Enhancing our robotic manipulation capabilities - Acquisition of Kindred Systems and Haddington Dynamics
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Acquisition of Kindred Systems and Haddington Dynamics Enhancing our robotic manipulation capabilities 2 November 2020
Acquisition of Kindred Systems and Haddington Dynamics
“We consider the opportunities for robotic manipulation solutions to be significant, both for Ocado
Smart Platform clients and across the fast-growing online retail and logistics sectors. Ocado has made
meaningful progress in developing the machine learning, computer vision and engineering systems required
for the robotic picking solutions that are currently in production at our Customer Fulfilment Centre (“CFC”) in
Erith. Given the market opportunity we want to accelerate the development of our systems, including
improving their speed, accuracy, product range and economics.
I am delighted to be welcoming Kindred Systems and Haddington Dynamics to the Ocado group, as
we believe they have the capabilities to allow us to accelerate delivery, innovate more, and grow faster. I am
also excited by the opportunity to enter new markets for robotic solutions outside of grocery that is
demonstrated by Kindred Systems’ robust growth, with existing customers such as Gap and American Eagle
across the general merchandise and logistics sectors.”
Tim Steiner, CEO Ocado Group
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©2020 Ocado Group plc. All rights reserved.
Acquisition of Kindred Systems and Haddington Dynamics
“We value our partnership with Ocado Group not just because of the world-leading technology they
offer today but because their constant commitment to innovate and invest keeps us ahead of the game,
helping us do things better, and at lower cost, so that we can offer an ever better customer experience as part
of our mission to Feed the Human Spirit.
Today’s announcement is exciting for us because it accelerates significantly Ocado’s already
impressive progress developing robotic picking. This should improve the efficiency of the flexible Ocado
Smart Platform ecosystem to our benefit as well as other Ocado partners, and we welcome it.”
Rodney McMullen - Chairman and CEO, Kroger
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©2020 Ocado Group plc. All rights reserved.Acquisition of Kindred Systems and Haddington Dynamics
✓
● Opportunity to improve CFC and Micro Fulfilment Centre economics, with picking and
decanting currently representing up to £7m of annual cost per CFC1
Enhances
Ocado’s
● Kindred Systems has an advanced technology stack that will help transform Ocado’s existing
✓
existing
robotic capabilities and accelerate the commercial delivery of robotic picking for OSP clients
manipulation
capabilities...
✓
● Haddington Dynamics’ technology offers specialised robotic arm characteristics that are well-
suited to grocery using novel, low cost designs
✓
● Robotic picking is a fast-growing segment of automation with an expanding range of end-
market use cases, including e-commerce fulfilment and package logistics
…and
provides an
✓
established ● Kindred Systems has a proven robotic picking and manipulation solution with 180 robots
position in a expected to be deployed by the end of 2020
fast-growing
new vertical
✓
● Growing customer base of leading general merchandise retailers (Gap, American Eagle)
and logistics companies, with ability to scale both in the USA and globally
1 Represents 100% of total labour cost associated with picking, packing and decanting processes at a typical six module CFC, with £420m of revenue at maturity based on an Ocado retail basket size 4
©2020 Ocado Group plc. All rights reserved.Transactions overview
Price ● $262 million ● $25 million
● Cash
Acquisition ● $4 million for key employees ● Cash and shares1
consideration subject to retention based
vesting conditions
● Subject to closing conditions ● Subject to closing conditions
Completion and including US regulatory including US regulatory
timing approvals approvals
● Expected to complete in 2020 ● Expected to complete in 2020
Note: All numbers are approximate. 5
1 In certain circumstances, at Ocado’s election, the consideration may be comprised solely of cash.
©2020 Ocado Group plc. All rights reserved.Kindred Systems: leader in AI powered robotic manipulation
Proprietary Existing
Founded in
technology customer base
2014 with
stack across of leading
offices in
machine global general
Toronto and
learning and merchandise
San Francisco
motion control retailers
180 robots Expected Approximately
expected to be CY2021 90 employees
in deployment revenue of over of which half
by end of 2020 $35 million are engineers
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©2020 Ocado Group plc. All rights reserved.Haddington Dynamics: designer and manufacturer
of advanced robotic arms
Potential for
Advanced Arm design
positive impact
robotics R&D allows low-cost
on financial
company based manufacturing
returns of robotic
in Las Vegas via 3D printing
deployments
Dexter HDI arm is
Dexter HDI highly dextrous Customers
robot currently and sensitive, include NASA
on sale for making it well and DuPont
US$11,000 suited to grocery
use-case
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©2020 Ocado Group plc. All rights reserved.Complementary capabilities will lead to accelerated delivery
Intelligent approach and enhanced scale will help solve the distinct challenges of grocery much faster
1. Existing capabilities in machine
learning, computer vision and
engineering systems
2. 5 robotic pick stations in
operation at Erith CFC with real
data capture for grocery use-case
3. Internationally recognised
research capabilities
Accelerate
commercial delivery
1. Advanced technology in of
reinforcement learning, robotic picking
teleoperation, scanning and +
path-planning, able to be Enhance economics
applied to complex grocery and flexibility of
use-case robotic picking
2. Proven system robustness
in live use
1. Light-weight, dexterous
3. A significant number of robotic arm with
engineers will be dedicated capabilities well-suited to
to grocery grocery
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©2020 Ocado Group plc. All rights reserved.Enhanced value in Kindred Systems’ existing business
Ocado will be able to add value to Kindred Systems’ existing operations in a number of areas
Commercialised robotic
Global reach
picking solution
Best practice sales Existing and growing
and partner management customer base
Excellence in product
Expanding product offering
development and rollout
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©2020 Ocado Group plc. All rights reserved.Summary
● Enhances Ocado’s capabilities and accelerates commercial
delivery of robotic solutions for OSP clients
● Opportunity to improve CFC efficiency by up to £7m of annual
cost per CFC1
● Haddington Dynamics’ technology offers specialised low cost
robotic arm designs well-suited to grocery
● Expanded engineering and technology team focussed on
delivering robotic picking in OSP
● Established position in a fast-growing new vertical supported by
the structural shift towards e-commerce
● Ocado to support Kindred Systems’ growth with its existing
product development and partnering expertise and global reach
1 Represents 100% of total labour cost associated with picking, packing and decanting processes at a typical six module CFC, with £420m of revenue at maturity based on Ocado basket size
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©2020 Ocado Group plc. All rights reserved.Disclaimer
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in Ocado nor shall it or any part of it
nor the fact of its distribution form the basis of, or be relied on in connection with, any investment decision in relation thereto nor does it constitute a recommendation regarding any Ocado securities. The
securities referenced in this presentation will be issued in private transactions pursuant to an exemption from the registration requirements of the US Securities Act of 1933 and may only be offered or
sold pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
This presentation contains oral and written statements that are or may be “forward-looking statements” with respect to certain of Ocado’s plans and its current goals and expectations relating to its future
financial condition, performance and results. These forward-looking statements are usually identified by words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other
words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they are based on current expectations and assumptions but relate to future events and
circumstances which may be beyond Ocado’s control. There are important factors that could cause Ocado’s actual financial condition, performance and results to differ materially from those expressed
or implied by these forward-looking statements, including, among other things, UK domestic and global political, social, economic and business conditions, market-related risks such as fluctuations in
interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, the possible effects of inflation or deflation, variations in commodity prices and other costs,
the ability of Ocado to manage supply chain sources and its offering to customers, the effect of any acquisitions by Ocado, combinations within relevant industries, retention of key employees, changes in
customer habits, COVID-19, and the impact of changes to tax and other legislation in the jurisdictions in which Ocado and its affiliates operate. Further details of certain risks and uncertainties are set
out in our Annual Report for 2019 which can be found at www.ocadogroup.com. Neither Ocado nor any of its associates, directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any forward looking statements in this presentation will actually occur. Ocado expressly disclaims any undertaking or obligation to
update the forward-looking statements made in this presentation or any other forward-looking statements we may make except as required by law. Persons receiving this presentation should not place
undue reliance on forward-looking statements which are current only as of the date on which such statements are made.
The information in this presentation has not been independently verified and speaks as of the date hereof only and is subject to updating, revision, and amendment without notice. Neither Ocado nor any
of its representatives is under any obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent or provide the recipient with
access to any additional information. This presentation does not purport to contain all of the information that may be required to evaluate any investment in Ocado or any of its securities.
No liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this presentation or its contents is accepted, and no representation, warranty or undertaking,
express or implied, is or will be made or given by or on behalf of Ocado or its representatives as to, and no reliance should be placed for any purposes on, the accuracy, completeness or fairness of the
information or opinions contained in this presentation nor for any errors, omissions or misstatements or for any loss howsoever arising, directly or indirectly, from any use of such information or opinions
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