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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 growth1 | 9 mths 2yoy2 | 9 mths 1yoy3 | Q3 2yoy4 | Q3 1yoy5 |
Group revenues | +58% | (3)% | +45% | (14)% |
UK revenues | +58% | (1)% | +47% | (12)% |
Germany revenues6 | +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 | |||||||||||||||||||
Mark Higgins, Group CFO | ||||||||||||||||||||
Cynthia Alers, Investor Relations Director | ||||||||||||||||||||
Powerscourt | Tel: +44 (0)20 7250 1446 | |||||||||||||||||||
Rob Greening Nick Hayns Sam Austrums |
| ao@powerscourt-group.com |
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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:
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 | ||||||||||||||||||||