AO World sees ‘significant’ sales boosts in UK and Germany
In a trading update for the three months ended 31 December 2020,said it saw continued ‘significant increase’ in demand for its products and services amid the pandemic.
The European online electrical retailer highlighted that 3Q21 UK revenues had jumped by 67.2% to £457.3m as the group experienced its strongest peak trading period over Black Friday and the run up to Christmas, while Germany sales were up 77.4% to €73.6m.
AO incured ‘significantly higher costs’ as it negotiated some of the operational challenges of working in a Covid compliant environment, particularly in the reverse supply chain, it noted.
AO also saw a slightly increased rate of cancellation of individual consumers' long term contracts in mobile and warranties, ‘driven by Covid impacts on customers behavior.’
The company said it continues to invest in its infrastructure in order to deliver the current higher levels of revenue including additional staff in warehouses, vehicles and drivers.
AO said it will continue to adapt as necessary during the lockdown and that it looks to 4Q21 and FY22 ‘with confidence’ as the structural shift to online is ‘cemented in consumers' minds by the outstanding service millions of new customers have received in 2020.’
Shares in AO World have increased by over 465% in value since the beginning of April 2020 to open 6.83% lower this morning at 352.25p following the announcement.
It said this is compounded by the ongoing tailwinds it expects to be driven by working from home and associated usage and appreciation of electrical products so essential in daily life.
Founder and Chief Executive Officer of AO World, John Roberts, commented, "I believe we've seen ten years of change in ten months, and experienced our strongest ever peak trading period.” Roberts highlighted that one of the company’s biggest achievements during the trading period was to have its German business remain profitable throughout 3Q21.
He added that, "Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back. We intend to cement that change by raising the bar on our service and proposition in ways that only AO can deliver.
We'll continue to make the right decisions for our customers, partners, people and planet too. I'm hugely proud of how AOers have responded to challenges as well as opportunities, providing amazing service to our customers during a record period. I'd like to thank the whole team for making it possible, including the 1,500 new recruits who joined us during 2020."
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