Ocado Group Plc · LSE:OCDO
Ocado — H1 2020 Earnings Presentation
28 slides from Ocado's earnings presentation, Jul 14, 2020
Slide 1: 1H20 Results
Ocado Group plc 1H20 Results 14th July 2020 1
Slide 2: 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
Slide 3: The Chairman's Overview
The Chairman’s Overview Lord Rose ©2020 Ocado Group plc. All rights reserved.
Slide 4: Financial Review
Financial Review Duncan Tatton-Brown CFO Ocado Group senior engineer with Groupe Casino colleague Groupe Casino: Fleury Monoprix-Plus, Paris Meurogis CFC,4 France 10 ©2020 Ocado Group plc. All rights reserved.
Slide 5: Financial Summary
Financial Summary £m 1H 2020 1H 2019 Var (%) Group Revenue 1,086.8 882.3 23.2% Group EBITDA 19.8 30.7 (35.5)% Depreciation, amortisation, (76.6) (65.0) 17.8% impairment Net Interest (22.9) (14.2) 61.3% Loss before tax (79.7) (48.5) 64.3% Exceptionals 39.1 (99.0) Loss before tax post exceptionals (40
Slide 6: Segmental Summary
Segmental Summary Revenue1 EBITDA2 Var Var 1H 2020 1H 2019 1H 2020 1H 2019 % % £m Retail 1,021.6 803.2 27 45.7 24.4 87 UK Solutions & 320.4 293.9 9 29.3 40.8 (28) Logistics International Solutions 1.6 0.3 433 (45.1) (23.7) 90 Other3 0.1 8.3 (99) (10.4) (11.0) 5 Total 1,086.8 882.3 23 19.8 30.7 (36)
Slide 7: Cash fees show progress building International Solutions
Cash fees show progress building International Solutions 1H 2020 1H 2019 Var £m £m % Revenue 1.6 0.3 433 EBITDA (45.1) (23.7) (90) Fees invoiced 73.7 46.6 58% ● Revenue commencing as CFCs in France and Canada go-live towards the end of 1H 20 ● Cumulative unrecognised cash fees of £219m ● Growth in c
Slide 8: UK Solutions: Client growth strong
UK Solutions: Client growth strong 1H 2020 1H 2019 Var % Revenue 320.4 293.9 9 EBITDA 29.3 40.8 (28) ● Client volume growth strong ● Revenue growth reduced due to Andover impacts (Erith “holiday” and reduced store pick fees) ● EBITDA decline ○ Andover revenue impacts ○ IFRS 16 adjustment ○ Extra inv
Slide 9: Ocado Retail: COVID-19 impact on demand
Ocado Retail: COVID-19 impact on demand Customer behaviour change driving impacts Sales growth = X orders growth + growth in basket value ● Demand in excess of capacity ● Limited ability to serve new customers but 27% demand is there 12% 12% ● Bigger baskets and less frequent orders 10% ● Remained p
Slide 10: Ocado Retail: COVID-19 impact on operations
Ocado Retail: COVID-19 impact on operations Change in customer behaviour impacts KPIs Increased volumes drive efficiencies UPH (mature CFCs2) benefits from recent trends CFC costs (% sales) down incl. COVID bonus +7% Smoothed week; More items per basket, 8.9% 8.1% better total utilisation better com
Slide 11: Ocado Retail performance
Ocado Retail performance (% Retail Revenue) 1H 20201 1H 20191,2 bps Gross margin (incl. media) 32.0 33.0 (100) Remained price competitive Trunking and delivery costs (11.1) (12.0) 90 Continued underlying progress, Erith now above average UPH; extra CFC costs (8.1) (8.9) 80 benefits overall from cust
Slide 12: Our people are essential to our commercial and financial success
Our people are essential to our commercial and financial success Prioritising our colleagues So we can be our best To deliver our best for stakeholders 17k employees; diverse locations, Successfully maintaining wellbeing Confidence in business unusual roles and responsibilities UK logistics UK - Eur
Slide 13: Group net cash flow development
Group net cash flow development £m FY19 Cash position 751 EBITDA 20 Working Capital ●Increase in trade payables and 88 accruals on higher throughput Strong operating cash flow Contract Liabilities 60 Insurance proceeds 10 Finance costs + other (12) Capex split1 Net debt/finance obligations 566 ●£600
Slide 14: Outlook for 2020
Outlook for 2020 ● Revenue growth: ○ Positive outlook for online grocery, Retail outlook suspended currently ○ UK Solutions & Logistics below Retail reflecting full year impact of Morrisons’ “holiday” from Erith ○ International Solutions expected to be <£10m International fees start to be recognis
Slide 15: Ocado Group in a post COVID-19 world
Ocado Group in a post COVID-19 world Tim Steiner CEO 15 ©2020 Ocado Group plc. All rights reserved. Sobeys: Voilà Ontario, Canada
Slide 16: COVID-19: significant and permanent, global channel shift
COVID-19: significant and permanent, global channel shift Significant channel shift, globally We expect growth is sustainable The opportunity is huge Online share of grocery almost Customers expect to continue Commitments for 54 CFCs1 doubled in a few months in the UK shopping online after the crisi
Slide 17: An extraordinary few months, an even bigger opportunity ahead
An extraordinary few months, an even bigger opportunity ahead Melanie Smith - CEO, Ocado Retail 17 ©2020 Ocado Group plc. All rights reserved.
Slide 18: Ocado Retail: growing faster in the UK
Ocado Retail: growing faster in the UK 27% 1H sales growth; expect sustained demand Adding c40% more capacity over next 18 months 1. IMPROVING CUSTOMER OFFER Bristol: 30k OPW: early 2021 Excludes Andover: 60k OPW: autumn 2021 Richer range with switchover to M&S Sept 1st Zoom sites Purfleet: 85k OPW:
Slide 19: We've reached some big milestones and we're ready to go further, faster
We’ve reached some big milestones and we’re ready to go further, faster Luke Jensen - CEO, Ocado Solutions 19 ©2020 Ocado Group plc. All rights reserved.
Slide 20: Serving our partners' needs: providing more capacity faster
Serving our partners’ needs: providing more capacity faster Partner store pick capacity Erith volumes up ramped 5x since March1 almost 50% since March Faster launch of partner CFCs Sobeys 4Q announcement: Acceleration with COVID-19 demand 500 “The customer launch of Voilà was accelerated to meet the
Slide 21: Serving our customers' needs: flexibility with the OSP ecosystem
Serving our customers’ needs: flexibility with the OSP ecosystem Multi format ecosystem offers long-term Retailers require flexibility; choice of format leadership across missions, with tactical flexibility informed by missions, market and timeline Strategic Customer offer CFCs offer the No one mode
Slide 22: Serving our partners' needs: a scalable, global supply chain
Serving our partners’ needs: a scalable, global supply chain Strengthening our supply Enabling us to scale MHE Which will also improve chain to support future growth production for partners, faster our total cost of ownership New partnerships planned with Avoiding hardware Capital cost of assets sho
Slide 23: Serving our partners' needs: investing for acceleration
Serving our partners’ needs: investing for acceleration A bigger tech team for faster development The implications of ramping more CFCs, faster Aim to hire 200 more colleagues to the Technology We have guided a c£30m net cumulative peak cash team in FY20 than originally planned outflow for a ‘standa
Slide 24: Benefits of OSP leadership club
Benefits of OSP leadership club Scale gives us more resources Reach adds global Collaboration compounds the to realise partner ambitions insight to local strength benefits of scale and reach The club is large and growing The club benefits from a global Geographic diversity facilitates view of consum
Slide 25: Continuous innovation; business as usual
Continuous innovation; business as usual James Matthews - CEO, Ocado Technology 25 ©2020 Ocado Group plc. All rights reserved.
Slide 26: Accelerating innovation
Accelerating innovation Compelling investments, benefiting Parallel streams Progress in 1H from likely trends post COVID-19 Improving competitive advantages of OSP Future proofing the Leveraging technology platform and investing in More online Hygiene Simpler Food know-how in other verticals tangent
Slide 27: Conclusion
Conclusion ● The world has changed in grocery retailing for good ● Ocado Retail has shown that, even in times of crisis, it can deliver market-leading customer experience with strong and sustainable economics ● Ocado Group has prepared for greater velocity of execution and innovation. We are ready f
Slide 28: Q&A
Q&A Submit your questions via the ‘Questions’ tab on the portal Tomatoes growing; Guggenheim ‘Countryside’ Exhibit 28 2020 Infinite Acres, NYC, ©2020 Ocado Group plc. All rights reserved.