TIDMOCDO
RNS Number : 0719V
Ocado Group PLC
29 November 2019
This announcement contains inside information
29th November 2019
Ocado Group plc/Aeon
Announcement of partnership between Ocado Solutions and Aeon
We are pleased to announce the signing of an agreement between
Ocado Solutions ("Ocado") and Aeon to partner to develop Aeon's
online grocery business in Japan using the Ocado Smart Platform
("OSP").
Aeon is one of Japan's longest-established retailers with almost
a century of experience serving Japanese customers. It is also one
of Asia's largest retailers, with over 580,000 associates and
approximately 100m customers. Aeon operates over 21,000 stores
across various businesses, with operations in 14 countries.
Aeon will launch a new online business with OSP, harnessing
Ocado's unique, proprietary customer fulfilment centres ("CFCs")
and end-to-end software applications to serve millions of customers
across Japan.
The agreement plans for the development of a national fulfilment
network to serve the whole of the Japanese market, with expected
sales capacity of around 600bn JPY by 2030, growing to
approximately 1tn JPY by 2035.
Initial CFCs will serve the Kanto region, with the first planned
to go live in 2023, to be followed by further CFC capacity over the
following two years. By 2025, Aeon expects to have a sales capacity
in this region in excess of 200bn JPY.
Aeon is expected to commit to further CFC capacity in the period
following its first CFC going live. This capacity will be served
via a configuration of different sizes of facility, enabling Aeon
to serve a wide range of customer shopping missions flexibly as the
Japanese grocery ecommerce market continues to develop. In
addition, Aeon will leverage Ocado's proprietary store-pick
software within parts of their existing store network, and offer
click-and-collect from selected sites.
Ocado will also provide Aeon with its end-to-end software
platform as well as a comprehensive suite of engineering and
support services to ensure smooth launch and ongoing development of
its ecommerce operations.
Aeon will pay Ocado certain upfront fees upon signing and during
the development phase, then ongoing fees linked to both sales
achieved and installed capacity within each CFC and service
criteria.
This agreement is mutually exclusive in Japan on the basis of
Aeon, in the longer term, meeting market share targets or ordering
an agreed amount of CFC capacity per annum.
Motoya Okada, CEO of Aeon said:
"We see Ocado as a state-of-the-art, exciting and transformative
partner aligned with our strategy of accelerating Aeon's Digital
Shift to serve Japan's consumers.
We will be able to give consumers the convenience and more
importantly "time" to let them fulfil other more meaningful
aspirations.
We will forge stronger relationships with our customers by
offering a more personalized service driven by the capabilities of
the Ocado Smart Platform, coupled with Aeon's capabilities to
curate an exciting and compelling product mix centered around
serving the lifestyles of our consumers.
We will actively partner with Ocado to create a smooth, seamless
digital experience thereby speeding up our efforts to reform the
online customer experience"
Tim Steiner, CEO of Ocado Group said:
"I am delighted to welcome another extraordinary retailer, and
the first from Asia, to the unique international club of grocers
powering their ecommerce operations with Ocado. This partnership
marks a major milestone for the food retail landscape in Japan, and
I am excited that Ocado will play a key role in bringing ever
greater levels of convenience and choice to Aeon's customers."
Luke Jensen, CEO of Ocado Solutions, said:
"Japan is one of the most high tech economies in the world. It
is also a unique and exciting market for grocery ecommerce, with
sales primed for huge growth in the coming years."
"Aeon is a giant of Japanese retail with a long-standing
commitment to delivering outstanding grocery experiences to its
customers. I am delighted that they have chosen the Ocado Smart
Platform to build on this commitment, bringing cutting-edge
innovation and the learnings from a global network of world-class
retailers to their ecommerce operations."
Expected financial impact for Ocado
As Ocado continues to sign more partnerships worldwide, the
company remains resolutely focused on execution. Ocado will invest
in the Solutions business and expects to scale the resources and
infrastructure required to serve our current and future partners
successfully. Ocado expects an additional GBP25m of operating costs
in FY20, given the extra support costs for Solutions generally and
the specific early costs of implementation for Aeon.
The transaction will have no financial impact in the current
financial year, given that it comes right at year-end. Ocado expect
minimal additional capex in FY20 with the majority of additional
capex in the 18 months prior to the opening of CFCs.
There will be a conference call for analysts held at 7.30am
GMT.
Dial in details: +44 3333000804 (toll) or 08003589473 (toll
free) Pin Code: 47649537#
A replay will be made available shortly afterwards on the
website.
Contacts
OCADO
-- Tim Steiner, Chief Executive Officer - Ocado Group, on 01707 228 000
-- Luke Jensen, Chief Executive Officer - Ocado Solutions, on 01707 228 000
-- Duncan Tatton-Brown, Chief Financial Officer, on 01707 228 000
-- David Shriver, Director of Communications, on 01707 228 000
-- Martin Robinson, Tulchan Communications on 020 7353 4200
AEON
-- Motoya Okada, President and Group CEO, on +81-43-212-6061
-- Akio Yoshida, Executive Vice President and Representative
Executive Officer, Developer Business and Digital Business, on
+81-43-212-6061
-- Kaori Miyake, Executive Officer CSR & Communication, on +81-43-212-6061
-- Kikuko Fujita, General Manager Corporate Communications Department, on +81-43-212-6061
-- Sadayuki Kurimoto, Manager Public Relations Group Corporate
Communications Department, on +81-43-212-6061
Notes to editors
About Ocado
Ocado is a UK based company admitted to trading on the London
Stock Exchange (Ticker OCDO). It comprises one of the world's
largest dedicated online grocery retailers, operating its own
grocery and general merchandise retail businesses under Ocado.com
and other specialist shop banners, together with its Solutions
division. In February 2019, Ocado Group announced the creation of
an online grocery retail joint venture with Marks & Spencer
plc, one of the UK's leading food and clothing retailers.
About Ocado Solutions
Ocado Solutions is responsible for Ocado's corporate
partnerships, providing the Ocado Smart Platform as a service to
retailers around the world. 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. It is underpinned by
Ocado's proven expertise and experience as a dedicated online
grocer in the UK.
Ocado Solutions is partnered with leading grocery retailers
worldwide, including Kroger, Sobeys, Morrisons, Groupe Casino,
Coles Supermarkets, ICA Group, Bon Preu Group, and Ocado
Retail.
About Aeon
Aeon is the largest retail conglomerate in Japan and has earned
the highest operating revenue in Japan's retail industry for seven
consecutive years. Aeon operates in 14 different countries with
major activity in Japan across various businesses and services such
as hypermarkets, supermarkets, drugstores, and financial
services.
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
Cautionary statement
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
assumptions and are subject to a number of risks and uncertainties
that could cause actual events or results to differ materially from
any expected future events or results expressed or implied in these
forward-looking statements. Persons receiving this announcement
should not place undue reliance on forward-looking statements.
Unless otherwise required by applicable law, regulation or
accounting standard, Ocado does not undertake to update or revise
any forward-looking statements, whether as a result of new
information
This information is provided by RNS, the news service of the
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END
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