Ocado Group H1 Earnings Call Highlights

Ocado Group (LON:OCDO) told investors it remains on track to turn cash flow positive in the second half of fiscal 2026, as management pointed to stronger international order volumes, new commercial activity and cost reductions that are expected to show more fully later in the year.

Opening the company’s first-half results presentation, an Ocado executive said the group had completed “significant organizational changes” after the end of a large R investment cycle and that the company now has a “simpler, more efficient” structure. He also addressed recent succession planning announcements, saying Ocado had set out a clear plan and would not comment further during the results call.

Tim, who presented the strategic update, said international volumes grew 27% year over year on an underlying basis, excluding customer fulfillment centers closed by Kroger and Sobeys. He said that volume growth translated into 5% revenue growth for the international business, with revenue expected to accelerate as partners draw down more capacity from existing sites.

Ocado Highlights Growth Across Retail Partners

Tim said Ocado Smart Platform partners are seeing strong customer and operational performance in several markets. He cited Alcampo in Madrid, where the customer fulfillment center recorded 65% year-over-year growth and a 97% perfect order rate. He also said Auchan Poland reported 21% growth across its network, with higher growth in Warsaw following the launch of an automated CFC near the city.

In Japan, Aeon delivered growth of around 70% year over year, while Coles in Australia continued to post strong growth in Sydney and Melbourne, according to Tim. He said Coles had also begun rolling out same-day orders from its automated sites using Ocado Swift Router.

Ocado Retail, the joint venture with Marks Spencer, remained a key proof point for the platform. Tim said Ocado Retail revenue rose 15% in the first half, driven by a 13% increase in orders and an 11% increase in active customers. Average basket value increased 1.9%, while average selling prices rose 2%, below U.K. grocery inflation of 3.9%.

Ocado Retail’s EBITDA increased to £73 million from £33 million, and adjusted EBT was positive at £12 million. Tim said the business now has 1.28 million active customers and that its customer fulfillment centers were operating at 103% of original design capacity in the first half.

Asda, Lotte and Platform Flexibility Take Focus

Management highlighted Ocado’s newly announced partnership with Asda as an example of the platform’s expanded flexibility. Tim said the company expects to support Asda across lead times from immediacy to next-day delivery, including orders through Asda’s own website and aggregator platforms such as Deliveroo, Uber Eats and Just Eat Takeaway.

Tim also said Ocado is preparing to go live with its first CFC in Korea for Lotte. The site will include Ocado’s proprietary Auto Freezer solution and multi-temperature totes. The Korea rollout will also introduce dawn delivery, which Tim said accounts for more than 50% of the delivery market in the country.

Commercial Pipeline Broadens as U.S. Exclusivity Ends

Nick de la Vega, Ocado’s Chief Revenue Officer, said the company has sharpened its commercial focus by consolidating teams, doubling down on grocery and increasing focus on the U.S. after exclusivity ended in that market. He said the U.S. online grocery market was about £160 billion in 2025 and could reach roughly £255 billion by 2030 under a conservative 8% growth assumption.

De la Vega said Ocado’s pipeline has “significantly transformed” across CFCs, store-based automation, end-to-end software and autonomous mobile robots. He said Ocado signed Asda in the first half and also signed a U.S. customer described as a global logistics organization that will use one of the Kroger warehouses that was shut down.

He also pointed to momentum in Ocado’s autonomous mobile robot business. De la Vega said Ocado sold more of its Chuck AMR product in the first six months of this year than it did in all of 2025. The company’s Porter autonomous pallet-moving robot is expected to become generally available within weeks, he said.

Store-based automation was a major theme of the call. De la Vega said Ocado commissioned a major consulting firm to challenge its assumptions about the U.S. opportunity. The study found that more than 8,400 U.S. stores could reach or exceed maximum capacity for servicing online demand by 2030, according to his remarks.

In response to analyst questions, Tim said Ocado does not yet have a full store-based automation pilot live, but has early prototype sites, test facilities in the U.K. and a demonstration site in Dallas. He said Ocado is looking to get a pilot site live within the next 12 months and hopes to pursue several pilots globally.

Financials: EBITDA Down, Liquidity Above £1 Billion

Stephen, who presented the financial results, said group revenue excluding Kroger and Sobeys closure fee receipts rose 1%. Technology Solutions revenue grew 5% on a like-for-like basis, while Logistics revenue increased 8%.

Group adjusted EBITDA was £81 million, down £11 million from the prior year. Stephen said the figure was affected by the timing of site closures and that recent cost reductions were implemented mainly in April and May, limiting their first-half impact. He said Ocado expects about £150 million of annualized savings to be realized more materially in the second half.

Ocado reported liquidity of just over £1 billion, including more than £700 million in cash and a £300 million undrawn but accessible revolving credit facility. Reported cash flow was positive £25 million, helped by £260 million of net closure receipts from Kroger and Sobeys. Underlying cash flow was an outflow of £147 million.

Stephen said Ocado paid down £55 million of gross debt in the first half and had gross debt of £1.438 billion at the period end. He said the company has an opportunity to reduce gross debt to about £700 million to £800 million over the next 12 to 18 months, depending on liquidity decisions and future cash generation.

Guidance Reaffirmed; CFC Delays Addressed

Stephen said guidance was unchanged, including Technology Solutions revenue of around £500 million and an EBITDA margin of at least 30%, Ocado Logistics revenue growth in the high mid-single digits, underlying cash outflow of around £200 million and capital expenditure of about £250 million.

During Q, Tim addressed delays in certain CFC openings. He said the first Korean site in Busan is opening imminently, while the Seoul site is expected to take longer as the partner reviews results from Busan. In Japan, he said the timing of a third Tokyo-area site had shifted because the first two sites serve contiguous geography and can be utilized further before opening another facility.

Asked about Kroger’s Phoenix site, Tim said Ocado expects it to open, though some work related to Auto Freezer permitting remains. He said that if Kroger ultimately chose not to open it, Ocado would expect a formulaic compensation outcome similar to prior site closures. Tim also described the relationship with Kroger as “very good.”

About Ocado Group (LON:OCDO)

Ocado Group is a UK based technology company that provides end-to-end online grocery fulfilment solutions, known as the Ocado Smart Platform, to some of the world's largest grocery retailers and holds a 50% share of Ocado Retail Ltd in the UK in a Joint Venture with Marks Spencer. OSP comprises access to Ocado's physical infrastructure solutions, running highly efficient warehouse operations for the single pick of products, together with the entire end-to-end proprietary software applications required to operate a world class online grocery business.

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