Agile Resilient Stronger ASOS PLC Annual Report and Accounts 2020 About us Highlights REPORT STRATEGIC We are an online retailer for fashion-loving 20-somethings around Revenue the world. Our purpose is to give our customers the confidence 2019: £2,733.5m to be whoever they want to be. Through our market-leading 2018: £2,417.3m app and web experience, ASOS customers can shop a curated A statement from edit of c.85,000 products, sourced from 850+ of the best global our Chairman, £3,263.5m and local third-party brands, alongside our mix of fashion-led Adam Crozier in-house labels including ASOS DESIGN, ASOS EDITION, ASOS Page 4 4505 and Collusion. We aim to deliver a truly frictionless experience for our customers, with an ever-greater number of Diluted EPS1 payment methods and hundreds 2019: 29.4p of local delivery and returns 2018: 98.0p options, dispatched from state-of- 125.6p Cash the-art fulfilment centres in the generation2 UK, US and Germany. 2019: (£133.2m) 2018: (£117.6m) Gross margin £258.6m 2019: 48.8% 2018: 51.2% Page 24 47.4% Our performance The people by market behind the brand Contents Page 10 Strategic report Governance report Financial statements Profit 1 Highlights 36 Board of Directors 76 Independent Auditors’ Report to the Members 1 2 A truly global retail leader 39 Corporate Governance Report of ASOS Plc before tax 4 Chairman’s statement 45 Audit Committee Report 81 Consolidated Statement of Total Comprehensive Income 2019: £33.1m 6 Operational & financial review 49 Nomination Committee Report 82 Consolidated Statement of Changes in Equity 10 Performance by market 51 Directors’ Remuneration Report 1 2018: £102.0m 83 Consolidated Statement of Financial Position 12 Strengthened foundations for growth 71 Directors’ Report EBITDA margin 84 Consolidated Statement of Cash Flows 16 Key Performance Indicators 74 Statement of Directors’ Responsibility 2019: 3.9% 85 Notes to the Financial Statements 18 Looking to the future 111 Company Statement of Changes in Equity 2018: 6.5% 20 Our business model 112 Company Statement of Financial Position 22 Stakeholder engagement £142.1m 113 Company Statement of Cash Flows 24 The people behind the brand 114 Notes to the Company Financial Statements 26 Fashion with Integrity 8.2% 118 Five-Year Financial Summary (unaudited) 30 Managing risk at ASOS 120 Company information 32 Principal risks and opportunities 1 FY20 figures include the transition to IFRS 16 ‘Leases’ 2 FY20 figure is excluding the net equity raise proceeds of £239.4m ASOS PLC Annual Report and Accounts 2020 ASOS PLC Annual Report and Accounts 2020 1 A truly global REPORT STRATEGIC retail leader 85K+ From almost any country in the world, you can shop over products 85,000 products from ASOS’ own collections and other on site global brands. US UK million Retail Sales 23active customers Retail Sales Our mission is to be the world’s number one localised sites, in 10 languages and £401.9m fashion destination for fashion-loving 19 currencies. Our global network of £1,175.9m 20-somethings. We believe in a world fulfilment and returns centres use the latest +18% where you have the freedom to explore automation to improve availability and +18% and express yourself without judgement, no stock efficiency, while smart carrier software matter who you are or where you’re from. and best-in-class propositions make That is why our purpose is to give fashion- rapid and convenient deliveries and loving 20-somethings the confidence to be returns possible in more countries. whoever they want to be. We give our Berlin Euro Hub customers confidence by creating and – Fully automated curating products and experiences to inspire – Capacity to handle 20m units them. Our market-leading app and website now boast more localised and personalised shopping features than ever before, and customers can now shop on 12 fully Atlanta – 1m Sq Ft – 1.5m customer fulfilment capacity Barnsley EU – 1.5 orders placed per second Retail Sales £1,005.3m +22% New brands Pride with our fourth ASOS X GLAAD& drop and are proud to have given and collaborations 100% of the net profits of this rainbow Our brand offering is more desirable pastel collection to GLAAD (Gay and than ever, with ASOS seen as the Lesbian Alliance Against Defamation). RoW one-stop shop for fashion-loving We had stellar results from product 20-somethings. We added over 100 collaborations and style edits with Retail Sales brands to our offering during the year, carefully selected influencers throughout including fashion giant Topshop and the year. Highlights include a second £587.9m cult beauty labels Urban Decay and collection with Ovie Soko and edits Charlotte Tilbury. We captured attention with Delilah Bell and Emily Shak. +18% with sought after collaborations including Our influencer content garnered huge POLO Ralph Lauren X ASOS, a perfect engagement, with wide-reaching mix of classic heritage design and organic impressions and large uplifts on the associated product. c.850 throwback 90s style. We celebrated third-party brands Map key Fulfilment Centres Returns Centres 2 ASOS PLC Annual Report and Accounts 2020 ASOS PLC Annual Report and Accounts 2020 3 Chairman’s REPORT STRATEGIC statement To further protect ASOS, we also made It would also not have been possible without As we finish this period with a solid set of appropriate use of government support, the expert leadership and judgement shown results, I want to take this opportunity to thank including payment deferrals and job retention by our Executive team, who have been able you all for your unwavering resolve during Robust and resilient operations have enabled programmes. However, we did so with the to adapt at speed during this critical time. the most turbulent of times. The superb ASOS to successfully navigate an intention always to do the right thing and Their quick and commendable decision- response from everyone at ASOS, at every not take advantage of funding support which making has impressed me, and I am sure level, as well as all of our business partners, unprecedented year. we did not require. As a result, following they will emerge from this experience having has ensured that we have come through this our strong results in our P3 Trading Statement learned many valuable lessons for the future. stronger together. Your talent, passion and in July, we announced that we would be The past year has been one of significant enthusiasm is what drives our success. returning the funds received under the challenges, but we have emerged a better I would also like to express my regret that government’s furlough scheme and, later, business for it. With our internal capabilities we are unable to gather together for our the Bank of England’s Covid Corporate aligned to our global growth ambitions, we Annual General Meeting (AGM). As per Financing Facility. are ready for whatever the future may hold. government guidance on preventing the A tough but necessary Navigating our way through an spread of COVID-19, we will be holding Looking towards a sustainable transformation journey unprecedented year a closed meeting this year. Meeting future of continued growth face-to-face to discuss the Group’s annual Undoubtedly, our 2019 financial year was We started our 2020 financial year with performance and strategy is an important The organisation Across our markets, ASOS continues to be a challenging one for ASOS. As I wrote then, a strong first half performance, before part of the governance process, but has been able to adapt an important part of consumers’ lives. Our while we had made significant progress with the outbreak of COVID-19. Of course, protecting the health and safety of everyone longstanding commitment to our Fashion our transition to an expanded international the pandemic had significant repercussions, at speed and continue is paramount. We look forward to with Integrity programme, and to acting warehouse network, we had underestimated not just for ASOS, but for the entire world, welcoming you to the AGM in 2021. to focus on delivering as a responsible business, is at the heart the complexity of these changes, highlighting and for our customers, too. of everything we do. Purpose-led brands Until we meet again, look after yourselves where gaps in our experience and against the commitments Throughout the global pandemic, our first continue to trailblaze, so it is vital that moving and your families. capabilities existed within the business. priority was to protect the health, safety we made last year into 2021 we focus on operating in the right Coming out of that period we defined 2020 and wellbeing of our people. As we went into way. Even in these difficult times, we must as a pivotal year for ASOS. We entered it lockdown, we quickly redesigned how our never lose sight of the big picture. Alongside with the intention of using it both as a reset fulfilment centres operate, reducing their improving fiscal performance, we need to period for us to get back on track, and also We were able to make that decision because capacity and headcount to make them drive a transparent, responsible and inclusive as a priming phase for our next stage of of the strong financial results achieved by the COVID-secure and compliant with social approach to business to transform the impact growth, towards delivering world-class, lean business. In spite of the initial impact on sales distancing guidelines, and we moved all of of fashion on people, communities, animals and frictionless operations internationally. and customer demand caused by COVID-19, our office staff to working from home and the continued uncertain outlook into the and our shared planet.