2020 Full Year Results - 14 October 2020 - Public
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2020 Full Year Results
14 October 2020
1
Overview
Nick Beighton | CEO
2
Results summary
Retail Sales EBITDA Margin* PBT
+19% 7.4% £142.1m
UK +18% EU +22% +350bps YoY Including c.£45m Covid-19
tailwind
US +18% ROW +18%
Net Cash* Active customers
£407.5m 23.4m
+3.1m in the year
Strong financial
position
*EBITDA margin is excluding IFRS 16; including IFRS 16 is 8.2% +430bps YoY
Net cash is cash and cash equivalents less borrowings 3
Strengthened foundations for growth with
delivery against key priorities
1 2 3
Strengthen organisational Remove Product choice, availability,
capabilities non-strategic cost price & newness
4 new executive appointments Progress across business supported Product mix pivoted to drive
completing 8 strong new exec team the c.180bps improvement in greater choice in lockdown
underlying profitability categories
4 5 6
Presentation Optimise customer Leverage benefits
& social media engagement acquisition retention from transformational investments
Over 79 million engagements 3.1m customers added to base Euro Hub pick rate +57%
through social channels alongside marketing cost efficiency
4
Supporting delivery of..
UK Sales +18%
Strong retail sales growth US Sales +18%
across all territories EU Sales +22%
RoW Sales +18%
Active Customers +15%
Great customer momentum
New Customers +19%
Operating Cost % Sales -470bps
From an increasingly
EH pick rate (exit rate) +57%
efficient base
EH pack rate (exit rate) +14%
Cash generation* +£258.6m
Record financial
EBITDA margin** +350bps
performance
PBT Margin +320bps
*Cash generation is the movement between opening and closing net cash/(debt) position. FY20 figure is excluding the net equity raise proceeds of £239.4m
5
**EBITDA margin is excluding IFRS 16; including IFRS 16 is 8.2% +430bps YoY
Business Performance
Mat Dunn | CFO
6
Financials at a glance
EBITDA
Total Sales Gross Margin
-140bps Margin*
+19% £ 3,263.5 m 48.8% +350bps 7.4%
3.9%
£ 2,733.5 m 47.4%
FY19 FY20 FY19 FY20 FY19 FY20
PBT Capex
Net (Debt)/
+329% £142.1m £195.0m
Cash £407.5m
£115.6m
£33.1m
FY19 FY20
FY19 FY20 FY19 FY20 (£90.5m)
7
*EBITDA margin is excluding IFRS 16; including IFRS 16 is 8.2% +430bps YoY
Underlying performance
Matching actual returns through lockdown against the associated sales reflects underlying
consumer demand
Overall demand continues to be Favourable returns driven by product mix
impacted by reduction in ‘going out’ and move towards more deliberate
occasions; strong growth across all purchasing
casualwear
30%
25%
20%
15%
10%
5%
0%
P1 P2 P3 P3 P4 P4 FY
Underlying** Underlying**
**Adjusted for underlying returns rates 8
UK KPI Covid-19 case study
Visits recovered quickly after initial shock but the shift to …the difference between gross and net sales. The
more deliberate purchasing caused a slower recovery in change in ABV reflects customer demand for lower
order growth, which is also evident in… selling price ‘lockdown’ categories through the half
Loosening "Stabilising" with Loosening "Stabilising" with
Initial Impact Lockdown Restrictions Limited Restrictions Initial Impact Lockdown Restrictions Limited Restrictions
Visit Growth Order Growth Gross Sales Growth Net Sales Growth ABV
9
UK performance
Sales increased 18% with continued market share growth
Shift to lower ASP lockdown More deliberate lockdown Continued growth in active
categories drove H2 purchasing reflected in H2 customer base +700k in
reduction in ABV conversion and orders FY20
H1 20 KPIs H2 20 KPIs FY 20 KPIs
Retail Sales +20% +17% +18%
Visits +18% +16% +17%
Orders +18% +3% +10%
Conversion +10bps -60bps -30bps
ABV +6% (6%) Flat
Active Customers* 6.8m (+10%) 7.1m (+11%) 7.1m (+11%)
* 12 month measures – Active customers defined as having shopped in the last 12 months as at 31 August.
10EU performance
Momentum rebuilt reflecting improved proposition and stock availability
Strong customer Leveraging investment in
momentum as active automation to enhance H2 performance supported
base grew by 1.4million delivery proposition by closure of retail outlets
H1 20 KPIs H2 20 KPIs FY 20 KPIs
Retail Sales +21% +22% +22%
Visits +26% +14% +20%
Orders +21% +8% +14%
Conversion -10bps -20bps -20bps
ABV +1% (3%) (1%)
Active Customers* 8.7m (+18%) 9.2m (+18%) 9.2m (+18%)
* 12 month measures – Active customers defined as having shopped in the last 12 months as at 31 August.
11US performance
Strong start to the year supported by improved stock offer, second half impacted by
Covid-19 consumer demand and airfreight disruption
US stock offer disrupted by US delivery proposition Continued focus on
Covid-19 airfreight improvements resonating well; developing US stock offer
restrictions NDD mix continues to grow
H1 20 KPIs H2 20 KPIs FY 20 KPIs
Retail Sales +25% +11% +18%
Visits +16% +22% +19%
Orders +21% (3%) +9%
Conversion +20bps -60bps -20bps
ABV +2% (5%) (2%)
Active Customers* 3.1m (+19%) 3.2m (+14%) 3.2m (+14%)
* 12 month measures – Active customers defined as having shopped in the last 12 months as at 31 August.
12ROW performance
Localised trading stance supported customer momentum
Solid growth in Australia Standout growth in MENA Growth in items per basket and
despite significant region supported by strong ABV driven by optimisation of
disruption to airfreight Ramadan delivery proposition
H120 KPIs H2 20 KPIs FY 20 KPIs
Retail Sales +20% +16% +18%
Visits +24% +15% +19%
Orders +19% (6%) +5%
Conversion Flat -30bps -20bps
ABV +6% +18% +12%
Active Customers* 3.7m (+23%) 3.9m (+18%) 3.9m (+18%)
* 12 month measures – Active customers defined as having shopped in the last 12 months as at 31 August.
13Income statement
FY20 IFRS 16 FY20 FY19 Underlying
% of sales Impact % of sales % of Change
incl IFRS 16 excl IFRS 16 sales
Gross Margin1 47.4% 47.4% 48.8% (140bps)
Distribution
(13.6%) (13.6%) (15.2%) 160bps
Costs1
Warehouse (9.6%) 40bps (10.0%) (11.0%) 100bps
Marketing (3.7%) (3.7%) (4.4%) 70bps
Other Costs (12.3%) 40bps (12.7%) (14.3%) 160bps
EBITDA Margin 8.2% 7.4% 3.9% 350bps
Depreciation (3.6%) (80bps) (2.8%) (2.6%) (20bps)
EBIT Margin 4.6% 4.6% 1.3% 330bps
1Distribution costs benefited from local distribution in the US which has offset additional costs incurred in gross margin for freight and duty. 14
Note: Above table subject to roundingProfitability
c.£45m net Covid-19 tailwind Euro Hub automation driving c.£50m net cost benefit from
from reduction in return rates significant efficiency removal of non-strategic cost
*Depreciation excluding IFRS 16
**Including net profit drag from IFRS 16
15Cash flow and net cash
Strong cash position driven Underlying improvements in Closing position enhanced
by record EBITDA and working capital and lower by timing of peak stock
proactive capital raise capital expenditure build
Includes c.£89m benefit
from later than usual Capex Spend
peak stock build
16
Note: The above bridge is on an excluding IFRS 16 basisOutlook for customer behaviour
We expect underlying returns rates to …whilst we expect demand for ‘going out’
continue to normalise… product to remain subdued
Underlying Return Rate P4 Sales Growth
40% of mix
+10% mix change
60%
50%
40%
30%
20% 25% of mix
10% -10% mix change
0%
-10%
-20%
-30%
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Going Out* Casual, Activewear & ASOS Excluding Going
F&B Out
YoY FY20 FY19
17
*Dresses, formal wear and fashion footwearExpectations, technical & funding
Funding platform
£408m + £350m
Net Cash RCF
➔ Robust financial position; positioned for growth
despite uncertainty ahead
➔ Net cash position to support trading and operations;
RCF providing contingency for volatility
Expectations & Technical
➔ Capex increasing to £170m-£180m including
rephasing of TGR and commencement of
investment in 4th Fulfilment Centre
➔ Expect to absorb ongoing incremental Covid-19
costs of c.£22m from warehouse and freight
disruption
➔ Brexit preparations well advanced; financial
impact assessment of WTO tariffs estimated at
c.£25m
18Building a Global Retail Leader
Nick Beighton | CEO
19The ASOS vision
To be the #1 destination for fashion loving
20-somethings worldwide
20We become the #1 destination, by meeting all the
fashion needs of 20-somethings in a way that
engages, inspires and excites through…
The ASOS Brands The ASOS Platform The ASOS Experience
Design that can’t One platform with all Inspiring, exciting,
be found anywhere the relevant product, friction-free and
else all of the time personalised
21Our strategy is to deliver this worldwide, supported by
an effective, efficient and sustainable model
1. Truly global retailer
2. The ASOS Brands 3. The ASOS Platform 4. The ASOS Experience
Design that can’t One platform with all Inspiring, exciting,
be found anywhere the relevant product, friction-free and
else all of the time personalised
5. Effective, efficient and sustainable model
22We are pursuing a clear set of priorities to
guide our focus over the next 3 years
01. Expand our overall scale and local scale by accelerating growth in
key markets
02. 03. 04.
Grow our unique ASOS Enhance our flexible and Improve our inspiring and
brands by launching new multi-brand platform by personalised customer
brands and improving on growing high potential experience through the
both speed to market categories, application of data
and price implementing flexible science and AI to deliver
fulfilment and improving the most engaging
our proposition experience
Develop our effective, efficient and sustainable model by transforming our
05. organisation and operations including upgrading talent and capabilities,
improving cross-functional ways of working and further driving responsible
fashion into everything we do
23Our journey to becoming Truly Global started with
building the foundations
3,171
Retail
Sales 2,355
£m
BECOMING A TRULY
GLOBAL RETAILER
1,112
324
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
ESTABLISHING GROWING AS
BUILDING GLOBAL INFRASTRUCTURE
UK BUSINESS A UK EXPORTER
241. Truly global retailer
2. The ASOS 3. The ASOS 4. The ASOS Customer
Brands Platform Experience
5. Effective, efficient and sustainable model
Expand our global reach and local scale by accelerating growth in key
markets
25TGR is transforming our Technology to enable
global growth
Planning and ranging by fulfilment centre… …trading dynamically by market
Supporting Full Sharpening
Price Sales Pricing
Driving Enhancing
Availability Choice
Planning tools to optimise the Greater flexibility and speed
width, depth and size range on pricing by market
of product in each fulfilment
centre Better visibility of intake and Giving customers access to
commitments across the product from across
supply chain our global stock pool
Unlocking key brands DTC
26Our warehouse infrastructure delivers global
capabilities to support our ambitions
UK Hub US Hub
Barnsley Euro Hub Atlanta
Berlin
720k sq ft 900k sq ft 1000k sq ft
Automated solution Automated solution Manual solution with possibility
to automate
Net sales throughput of c.£1.5- Net sales throughput of c.£1.5- Net sales throughput of c.£0.7-
1.8bn 1.8bn 1.0bn
Fulfilling UK and ROW Fulfilling EU and Russia Fulfilling US
Supports UK NDD with 10pm cut Supports Germany NDD with 2pm cut off,
Berlin Same Day and Express to Russia Supports NDD to over 99% of US customers
off and 2 day Express to Australia
27We are continuing to invest in capacity to support our
growth trajectory
ASOS will outgrow Barnsley Deploying learnings from our …and developing capacity now
capacity in the next few years previous fulfilment centre builds.. ahead of requirements
UK ROW Gradual project build 2nd UK Hub
1,764
Project timing designed to allow gradual
Lichfield
Retail
Sales
ramp up ahead of capacity requirements for
1,304 peak FY23
£m
430k sq ft
699 Capacity at risk reduced
Capacity and fulfilment capabilities in existing Manual solution to be automated
232 3 fulfilment centres reduces risk of disruption
when bringing 4th centre on stream
Phased ramp up from H1 22
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Greater experience managing new Flexible fulfilment for UK and ROW
Russia fulfilment switched to Euro Hub to facility ramp up
provide current headroom for UK growth Deploying learnings and implementing c.£90m investment over 3 years
stronger cross-functional approach to build
281. Truly global retailer
2. The ASOS 3. The ASOS 4. The ASOS Customer
Brands Platform Experience
5. Effective, efficient and sustainable model
29
Grow our unique ASOS brands by launching new brands and improving on
both speed to market and price
29The ASOS Brands Architecture
ASOS Brands Destinations
Venture Brands
Logo Carriers
30Collusion & ASOS 4505
Delivering great growth with strong demand through lockdown
4505
+89%
vs LY
Collusion
+44%
vs LY
31ASOS Luxe & Dark Future
Performance supported by increased product choice and influencer campaigns
32Continuing to develop our brands at speed
Launching AsYou – fashion forward product at lower price points
Start of supplier visits to Supplier Capacity secured Drop 1 production begins Sign off approved PR/Influencer and Social
scope capacity with Studio test shoot factories/supply partners teasers
sourcing partners Influencer Strategy finalised Drop 2 production starts
Drop 1 sketching started
WEEK 1 WEEK 2 WEEK 4 WEEK 5 WEEK 6 WEEK 7 WEEK 8 WEEK 9 WEEK 11 WEEK 12 WEEK 14
AsYou Brand created Drop 1 sample model Test shoot samples ordered Model fits begin Product shot in
Brand identity established
Team scouted
fittings and PR samples made
Drop 2 Brainstorm
ASOS studios Launch
33AsYou
Launching AsYou – fashion forward product at lower price points
341. Truly global retailer
2. The ASOS 3. The ASOS 4. The ASOS Customer
Brands Platform Experience
5. Effective, efficient and sustainable model
Enhance our flexible and multi-brand platform by growing high potential
categories, implementing flexible fulfilment and improving our proposition
35Increasing choice through our multi-brand platform
with development of relevant categories
Activewear +49%
“Curating the best edit of sports lifestyle and
activewear product for our 20-
something customer from the most globally FY20
relevant brands”
Activewear
Sales
Face + Body
+73% “The best global edit of brands spanning
mass to luxury, supporting ASOS’ purpose to
give customers confidence to be who they
FY20 want to be...
A wonderland of possibilities with endless
Face + Body ways to be you”
Sales
36Flexible Fulfilment will further enhance curated
customer choice on our platform
Enhancing US Expand to include
branded offer other brands Improve availability with Enhance range with
with key brands in across our Fully flexible key brand partners with new partners
our network network offer D2C offering D2C
Now FY23
Network Choice and Availability Global Brand Partnerships
371. Truly global retailer
2. The ASOS 3. The ASOS 4. The ASOS Customer
Brands Platform Experience
5. Effective, efficient and sustainable model
38
Improve our personalised customer experience through the application of
data science and experimentation to deliver the most engaging experience
38Continuing to build engagement through our apps &
sites with a constantly evolving customer experience
Customer reviews support Customers can now track orders
Customers
Customers can nowcan
sharenow
theirshare their Customer reviews support engagement
engagement and purchase and receive order and return
ASOS Product
ASOS Product Boards
Boards with friendswith friends confidence and purchase confidence
status updates
39Delivering inspirational presentation and engaging
content across the most relevant channels
Inspirational fashion-led …supported by the most …across multiple content
presentation… relevant influencers… formats and channels
401. Truly global retailer
2. The ASOS 3. The ASOS 4. The ASOS Customer
Brands Platform Experience
5. Effective, efficient and sustainable model
42
Develop our effective, efficient and sustainable model by transforming our
organisation including upgrading talent and capabilities, improving cross-
functional ways of working and further driving responsibility into everything 42
we doLeveraging benefits from our transformational
investments
Investment in automation driving significant KPI improvements
Warehouse Pick Efficiency Warehouse Pack Efficiency
140
180
120
170
100
Pack Rate
Pick Rate
80 160
60 150
40
140
20
0 130
Week 1 Week 52 Week 1 Week 52
Barnsley Eurohub
Barnsley Eurohub
43Developing our organisational culture & structure
Enhancing our organisation …building a more robust model …and embedding greater
capabilities… for delivering strategic change… discipline into our culture
Cross functional team to
4 new executives added to Authentic Brave
co-ordinate change and
complete 8 strong exec team
projects across the business
Reshaped our teams into more
effective structures
Driving alignment and Creative Disciplined
momentum
44Delivering speed to market through an
increasingly efficient supply chain
Diverse and flexible Leveraging
global sourcing base technology solutions
In country quality
Optimising lead times
control
Sourcing across 13 different 3D Virtual fitting reducing
regions strategically planned lead time and removing
to maximise agility, quality cost on design, sampling
and cost Combining short and and fitting Quality control capabilities
longer lead sourcing to in region to ensure product
optimise balance of is right prior to shipping
speed and margin
45Fashion With Integrity
Product People Planet Packaging
• ASOS Design 85% more • Joined the Ellen
• Strengthened • Concluded our Carbon
sustainable cotton & MacArthur Initiative’s
requirements for brand 2020 programme,
40% more sustainable New Plastics Economy
partners with UK delivering a 30%
fibres; Global Commitment
manufacturing, reduction in carbon
Fashion • Launched first circular requiring commitment emissions per order
and set a range of
ambitious plastic
design collection; to Transparency Pledge since 2015; targets for 2025;
and Fast Forward
• 20% reduction in • Continued rollout of • Transitioned to 90%-
auditing;
With carbon use, 4%
• Joined the ILO Global
low-impact electric recycled content in our
reduction in waste and vehicles to Berlin garment bags and
10% reduction in water Proposal Call to Action; following launch in 80%-recycled in our
use in our product • Submitted evidence to London mailing bags, both of
Integrity manufacture vs. a 2012
baseline.*
the Government, which are 100%
providing our recyclable;
recommendations on
• Removed close to 40%
strengthening of the
of unnecessary
Modern Slavery Act
packaging lines
Announce our ambitious commitments for • Continue to accelerate • Further develop and launch
Continueour
to accelerate
communication and Further develop
initiatives andclothing
around launch initiatives around
Fashion With Integrity for 2025 and beyond,
FY21 priorities bringing together our workstreams across the
our communication
engagement and engagement
with our with clothing
takeback and resale,resale,
takeback and and trial
and trial
our customers on these topics;
customers on these topics; reusable mailing bags.
reusable mailing bags.
business;
* Reported through the Sustainable Clothing Action Plan, a UK-based initiative which reports only on impact of UK sales.
46Summary
Strong profit & Navigated a Strengthened
cash generation challenging year foundations for
driven through with a clear focus growth; emerging
rigorous on doing the right as a stronger,
performance thing for our more resilient and
management people and agile business
partners
Robust funding in Significant short- Well positioned to
place to manage term uncertainty capture future
volatility and reflecting global
support future disruption to 20- opportunity
growth something
lifestyles
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