AO Returns To Profit

• Delivering a step change in financial performance, driven by strategic pivot to profit and cash generation 
• Continuing as the UK's most trusted electricals retailer 

AO World plc ("the Group" or "AO"), the UK's most trusted electrical retailer, today announces its audited financial results for the financial year ended 31 March 2023 ("FY23"). 

The strong performance over the year illustrates the excellent progress against the Group's plan to pivot the business to focus on profit and cash generation. 

Financial highlights 

• Step change in profitability YoY as we rationalise, simplify and refocus our operations
  
  
• Statutory profit before tax of £7.6m (2022: loss of £10.5m)
  
  
• Adjusted EBITDA of £45m, achieving an adjusted EBITDA margin of 4.0%
  
  
• Overall liquidity⁵ of £89m (2022: £50m) at 31 March 2023 with net funds of £4m (2022: £33m net debt); balance sheet position strengthened with £40m share placing
  
  
• £80m Revolving Credit Facility renewed now expires in April 2026
  
  
• Revenue performance in line with our pivot plan, driven by actions taken to remove non-core channels and loss-making sales, also reflecting weak consumer sentiment attributed to cost of living pressures

Operational highlights

• Strategic pivot delivered: exited some business lines and delivered operational efficiencies and overhead reductions ahead of original plans
  
  
• AO remains a UK market leader in Major Domestic Appliances ("MDA") with a 16% total market share and a 30% online share
  
  
• Over 800,000 new customers⁶ experienced the AO Way during the year, with repeat customers taking an increasing share of overall business
  
  
• Customer satisfaction scores remain outstanding, with Net Promoter Scores averaging c85⁷ and over 400,000 Trustpilot ratings, averaging an "Excellent" 4.6/5 stars - as we continue to be the UK's most trusted electrical retailer
  
  
• Simplified the UK operations focusing on more profitable lines of business that fit our core model
  
  
• Ceased trading in Germany and completed its closure in all material respects with minimal cash impact to the Group
  
  
• Recycled or given new life to our six millionth appliance at our AO Recycling facility and we are continuing to work with manufacturers to use our recycled plastic in new products
  
  
• Cultural improvements as we bring AOers back together at our sites, enabling the business to benefit from better cohesion across the group

Outlook

Looking forward to FY24 we are confident in our ability to deliver on our 5% EBITDA ambition in the short term and returning to top line growth in the medium term. Our strategy now is to invest prudently in the business, seize the significant market opportunities that we see in front of us, leveraging our growing and loyal customer base. 

AO's Founder and Chief Executive, John Roberts, said:

"We are delighted with the demonstrable progress that we've made with the strategic realignment of AO towards profitability and cash generation. The significant improvement in our profit performance speaks for itself and has been achieved by focusing on our core strengths and simplifying our operations, while still delivering the outstanding customer service for which we're famous. 

"Looking ahead, we intend to continue with this focus whilst also retaining the flexibility to drive growth through disciplined investment at the right pace and at the right time.

"Over five million new customers experienced the AO Way over the last three years, during which time we've maintained our "excellent" Trustpilot rating from more than 400,000 Trustpilot reviews, making AO the most trusted electricals retailer in the UK.

"I'd also like to thank all AOers for their support and commitment over the last 12 months I'm always very proud of the way in which they rise to the challenges and maintain our fantastic culture, which is ultimately how we deliver for customers. I'm also grateful to our manufacturer partners for their continued support as we navigate this hugely unpredictable trading period together."

Source : AO

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