Bolton’s AO World reviews German business

Bolton-based online electrical retailer AO World plc has announced a strategic review of its German business and a third quarter trading update for the period ended December 31, 2021.

AO World said: “Our German business is being significantly impacted by a number of recent material changes to the local trading environment: competition in the online market has intensified whilst online penetration has returned to pre-pandemic levels; digital marketing costs have substantially increased against pre-pandemic levels; and supply remains constrained.  

“We expect these trends will continue for the foreseeable future in the German market.

“The board is focused on maximising shareholder value, and as a result of the aforementioned factors, the group has decided to commence a strategic review of its German business, which will evaluate a range of options.

“The results of the review will be announced in due course.

“We remain confident about AO’s long-term growth prospects, driven by the strength of our proven business model, the quality of our customer proposition, and the long-term market trend towards online migration.”

On trading, AO World said: “The group confirms that current trading estimates for the full year remain in line with the guidance set out at the interim results on 23 November 2021.

“On a comparable two-year period for the nine months to 31 December, UK revenues grew 58%.

“On a one-year comparative, which covered the Covid-related government lockdowns in the previous year, UK revenues were broadly stable, despite supply chain constraints and driver shortages.

“In Germany, on a comparable two-year period for the nine months to 31 December, revenues grew 67%.  On a one-year comparative in Germany for the same period, revenues declined 8%.”