Ocado FY21 losses widen amid labour shortages and robotics roll-out
Meanwhile, the group saw growth in all business segments with group revenues up 7.2%
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The Ocado Group has reported a loss before tax of £176.9m for the 52 weeks ending 28 November 2021 (FY21), down from £52.3m in FY20, following the group’s investment in robotics and AI technology and the opening of five global fulfilment centres.
Ocado said it was hit by labour market challenges and operating disruption at Erith, as well as industry wide cost inflation, resulting in its full-year EBITDA margin to drop to 6.6%, down year-on-year from £73.1m to £61.0m.
Meanwhile, group revenues increased 7.2% to £2.5bn with all business segments growing. Ocado retail sales rose year-on-year by 4.6% to £2.3bn, up 41.5% from pre-Covid levels. According to Ocado, this was driven by an increase in customer numbers of 22.4% to 832,000, driving an increase in orders of 11.9%.
International Solutions revenues also increased year-on-year from £16.6m to £66.6m, and the company reported “strong underlying demand” for online grocery in the UK, now at 12% of total grocery market share in the UK.
Additionally, Ocado plans to open nine new Customer Fulfilment Centres (CFCs) in 2022 to almost double the number of operational sites to 19. CFC openings planned for Bicester in 2022 and Luton in 2023 will reportedly expand its capacity potential to around 700,000 orders per week.
In addition to these sites, the business has announced two further CFC sites in the Northwest and Southeast of England, both planned for 2024.
For FY22, Ocado has announced increased investments of £50m to support growth of Ocado Retail, and its UK Solutions and Logistics EBITDA is expected to increase by 50%.
Tim Steiner, CEO of Ocado Group, said: “The past year has further reinforced that demand for online grocery is here to stay. In the majority of mature markets, the fastest growing channel is online and to truly win here food retailers need to deliver the best offer with the best economics across all customer missions.
“Partners ordering CFCs today will be able to go-live quicker, at lower cost, and achieve higher margins and return on capital. For Ocado Group, this means a bigger addressable market, the opportunity to win new partners more quickly, and fresh opportunities to accelerate growth.”
