Published on July 14th, 2020 | by The GC Team0
AO posts strong full-year EBITA performance
Online electricals retailer AO World reported adjusted EBITDA up 53.6% for the year ended 31 March 2020 and revenue growth of 15.9%, aided by significant market share gains across many its key categories from the start of lockdown on 23 March as the electricals market migrated to nearly 100% online overnight.
EBITDA rose to £19.6m (2019: £12.8m) on revenues of £1,046.2m (£902.5m).
Total UK revenue increased 20.3% to £901.6m (up 8.2% on a like for like basis excluding revenues from the Mobile Phones Direct3 business). Adjusted EBITDA improved by 7.0% to £40.8m.
In Europe, revenue for the period fell 4.6% to €165.4m (down 5.6% in GBP to £144.5m) due to the closure of the Netherlands website in the third quarter as the business re‐aligned its European operating model with its UK policy. Adjusted EBITDA losses improved from €27.9m to €24.2m (£25.3m to £21.1m) with actions implemented during the period starting to benefit performance in the second half.
John Roberts, AO Founder and Chief Executive Officer, said: “I’m pleased that we have made substantial progress, closing the year in good shape after getting AO fit and focused on the future.”
Looking at the year ahead, the retailer acknowledged potential headwinds such as significant falls in GDP in both the UK and Germany and in the level of UK housing transactions, to which its performance is in part linked, along with levels uncertainty over a hard Brexit in December.
But for now, demand remains strong, and while the recent reopening of the high street means customers now have more options to purchase their appliances offline from stores, initial data shows that since stores have reopened the online market has in fact continued to grow year on year.
“Covid‐19 has accelerated a shift in customer behaviour towards online shopping and we now need to cement that change,” said Roberts.
“In short, we must drive forward so those customers never look back.”