Final results for the period to 1 September 2024

ASOS Plc

Global Online Fashion Destination

Final results for the period to 1 September 2024

Back to Fashion targets met, foundations in place to deliver sustainable, profitable growth

Summary financial results

£m1	Period to 1 Sep 2024 (FY24)	Period to 3 Sep 2023 (FY23)	Change	LFL Change
Headline measures2
Adjusted group revenue3,4	2,896.0	3,538.0		(16%)
Adjusted gross margin	43.4%	44.2%	(80bps)
Adjusted cost to serve5	40.7%	40.8%	10bps
Adjusted EBITDA	80.1	124.5	(44.4)
Adjusted EBIT	(81.5)	(29.0)	(52.5)
Adjusted loss before tax	(126.0)	(70.3)	(55.7)
Net debt	(297.1)	(319.5)	+22.4
Free cash inflow/(outflow)	37.7	(213.0)	+250.7
Statutory Measures
Group revenue	2,905.8	3,549.5	(18%)
Gross margin	40.0%	41.1%	(110bps)
Operating loss	(331.9)	(248.5)	(83.4)
Loss before tax	(379.3)	(296.7)	(82.6)

Strategic update and results summary

• Back to Fashion targets met: Stock clearance complete, new commercial model embedded, Test & React scaled above 10% of own brand sales, flexible fulfilment doubled and unit economics transformed with variable contribution per order now +28% on FY22. Foundations of more agile and profitable business now in place.
• Significant cash flow improvement: FY24 adjusted EBITDA of £80.1m, at the top end of consensus expectations, and £37.7m free cashflow, a £250.7m improvement year-on-year ('YoY').
• Stock transition complete: inventory down c.50% since FY22 to £520m, through disciplined stock management and c.£100m write-down to complete transition to the new commercial model by end of FY24. Stock position now offers greater newness for customers, with aged stock down c.75% YoY and >80% of stock under 6 months old.
• Continued optimisation of profit contribution over revenue, resulting in FY24 revenue decline of 16%⁴ YoY, in-line with guidance provided in our September trading update.
• New commercial model resonating with customers: sales of newness +24% YoY over the last 3 months (Jul-Sep) with only 6% higher stock, demonstrating strong demand for full-price product. Offset at group level by c.30% YoY decline in sales of old inventory from c.60% lower stock levels. Importantly, this has a sustainable positive impact on gross margin and profit, despite the near-term revenue headwind.
• Balance sheet strengthened significantly following the year end through a comprehensive refinancing and proceeds from the formation of the Topshop and Topman joint venture⁶ (TSTM JV).
• Strong foundations now in place, shifting focus in FY25: focus on taking actions to delight customers, doubling Test & React to 20% of own-brand sales, further scaling FF models, adding exciting brand partners, empowering faster innovation through our Technology and Digital Product transformation, launching loyalty programme, launching Topshop.com, and further tackling the causes of unnecessary returns.
• In FY25, driven by a significant increase in our full-price sales mix, we expect at least 300bps increase in gross margin to over 46% and adjusted EBITDA to increase by at least 60% to £130m to £150m, including the impact of the TSTM JV. FY25 FCF expected to be broadly neutral, with capex of c.£130m and cash interest of c.£35m.
• In the mid-term our focus remains sustainable, profitable growth. We continue to expect revenue growth, gross margin towards c.50% and an adjusted EBITDA margin of c.8%, sustainably ahead of capex, interest, tax and leases.

José Antonio Ramos Calamonte, Chief Executive Officer said:

"We achieved our key priorities for the year, significantly reducing our inventory position, while generating positive adjusted EBITDA and free cash flow. Following the year end, we further strengthened our balance sheet with our Topshop Topman joint venture and our refinancing. Our product is now in the strongest position it has been in years, with the right level of newness to excite customers, and we have fundamentally improved our profitability through a relentless focus on operational efficiency. With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers. There is much work to do, but we have already seen our efforts rewarded with new product sales increasing 24% YoY over the last three months. I am energised by the progress we have made so far and excited for the next phase of our journey."

For the full results, read our FY24 RNS here.

Notes

1. Numbers throughout this section are subject to rounding.

2. The alternative performance measures used by ASOS are explained, defined and reconciled to statutory measures in the Alternative Performance Measures note at the end of the Financial Statements.

3. Adjusted revenue includes retail sales and income from other services, excluding non-underlying jobber income.

4. Like-for-like ('LfL') adjusted revenue are adjusted for the impact of foreign exchange translation (constant currency sales) and the impact of four additional trading days in FY23

5. Cost to serve defined as operating expenses (excluding depreciation, amortisation, impairments and adjusting items) as a percentage of adjusted revenue.

6. The arrangement with Heartland, whilst referred to as a joint venture throughout this report, will be accounted for as an associate, as detailed in note 20 of the Financial Statements.

Investor and analyst meeting:

The group will be hosting an in-person presentation for analysts at 10.30am at ASOS HQ, Greater London House, NW1 7FB. A live webcast will also be available, and a recording of the presentation will be uploaded to the ASOS investor relations website afterwards.

To access live please dial +44208 080 6591 and use Meeting ID: 810 1611 2586 followed by a #. A live stream of the event will be available here.

A recording of this webcast will be available on the ASOS Plc investor centre website after the event: https://www.asosplc.com/investor-relations/

For further information:

Investors:
Emily MacLeod, ASOS Head of Strategy and Investor Relations	Tel: 020 7756 1000
Media:
Jonathan Sibun / Will Palfreyman, Teneo	Tel: 020 7353 4200

Background note

ASOS is a destination for fashion-loving 20-somethings around the world, with a purpose to give its customers the confidence to be whoever they want to be. Through its app and mobile/desktop web experience, available in nine languages and in over 200 markets, ASOS customers can shop a curated edit of nearly 50,000 products, sourced from over 600 global and local third-party brands alongside a mix of fashion-led own brand labels - including ASOS Design, ASOS Edition, ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, and Miss Selfridge. ASOS aims to give all its customers a truly frictionless experience, with an ever-greater number of different payment methods and hundreds of local deliveries and return options, dispatched from state-of-the-art fulfilment centres in the UK, US, and Germany.

Forward looking statements:

This announcement may include statements that are, or may be deemed to be, "forward-looking statements" (including words such as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances, and actual results may, and often do, differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflect management's view with respect to future events as at the date of this announcement. Save as required by applicable law, ASOS plc undertakes no obligation to publicly revise any forward-looking statements in this announcement, whether following any change in its expectations or to reflect events or circumstances after the date of this announcement.

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