OCDDY - Ocado Group plc (OCDGF) H1 2024 Earnings Call Transcript
2024-07-16 14:25:29 ET
Ocado Group plc (OCDGF)
H1 2024 Earnings Conference Call
July 16, 2024, 4:30 AM ET
Company Participants
Rick Haythornthwaite - Chairman
Tim Steiner - Chief Executive Officer
Stephen Daintith - Chief Financial Officer
Mark Richardson - Chief Executive Officer, Ocado Intelligent Automation
Conference Call Participants
Marcus Diebel - JPMorgan
Sarah Roberts - Barclays
Tintin Stormont - Deutsche Numis
Luke Holbrook - Morgan Stanley
William Woods - Bernstein
Giles Thorne - Jefferies
Charles Allen - Bloomberg Intelligence
Sreedhar Mahamkali - UBS
Presentation
Rick Haythornthwaite
Very good. Good morning, everyone. Welcome to Ocado’s First Half Results. Tim and Stephen are going to lead you through the operational and the financial milestones of the period, and then we’ll go on shortly thereafter to talk about the progress that we’ve made in improving cash flow and growing profitability, not only in Technology Solutions but in Retail as well. And then how we’ve been improving in the rolling out of CFCs around the world.
What we’re pleased to be able to say, again, is that online is the fastest growing grocery retail channel, and as Ocado, as you all know, we have proven technology, constant innovation that we can feed into clients, those clients looking to find solutions for growing e-commerce.
And as a Board, what we’ve been particularly encouraged to see over the year -- the past half year and before that is the work we are doing to help our clients manage that tough but crucial transition to being a growing, profitable, multi-channel retailer, and that transition actually requires incredibly patient and close collaboration.
And as you all know, we’ve taken some very significant organizational and process steps that are absolutely essential to help manage that transition. As a result, we actually have a very high conviction that it’s going to pay off, that we will see accelerating growth and profitability over time.
Meanwhile, I think from Ocado’s standpoint, we still bring the cash and the cost discipline. When you combine that along with the economics of the CFCs that are in existence, we have a growing competence of a clear trajectory to cash flow breakeven in the second half of 2026.
And with that, Tim, I’m going to hand over to you to take us through the results.
Tim Steiner
Thanks, Rick. Okay. So let’s move on to the highlights. Clicker. Here we go. Thank you. And all right. So, financial progress, strong. Group revenues up 13%. EBITDA nearly tripled up at £71 million, up £55 million year-on-year. Strong revenue and EBITDA growth has come across all the divisions.
Strong cost and capital discipline in the group. Underlying cash flow up £101 million in the first half. With guidance raised, we had guided to £100 million for the year. We’ve now increased that guidance to £150 million. That is following from £356 million, if my memory serves me right, last year. So, £500 million improvement over financial years 2023 and 2024.
That is on the back of operational progress, so Technology Solutions driven by the resilient recurring revenue growth and increasing cost efficiency. So, obviously, the cost efficiency is improving at a faster rate than we had suggested....
Ocado Group plc (OCDGF) H1 2024 Earnings Call Transcript