REG - Ocado Group PLC - Annual Financial Report
28/02/2023 15:45
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RNS Number : 3880R Ocado Group PLC 28 February 2023
ANNUAL FINANCIAL REPORT
OCADO GROUP PLC
28 February 2023
Ocado Group plc
Annual Financial Report 2022
Ocado Group plc ("Ocado") has today submitted to the Financial Conduct
Authority's national storage mechanism its annual report and accounts for the
52 weeks ended 27 November 2022 (as required by Listing Rules 9.6.1 and
9.6.3).
The annual report and accounts for the 52 weeks ended 27 November 2022 is
available to view on Ocado's website: www.ocadogroup.com
(http://www.ocadogroup.com/) (in compliance with Disclosure Guidance and
Transparency Rule 6.3.5(3)).
Ocado's annual report and accounts for the 52 weeks ended 27 November 2022
will also be available for viewing at the Financial Conduct Authority's
national storage mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
This announcement follows Ocado's announcement today of its preliminary
results for the same period. A condensed set of Ocado's financial statements
and information on important events that have occurred during the year and
their impact on the financial statements and related party information were
included in Ocado's preliminary results announcement. That information
together with the information set out below is the information provided in
satisfaction of the requirements of Disclosure Guidance and Transparency Rule
6.3.5. The description of principal risks and uncertainties below is extracted
in unedited full text from the annual report and accounts for the 52 weeks
ended 27 November 2022. Reading this announcement and/or the preliminary
results announcement should not be a substitute for reading the full annual
report and accounts for the 52 weeks ended 27 November 2022. This announcement
and the preliminary results announcement are available to view on Ocado's
website: www.ocadogroup.com (http://www.ocadogroup.com/) .
Principal risks and uncertainties
We have identified 11 principal risks and uncertainties facing Ocado. These
risks, mitigations and changes during the year are summarised in the table
below. They are not set out in priority order. Further information on risk is
set out on pages 86 to 95 of the annual report and accounts for the 52 weeks
ended 27 November 2022.
Principal Risks What is the risk? Key risk drivers How we manage it Movement Risk appetite Owner Link with strategy Responsible business approach link
Product Commercial Proposition Our OSP offer, pricing and contractual terms may not provide adequate and · Commercial viability · Pricing model approved by Chief Commercial Officer, Ocado Solutions and ↑ Cautious - Preference for safe delivery and will accept if trade-off is Luke Jensen Grow our revenue Environment and natural resources
sustainable returns for us and our shareholders and an attractive commercial
Board.
proposition for our clients. · Commodity and cost inflation
limited, and heavily outweighed by benefits.
· All deals are modelled and reviewed before signing
· Partner dependency
Optimise OSP economics Platform resilience and innovation
· Quarterly pricing review.
· Partner market volatility
· Monthly monitoring of project P&Ls undertaken by Finance.
· Food waste
Responsible business approach
· Diversified pipeline of deals with new partners in new territories.
Product Performance Failure to provide clients with timely, consistently reliable performance at a · Partner (operational) performance · Governance teams monitor individual projects. ↓ Cautious - Preference for safe delivery and will accept if trade-off is James Matthews and Luke Jensen Grow our revenue Platform resilience and innovation
level of quality to meet the needs of their end customers. Partners may not
limited, and heavily outweighed by benefits.
have the necessary knowledge, guidance, or capabilities to operate OSP · Contractual obligation and change · Monthly reviews of partner performance undertaken, including KPIs and
efficiently and cost-effectively. These issues could lead to increased costs,
partner engagement.
reduced revenue or penalties for Ocado and its clients. · Platform implementation delays
Deliver on our client commitments
· Partner Success Teams share knowledge and advice on improved ways of
· Product quality working.
· Operational disruption (including technical and software failures) · New products are tested at dedicated development sites. Responsible business approach
Product innovation Failure to respond to emerging technology or disruptive business models could · Disruptive technology · Quarterly product planning meetings assess product development against → Open - Will take justified risks to achieve highest return and accept James Matthews Optimise OSP economics Our people and skills for the future
undermine our ability to attract and retain clients.
functionality, target KPIs, timelines and budget.
possibility of failure.
· Product strategy and roadmap
· Ongoing market research to identify our partners' needs and market
trends. Deliver transformational technology Environment and natural resources
· Establishing our identity as a technology business, international
platform provider and innovation factory.
Responsible business approach Platform resilience and innovation
Intellectual Property Third party IP infringement or failure to protect our own IP could result in · Infringement · Conduct Freedom to Operate searches on relevant technologies and in ↓ Cautious - Preference for safe delivery and will accept if trade-off is Neill Abrams Deliver transformational technology Platform resilience and innovation
loss of use of the Group's assets, financial damages or harm to the Company's
selected jurisdictions.
limited, and heavily outweighed by benefits.
reputation or relationships. · Protection
· Monitor IP filings and grants by a large number of competitor
companies. Responsible business approach
· Specialist patent attorneys work with the development streams to
identify new innovations and provide training and guidance.
· Combine internal and external legal counsel management of litigation
and other IP proceedings.
Supply Chain Disruption in our extended and complex supply chain may adversely affect · Contract performance · Steering group monitors supply chain demand against supplier capacity ↑ Cautious - Preference for safe delivery and will accept if trade-off is James Matthews Grow our revenue Our people and skills for the future
product availability and responsible sourcing. This could result in increased
constraints. limited, and heavily outweighed by benefits.
costs and fines, delays to contractual commitments and loss of revenue. · Responsible sourcing
· Dedicated procurement teams with specific market and product knowledge.
· Supplier dependency
Optimise OSP economics Platform resilience and innovation
· Supplier assessments, due diligence and site audits undertaken during
· Power shortages/blackouts product development process.
· CO2 shortage · Quarterly business review of all major suppliers covers performance, Deliver on our client commitments
product quality, cost and market assessment.
· Responsible Sourcing Working Group monitors multiple work streams,
reporting to the ESG Committee. Responsible business approach
Talent & Capability Difficulty in filling key positions, a loss of top performers and an inability · Retention and rewards · Workforce planning undertaken to identify current and future landscape. → Flexible - Will take strongly justified risks and will manage impact of Claire Ainscough Deliver transformational technology Our people and skills for the future
to embed diversity could undermine business operations and growth plans.
possible failure.
· Attraction · Periodic review of remuneration and incentive plans to align with
market trends.
· Training and development
Deliver on our client commitments
· Talent development programmes implemented to support resourcing plans.
· Diversity and inclusion
· Employee surveys to analyse opinions
· Succession planning
Responsible business approach
· Succession plan developed.
· Culture and wellbeing (employee engagement and relations)
· Organisational structures
Cybersecurity Disruption or loss of critical assets and sensitive information as a result of · Cybersecurity breach · IT infrastructure established to operate with resilience and security. ↑ Minimal - Extremely conservative and will accept only if essential and limited James Matthews Deliver transformational technology Platform resilience and innovation
a cyber attack, insider threat or a data breach within our Group network or
possibility of failure.
our supply chain, could result in business disruption, reputational damage and · Commercial data loss · Regular testing by third parties and cyber incident contingency
regulatory impacts, for us and our clients.
planning.
· Personal data loss
Responsible business approach
· Data Protection Officer oversees Group's privacy compliance programme.
· Infrastructure outage
· No customer payment card data is held in Ocado Group's databases.
· Third party compromise
· Dedicated Information Security team monitors security issues and
responds to security incidents.
Fire & Safety Fire, or harm to a worker or customer, caused by product design or operating · Fire safety · Health and safety governance programme overseen by the Safety → Minimal - Extremely conservative and will accept only if essential and limited James Matthews Deliver on our client commitments Our people and skills for the future
failures could result in business disruption, loss of assets and reputational
Committee.
possibility of failure.
loss. · Product safety
· Experienced technical experts monitor and audit compliance against
· Food safety relevant safety regulations, policies and procedures in safety areas, Responsible business approach Platform resilience and innovation
including food, product, occupational health, fire and construction.
· People safety (construction and logistics)
· Training, risk assessments and safe systems of work undertaken by
qualified staff to raise awareness and knowledge.
· Regulatory changes actively monitored and supported by external
expertise and advice.
Regulatory & Compliance Failure to comply with local and international regulations could lead to loss · Statutory compliance · UK, EU and rest of world regulatory monitoring tracker. → Minimal - Extremely conservative and will accept only if essential and limited Neill Abrams Responsible business approach Platform resilience and innovation
of trust, penalties, and undermine our ability to operate.
possibility of failure.
· Fraud, bribery and industry specific compliance · Perform due diligence and territory research and seek specialist advice
for regulatory issues.
· New geographies
· Monitor regulatory developments to ensure that changes are identified.
· Governance
· Implement compliance framework of policies and procedures and employee
training.
Geopolitical & Economic Uncertainty Global economic and political crises may undermine customer demand, our access · Sanctions · Risk assessments prior to entering new geographical markets or ↑ Flexible - Will take strongly justified risks and will manage impact of Stephen Daintith Optimise OSP economics Our people and skills for the future
to skills and our supply chain. This could impair operations and delivery of
undertaking new ventures. possible failure.
new capacity. · War and conflict
· Scan of government and media channels for emerging threats.
· Cost of living
Deliver on our client commitments Platform resilience and innovation
· Maintain financial and physical reserves to cushion any operational
· Pandemic impact for an extended period.
· Civil unrest/activism · Update business continuity management plans in response to threats. Responsible business approach
Climate Extreme weather events and climate-related regulation could disrupt our supply · Climate reporting · ESG Committee oversight of ESG and climate programmes. → Flexible - Will take strongly justified risks and will manage impact of Neill Abrams Deliver transformational technology Environment and natural resources
chain, operations and demand for our products.
possible failure.
· Fleet transformation · Risk workshops and scenario analysis to identify financial impact, and
mitigations over extended timeframe (see TCFD disclosure note - pages 47-55).
· Energy costs
Deliver on our client commitments Platform resilience and innovation
· KPI monitoring.
· Climate impact on supply chain
· Climate and Net Zero roadmap planning.
· Natural disasters
Responsible business approach
· Horizon scanning to identify regulatory developments.
Key: ↑ Risk has increased ↓ Risk has decreased → No change
For further information on the financial risks see pages 96 to 99 and 243 to
245 of the notes to the consolidated financial statements in the annual report
and accounts for the 52 weeks ended 27 November 2022.
Directors' Responsibility Statement
Ocado's annual report and accounts for the 52 weeks ended 27 November 2022
contains the following statements regarding responsibility for the financial
statements and the annual report in compliance with DTR 4.1.12. This
responsibility statement is repeated here (below) solely for the purposes of
complying with Disclosure Guidance and Transparency Rule 6.3.5. It is not
connected to the extracted information presented in the preliminary results
announcement or this announcement.
Each of the Directors who held office at the date of the approval of this
Annual Report (included in the biographies of the Directors on pages 106 to
109) confirms, to the best of his or her knowledge, that:
· the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group; and
· the "Management Report" (as defined in the Directors' Report on
page 171 to 172) includes a fair review of the development and performance of
the business and the position of the Group, together with a description of the
principal risks and uncertainties that it faces.
The Directors of Ocado Group plc are listed on pages 106 to 109 of the annual
report and accounts for the 52 weeks ended 27 November 2022 and are listed on
the Ocado Group's corporate website: www.ocadogroup.com
(http://www.ocadogroup.com/) . The Directors of Ocado Group plc as at the date
of this announcement are as follows:
Rick Haythornthwaite;
Tim Steiner;
Neill Abrams;
Stephen Daintith;
Mark Richardson;
Luke Jensen;
Jörn Rausing;
Andrew Harrison;
Emma Lloyd;
Julie Southern;
Michael Sherman;
Nadia Shouraboura;
John Martin; and
Julia M. Brown.
Enquiries
For further information contact:
Company Secretary Chief Reputation Officer
David Shriver
Neill Abrams
+44 1707 228 000
email: company.secretary@ocadogroup.com
(mailto:company.secretary@ocadogroup.com) investor.relations@ocadogroup.com (mailto:investor.relations@ocadogroup.com)
Person responsible for arranging the release of this announcement:
Neill Abrams
Group General Counsel & Company Secretary
Ocado Group plc
Buildings One & Two
Trident Place
Mosquito Way
Hatfield
Hertfordshire AL10 9UL
Fax: +44 (0)1707 227 997
email: company.secretary@ocadogroup.com
(mailto:company.secretary@ocadogroup.com)
Ocado Group plc LEI: 213800LO8F61YB8MBC74
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