REG - AO World plc - Q3 Trading & Strategic Review of Germany

AO WorldAnnouncement

27/01/2022 07:00

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RNS Number : 7776Z  AO World plc  27 January 2022

This announcement may contain 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 R01egulatory
Information Service, this inside information is now considered to be in the
public domain.

 

27 January 2022

AO WORLD PLC

Trading update and Strategic Review of the German business

 

AO World plc ("the Group"), a leading European online electricals retailer,
today issues the following trading update for the period ended 31 December
2021 and announces a strategic review of its German business.

 Revenue growth(1)    9 mths    9 mths    Q3        Q3

                      2yoy(2)   1yoy(3)   2yoy(4)   1yoy(5)
 Group revenues       +58%      (3)%      +45%      (14)%
 UK revenues          +58%      (1)%      +47%      (12)%
 Germany revenues(6)  +67%      (8)%      +35%      (24)%

The Group confirms that current trading estimates for the full year remain in
line with the guidance set out at the Interim Results on 23 November 2021. On
a comparable two-year period for the nine months to 31 December, UK revenues
grew 58%. On a one-year comparative, which covered the Covid-related
government lockdowns in the previous year, UK revenues were broadly stable,
despite supply chain constraints and driver shortages. In Germany, on a
comparable two-year period for the nine months to 31 December, revenues grew
67%(6).  On a one-year comparative in Germany for the same period, revenues
declined 8%(6).

Our German business is being significantly impacted by a number of recent
material changes to the local trading environment: competition in the online
market has intensified whilst online penetration has returned to pre-pandemic
levels; digital marketing costs have substantially increased against
pre-pandemic levels; and supply remains constrained.  We expect these trends
will continue for the foreseeable future in the German market.

The Board is focused on maximising shareholder value, and as a result of the
aforementioned factors, the Group has decided to commence a strategic review
of its German business, which will evaluate a range of options. The results of
the review will be announced in due course.

We remain confident about AO's long-term growth prospects, driven by the
strength of our proven business model, the quality of our customer
proposition, and the long-term market trend towards online migration.

AO World will announce its full year results to 31 March 2022 on 15 June 2022.

 Enquiries
 AO World plc                                          +44 (0)7525 147 877
 John Roberts, Founder and Chief Executive             IR@AO.com (mailto: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 (mailto:ao@powerscourt-group.com)

 Nick Hayns

 Sam Austrums

 Notes

 (1) Based on unaudited management accounts. AO World's financial year FY22
 runs from 1 April 2021 to 31 March 2022.

 (2 )Covers the nine months 1 April to 31 December 2021 compared to the
 equivalent period in FY20.

 (3) Covers the nine months 1 April  to 31 December 2021 compared to the
 equivalent period in FY21.

 (4) Covers the three months 1 October to 31 December 2021 compared to the
 equivalent period in FY20

 (5) Covers the three months 1 October to 31 December 2021 compared to the
 equivalent period in FY21

 (6) Based on euros constant currency.  On a sterling basis, revenue growth
 for each period is:

         9mths  9 mths  Q3     Q3

          2yoy    1yoy    2yoy   1yoy
 Germany revenues  +63%    (12)%   +34%   (28)%

 

 About AO

 AO World plc, headquartered in Bolton and a constituent of the FTSE Small Cap
 index, is a leading online electrical retailer.  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 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 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.

 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 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

 

About AO

AO World plc, headquartered in Bolton and a constituent of the FTSE Small Cap
index, is a leading online electrical retailer.  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 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 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.

 

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 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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