2019 Full Year Results 16 October 2019 Overview Nick Beighton | - PowerPoint PPT Presentation

2019 Full Year Results 16 October 2019

Overview Nick Beighton | CEO

Results Summary Sales PBT Active customers +13% £33.1% 20.3m ↑ +10% UK +15% EU +12% Transition and restructuring costs (FY19: £50.5m, FY18: £25m) US +9% ROW +12% Net debt Solid Finish to P4 £90.5m Sales +15% Visits +20% after elevated Capex investment

Disruption Through Transformation Invested over £600m to build a platform for growth and capabilities for a leading global retailer Underestimated complexity of Internal Capabilities not kept pace: simultaneous warehouse transformation deflected focus from core product in Europe & US & engagement Content & velocity Customer US Hub operations stable with improved Engagement capability to support growth & resonating well Presentation improved, Product width Product rebalancing and stock build in & newness restored US progressing to plan ahead of peak Tech changes driving SEO ranking improvements rankings globally Euro Hub automation & mechanisation Upweighting management People issues resolved, operational as planned experience

FY20 Priorities… Building greater fitness for growth Built platform and foundations for global growth in FY19 1 2 3 4 5 6 Strengthen Remove Product choice, Presentation Optimise customer Leverage benefits organisational non-strategic cost availability, price & social media acquisition & from capabilities & newness engagement retention transformational investments

Business Performance Mat Dunn | CFO

Financials at a glance Gross Margin Retail Sales PBT -240bps +13% -68% 51.2% £102.0m £2,657.7m 48.8% £33.1m £2,355.2m FY19 FY18 FY19 FY18 FY18 FY19 Net Debt Diluted EPS Capex -70% £42.7 £242.4m m FY18 98.0p £195.0m FY18 FY19 29.4p £(90.5m) FY18 FY19 FY18 FY19

UK Performance Sales growth of 15% driven by strong demand from UK customer base Conversion up reflecting Monthly new customer Traffic growth strong customer loyalty and acquisition and strengthening through the product offering reactivations improving year FY19 KPIs FY19 Retail Sales Growth 20% Retail Sales +15% Visits +9% 15% Orders +18% 10% Conversion +40ps ABV Flat 5% Active 6.4m (+7%) Customers* - P1 P2 P3 P4 FY * 12 month measures – Active customers defined as having shopped in the last twelve months as at 31 August.

EU Performance Sales up12% reflecting restricted stock availability from warehouse automation issues Stronger P4 ABV decline Strong sales Focus on performance as driven by growth reactivating stock availability restricted in Sweden & customers and service higher ASP Netherlands following improved availability driven by new warehouse in P3 localised sites disruption FY19 KPIs FY19 Retail Sales Growth 20% Retail Sales +12% 15% Visits +16% Orders +12% 10% Conversion -10ps 5% ABV -6% - Active 7.8m (+10%) P1 P2 P3 P4 FY Customers* * 12 month measures – Active customers defined as having shopped in the last twelve months as at 31 August.

US Performance US sales growth of 9% delivered during year of major operational transition P4 sales impacted by Reduction in ABV US warehouse clearance activity with driven by ASP of disruption evident in orders and visits growth available US stock pool P2 stronger and markdown FY19 KPIs FY19 Retail Sales Growth 14% Retail Sales +9% 12% Visits +8% 10% Orders +8% 8% Conversion Flat 6% ABV -4% 4% Active 2% 2.8m (+12%) Customers* - P1 P2 P3 P4 FY * 12 month measures – Active customers defined as having shopped in the last twelve months as at 31 August.

ROW Performance Sales growth of 12% driven by improving customer experience after P1 H2 acceleration in ABV increased year Consistently strong visits Australia, great on year driven by growth of over 20% growth in Russia and items per basket after P1 Middle East improvement FY19 KPIs FY19 Retail Sales Growth 25% Retail Sales +12% 20% Visits +19% 15% Orders +15% 10% Conversion -10bps 5% ABV +3% - Active 3.3m (+18%) Customers* P1 P2 P3 P4 FY (5%) * 12 month measures – Active customers defined as having shopped in the last twelve months as at 31 August.

Operating costs FY19 % FY18 % of sales of sales Change Gross Margin 48.8% 51.2% (240bps) Distribution Costs (15.2%) (15.8%) 60bps Warehouse (11.0%) (10.0%) (100bps) Marketing (4.4%) (4.4%) 0bps Other Costs (14.3%) (14.5%) 20bps Depreciation (2.6%) (2.3%) (30bps)

Cash flow and net debt FY19 capital expenditure reflects Capital expenditure to Working capital reflects transformational return towards BAU levels transition to 3 hubs warehouse rollout Capex spend (90.5)

Removing Non-Strategic Cost Remove non-strategic cost… …to support growth and profitability Removing duplication and low return investment Competitive pricing and promotional offering • • Streamlining organisation Increasing consumer engagement • • Non-working marketing spend Optimising our use of tools and channels • • to maximise investment Supply chain efficiencies across warehouse • and delivery Maximising opportunity with partners • More active KPI management and inflight controls Greater discipline and rigour in performance management Increased focus on capital discipline and cash management Sustainable long-term increases in profitability

Accounting, Technical & Funding Technical Funding platform ➔ Capex reducing to c.£150m following warehouse 80bps 5 year £ 350m investment ➔ Interest charge expected to be low single digit margin term RCF million ➔ Accounting policies reviewed and some small asset impairments taken in year ➔ Appropriate ➔ Standard headroom ➔ IFRS 16 expected to reduce PBT by low single covenants and balance digit million and increase EBITDA margin c80bps sheet flexibility ➔ Brexit preparations well advanced

Building a Global Retail Leader Nick Beighton | CEO

ASOS Strategy Mission to be the world’s number one fashion destination for 20-somethings  Most relevant choice of 20 something fashion – amazing product competitively priced  Content that’s inspirational, educational & engaging reaching through the channels where 20 Our proposition somethings are  Sustainably sourced and delivered  Total customer digital fashion offer  Global offer - distributed worldwide, increasingly localised Where we play  Enhanced focus on UK, EU & US – “Keep UK hot, Accelerate EU, US”  Capture growth and trade ROW territories  Personalised product and experiences presented to engage and inspire  Digital experiences that are intuitive and easy to shop How we win  Friction free, fast & flexible service across delivery, returns and customer support  Local fulfilment and virtual stock pool  Increasing choice & newness  Cost effective agile model What capabilities  Enhanced leadership capability will we need?  Fashion DNA, Global logistics experience, Technology  Thought leadership on Ecommerce Investing to build momentum and achieve mission

Leveraging Investment in Logistics UK, EU & US facilities enable enhanced customer proposition to our key strategic markets Managing both choice Driving efficiency in of product and speed of cost and Capacity for cost efficient delivery to customers throughput speed growth globally for reinvestment Global Warehouse Capacity Key Warehouse Project Timeline 60.0m 14.0m Stockholding Weekly Throughput Stockholding Throughput 2014-2016 - Automation in Barnsley 12.0m 50.0m 10.0m - Incremental automation live in Barnsley 40.0m 2017 - 2018 - Transition from 1st Europe site to larger Euro Hub 8.0m 30.0m - US Hub opens 6.0m 2019 - Additional storage utilised in UK returns centre 20.0m - Euro Hub automation goes live 4.0m - Additional automation in Euro Hub will take 10.0m 2.0m 2020 throughput to 5.2m units increasing network throughput to 11.5m units 0.0m 0.0m 2014 2015 2016 2017 2018 2019 2020 2021

Euro Hub Video

Leveraging Investment in Tech Platform Scalable platform Increasingly Embedding TGR building with capacity for personalised & automation & capabilities to growth & stability localised friction driving efficiency trade as a through peak free customer for reinvestment global retailer periods experience across multiple hubs Visits [Bn] Global Tech Platform 2.5 200+ localised experiences 2.0 12 local language sites 1.5 19 currencies 10 payment methods 1.0 20.3 million active customers 0.5 17.9 million active app installs 0.0 2014 2015 2016 2017 2018 2019

Strengthening Organisational Capability  Investing in capability & experience for the next stage of the journey  Building a more agile organisational and operating model  Driving end to end accountability & ownership  Harnessing internal talent & passion in more efficient structure Nick Beighton Chief Executive Officer Mark Holland Mat Dunn Cliff Cohen Chief Commercial Chief Growth Chief Strategy Chief People Chief Operating Chief Financial Chief Information Officer Officer Officer Officer Officer Officer Officer