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AO Announces 57% Rise In Half-Year Sales

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AO World plc, a leading European online electrical retailer, today issues the following trading update for the six months ended 30 September 2020. 

-     We expect Group revenue for the period to be in the region of £715m, an increase of c.57% YoY*

o  UK revenue increased by c.54%

o  Germany revenue grew by c.83% on a constant currency basis

-   In our UK retail business, the sales momentum continued from Q1 throughout Q2 despite the reopening of competitor bricks and mortar stores. We believe we have seen a lasting step change in online penetration. 

-     During the first half we have seen a change in the behavior of some customers in our mobile business with increased cashback redemption rates and cancellation of contracts with Networks that have negatively impacted our gross margin. We have changed the mix of our customer proposition to minimise this risk in future.

-     Our German business has also continued to perform strongly which reflects the result of the changes made over the last 18 months as well as the impact of Covid-19 on demand for online shopping. This performance demonstrates the growing benefits of our One AO approach.  We are confident that this business will achieve profitability on an adjusted EBITDA monthly basis as we trade through our peak period and will be profitable in FY22 and thereafter.

-     Our priority during this extraordinary period has been the safety and wellbeing of AOers, customers and our suppliers and partners. The challenges experienced across the business to cope with extended periods of heightened levels of demand have been well managed. We have invested in our infrastructure and our teams to ensure continued resilience and that our high levels of customer service are maintained so that we cement the current migration to online. Increased costs incurred from operational challenges have been offset by less competition in some marketing channels and additional delivery income as we have managed demand.

AO Founder and Group Chief Executive, John Roberts, commented:

"The last six months of trading have been like no other during my two decades in the business. AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths. 

"The progress that we've made in Germany gives us the platform and confidence to grow.  We remain excited by the opportunities ahead and ambitious to realise them.

"I would like to thank all AOers and our delivery partners right across the business who have worked safely and tirelessly both to provide exceptional service to our customers when they needed us most and to overcome the operational challenges of recent months. I can definitely say our mums would be proud of what the AO team is achieving. 

"Whilst we remain mindful of the uncertain economic climate caused by the pandemic and Brexit, we are on track with plans and well set for our biggest ever peak trading period in the UK and Germany."

Interim Results

The Group expects to announce its interim results for the six months ended 30 September 2020 on Tuesday 24 November 2020.  A webcast of our results presentation will be available from 7am that day with a live Q&A session scheduled for 9:30am. 

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

Source : AO World PLC

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15 October 2020

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