REG - Ocado Group PLC - Final Results <Origin Href="QuoteRef">OCDO.L</Origin> - Part 2
06/02/2018 07:05
- Part 2: For the preceding part double click ID:nRSF9852Da
includes revised guidance on the classification and measurement of
financial instruments, including a new expected credit loss model for calculating impairment on financial assets and the
new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of
financial instruments from IAS 39. The Group is assessing the potential impact on its consolidated financial statements
resulting from the application of IFRS 9. Our initial review of IFRS 9 has indicated that the impact of this new standard
on the Groups' results is unlikely to be material.
- IFRS 15 "Revenue from Contracts with Customers" (endorsed by the EU) provides guidance on the recognition and
measurement of revenue. The standard establishes a principles-based approach for revenue recognition and is based on the
concept of recognising revenue for obligations only when they are satisfied and the control of goods or services is
transferred. This applies to all contracts with customers except those in the scope of other standards. This new standard
will replace IAS 18 "Revenue" and is effective for annual periods beginning on or after 1 January 2018 unless adopted
early. The Group does not expect there to be a material impact from IFRS 15. The Group will continue to monitor the impact
of IFRS 15 on new service contracts as they arise.
- IFRS 16 "Leases" provides guidance on the classification, recognition and measurement of leases to help provide
useful information to the users of financial statements. The main aim of this standard is to ensure all leases will be
reflected on the Consolidated Balance Sheet, irrespective of substance over form. The new standard will replace IAS 17
"Leases" and is effective for annual periods beginning on or after 1 January 2019 unless adopted early. IFRS 16 is expected
to have a significant impact on the amounts recognised in the Group's consolidated financial statements. On adoption of
IFRS 16 the Group will recognise within the balance sheet a right of use asset and lease liability for all applicable
leases. Within the income statement, rent expense will be replaced by depreciation and interest expense. This will result
in a decrease in operating expenses and an increase in finance costs with no net impact. The standard will also impact a
number of statutory measures such as operating profit, cash generated from operations, and alternative performance
measures, such as EBITDA*, that are used by the Group.
The Group's initial review of IFRS 16 indicates that the financial impact will result in an increase in finance leased
assets of approximately £331 million, and a corresponding increase in financial liabilities of £335 million, on the
consolidated balance sheet.
Section 2 - Results for the year
2.1 Segmental reporting
The Group's principal activities are grocery retailing and the development and monetisation of Intellectual Property ("IP")
and technology used for the online retailing, logistics and distribution of grocery and consumer goods. The Group is not
reliant on any major customer for 10% or more of its revenue.
In accordance with IFRS 8 "Operating Segments", an operating segment is defined as a business activity whose operating
results are reviewed by the chief operating decision-maker ("CODM") and for which discrete information is available.
Operating segments are reported in a manner consistent with the internal reporting provided to the CODM, as required by
IFRS 8. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been
identified as the Executive Directors.
During the period the Group determined it has two reportable segments: Retail and Solutions. The Retail segment provides
online grocery and general merchandise offerings to customers within the UK. The Solutions segment provides end-to-end
online retail solutions to corporate customers within and outside of the UK. In order to reconcile segment revenues* to the
Group revenue and profit, a third category entitled "Other" shows unallocated costs such as central business activities.
The Board assesses the performance of all segments on the basis of EBITDA*. EBITDA*as reported internally by segment is the
key measure utilised in assessing the performance of operating segments within the Group.
The accounting policies of the segments are the same as those for the Group as a whole. Any transactions between the
business segments are subject to normal commercial terms and market conditions. Segment results and assets include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Segment revenue* and EBITDA* Retail£m Solutions£m Other£m Total£m
2016
Segment revenue* 1,171.6 99.4 - 1,271.0
Segment EBITDA* 75.8 5.5 3.0 84.3
2017
Segment revenue* 1,346.1 117.7 - 1,463.8
Segment EBITDA* 81.0 2.5 2.5 86.0
2.2 Gross sales*
A reconciliation of revenue to gross sales* is as follows:
53 weeks ended 3 December 2017 52 weeks ended27 November 2016
£m £m
Revenue 1,463.8 1,271.0
VAT 114.9 98.9
Marketing vouchers 22.7 16.8
Gross sales* 1,601.4 1,386.7
2.3 Exceptional items*
53 weeks ended 3 December 2017 52 weeks ended27 November 2016
£m £m
Head office relocation costs
- Impairmentofproperty,plantandequipment - 0.7
- Other 0.2 0.8
Litigation costs 0.1 0.9
0.3 2.4
Head office relocation costs
Following the growth of the business, the Group relocated its head office. The move to the new premises was completed in
stages to minimise the impact on the business and the Group incurred dual running costs as it transitioned to the new
premises. Due to the one-off nature of the head office move, these costs were treated as exceptional.
Litigation costs
The Group has incurred litigation costs relating to the recovery of interchange fees for card transactions. The fees
relating to this are material and non-recurring and have therefore been treated as exceptional.
2.4 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period, excluding ordinary shares held pursuant to the Group's JSOS
on an allocated basis which are accounted for as treasury shares.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion or vesting of all dilutive potential shares. The Company has two classes of instruments that are potentially
dilutive: share options and share interests held pursuant to the JSOS.
Basic and diluted earnings per share have been calculated as follows:
53 weeks ended 3 December 2017 52 weeks ended27 November 2016
Number of shares(m) Number of shares(m)
Issued shares at the beginning of the period, excluding treasury shares 598.8 590.6
Effect of share options exercised in the period 0.7 2.5
Effect of treasury shares disposed of in the period - 1.3
Weighted average number of shares at the end of the period for basic earnings per share 599.5 594.4
Potentially dilutive share options and shares 19.8 19.1
Weighted average number of diluted ordinary shares 619.3 613.5
£m £m
Profit attributable to the owners of the Company 1.0 12.0
pence pence
Basic earnings per share 0.16 2.02
Diluted earnings per share 0.16 1.96
Section 3 - Assets and liabilities
3.1 Intangible assets
Internally generatedassets Other intangible assets Total intangible assets
£m £m £m
Cost
At 29 November 2015 83.0 17.6 100.6
Additions - 4.9 4.9
Internal development costs capitalised 34.9 - 34.9
Disposals (0.3) (0.2) (0.5)
At 27 November 2016 117.6 22.3 139.9
Additions - 5.6 5.6
Internal development costs capitalised 42.7 - 42.7
At 3 December 2017 160.3 27.9 188.2
Accumulated amortisation
At 29 November 2015 (43.1) (4.6) (47.7)
Charge for the period (11.8) (0.8) (12.6)
Impairment (0.4) - (0.4)
Disposals 0.3 0.2 0.5
At 27 November 2016 (55.0) (5.2) (60.2)
Charge for the period (13.6) (1.8) (15.4)
Impairment (0.2) - (0.2)
At 3 December 2017 (68.8) (7.0) (75.8)
Net book value
At 27 November 2016 62.6 17.1 79.7
At 3 December 2017 91.5 20.9 112.4
Included within intangible assets is capital work-in-progress for internally generated assets of £15.1 million (2016: £20.0
million) and capital work-in-progress for other intangible assets of £1.7 million (2016: £3.3 million).
The net book value of intangible assets held under finance leases is analysed below:
53 weeks ended 3 December 2017 52 weeks ended 27 November 2016
£m £m
Cost 14.4 14.3
Accumulated amortisation (13.0) (11.2)
Net book value 1.4 3.1
For the 53 weeks ended 3 December 2017, internal development costs capitalised represented approximately 88% (2016: 88%) of
expenditure on intangible assets and 27% (2016: 22%) of total capital spend including property, plant and equipment.
3.2 Property, plant and equipment
Land and buildings Fixtures, fittings, plantand machinery Motor vehicles Total
£m £m £m £m
Cost
At 29 November 2015 80.7 403.3 55.2 539.2
Additions 27.6 63.7 16.6 107.9
Internal development costs capitalised - 10.1 - 10.1
Disposals (0.1) (4.9) (7.5) (12.5)
At 27 November 2016 108.2 472.2 64.3 644.7
Additions 10.9 74.5 14.6 100.0
Internal development costs capitalised - 11.8 - 11.8
Disposals - (1.3) (4.8) (6.1)
At 3 December 2017 119.1 557.2 74.1 750.4
Accumulated depreciation
At 29 November 2015 (20.5) (170.0) (21.4) (211.9)
Charge for the period (1.9) (33.4) (11.7) (47.0)
Impairment - (1.0) - (1.0)
Disposals 0.1 4.9 7.5 12.5
At 27 November 2016 (22.3) (199.5) (25.6) (247.4)
Charge for the period (2.9) (39.3) (12.8) (55.0)
Impairment - (0.4) - (0.4)
Disposals - 1.3 4.8 6.1
At 3 December 2017 (25.2) (237.9) (33.6) (296.7)
Net book value
At 27 November 2016 85.9 272.7 38.7 397.3
At 3 December 2017 93.9 319.3 40.5 453.7
Included within property, plant and equipment is capital work-in-progress for land and buildings of £37.2 million (2016:
£27.4 million) and capital work-in-progress for fixtures, fittings, plant and machinery of £61.6 million (2016: £22.9
million).
The net book value of non-current assets held under finance leases is set out below:
Land and buildings Fixtures, fittings, plantand machinery Motor Total
vehicles
£m £m £m £m
At 27 November 2016
Cost 30.9 209.8 63.5 304.2
Accumulated depreciation and impairment (19.5) (110.6) (25.0) (155.1)
Net book value 11.4 99.2 38.5 149.1
At 3 December 2017
Cost 31.9 211.1 61.5 304.5
Accumulated depreciation and impairment (21.2) (127.8) (26.2) (175.2)
Net book value 10.7 83.3 35.3 129.3
Property, plant and equipment with a net book value of £nil (2016: £19.0 million) has been pledged as security for the
secured loans.
Section 4 - Capital structure and financing costs
4.1 Borrowings and finance leases
Less Than Between One Year and Between Two Years Over
and
One Year£m Two Years£m Five Years£m Five Years£m Total£m
As at 27 November 2016
Unsecured loans 51.3 - - - 51.3
Secured loans 1.6 6.1 - - 7.7
Total Borrowings 52.9 6.1 - - 59.0
As at 3 December 2017
Senior secured notes - - - 243.3 243.3
Total Borrowings - - - 243.3 243.3
The loans outstanding at period end can be analysed as follows:
Carrying Amount as at 3 December Carrying Amount asat 27November
2017 2016
Principal Amount £m Inception Security Held Current Interest Rate InstalmentFrequency Final Payment Due £m £m
100.0 July 2014 None LIBOR + 1.5% Monthly June 2022 - 51.3
2.5 July 2014 Property, plant and equipment 9.12% Monthly July 2017 - 0.5
8.2 September 2015 Freehold property LIBOR + 1.5% Quarterly September 2018 - 7.2
250.0 June 2017 Collateral 4% Semi- June 2024 243.3 -
annually
243.3 59.0
Disclosed as:
Current - 52.9
Non-current 243.3 6.1
243.3 59.0
In the current year, the unsecured £210 million revolving facility was reduced to £100 million and extended by 3 years to
2022. As at 3 December 2017 the facility has not been utilised. Senior secured notes were issued in June 2017, raising £250
million; this is shown net of transaction fees. The senior secured notes are secured by charges over the issued share
capital of the subsidiary undertakings that acted as guarantors for the notes.
The group regularly reviews its financing arrangements. The revolving facility and the senior secured notes contain typical
restrictions concerning dividend payments and additional debt and leases.
Obligations under finance leases
3 December 2017 27 November 2016
£m £m
Obligations under finance leases due:
Within one year 27.2 29.8
Between one and two years 24.6 25.8
Between two and five years 65.3 66.4
After five years 17.6 34.8
Total obligations under finance leases 134.7 156.8
External obligations under finance leases are £40.6 million (2016: £48.1 million) excluding £94.1 million (2016: £108.7
million) payable to MHE JVCo, a joint venture company.
3 December 2017 27 November 2016
£m £m
Minimum lease payments due:
Within one year 33.6 38.4
Between one and two years 29.3 31.7
Between two and five years 72.7 76.9
After five years 18.3 36.8
153.9 183.8
Less: future finance charges (19.2) (27.0)
Present value of finance lease liabilities 134.7 156.8
Disclosed as:
Current 27.2 29.8
Non-current 107.5 127.0
134.7 156.8
4.2 Analysis of net debt*
3 December 2017 27 November 2016
£m £m
Current assets
Cash and cash equivalents 150.0 50.9
Current liabilities
Borrowings - (52.9)
Obligations under finance leases (27.2) (29.8)
(27.2) (82.7)
Non-current liabilities
Borrowings (243.3) (6.1)
Obligations under finance leases (107.5) (127.0)
(350.8) (133.1)
Total net debt* (228.0) (164.9)
Net debt* is £133.9 million (2016: £56.2 million), excluding finance lease obligations of £94.1 million (2016: £108.7
million) payable to MHE JVCo, a joint venture company. £4.1 million (2016: £4.5 million) of the Group's cash and cash
equivalents are considered to be restricted and are not available to circulate within the Group on demand.
Reconciliation of net cash flow to movement in net debt*
3 December 2017 27 November 2016
£m £m
Net increase in cash and cash equivalents 99.1 5.1
Net (increase) in debt and lease financing (147.7) (23.4)
Non-cash movements:
- Assets acquired under finance lease (14.5) (19.6)
Movement in net debt* in the period (63.1) (37.9)
Opening net debt* (164.9) (127.0)
Closing net debt* (228.0) (164.9)
4.3 Finance income and costs
53 weeks ended 3 December 2017 52 weeks ended27 November 2016
£m £m
Interest on cash balances 0.2 0.2
Finance income 0.2 0.2
Borrowing costs
- Obligations under finance leases (8.2) (9.4)
- Borrowings (5.7) (0.3)
Finance costs (13.9) (9.7)
Net finance costs (13.7) (9.5)
4.4 Share capital and reserves
The movements in the called up share capital and share premium accounts are set out below:
Ordinary shares Ordinary shares Share premium
Number of shares(million) £m £m
At 29 November 2015 625.4 12.6 258.7
Issues of ordinary shares 3.4 - 0.6
Reacquisition of interest in treasury shares - - (2.9)
Allotted in respect of share option schemes 0.4 - 0.5
At 27 November 2016 629.2 12.6 256.9
Issues of ordinary shares 1.1 - 0.9
Allotted in respect of share option schemes 0.4 - 0.6
At 3 December 2017 630.7 12.6 258.4
Included in the total number of ordinary shares outstanding above are 32,803,390 (2016: 32,830,613) ordinary shares held by
the Group's employee benefit trust. The ordinary shares held by the trustee of the Group's employee benefit trust pursuant
to the JSOS are treated as treasury shares in the consolidated balance sheet in accordance with IAS 32 ''Financial
Instruments: Presentation''. These ordinary shares have voting rights but these have been waived by the trustee (although
the trustee may vote in respect of shares that have vested and remain in the trust). The number of allotted, called up and
fully paid shares, excluding treasury shares, at the end of each period differs from that used in the basic earnings per
share calculation as basic earnings per share is calculated using the weighted average number of ordinary shares in issue
during the period, excluding treasury shares.
The movements in reserves other than share premium are set out below:
Treasury sharesreserve Reverse acquisitionreserve Fair value reserve
£m £m £m
At 29 November 2015 (50.9) (116.2) (0.8)
Movement on derivative financial instruments - - 0.7
Disposal of treasury shares - - 0.3
Reacquisition of interests in treasury shares 2.9 - -
At 27 November 2016 (48.0) (116.2) 0.2
Movement on derivative financial instruments - - 0.3
Translation of foreign subsidiary - - 0.2
At 3 December 2017 (48.0) (116.2) 0.7
(a) Treasury shares reserve
This reserve arose when the Group issued equity share capital under its JSOS, which is held in trust by the trustee of the
Group's employee benefit trust. Treasury shares cease to be accounted for as such when they are sold outside the Group or
the interest is transferred in full to the participant pursuant to the terms of the JSOS. Participant interests in
unexercised shares held by participants are not included in the calculation of treasury shares; unvested interests of
leavers which have been reacquired by the Group's employee benefit trust during the period are not accounted for as
treasury shares.
(b) Other reserves
The fair value reserve comprises gains and losses on movements in the Group's cash flow hedges, which consist of commodity
swaps and foreign currency hedges.
Section 5 - Other notes
5.1 Capital commitments
Contracts placed for future capital expenditure but not provided for in the financial statements are as follows:
3 December 2017 27 November 2016
£m £m
Land and buildings 2.7 2.5
Property, plant and equipment 42.3 31.9
Total capital expenditure committed at the end of the period 45.0 34.4
Of the total capital expenditure committed at the current period end, £37.2 million (2016: £25.7 million) relates to new
CFCs, £2.2 million (2016: £0.8 million) to existing CFCs, £0.3 million (2016: £1.7 million) to fleet costs and £0.2 million
(2016: £2.0 million) relates to technology related projects.
5.1 Related party transactions
Key management personnel
Only the Executive and Non-Executive Directors are recognised as being key management personnel. It is the Board which has
responsibility for planning, directing and controlling the activities of the Group. The key management compensation is as
follows:
3 December 2017 27 November 2016
£m £m
Salaries and other short-term employee benefits 3.1 3.2
Share-based payments 2.4 3.1
5.5 6.3
The share-based payment charge in 2017 was the charge arising for each of the share schemes in which the directors
participate. Further information can be found in the Annual Report and Accounts, which we anticipate will be available on 6
February 2018.
Other related party transactions with key management personnel made during the period related to the purchase of
professional services and amounted to £2,700 (2016: £900). All transactions were on an arm's length basis and no period end
balances arose as a result of these transactions.
At the end of the period, there were no amounts owed by key management personnel to the Group (2016: £nil).
There were no other material transactions or balances between the Group and its key management personnel or members of
their close family.
Investment
The following transactions were carried out with Paneltex Limited, a company incorporated in the UK in which the Group
holds a 25% interest.
53 weeks ended3 December 2017 52 weeks ended27 November 2016
£m £m
Purchase of goods
- Plant and machinery 0.7 -
- Consumables 0.5 0.5
Sale of goods 0.2 0.1
Indirect transactions, consisting of the purchase of plant and machinery through some of the Group's finance lease
counterparties, were carried out with Paneltex Limited to the value of £6.3 million (2016: £11.8 million). At period end,
Paneltex Limited owed the Group £15,000 (2016: the Group owed Paneltex Limited £57,000).
Joint Venture
The following transactions were carried out with MHE JV Co, a joint venture company, incorporated in the UK, in which the
Group holds an interest:
3 December 2017 27 November 2016
£m £m
Capital contributions made to MHE JVCo - 1.1
Dividend received from MHE JVCo 7.6 8.4
Reimbursement of supplier invoices paid on behalf of MHE JVCo 7.5 4.9
Lease of assets from MHE JVCo 1.3 3.1
Capital element of finance lease instalments paid to MHE JVCo 16.0 13.8
Interest element of finance lease instalments accrued or paid to MHE JVCo 5.2 5.8
During the period the Group paid lease instalments (including interest) of £21.2 million (2016: £19.6 million) to MHE
JVCo.
Of the £21.2 million, £10.1 million (2016: £10.7 million) was recovered directly from Morrisons in the form of Other Income
and a further £7.6 million (2016: £8.4 million) was received from MHE JVCo by way of a dividend. The remaining £3.5 million
(2016: £0.5 million) represents capital expenditure requirements of MHE JVCo for which no additional funding was required
from Ocado. The net result is the termination of £16.0 million of MHE JVCo debt during the period (2016: £13.8 million)
with no corresponding net cash outflow.
In the current period, the Group made no additional capital contributions to MHE JVCo (2016: £1.1 million).
Included within trade and other receivables is a balance of £1.7 million owed by MHE JVCo (2016: £5.3 million). £0.7
million of this relates to a finance lease accrual which is included within other receivables (2016: £0.8 million). £1.0
million (2016: £4.5 million) relates to capital recharges.
Included within trade and other payables is a balance of £1.9 million owed to MHE JVCo (2016: £3.8 million).
Included within obligations under finance leases is a balance of £94.1 million owed to MHE JVCo (2016: £108.7 million).
No other transactions that require disclosure under IAS 24 "Related Party Disclosures" have occurred during the current
financial period.
5.2 Post balance sheet events
There have been no significant events, outside the ordinary course of business, affecting the Group since 3 December 2017.
Alternative Performance Measures
The Group assesses its performance using a variety of alternative performance measures which are not defined under IFRS and
a therefore termed "non-GAAP" measures. These measures provide additional useful information on the underlying trends,
performance and position of the Group. The non-GAAP measures used are:
· 52 Week Comparative for the 2017 Financial Year;
· Gross Sales;
· Segment Revenue;
· Exceptional Items;
· Segment Administrative Costs and Distribution Costs;
· EBITDA;
· Segment EBITDA;
· External Gross Debt; and
· Net Debt.
A reconciliation from these non-GAAP measures to the nearest measure prepared in accordance with IFRS is presented below.
The alternative performance measures used may not be directly comparable with similarly titled measures used by other
companies.
52 Week Comparative for the 2017 Financial Year
As a predominately retail business, the business has a 53 week financial year every 5-6 years. The business have removed
the last trading week of the 2017 financial year to aid comparability for the users. These comparable numbers are not
highlighted throughout the report.
Gross Sales
Gross Sales is a measure of reported revenue before excluding value added tax and relevant vouchers and offers. Gross Sales
is a common measure used by investors and analysts to evaluate the operating financial performance of companies within the
retail sector.
A reconciliation from reported revenue to Gross Sales can be found in note 2.2 to the consolidated financial statements.
Segment Revenue/Revenue (Retail)/Revenue (Solutions)
Segment revenue is a measure of reported revenue for the Group's Retail and Solutions segments. A reconciliation of revenue
for the segments to revenue for the Group can be found in note 2.1 to the consolidated financial statements.
Exceptional Items
The Group's Consolidated Income Statement separately identifies trading results before exceptional items. The Directors
believe that presentation of the Group's results in this way is relevant to an understanding of the Group's financial
performance. This presentation is consistent with the way that financial performance is measured by management and reported
to the Board and assists in providing a meaningful analysis of the trading results of the Group. This also facilitates
comparison with prior periods to assess trends in financial performance more readily.
The Group applies judgement in identifying significant non-recurring items of income and expense that are recognised as
exceptional to help provide an indication of the Group's underlying business. In determining whether an event or
transaction is exceptional in nature, management considers quantitative as well as qualitative factors such as the
frequency or predictability of occurrence.
Examples of items that the Group considers exceptional include, but are not limited to, material costs related to the
opening of a new warehouse, corporate reorganisations, material litigation, and any material costs, outside of the normal
course of business as determined by management.
Exceptional items are disclosed in note 2.3 to the consolidated financial statements.
Segment Administrative Costs and Distribution Costs
Segment distribution and administrative costs are measures which seek to reflect the performance of the Group's segments in
relation to the long-term sustainable growth of the Group. These measures exclude the impact of certain costs that are not
allocated to a segment; depreciation, amortisation, impairment and other central costs. A reconciliation from reported
distribution and administrative costs, the most directly comparable IFRS measures, to the segment distribution and
administrative costs is set out below.
53 weeks ended3 December 2017 52 weeks ended27 November 2016
£m £m
Retail distribution and administrative costs 356.1 301.4
Solutions distribution and administrative costs 115.1 93.9
Unsegmented distribution and administrative costs 80.7 71.0
551.9 466.3
53 weeks ended3 December 2017 52 weeks ended27 November 2016
£m £m
Reported distribution costs 434.2 365.7
Reported administrative expenses 117.7 100.6
551.9 466.3
EBITDA
In addition to measuring its financial performance based on operating profit, the Group also measures performance based on
EBITDA. EBITDA is defined as the Group earnings before depreciation, amortisation, impairment, net finance expense,
taxation and exceptional items. EBITDA is a common measure used by investors and analysts to evaluate the operating
financial performance of companies.
The Group considers EBITDA to be a useful measure of its operating performance because it approximates the underlying
operating cash flow by eliminating depreciation and amortisation. EBITDA is not a direct measure of liquidity, which is
shown by the cash flow statement, and needs to be considered in the context of the Group's financial commitments.
A reconciliation from operating profit to EBITDA can be found on the face of the Consolidated Income Statement.
Segment EBITDA/EBITDA (Retail/EBITDA (Solutions)
The financial performance of the Group's segments is measured based on EBITDA, as reported internally.
A reconciliation of EBITDA for the segments to EBITDA for the Group can be found in note 2.1 to the consolidated financial
statements.
External Gross Debt
External gross debt consists of loans and other borrowings (both current and non-current), less finance leases payable to
joint venture interests of the Group.
External gross debt is a measure of the Group's indebtedness to third parties which are not considered a related party to
the Group.
A reconciliation from external gross debt to gross debt can be found below.
2017 2016
£m £m
External gross debt 283.9 107.1
Finance leases relating to joint ventures 94.1 108.7
Gross debt 378.0 215.8
Net Debt
Net debt consists of loans and other borrowings (both current and non-current), less cash and cash equivalents. Loans and
other borrowings are measured as the net proceeds raised, adjusted to amortise any discount over the term of the debt.
Net debt is a measure of the Group's net indebtedness that provides an indicator of the overall balance sheet strength. It
is also a single measure that can be used to assess the combined impact of the Group's cash position and its indebtedness.
The use of the term "net debt" does not necessarily mean that the cash included in the net debt calculation is available
to settle the liabilities included in this measure.
Net debt is considered to be an alternative performance measure as it is not defined in IFRS. The most directly comparable
IFRS measure is the aggregate of loans and other borrowings (current and non-current) and cash and cash equivalents. A
reconciliation from these measures to net debt can be found in note 4.2 in the consolidated financial statements.
Announcement information
Person responsible for arranging the release of this announcement:
Neill Abrams
Group General Counsel & Company Secretary
Ocado Group plc
Buildings One & Two Trident Place
Mosquito Way
Hatfield
Hertfordshire
AL10 9UL
Fax: +44 (0)1707 227997
email: company.secretary@ocado.com
Ocado Group plc LEI: 213800LO8F61YB8MBC74
This information is provided by RNS
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