Slide 1: Half Year Results
Half Year Results 18th July 2023
Slide 2: The Chairman's Overview
The Chairman’s Overview Rick Haythornthwaite 2
Slide 3: 1H23 Highlights
1H23 Highlights Tim Steiner, CEO 3
Slide 4: Our Technology
Our Technology Solving complex problems for the world’s largest grocery retailers and beyond ● Industry-leading end to end solution for grocery online ● Technology applicable to all sectors outside grocery ● Driven by advanced technology R&D in AI, machine learning, and robotics ● Technology team of
Slide 5: First Half Highlights
First Half Highlights ● Financial progress – growing revenue, positive EBITDA and improving cash flow ● Operational progress – driving partner success, strong growth in live modules, improved productivity and cost efficiencies ● Strategic progress – Ocado Intelligent Automation proposition and busin
Slide 6: Financial Summary
Financial Summary £m 1H23 1H22 Change FY22 Revenue 1,371 1,262 +9% 2,514 EBITDA 17 (14) +31 (74) Loss before tax (212) (204) -8 (471) (pre exceptionals) Underlying cash flow (288) (396) +108 (834) ● Revenue up 9%; Technology Solutions +59%, Ocado Logistics +2%, Ocado Retail +5% ● EBITDA: Technology
Slide 7: Operational Progress - Technology Solutions
Operational Progress - Technology Solutions Increase in live modules driving recurring revenue fee growth Continued capacity growth for our partners: 25 sites and Strong revenue growth & 105 modules are now live around the world positive EBITDA +35% average live modules +22% period end live modules
Slide 8: Operational Progress - OSP partners
Operational Progress - OSP partners Supporting our partners to optimise operational performance Ocado Partner Success teams in place and making a difference Working closely with partners: Targeted areas of support: Embedding our 20+ years of ● Fulfilment: labour planning & experience and know-how in
Slide 9: Operational Progress - OSP partners: Project Endeavour
Operational Progress - OSP partners “Project Endeavour” working closely with Kroger to drive operational performance % improvement since December 22 ● Initial focus on the first two Kroger CFCs (Ohio and Florida) >25% Units per hour higher ● Phase 1 successfully completed; 12 week programme Drops pe
Slide 10: Operational Progress - Ocado Logistics
Operational Progress - Ocado Logistics Improving productivity in warehouse and deliveries OSP UPH1 continues to Deliveries per van per week2 increase - up 14% YOY to 206 returning to pre covid levels 1H23 exit at 194 +14% +3% UK OSP CFC UPH Ocado Retail drops per van per week ● Increasing productivi
Slide 11: Operational Progress - Ocado Retail
Operational Progress - Ocado Retail Strong progress on strategy; delivering profitability in Q2 Q2: 3 consecutive months of positive EBITDA Key drivers from “Perfect Execution” programme: ● customer proposition improved across value, service and range ● volumes increased quarter on quarter; eaches p
Slide 12: Operational Progress - Ocado Retail
Operational Progress - Ocado Retail Growing profitability and KPIs improving Basket size stabilising in Q2 Strong customer acquisition Actions taken to improve +10.6% YOY capacity utilisation covid impact 2H23 volumes expected to be at >75% of capacity Ocado.com basket size (eaches) Active customers
Slide 13: Strategic Progress
Strategic Progress Ocado Intelligent Automation well placed in attractive market MHE sell model Leverages Profit The Capital light; fees existing OSP recognised on Model upfront to offset technology; ‘go live’ of cash outflows limited extra R&D investment project ● Discussions Our Progress with seve
Slide 14: Summary
Summary First half - clear progress; delivering results ● KPIs continued progress across all segments ● Improving profitability ● Cash outflows reducing ● H1 performance reinforces outlook for FY23 Second half - key priorities ● Operational execution - for Ocado and our partners ● Financial discipli
Slide 15: Financial Review
Financial Review Stephen Daintith, CFO 15
Slide 16: Group P&L - increasing scale of Technology Solutions
Group P&L - increasing scale of Technology Solutions drives higher revenue and positive EBITDA £m 1H23 1H22* Change FY22* Revenue Technology Solutions 198 125 +59% 291 Ocado Logistics 335 330 +2% 660 Group revenue +9% to £1.4bn: Ocado Retail 1,179 1,122 +5% 2,203 ● Technology Solutions +59% ● Ocado
Slide 17: Technology Solutions
Technology Solutions 17
Slide 18: Technology Solutions - strong revenue growth and positive EBITDA
Technology Solutions - strong revenue growth, increased contribution margin and positive EBITDA £m 1H23 1H22* Change FY22* Revenue1 198 125 +59% 291 Live modules (average) 101 75 +35% 84 Contribution 140 81 +73% 187 Contribution margin % 71% 65% +6% 64% Technology costs (46) (39) +16% (81) Support c
Slide 19: Technology Solutions KPIs improving
Technology Solutions KPIs improving Ordered site modules Live modules up 22% since OSP direct operating costs % capacity up 5% since 1H22 1H22 improving with maturity of sites 105 232 232 221 99 213 86 177 168 162 141 61 54 121 43 44 33 36 UK Modules Ordered UK Modules Live International Modules Ord
Slide 20: Technology Solutions positive swing in EBITDA
Technology Solutions positive swing in EBITDA driven by revenue growth, high contribution margin and cost control £6m +£5m £6m £0m £(6)m £(3)m +£10m £12m net reduction in £(59)m +£59m Support costs £122m Technology Sales & Partner Other Support Sale of Dartford 1H22 Contribution 1H23 costs Success c
Slide 21: Technology investment at peak levels in FY23
Technology investment at peak levels in FY23 Technology spend peaking in FY23 Technology costs are focussed on Re:Imagined product development and roll out £149m £143m Re:Imagined products on track for near-term delivery £125m driving stabilisation/reduction of spend £122m ● Automated Frameload: liv
Slide 22: Support costs down; investment in the customer
Support costs down; investment in the customer Support costs include: Support costs reducing ● Sales & account management ● Partner success ● Supply chain & operations ● Finance ● Legal ● HR ● Group IT ● Real estate £100.6m ● Board £88.5m Key drivers: ● Investment in partner success and account mana
Slide 23: Ocado Logistics
Ocado Logistics 23 23
Slide 24: Ocado Logistics EBITDA in line with 1H22
Ocado Logistics EBITDA in line with 1H22 £m 1H23 1H22* Change FY22* Revenue 335 330 +2% 660 Costs (320) (315) +2% (626) EBITDA 15 15 - 34 Eaches (m) 596 612 -2.6% 1,196 Orders per week (000s) 512 491 +4.3% 494 OSP CFC UPH 206 181 +13.8% 184 Deliveries per van per week 182 177 +2.8% 176 ● Revenue of
Slide 25: Ocado Retail
Ocado Retail 25
Slide 26: Ocado Retail improving profitability during H1
Ocado Retail improving profitability during H1 £m 1H23 1H22 change FY22 Revenue 1,179 1,122 +5% 2,203 Gross profit 390 385 +1% 740 Gross margin % 33.1% 34.3% (1.2)ppts 33.6% Fulfilment & delivery costs (238) (234) +2% (412) Marketing costs (20) (27) -24% (58) Support costs (49) (31) +56% (135) Fees
Slide 27: Revenue up, with strong active customer growth
Revenue up, with strong active customer growth 1H23 1H22 Change Revenue £m 1,179 1,122 +5.0% ● Strong customer, orders and basket value growth avg. orders per week 392 377 +4.0% ● Q2 orders per week at 401k (000s) ● Strong growth in active customers, improved active customers 959 867 +10.6% customer
Slide 28: Ocado Group
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Slide 29: Significant reduction in cash outflow; strong liquidity
Significant reduction in cash outflow; strong liquidity First half underlying cash flow improved by £108m Healthy liquidity position of £1.3bn and improving further 300 1,309 (396) 30 99 1,009 (21) (288) £108m improvement 1H22 EBITDA Capex Other 1H23 1H23 Undrawn 1H23 underlying underlying cash RCF
Slide 30: Capital expenditure on track for FY23 guidance
Capital expenditure on track for FY23 guidance £367m 56 Sites: £284m ● Fewer sites under construction; 2 CFCs went live in the 29 half and a further 5 are under construction (1H22: 12 sites 17 21 under construction at the end of the period) 86 Technology: 103 ● Technology R&D spend at peak levels as
Slide 31: First half summary
First half summary ● KPIs improving across all operating divisions ● Technology Solutions EBITDA positive ● Ocado Logistics continuing to improve productivity ● Ocado Retail improving profitability during period ● Cost control and financial discipline ● Cash flow improving; liquidity remains strong
Slide 32: Outlook & FY Guidance
ocado GROUP: ok & uidance “\O2 GROUP
Slide 33: Outlook for the second half
Mark Outlook for the second half Technology Solutions ● 1 further CFC (Luton) opening in 2H23 ● xxx ● 2 Coles CFCs previously scheduled for 2H23; working closely with Coles on revised timing ● Further operating efficiencies and cost reductions; positive EBITDA for the full year Ocado Logistics ● Fur
Slide 34: FY23 guidance unchanged
FY23 guidance unchanged Capital Revenue EBITDA Expenditure Technology Solutions +40% positive Ocado Logistics broadly stable around £25m mid-single digit Ocado Retail marginally positive growth Total Group Capex - - £550m 34
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Slide 36: Appendix
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Slide 37: Appendix - contents
Mark Appendix - contents ● xxx 1. Glossary 2. Reconciliation of Proforma to Actuals - 1H22 & FY22 3. Exceptional items 4. Underlying cash flow 5. Ocado Retail revenue KPIs by quarter 37 37
Slide 38: Appendix 1: Glossary (1 of 3)
Mark Appendix 1: Glossary (1 of 3) Active customers - a customer who has shopped at Ocado.com within the previous 12 weeks ● xxx Average live modules - based on average weekly live modules in the reporting period Basket size - number of eaches (number of individual pick of SKUs) for Ocado.com CFC -
Slide 39: Appendix 1: Glossary (2 of 3)
Mark Appendix 1: Glossary (2 of 3) Ocado.com - relates to sales on the Ocado.com platform (excludes Ocado Zoom) xxx costs - includes other income ● Logistics Ocado Ocado Logistics eaches (m) - total CFC units of volume fulfilled for UK clients in millions Ocado Logistics orders per week - total CFC
Slide 40: Appendix 1: Glossary (3 of 3)
Mark Appendix 1: Glossary (3 of 3) ● xxx Ordered modules - represent the maximum module capacity of sites for which a contractual agreement has been signed with a partner and an invoice has been sent for the associated fees. OSP - Ocado Smart Platform; the end-to-end solution for operating online in
Slide 41: Appendix 2: Segmental changes overview (1 of 4)
Mark Appendix 2: Segmental changes overview - reconciliation of proforma to actuals (1 of 4) ● The Group has changed its segmental reporting for FY23 to reflect the Group’s three distinct business models of Technology Solutions, Ocado Retail and Ocado Logistics. The 1H22 and FY22 prior year xxx ●com
Slide 42: Appendix 2: Reconciliation of proforma to actuals - 1H22 (2 of 4)
Appendix 2: Reconciliation of proforma to actuals (restated) - 1H22 (2 of 4) 1 2 3 4 Proforma at Actuals July 2022 Inter-segment transfers Restated Group & other Technology Intra-segment Rounding & £m 1H22 segment costs Support costs transfers other 1H22 EBITDA Technology Solutions (36) (20) 10 (13)
Slide 43: Appendix 2: Reconciliation of proforma to actuals - FY22 (3 of 4)
Appendix 2: Reconciliation of proforma to actuals (restated) - FY22 (3 of 4) Proforma at 1 2 3 4 February Actuals 2023 Inter-segment transfers Restated Group & other Technology Support Intra-segment Rounding & £m FY22 segment costs costs transfers other FY22 EBITDA Technology Solutions (94) (10) 22
Slide 44: Appendix 2: Reconciliation of proforma to actuals (4 of 4)
Appendix 2: Reconciliation of proforma to actuals (4 of 4) Proforma at 1 2 Actuals February 2023 Restated Capital expenditure £m FY22 Technology Retail design fees FY22 Technology Solutions 699 (19) 680 Ocado Logistics - 19 19 Ocado Retail 134 134 Inter-segment eliminations (36) (36) Group 797 - - 7
Slide 45: Appendix 3: Exceptional items
Appendix 3: Exceptional items £m 1H23 1H22 FY22 UK network capacity review (39) - - Litigation costs (9) (11) (27) Organisational restructure (8) - (3) Changes in fair value of contingent consideration (17) 5 (58) Other (4) (1) 58 Total (77) (7) (30) ● UK network capacity review is driven by the pro
Slide 46: Appendix 4: £108m improvement in underlying cash flows
Appendix 4: £108m improvement in underlying cash flows £m 1H23 1H22 £m change FY22 EBITDA 17 (14) +31 (74) Cash received from contracts 24 43 -19 79 Other working capital movements (10) 23 -33 32 Repayment of lease obligations (45) (37) -8 (86) Capital expenditure (289) (388) +99 (786) Interest paid
Slide 47: Appendix 5: Ocado Retail revenue KPIs by quarter
Appendix 5: Ocado Retail revenue KPIs by quarter Q1 23 Q2 23 1H23 Q1 22 Q2 22 1H22 Revenue £m 584 595 1,179 565 557 1,122 avg. orders per week 382 401 392 369 386 377 (000s) active customers 957 959 959 835 867 867 (000s) avg. basket value (£) 123 120 121 123 117 119 avg. eaches per basket 45 44 45
Slide 48: Forward-looking statements
Forward-looking statements DISCLAIMER This presentation contains oral and written statements that are or may be “forward-looking statements” with respect to certain of Ocado’s plans and its current goals and expectations relating to its future financial condition, performance and results. These forw