AR 2022

For many years, grocery retail has been steadily migrating online. The COVID-19 pandemic accelerated the transition of grocery retail to online, with most markets stabilising at higher levels than before. This is expected to continue to rise.

Grocery is the largest retail market globally, representing a huge opportunity. As the only end-to-end solutions provider for online grocery fulfilment globally, Ocado is well positioned to seize this opportunity.

We have been growing and strengthening existing relationships and establishing new partnerships. In 2022 we signed Auchan Polska in Poland and Lotte Shopping in South Korea. A joint venture was formed with Groupe Casino to provide logistics services to other potential OSP partners in France.

2022 was the first year we launched more new sites for partners outside the UK than within, with 8 going live internationally: in Canada, Sweden, and 6 in the US.

All of the sites were delivered on time, and partners are reporting strong customer satisfaction in their respective markets. We ended the year with 6 partners live with our In-Store Fulfilment (ISF) solution, including Alcampo, which went live less than a year after signing.

Our partnerships have benefitted from a hands-on approach, allowing partners to absorb learnings into their operations.

12 of the world’s largest grocery retailers have already chosen OSP to deliver a market-leading shopping experience to their own customers. Online grocery shopping has stabilised at a higher level than before the pandemic, so our partners will need to move faster to meet their customers’ needs.

In January 2022, we showcased seven key developments representing the next leap in OSP technology at Ocado Re:Imagined. From the end of 2023, some of these technology innovations will be available for commercial rollout. Ocado Retail’s CFC in Luton, due to go live in 2023, is expected to be the first CFC with 600 Series Bots.

These breakthroughs will enable partners to offer their customers an even better online grocery proposition: greater choice, shorter lead times and better value.

Partners ordering a CFC for delivery from the second half of 2023 and onwards will have the new features enabled, while orders made prior to the Re:Imagined launch can be retrofitted to include many of the enhancements.

Re:Imagined technologies expand our opportunity in the wider automated storage and retrieval space (ASRS). Mark Richardson was announced as leading the effort to expand in sectors beyond grocery. This expansion to offer OSP outside of grocery requires no additional capital expenditure but brings additional room to grow.

We are leveraging our technological know-how to drive additional value to our own business, and that of our partners in grocery and beyond.

After a successful capital raise in June 2022, we have ample liquidity to support mid-term growth plans. No additional Group financing is expected as the business becomes cash-flow-positive (assuming refinancing of convertible bond due in 2025). The funding allows us to invest in new technology and continue developing solutions to ensure the Group’s reputation as a leader in the industry.

In 2022, we made £797m total capital investments, and we expect these to enable us to deliver against our strategy and drive significant future value for Ocado Group and our stakeholders.

We have mapped out our Scope 3 baselines across all 15 categories for the first time: this work was a critical undertaking to enable future delivery of our net zero commitments. Over the next year, we will be developing our Scope 3 information and reporting, sharing recommendations across the business and seeking improvements in key areas.

Each month our Environment, Social and Governance committee meets to provide governance over the delivery and further progression of the strategy.

Our stated ambition is to achieve net-zero emissions in our operations by 2035, and our value chain by 2040. Building on our long track record of reporting and improving our emissions intensity of Scope 1 and 2, our product development teams in Ocado have launched a piece of work to understand, calculate and make recommendations to reduce the embodied carbon content of our OSP platform.

Our people bring a diverse range of experience and expertise to Ocado and are essential for delivering our strategic objectives. It’s vital for Ocado’s continued success that we maintain an environment where people feel valued, motivated and able to thrive. We have continued investment in development to coach, support and engage our people.

Correction to 2022 Annual Report

*Correction to page 65 ("Key drivers of segmental performance"): Under the KPI section headed "UK Solutions and Logistics" with respect to the "Number of modules live" chart, the 2022 column shows the 2022 figure as 59 modules live.

This is incorrect and should be stated as 61 modules live for 2022. The 61 modules live are correctly referred to on page 75 of the report in the "Financial Review" section.

Following the correction, the "Number of modules live" chart on page 65 would appear as corrected below: