RNS Number : 5148V

AO World plc

15 April 2021

15 April 2021



A year of outstanding financial and operational progress

The Group delivered a strong performance across all aspects of the business, stepping up to, and capitalising on, the challenges and opportunities presented by the Covid pandemic. This included significant increases in revenue, a step change in profitability at both Group and divisional levels, strong cash generation, improved financial resources, and substantial progress in operational capability. This was achieved whilst sustaining AO's leading scores for customer engagement and without financial support from Government.


-- Group revenues increased by 62% to GBP1.66bn(1) , with momentum continuing in the fourth quarter;

-- AO.com, our UK website, increased year-on-year revenue by 88% in Q4, and AO.de, our German website, increased full year revenue by 77%;

-- Our German business achieved run rate profitability in Q3 and is expected to generate profits in the current financial year;

-- Over 2 million new customers(2) were added in the financial year, who experienced The AO Way for the first time;

-- Our customer satisfaction rating, as measured by Net Promoter Score, continued to be ranked amongst those of world-leading consumer companies at over 80(3) .

   --    The One AO strategy, together with changes to our operating model and associated investments, significantly enhanced our operating capacity and strengthened the Group's positioning as we seek further growth. 

As a result of these achievements, Group Adjusted EBITDA(4) , despite Covid-related costs, is expected to be in the range GBP63m - GBP72m (FY 2020: GBP19.6m), in line with market consensus(5) . Over the period, Government support was either repaid or not claimed and had no impact on profitability.

In addition, in our Q3 statement on 19 January, we referred to an increase in warranty plan cancellations. We are completing a full reconciliation of the contract base, and subsequently expect a one-off non-cash reduction in the region of GBP15m in the value of the contract asset relating to the period 2008 to 2020. We will provide further detail at our full year results in June.

Financial position

The Group generated GBP60m of cash over the year, with cash of GBP66.5m (2020: GBP6.9m) at the year end. Net cash (excluding right of use lease liabilities) at year end stood at GBP57.0m (2020: GBP(23.4)m debt), with our re-negotiated RCF(6) of GBP80m now maturing in April 2023. This gives total liquidity headroom of GBP142.6m at the period end.

John Roberts, AO Founder and Chief Executive said:

"I am delighted to report a year of outstanding financial, operational and strategic progress. The last 12 months have been like no other and we have been very proud to rise to the challenges for our customers - keeping their lives powering on with essential electrical and technology products. Serving customers in The AO Way and treating every customer like our own gran, irrespective of cost, has enabled us to impress millions of customers with a better way to shop electricals.

"We were brave and bold in our capacity and infrastructure investments early in the year and now look forward to building on that scale advantage.

"I believe that these market dynamics will stick and, whilst there is inevitable uncertainty, the direction of travel is firmly with AO and the business model we have spent more than 20 years building. I expect that we will continue to be a double-digit growth business in the year ahead, even now as we lap the tough comparatives from last year with physical stores open. I look forward to providing more detail at our full year results in June.

"I would like to thank all AOers for living our values through this year and our trading partners who have been with us shoulder to shoulder as we have shown millions of customers a better way to shop electricals."

AO World will announce its Full Year results for the year on Wednesday, 16 June 2021, with the RNS and presentation released at 7.00 am BST and available on the IR website thereafter. There will be a Q&A session for analysts and investors broadcast at 9.30 am BST (7) , which will also be available on our website on the day.

 AO World plc                                                                     +44 (0)7525 147 877 
 John Roberts, Founder and Chief                                                            IR@AO.com 
 Mark Higgins, Group CFO 
 Cynthia Alers, Investor Relations Director 
 Powerscourt                                                                  Tel: +44(0)20 7250 1446 
 Rob Greening                                                                ao@powerscourt-group.com 
  Lisa Kavanagh 
  Sam Austrums 
   About AO 
   AO World plc, headquartered in Bolton and a constituent of 
   the FTSE 250, is a leading online electrical retailer, with 
   a mission to be the global destination for electricals. 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. 
   In the UK, we sell major and small domestic appliances and 
   a growing range of mobile phones, AV, consumer electricals 
   and laptops, delivering them via our in-house logistics business 
   and carefully selected third parties. We also provide ancillary 
   services such as the installation of new and collection of 
   old products and offer product protection plans and customer 
   finance. AO Business serves the B2B market in the UK, providing 
   electricals and installation services at scale. AO launched 
   in Germany in October 2014 selling major and small domestic 
   appliances, AV and electrical floorcare products. 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 in the UK. 
   (1) Adjusted to exclude prior year revenues for AO.nl which 
   ceased trading in March 2020. 
   (2) New customers calculated as gained through our websites, 
   AO.com and AO.de and excluding AO Mobile, customers previously 
   acquired through AO.NL and customers added through third party 
   (3) Based on average Net Promoter Scores across the AO brand 
   and our MPD platform for the 12 months ended 31 March 2021. 
   (4) Group Adjusted EBITDA is defined as profit/(loss) before 
   tax, depreciation, amortisation, net finance costs, and other 
   adjusting items (e.g., non-cash one-off items). 
   (5) Consensus estimates of Group Adjusted EBITDA as at 14 
   April 2021 based on five analysts' estimates ranging from 
   GBP63m to GBP72m and averaging GBP66m. 
   (6) Revolving Credit Facility. 
   (7) Details will be posted on our website Investor Centre 
   | AO World (ao-world.com) and in our results announcement 
   on the day. 

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(END) Dow Jones Newswires

April 15, 2021 02:00 ET (06:00 GMT)

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