Ocado Group Plc · LSE:OCDO
Ocado — FY2012 Earnings Presentation
36 slides from Ocado's earnings presentation, Feb 7, 2013
Slide 1: Ocado Group plc 2012 Preliminary Results
Ocado Group plc 2012 Preliminary Results 7 February 2013
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 Ocado’s plans and its current goals and expectations relating to its future financial condition, performance and results. These forw
Slide 3: Agenda
Agenda • Financial Review – Duncan Tatton-Brown • Business Review – Tim Steiner • Q&A Appendices www.ocadogroup.com 3
Slide 4: Duncan Tatton-Brown, CFO
Duncan Tatton-Brown CFO www.ocadogroup.com 4
Slide 5: Financial summary (52 weeks)
Financial summary1 (52 weeks) FY12 FY11 FY12 (£m) FY11 (£m) YOY Growth (% Revenue) (% Revenue) Gross sales 716.2 642.8 11.4% Revenue 664.0 598.3 Gross profit 202.8 184.8 30.5 30.9 EBITDA 33.5 27.9 20.4% 5.1 4.7 Depreciation, (28.6) (26.8) (4.3) (4.5) amortisation & impairment2 Interest (3.6) (3.5) (
Slide 6: Operational KPIs (52 weeks)
Operational KPIs (52 weeks) FY12 FY11 % Change CFC efficiency (units per hour)1 120 111 +7.9 Average deliveries per van per week 151 145 +4.2 Average product wastage (% of revenue)2 0.7 0.7 - Items delivered exactly as ordered (%)3 98.3 98.3 - Deliveries on time or early (%) 92.7 92.3 - 1) Measured
Slide 7: Sales drivers (52 weeks)
Sales drivers (52 weeks) Gross Sales, £m Revenue, £m 664 716 643 598 551 516 FY10 FY11 FY12 FY10 FY11 FY12 Average Orders Per Week, ‘000 Average Basket Size, £ 123 110 114 93 112 112 FY10 FY11 FY12 FY10 FY11 FY12 www.ocadogroup.com 7
Slide 8: Gross margin %
Gross margin % Gross margin1,2 (incl. other income)me) 33.0 33.0 32.6 1.3 2.1 2.5 Other Income 31.3 +32% +14%30.9 30.5 +14% FY10 FY11 FY12 1) For the 52 weeks ended 25 November 2012 2) Expressed as a percentage of Revenue www.ocadogroup.com 8
Slide 9: Operating costs (52 weeks)
Operating costs (52 weeks) Change in % FY12 FY11 Growth FY12 FY11 Revenue (£m)1 (£m) (£m) (% Revenue) (% Revenue) FY11 – FY12 Trunking & delivery 81.0 71.9 9.1 12.2 12.3 (0.1) CFC 58.1 55.0 3.1 8.7 8.9 (0.2) Other operating costs 7.7 6.5 1.2 1.2 1.1 0.1 Administrative expenses 32.6 28.1 4.5 4.9 4.7
Slide 10: Marketing (52 weeks)
Marketing (52 weeks) Vouchering & Marketing costs, £m 17.4 15.9 13.5 6.2 7.9 +22% +48% -21% 5.4 Marketing costs Vouchering costs 11.2 8.1 8.0 FY10 FY11 FY12 % Revenue 2.6% 2.6% 2.6% www.ocadogroup.com 10
Slide 11: EBITDA (52 weeks)
EBITDA (52 weeks) EBITDA, £m EBITDA, % of Revenue 33.5 5.1% 27.9 22.0 4.7% 4.3% FY10 FY11 FY12 FY10 FY11 FY12 www.ocadogroup.com 11
Slide 12: Statutory summary
Statutory summary FY12 (£m) FY12 (£m) FY11 (£m) 53 week 52 weeks 52 week EBITDA 34.5 33.5 27.9 Adjusted1 profit/(loss) before tax 1.8 1.3 (2.4) Exceptional items (2.4) (2.3) - Loss before tax (0.6) (1.0) (2.4) Tax (1.8) (1.8) 1.9 Loss per share (0.46p) (0.54p) (0.10p) 1) Adjusted to exclude exceptio
Slide 13: Capital investment
Capital investment 2012 (£m) 2011 (£m) CFC 1 15.6 27.7 CFC 2 80.4 72.6 Delivery 8.9 11.8 IT 14.4 12.7 Other1 5.2 1.2 Total capital investment2 124.5 126.1 1) Includes non-food distribution centre spend of £3.9m in 2012 2) Includes capitalised interest of £4.1m 2012: £0.6m in 2011 www.ocadogroup.com
Slide 14: CFC2 total spend
CFC2 total spend Phase I Forecast Phase 2 Forecast Capital £m Capital £m Land & Building 80 - Fit out1 100 24 Technology 10 1 Total2 190 25 Weekly order capacity 120 - 130,000 180 - 190,000 1) Including material handling equipment and associated works 2) Excludes capitalised interest and pre-opening
Slide 15: Cashflow
Cashflow FY12 (£m) FY11 (£m) EBITDA 34.5 27.9 Exceptional items (1.5) - Capital spend (96.8) (114.2) Working Capital movements 6.7 (1.6) Financing activities 62.2 61.3 Interest paid (7.7) (6.2) Total cash movement (2.6) (32.8) Exchange adjustments 0.1 0.3 Opening cash 92.1 124.6 Closing cash 89.6 92
Slide 16: Debt profile
Debt profile Term of Group debt, £m 92.8 Capex Facility Vehicles 24.6 Other asset related 21.6 finance 5.8 2013 2014 2015-17 2018+ www.ocadogroup.com 16
Slide 17: Summary
Summary • Solid performance in 2012 • Financial position stable • Substantial capacity coming on stream • Clear pathway to improved profitability and cash generation − Scale − Innovation and efficiency − Significant expansion capital spend completed www.ocadogroup.com 17
Slide 18: Tim Steiner, CEO
ocado Tim Steiner CEO
Slide 19: Strategy
Strategy Strategic objectives Update for the period • Service and usability enhancements Developing the • Range expansion proposition to customer • Price initiatives • Online grocery increasingly important to consumers Growing customer • Building an ever growing base of loyal and valuable customers
Slide 20: Developing the proposition to customers
Developing the proposition to customers Improving our offer to customers – service, range and price Highest service levels Quick, easy to use Wider Price Range Fresher Better produce value www.ocadogroup.com 20
Slide 21: Developing the proposition to customers
Developing the proposition to customers Making it easier for our customers “customers can track their “checkouts on apps now 28%” orders in real time” “other usability developments including Facebook login and “mobile checkouts across “webshop improvements to BBC Good Food shopping website growing s
Slide 22: Developing the proposition to customers
Developing the proposition to customers Range expanded by 40+% to over 28,000 SKUs Extending Speciality New Shop in Shops www.ocadogroup.com 22
Slide 23: Developing the proposition to customers
Developing the proposition to customers Ocado own-label now 15% of total own-label sales, up over 70% year on year Ocado own-label sales as a proportion of total own-label 15% 0 2009 2010 2011 2012 www.ocadogroup.com 23
Slide 24: Developing the proposition to customers
Developing the proposition to customers Non-Food expanding now over 8,000 SKUs and growing rapidly • Dedicated distribution centre opened January 2013 • Supports extension of Non-Food range • Orders integrated with grocery deliveries www.ocadogroup.com 24
Slide 25: Developing the proposition to customers
Developing the proposition to customers Ocado is increasingly price competitive www.ocadogroup.com 25
Slide 26: UK Grocery market: £163 billion
Growing customer numbers and spend Online important to grocery shoppers, resulting in ever increasing numbers migrating from stores UK Grocery market: £163 billion1 Annual online grocery market growth c15%1 1) Source: IGD, Exane BNP Paribas estimates www.ocadogroup.com 26
Slide 27: Growing customer numbers and spend
Growing customer numbers and spend Active customers growing, new customers increasing, retention and basket stable Active customers1, ‘000 Customer Basket 355 • Basket stable 298 • New customer growth gaining 262 momentum Upward lift Downward Pressure 220 Retention rate stable 193 • •Inflation •New
Slide 28: Growing customer numbers and spend
Growing customer numbers and spend Income and location demographics continue to broaden Income demographics – new customers Location – new customers 10% 22% 18% 25% Over >£100k 55% London & South 62% 30% 70% £60 - £100k East 33% 27% Rest of UK £40-£60K 26% 23% Less than £40k 45% 38% 38% 26% 30% 21%
Slide 29: Optimising operations and building capacity
Optimising operations and building capacity Increasing capacity, efficiency and resilience Improvement Status Latest zone pick • Fully operational OSR2 • Fully operational, all ambient/chilled manual trolley pick removed CFC1 CFC1 Automated bagging • First machines installed and working Output • Ave
Slide 30: Optimising operations and building capacity
Optimising operations and building capacity CFC2 • Stocking started • First order due by end of February • Initial new capacity 120 - 130,000 orders per week • On budget www.ocadogroup.com 30
Slide 31: Optimising operations and building capacity
Optimising operations and building capacity Delivery catchment area does not change, efficiency and capacity improve Ocado coverage – over 70% of UK population LEEDS MANCHESTER CFC Spoke location CFC2 COVENTRY OXFORD OXFORD CFC1 BRISTOL WHITE CITY WEYBRIDGE DARTFORD WIMBLEDON SOUTHAMPTON www.ocadogr
Slide 32: Summary
Summary Opportunities to drive profitability and cash generation Now Opportunity Driven by Time • Scale Gross margin Similar to Waitrose • Own label and range growth Medium/long • Building supplier relationships • CFC2 benefits Picking Lowest cost in industry Short/medium • Further automation
Slide 33: Q&A
Q&A www.ocadogroup.com 33
Slide 34: Appendices
Appendices www.ocadogroup.com 34
Slide 35: Appendix 1: Balance sheet
Appendix 1:Balance sheet FY12 (£m) FY11 (£m) Non-current assets Property, plant and equipment 280.3 194.1 Other 29.9 23.3 Total 310.2 217.4 Current assets Cash and cash equivalents 89.6 92.1 Other current assets 48.5 52.2 Total 138.1 144.3 Total assets 448.3 361.7 Current Liabilities Trade and other
Slide 36: Appendix 2: Capital spend; reconciliation of actual spend to reported cash
Appendix 2: Capital spend; reconciliation of actual spend to reported cash FY12 (£m) FY11 (£m) Reported capital investment 124.5 126.1 Non cash additions of finance leases (7.6) (9.3) Capitalised interest costs (4.1) (0.6) Net movement in provisions and reserves (2.8) 1.2 Net movement in invoices re