REG - Ocado Group PLC - Trading Statement

OcadoAnnouncement

14/01/2025 07:00

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RNS Number : 1655T  Ocado Group PLC  14 January 2025

OCADO GROUP PLC

14 January 2025

 

Ocado Retail Q4 Trading Statement

 

Strong performance throughout 2024; accelerated sales growth in Q4,

remaining the fastest growing grocer in the UK

 

Ocado Retail Ltd ("Ocado"), a joint venture between Ocado Group plc ("Ocado
Group") and Marks & Spencer Group plc ("M&S"), today announces its
trading statement for the 13 weeks to 1st December 2024

 

Q4 Highlights

·      Q4 Retail revenue grew by 17.5% to £715.8m as we continued to
deliver on our strategy of unbeatable choice, unrivalled service and
reassuringly good value; enabled by Ocado's technology and automated Customer
Fulfilment Centres

·      Volumes (total items) on Ocado.com grew 17.0% year-on-year and
average orders per week grew by 16.9% to 476k

·      Performance was driven by active customer base growth of 12.1%,
now at 1.1m active customers, and greater frequency as more customers shopped
with us more of the time

·      Growth was driven by order volumes; average basket sizes were
stable and average selling prices were flat as we continued to invest in price
and value ahead of the market

 

Key financial drivers

                                     13 weeks  13 weeks     Year-on-year change (%)(8)

                                     Q4 2024   Q4 2023(7)
 Retail revenue (£ million)(1)       715.8     609.4        +17.5
 Volumes - total items (million)(2)  271.6     232.2        +17.0
 Average orders per week (000s)(3)   476       407          +16.9
 Active customers (000s)(4)          1,119     998          +12.1
 Average basket value (£)(5)         120.85    120.62       +0.2
 Average selling price (£)(6)        2.75      2.75         +0.1
 Average basket size (items)         43.9      43.8         +0.1

 

 

FY 2024 (52 weeks to 1st December 2024)

·      Full year Retail revenue grew by 13.9% to £2,685.8m

·      Volumes (total items) on Ocado.com grew by 12.9% and average
orders per week grew by 12.5%, driven by growth in active customer base of
12.1% to 1.1m active customers, and increased frequency

·      Average basket value increased by 1.0% to £122.09, with basket
size up 0.3% to 44.3 items and a 0.6% increase in ASP, well below UK grocery
inflation(9) of 3.0%

·      Our topline growth, as well as continued focus on cost and
efficiency, has resulted in strong EBITDA growth

 

 

Progress implementing our strategy

·      We have offered even better choice, including almost all of the
M&S addressable range live on site and more joint launches than prior
years. We know M&S products continue to bring new customers to Ocado.com.
Alongside our strong range of bigger brands and Ocado Own Brand, we also
offered more innovation and newness to customers through our challenger brands

·      Our already high Perfect Orders (on time and in full, with no
substitutions) increased by +7ppt across the year, and 99% of items were
delivered as promised. Product availability and delivery slot availability
both improved whilst we also added an additional half a day of freshness to
the shelf life of our produce

·      We have continued to invest meaningfully in price with price
perceptions continuing to improve as a result, with value satisfaction
increasing +4.3ppt in the year. We lowered more prices through our 'Big Price
Drops' and continued with our Ocado Price Promise, basket matching on 10,000
like-for-like products with Tesco

 

Christmas Trading

·      Ocado delivered another record-breaking Christmas, with our
highest ever level of sales over the peak Christmas trading period

·      We offered an extensive seasonal range across M&S and many
other suppliers, with customer favourites including the M&S party food
selection from hot honey halloumi to pigs in blankets to the showstopper
entertaining range; cheeses from a wide range of suppliers including Paxton
and Whitfield; and a continuing popularity of low and no alcohol drinks for
the festive season

·      Our CFC efficiency improved throughout the year with average
units per hour, "UPH" rising to 220, up 15% versus last year, with our newest
CFC in Luton reaching 269 UPH in the year as we further rolled out On-Grid
Robotic Pick. Over the Christmas period our network exceeded design capacity
demonstrating the further growth potential of our CFCs.

 

Hannah Gibson, Ocado Retail's Chief Executive Officer, said:

 

"2024 was a year of strong growth. In the fourth quarter, we accelerated sales
again - reaching 500,000 orders per week for the first time, at the end of
November.

 

We've achieved this growth by being laser focused on customer service and
delivering unbeatable choice, unrivalled service and reassuringly good value
to the households and families that we serve. We've made a series of
significant improvements  - including making sure customers can buy all their
favourite M&S products, ensuring our service is near perfect, shifting our
value perceptions as customers realise how much we've moved on price and
helping new customers discover Ocado.

 

"As we enter the next phase of our strategy, we are excited about the future
of online grocery and our role in shaping it. Priorities for this year are
raising the bar again in our leading customer proposition, making further
progress on improving profitability and transitioning the business onto new
technology platforms."

 

 

 

FY25 Guidance

 

We have confidence that the business will continue to show market-leading
sales growth and volume momentum in FY25. Moreover, we expect to make further
progress on driving operational efficiency and scale leverage, continuing on
our journey towards a high mid-single digit adjusted EBITDA margin in the
mid-term.

Our expectations for further growth will be reflected in our guidance for FY25
for Ocado Retail at the Ocado Group Full Year Results on 27 February 2025.

 

Alongside this release, a short video is available on the Ocado Group website
here (https://www.youtube.com/watch?v=yak-qMJxUXY) in which Ocado Retail CEO,
Hannah Gibson, discusses recent performance, strategy, and the outlook for
Ocado Retail.

 

Ocado Group, on behalf of the joint-venture, will be hosting an analyst
conference call at 8.00am today. Please use participant number: +44 (0) 33
0551 0200 and confirmation code: Ocado Q4 - Analyst Call. A replay facility
will be available through an on demand link for 90 days following the
announcement.

 

Contacts

·      Stephen Daintith, Chief Financial Officer, Ocado Group plc on +44
1707 228 000

·      Nick Coulter, Head of Investor Relations, Ocado Group plc on +44
1707 228 000

·      Fraser Ramzan, Head of Investor Relations, Marks and Spencer
Group plc, on +44 20 3884 7080

·      Oliver Hughes at MHP on +44 20 3128 8100 or ocado@mhpgroup.com

 

About Ocado Retail

Ocado.com (operated by Ocado Retail) is the world's largest dedicated online
supermarket and is a 50:50 joint venture between Marks & Spencer Group and
Ocado Group.

 

Reaching over 80% of the UK population, more than 1 million active customers
benefit from an unbeatable range of around 45,000 products (including M&S,
Ocado Own-Range, big-name brands and challenger brands), unbeatable service
with next-to-no substitutions. Every order is carefully packed in one of seven
distribution centres using world-leading software and technology. Shopping is
then delivered directly to customers using a network of regional spokes and
fleet of brightly-coloured delivery vans.

 

Thoughtful service features such as colour-coded bags, digital receipts
provided in date order, reminder texts with your driver's name, along with
convenient hourly delivery slots complemented by award-winning customer
service on email, phone and social media.

 

Ocado Retail is also responsible for Zoom by Ocado, its rapid grocery delivery
service.

 

 

Notes

1.     Retail revenue comprises revenues from Ocado.com and Zoom by Ocado

2.     Volumes - total items refers to results of Ocado.com

3.     Average orders per week refers to results of Ocado.com

4.     Active customers are classified as active if they have shopped at
Ocado.com within the previous 12 weeks

5.     Average basket value refers to results of Ocado.com

6.     Average selling price refers to Ocado.com and is defined as product
sales divided by total eaches

7.     FY23 was a 53 week year and Q4 2023 was 14 weeks.  To provide a
like-for-like comparative the Q4 2023 trading update was based on the 13 weeks
ending 26th November (with the exception of active customers which is based on
the 53rd week year exit number)

8.     Growth percentage calculated on an unrounded basis

9.     NIQ Total Till and NIQ Homescan from Nielsen Consumer LLC

 

A copy of this trading update is available on www.ocadogroup.com

 

Cautionary statement

Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and assumptions and are
subject to a number of risks and uncertainties that could cause actual events
or results to differ materially from any expected future events or results
expressed or implied in these forward-looking statements. Persons receiving
this announcement should not place undue reliance on forward-looking
statements. Unless otherwise required by applicable law, regulation or
accounting standard, Ocado does not undertake to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise.

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