This article first appeared on GuruFocus .
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Group Revenue Growth:12% increase.
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Adjusted EBITDA:Increased by GBP66 million to GBP178 million.
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Underlying Cash Flow:GBP230 million outflow, improved by GBP130 million when accounting for the letter of credit.
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Liquidity:GBP700 million in cash and access to a revolving credit facility, bolstered by a GBP279 million inflow post year-end.
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Gross Debt:Convertible bond of GBP350 million due in January '27 can be paid out of cash.
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Tech Solutions Revenue Growth:7% increase to GBP444 million.
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Contribution Margin for Tech Solutions:Improved to 72%.
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Ocado Retail Revenue Growth:15% increase.
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Ocado Retail Gross Profit:Up by 14%.
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Orders Per Week Growth:10% increase in logistics.
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UPH (Units Per Hour):Average of 289, with a peak of 318 in Luton.
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Net Cash Inflows:Final receipt from AutoStore settlement and sale of stake in Paneltex.
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CapEx:Around GBP250 million, weighted to Re:Imagined fees.
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Debt Management:Gross borrowings expected to decrease significantly.
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Tech Solutions Revenue Guidance:Around GBP500 million with an adjusted EBITDA margin of around 30%.
Release Date: February 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ocado Group PLC ( OCDDY ) reported a 12% increase in group revenue, showcasing strong financial progress.
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The company achieved a significant adjusted EBITDA growth of GBP66 million, reaching GBP178 million.
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Ocado Group PLC ( OCDDY ) ended the year with a healthy liquidity position of approximately GBP700 million.
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The company is on track to turn cash flow positive later this year, with full-year cash generation expected in FY27.
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Ocado Group PLC ( OCDDY ) has successfully integrated new software to improve operational efficiency, achieving a 34% improvement in drops per shift in certain warehouses.
Negative Points
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Ocado Group PLC ( OCDDY ) faced challenges in North America, leading to the closure of several sites due to underperformance.
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The company reported an underlying cash flow outflow of GBP230 million, highlighting ongoing financial challenges.
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Interest costs increased by GBP48 million, impacting the company's financial performance.
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Ocado Group PLC ( OCDDY ) is experiencing delays in the rollout of new sites in Korea and Japan, affecting growth plans.
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The company is undergoing a cost reduction exercise, which may impact innovation and operational efficiency in the short term.
Q & A Highlights
Q: Where is the most activity happening in terms of pipeline and customer engagement for Ocado's solutions? A: The initial interest from retailers is around their biggest and busiest sites where capacity is maxed out. The focus is on increasing capacity and improving customer experience. The store-based automation product is particularly attractive due to its efficiency and quick payback period. (Timothy Steiner, CEO)
Q: Can you explain the delays in rollouts for partners in Korea and Japan? A: In Japan, the timing of the third site isn't critical as volume is managed by the first two sites. In Korea, the first site is in Busan, and the second in Seoul, which is a larger market. The Seoul site might roll into next year due to client timelines, but we're seeing good growth in store pick. (Timothy Steiner, CEO)
Q: How many CFCs are still underperforming, and is there potential for further downside? A: There is very limited downside at this point. Most CFCs have moved to a level where we are satisfied with their utilization. (Timothy Steiner, CEO)
Q: How does Ocado position itself in the competitive micro-fulfillment and warehouse automation market? A: Ocado's deep understanding of grocery handling, dense storage solutions, and unique on-grid robotic picking technology give it a competitive edge. Our solutions offer the highest throughput from the smallest space, which is crucial in urban environments. (Timothy Steiner, CEO)
Q: What lessons have been learned from the Kroger and Sobeys partnerships, and what changes have been made? A: We've learned the importance of building warehouses that are economically viable at smaller sizes and allowing partners to grow incrementally. Early models required larger upfront commitments, which were challenging for some partners. We've adapted our approach to be more flexible and partner-focused. (Timothy Steiner, CEO)
Q: Have any innovations been delayed due to cost efficiency programs? A: Core projects like store-based automation and supply chain enhancements remain on track. Some speculative projects are progressing slower, but key innovations are prioritized to maintain competitive advantage. (Timothy Steiner, CEO)
Q: How is Ocado addressing operational complexities in smaller sites? A: Advances in technology, such as lighter bots and on-grid robotic picking, have resolved many operational challenges. These innovations allow for efficient operations in smaller spaces, making smaller sites viable. (Timothy Steiner, CEO)
Q: Does Ocado have a working prototype for the new store-based automation sites? A: We have components and early prototypes in place, but not a complete working model. We are progressing towards building full prototypes to demonstrate the concept in a live environment. (Timothy Steiner, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
