AO World plc Conclusion of Strategic Review of German Business (2340O)
09 Giugno 2022 - 8:02AM
UK Regulatory
TIDMAO.
RNS Number : 2340O
AO World plc
09 June 2022
This announcement contains 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 the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
9 June 2022
AO WORLD PLC
Conclusion of Strategic Review of the German business
AO World plc ("the Group" or "AO"), a leading online electricals
retailer, today provides the following business update.
On 27 January 2022, the Group announced a strategic review of
its German business as a result of material changes to the local
trading environment which have significantly impacted the business
over the past year. These included an intensifying competitive
landscape, as customers have returned to pre-pandemic levels of
online shopping, a substantial increase in digital marketing costs,
and a constrained supply chain.
Having evaluated a range of strategic options during the review
process, the Board has decided that closure of the German business
is the best course of action. This decision was based on the
continuing deterioration in the outlook for the German business, as
well as the Board's responsibilities to shareholders and other
stakeholders. The business will continue to trade for a brief
period to facilitate a structured and orderly closure for its
customers, suppliers and employees . The Board wishes to thank all
the employees in AO's German business for their hard work and
dedication since we launched the business in 2014.
The German business currently represents c. 10% of AO's total
Group revenue. It is expected that its closure will incur cash
costs of between nil and GBP15m.
AO will now increase its focus on its leading online position in
the UK electricals market and optimising the Group's profit and
cash generation potential. Given the strength and scale of the AO
business model, its market-leading, consistently high levels of
customer satisfaction , and the structural market trends towards
online retailing, the Group continues to have confidence in both
its strategy and its long-term prospects. Further details of
strategic initiatives will be discussed at full year results.
Whilst remaining mindful of the uncertain macroeconomic context
in the UK and the continuing global supply chain challenges, the
Group's UK business continues to trade in line with the Board's
expectations for FY23.
Enquiries
AO World plc Tel: +44 (0)7525 147 877
John Roberts, Founder and Chief IR@AO.com
Executive
Mark Higgins, Group CFO
Cynthia Alers, Investor Relations Director
Powerscourt Tel: +44 (0)20 7250 1446
Rob Greening ao@powerscourt-group.com
Nick Hayns
Elizabeth Kittle
About AO
AO World plc, headquartered in Bolton and a constituent of
the FTSE Small Cap index, is a leading online electricals
retailer in the UK. Our strategy is to create value by offering
our customers brilliant customer service and making AO the
destination for everything they need, in the simplest and
easiest way, when buying electricals, including major and
small domestic appliances and a growing range of mobile phones,
AV, consumer electricals and laptops.
We deliver for our customers via our in-house logistics business
and carefully selected third parties. We also provide ancillary
services such as the installation of new products and recycling
of old products as well as offering product protection plans
and customer finance. AO Business serves the B2B market in
the UK, providing electricals and installation services at
scale. AO also has a majority equity stake in AO Recycling,
a WEEE processing facility, allowing AO to ensure its customers'
electronic waste is dealt with responsibly.
Cautionary statement
This announcement contains certain forward-looking statements
(including beliefs or opinions) with respect to the operations,
performance and financial condition of the Group. These statements
are made in good faith and are based on current expectations
or beliefs, as well as assumptions about future events. By
their nature, future events and circumstances can cause results
and developments to differ materially from those anticipated.
Except as is required by the Listing Rules, Disclosure Guidance
and Transparency Rules, MAR and applicable laws, no undertaking
is given to update the forward-looking statements contained
in this document, whether as a result of new information,
future events or otherwise. Nothing in this document should
be construed as a profit forecast or an invitation to deal
in the securities of the Company. This announcement has been
prepared for the Group as a whole and therefore gives greater
emphasis to those matters which are significant to AO World
plc and its subsidiary undertakings when viewed as a whole.
ENDS
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END
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