Ocado Group (0OC) Q2 2026 Earnings Report

The call presented strong operational momentum in core areas: international volumes (+27%), notable retail performance (Ocado Retail revenue +15%, EBITDA +119%), improving productivity (UPH +12%, deliveries/van +6%), accelerating AMR sales and a strengthened commercial pipeline (Asda, Lotte, Coles, strong partner growth in Spain, Japan, Poland). Management has executed a structured cost reduction program with ~£150m annualized savings targeted and retains healthy liquidity (>£1bn). Key challenges remain: modest group revenue growth (+1% excluding closures), underutilized partner capacity limiting near‑term revenue conversion, delays/closures at some CFCs (Kroger/Sobeys impacts), elevated gross debt (~£1.44bn) and notable interest costs. Management reiterated guidance, expects to turn cash flow positive in H2 and be cash flow positive for FY2027, and outlined a credible path to materially reduce gross debt. Overall, positive operational progress and a clear plan to address financial challenges, but near‑term risks and timing of fee recognition remain.

Management reaffirmed its financial guidance: Ocado expects to turn cash‑flow positive in H2 FY2026 and be cash‑flow positive for full‑year FY2027, supported by targeted annualised cost savings of ~£150m and a live‑modules base of 120–125 (c.£4m contribution/module). FY2027 targets include Technology Solutions revenue ≈£500m with ≥30% EBITDA margin, Ocado Logistics high mid‑single‑digit revenue growth with 30–35% EBITDA, an underlying cash‑flow outflow of c.£200m, CapEx ≈£250m, tech/support spend ~£250m (≈£150m below FY2025), net interest c.£70–100m p.a., liquidity >£1bn (cash ~£765m) and gross debt £1.438bn with a plan to reduce toward ~£700–800m within 12–18 months.