Financial and Statutory Highlights

FY 2016
£m
FY 2015
£m
Variance
%
Gross sales1 (Retail)1,267.41,115.713.6
Revenue21,271.01,107.614.8
EBITDA384.381.53.3
Profit before tax and exceptional items14.511.921.8
Profit after tax12.011.81.7
Cash and cash equivalents50.945.8
Net debt164.9127.0
External net debt456.27.5

Tim Steiner, Chief Executive Officer of Ocado, said:

We are pleased to announce results today which reflect robust trading in our core business and shows continued progress against our strategic objectives in what has been a challenging retail environment. Over the course of the last year, we grew our active customer base by almost 14%, with growth in average orders per week approaching 18%, testament to the strength of our customer proposition, market position and technology.

"We commenced operations at our new Customer Fulfilment Centre in Andover, which has the first installation of our new proprietary technology. At the same time, we have made good progress in improving the efficiency and throughput of our existing operations, increasing our capacity from existing facilities by over 20,000 weekly orders. These developments position us well for future growth, whilst improving our returns and enhancing the service we can offer our customers.

"In this ever evolving retail environment, we look forward to further developing our capabilities through innovation, creating the next generation eCommerce capabilities that will ensure our offer remains compelling for both retail and OSP customers alike."

Strategic update

We have continued to make strong progress in delivering our strategic objectives - driving growth, maximising efficiency and utilising proprietary knowledge, through the following actions:

Constantly improving the proposition to customers

  • Market-leading service levels remain high at 94.9% for delivery punctuality (2015: 95.3%) and at 99.0% (2015: 99.3%) for order accuracy
  • Range at Ocado.com further broadened to over 50,000 SKUs (2015: 47,000 SKUs)
  • Further interface improvements including calorie saver suggestions, online coupons and new shop-in-shops
  • Launch of our latest destination site, Fabled, in the premium beauty segment, together with its flagship store in London
  • Voted Best Online Supermarket for the second consecutive year at the Grocer Gold Awards 2016

Strengthening brands

  • Active customers5 up 13.9% to 580,000 (2015: 509,000)
  • Total order volumes have grown by 17.9% to an average of over 230,000 orders per week (2015: 195,000 OPW), with highest number of orders delivered in a week exceeding 270,000
  • Ocado own-label sales up over 10%, with over 6 products per average customer basket
  • Average hypermarket basket value declined by 2.7% to £108.10 (2015: £111.15), impacted by price deflation in the market and continued uptake of Ocado Smart Pass
  • Continued year-on-year growth of over 40% in general merchandise revenues

Continuously developing more capital and operationally efficient infrastructure solutions

  • Commenced operations at our new CFC in Andover, Hampshire, in November 2016
  • Mature CFC6 operational productivity improved to 160 UPH (2015: 155 UPH)
  • Delivery efficiency improved further to 176 DPV (2015: 166 DPV)
  • Expecting a further 20,000 OPW capacity in mature CFCs with limited additional capital expenditure

Enhancing end-to-end technology systems

  • Roll out of new software platform started with commencement of operations in Andover CFC
  • Further innovation and increased activity to protect our intellectual property; patent applications now covering over 50 innovations had been filed by the end of the period
  • Continued expansion of our development teams to include over 950 technology professionals and over 200 qualified engineers

Enabling Wm Morrison Supermarkets ("Morrisons") and future partners' online businesses

  • We have provided the capability and execution for strong growth for our first commercialisation partner, Morrisons.com
  • Announced extension to agreement with Morrisons covering provision of additional future CFC capacity and broadening of services we provide, including provision of a store picking module
  • Continued discussions with multiple international retailers regarding adoption of Ocado Smart Platform solution

Results presentation

A results presentation will be held for investors and analysts at 9.30am today at Peterborough Court, 133 Fleet Street, London EC4A 2BE. Presentation material will be available online

Contacts

Tim Steiner, Chief Executive Officer on 020 7353 4200 today or 01707 228 000

Duncan Tatton-Brown, Chief Financial Officer on 020 7353 4200 today or 01707 228 000

David Hardiman-Evans, Head of IR & Corporate Finance on 020 7353 4200 today or 01707 228 000

Stephen Malthouse or Michelle Clarke at Tulchan Communications on 020 7353 4200

Notes

  1. Gross sales include VAT and marketing vouchers
  2. Revenue is online sales (net of returns) including charges for delivery but excluding relevant vouchers/offers and VAT. The recharge of costs to Morrisons and fees charged to Morrisons are also included in revenue
  3. EBITDA is a non-GAAP measure which we define as earnings before net finance cost, taxation, depreciation, amortisation, impairment and exceptional items
  4. External net debt is the net debt less amounts owing to MHE JVCo of £108.7 million (2015: £119.5 million)
  5. Customers are classified as active if they have shopped on ocado.com within the previous 12 weeks
  6. A CFC is considered mature if it has been open for 12 months by the start of the half year reporting period

Financial Calendar

Our financial reporting calendar for the remainder of the year will be a Q1 Trading Statement on 14 March 2017, a Half Year Results Statement on 5 July 2017, a Q3 Trading Statement on 19 September 2017 and a Q4 Trading Statement on 14 December 2017.

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.