roberts, Founder and CEO Mark Higgins, Group CFO 5th July 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: Macro-economic context
Macro-economic context oy, Rearof oo, Oat UK car insurance costs likely to rise aa Ritetia ar Pauper for another two years, report says SHAPE RATE , UK supply chain pressures recede PATE SETTER: CONCERN OVER HOUSEHOLD RESLIENC ate ; as China's reopening eases War in Ukraine forces reduction shortage
Slide 5: Recap - FY23 strategic pivot to cash and profit
Recap - FY23 strategic pivot to cash and profit • FY23 actions delivered • Capital raise in July 2022 to strengthen the balance sheet • Closed the Germany operation quickly and efficiently with minimal cash impact • Removed parts of the business that didn’t fit our priorities – Tesco and Housebuilde
Slide 6: The last word on Covid
The last word on Covid • Over 5m new customers acquired during the Covid period • Post-Covid online penetration will continue; now over 50% • Covid supply chain impact largely normalised • Building a moat around the business –it’s not just what we do, it’s how we do it • FY24: • Profitable, cash gen
Slide 7: Financial Performance
Financial Performance Mark Higgins Group CFO
Slide 8: FY23 Revenue Highlights
FY23 Revenue Highlights YoY £m FY23 FY22 Change Product revenue 875 1,114 -22% Services revenue 56 50 12% Commission revenue 156 157 0% Logistics revenue 28 23 21% Recycling revenue 24 24 -2% 1,139 1,368 -17% • Pivot to cash and profit has impacted revenue • Resilient UK performance against tough ec
Slide 9: UK Gross margin
UK Gross margin • UK margins in FY23 UK Gross Margin affected by inflationary pressures in a number of areas, specifically in FY23 20.9% delivery costs. • Inflationary costs offset by FY22 19.3% • Higher product pricing • Introduction of delivery charges FY21 19.0% • Fuel price hedge 18.0% 18.5% 19.
Slide 10: UK SG&A costs
UK SG&A costs UK SG&A Costs (£m) • Cost base was set up for higher sales 300 & complex growth 250 200 • Total cost saving YoY of £46m 150 • Detailed review of efficiency of 100 acquisition spend - £8m YoY 50 marketing spend saving 0 FY21 FY22 FY23 • Warehousing costs have fallen £10m Marketing Wareh
Slide 11: UK Adjusted PBT progression
UK Adjusted PBT progression Adjusted Profit / (Loss) Before Tax 50.0 • Exceptional costs of £4.5m 43.5 40.0 • Cost structure at 3.0% beginning of year set up for 30.0 24.3 bigger business • Other SG&A includes H2 20.0 20.0 Millions £ 2.7% 2.7% 3.4% 12.0 savings from strategic 10.0 1.1% review, inclu
Slide 12: UK Working Capital
UK Working Capital Debtors and contract assets (GBPm) Analysis - UK payables Stock (£m) FY21 FY22 FY23 140 300 0 115 250 2 (50) 120 1 3 (163) 43 32 (100) (189) 39 200 100 24 22 (262) 40 17 (150) days 82 150 (37) 80 73 83 81 (200) 91 (44) (33) 34 100 (250) (40) (21) 60 days 40 (63) (24) days (300) 50
Slide 13: Cashflow and liquidity
Cashflow and liquidity FY23 FY22 £'m £'m • Net working capital outflow reduced Adjusted EBITDA - continuing 45 22 as inventory and payables normalise Change in working capital (17) (75) • Successful share placing in year to strengthen balance sheet Share placing 39 0 44 days • Low capex spend of £2.
Slide 14: FY24 financial outlook
FY24 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 FY24: • Group Adj. PBT c2.5% • Revenues -5% to flat • Capex of £4m • Medium term operating ambi
Slide 15: Outlook
Outlook John Roberts Founder and CEO
Slide 16: Where do we go from here?
Where do we go from here? • Over five million new customers impressed by the AO Way during the Covid period • 18 years to impress the first five million customers • Covid customer cohort is more valuable • Continue driving the right growth at the right pace 16
Slide 17: Brand investment
Brand investment Look at that lineup! Take your pick with the Uk’s ‘most trusted electrical retailer Delivery pai | save life then fit his cooker 8Y DAN WARBURTON
Slide 18: Summary
Summary
Slide 19: Questions
Questions