AO Reports 67.2% Rise In Q3 Revenue

AO World plc, a leading European online electrical retailer, today issues the following trading update for its third quarter, the three months ended 31 December 2020. 

The significant increase in demand for AO's products and services since the start of the pandemic has continued throughout our third quarter as we experienced our strongest ever peak trading period over the Black Friday period and in the run up to Christmas.  In the three months to 31 December 2020 we recorded year on year UK revenue growth of 67.2% to £457.3m and of 77.4% to €73.6m in Germany¹.  

We are continuing to invest in our infrastructure to deliver these higher levels of revenue including additional staff in warehouses, vehicles and drivers. We have incurred significantly higher costs as we negotiate some of the operational challenges of working in a Covid compliant environment, particularly in the reverse supply chain. We have also seen a slightly increased rate of cancellation of individual consumers' long term contracts in mobile and warranties, driven by Covid impacts on customers behavior.  

We are delighted with how our investments in infrastructure and corresponding planning for the structural market changes have played out, although there remain some Covid created imbalances in supply and demand in some categories.  

We continue to put the welfare and safety of our people, customers, suppliers and partners first, as we have done throughout the pandemic. Our services will continue to be adapted as necessary during the current lockdown.  

We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers' minds by the outstanding service millions of new customers have received in 2020.  This is compounded by the ongoing tailwinds we expect to be driven by working from home and associated usage and appreciation of electrical products so essential to our day to day lives.

AO Founder and Chief Executive, John Roberts, said: "I believe we've seen ten years of change in ten months, and experienced our strongest ever peak trading period.

"We backed ourselves by investing early in warehouses, vehicles, stock and people. This not only set us up to satisfy customer demand for electricals for the current crisis but also for the longer term, as the structural shift to online becomes a permanent feature of the market in the UK and Germany. One of our biggest achievements this period is to have our German business profitable throughout Q3.

"Our confidence in those investments has been rewarded by these exceptional levels of sales. We've seen how the short-term costs translate into a fantastic opportunity to drive lifetime value for millions more customers. We're delighted to have earned their trust after their first purchase and their first experience of the AO Way.

"Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back. We intend to cement that change by raising the bar on our service and proposition in ways that only AO can deliver.

"We'll continue to make the right decisions for our customers, partners, people and planet too.  I'm hugely proud of how AOers have responded to challenges as well as opportunities, providing amazing service to our customers during a record period. I'd like to thank the whole team for making it possible, including the 1,500 new recruits who joined us during 2020."

¹excludes sales derived from AO.nl, our Netherlands website which was closed during the prior financial year

Source : AO World PLC

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