#1© 2023 asos 1 H1 FY23 Results 10th May 2023 asos Adı#2© 2023 asos Agenda H1 FY23 Results Overview CEO Update H1 FY23 Financial Results Outlook MOKK DR 2 asos#3© 2023 asos Executing on Driving change agenda, creating strong foundations for sustainable profit and cash generation H1 FY23 Operational excellence New Commercial model Robust Balance sheet Leadership & culture Driving Change Sales declined 7% ¹ reflecting a challenging backdrop and planned profitability initiatives. Adjusted EBIT of (£69.4)m reflecting phasing of headwinds and benefits across FY23. On track to deliver over £300m benefits, with over £100m delivered in H1 and more than 95% of H2 balance flowing from actions already taken. Stock reduction ahead of plan (down 9% vs FY22 year end), with plan to reduce stock c.20% YoY by year end. Gross margin exit rate up over 300bps YoY. Cash headroom of over £400m at H1 FY23. In May, amended and extended £350m RCF facility through to November 2024. Simplified decision-making processes, promoted culture of innovation, and reinforced the senior leadership team with strategic key hires. Remain focused on executing the final stages of Driving Change agenda, creating strong foundations for next phase of growth. ¹Total sales growth based on constant currency sales growth and excludes Russian sales in H1 FY22 All sources: ASOS internal operational records 3 asos#4© 2023 asos Agenda H1 FY23 Results Overview CEO Update H1 FY23 Financial Results Outlook asos#5© 2023 asos The Driving Change agenda underpins ASOS' journey to sustainable profit and cash generation $3 Renewed commercial model €112 TOMA WORLDWIDE LED Stronger order economics and lighter cost profile Robust and flexible balance sheet INS TOMMY JEANS 5 14 Refreshed leadership team & culture asos#6© 2023 asos 01. Renewed commercial model Accelerated change in buying and merchandising resulting in a more curated customer offer and more efficient stock management Opportunity Improved Fashionability and flexibility of range More efficient stock management 1 Immediate focus Embed new organisation focused on relevance and flexibility New business models to enable flexibility (Partner Fulfils, Fulfilled by ASOS, Test & React) New buying processes with reinforced controls Increase visibility of full-price product on site Customer engagement focused on relevance and story telling Increased stock management discipline Faster routes to clear with more channels to clear stock and improved profitability and speed Right-sizing our stock portfolio in H1 resulting in a non-cash write off of £100m-£130m Reduce costs and complexity in our logistics network ↑ Outcome Gross margin Working capital Time to market Stock turn Working capital Logistic costs 6 asos#7© 2023 asos 01. Renewed commercial model Accelerated change in buying and merchandising resulting in a more curated customer offer and more efficient stock management Opportunity Improved Fashionability and flexibility of range More efficient stock management ¹Adjusted gross margin in H1 FY23 of 42.9%, vs. H1 FY22 43.1% All sources: ASOS internal operational records What we've achieved Maintained gross margin¹ in the face of headwinds Progress on stock (-9% vs plan of -5% on FY22) Extracted c.90% of stock identified for write off Central merchandise planning team created Decisive action taken to lower SS23 and AW24 intake 7#8© 2023 asos 01. Renewed commercial model Structured approach to reducing stock with stock turn returning to pre-pandemic levels by FY24 Stock Balance & Stock Turnover¹ Stock turnover Stock balance (£'m) ● FY20 FY21 Pandemic, Supply chain disruption and old commercial model Historical lack of discipline on clearance Volatile demand, global supply chain issues Stock build ahead of expected sales growth FY22 ¹Stock balance as per reported financial statements. Stock turnover based on stock balance and forward-looking COGS All sources: ASOS internal operational records ● ● ● FY23 FY24 Not to scale, illustrative purposes only Driving Change Stock write-off New commercial model Reduced option width for SS23 New Model Restored width and optimised volume for AW23 and beyond Stock turn restored by FY24 8 asos#92023 asos 01. Renewed commercial model ASOS is trialling new initiatives to increase long-term flexibility in the assortment UK pilot across selected product categories to pressure test ASOS processes 'React' cycles in progress: success will be measured by rate of sell through Own brand: Test & React Success on 'Test' cycle: product to site in c.2 weeks Small initial purchase + product refinement based on customer reaction + replenishment based on demand Benefits include: First to market on new trends 2⁰ 'React' not 'repeat': differentiated product based on learning turnover and product into markdown Potential to roll out across categories / geographies based on initial learnings 9 asos#102023 asos 01. Renewed commercial model ASOS is trialling new initiatives to increase long-term flexibility in the assortment Partner brands: Partner Fulfils Product available on ASOS platform but fulfilled directly by partner brands Benefits include: uwu Increased width / depth without inventory risk 8 Additional flexibility in longer lead categories (e.g. sportswear) Tech development to enable easier integration for new brands and better partner experience From 2 brands in the UK at launch in FY22 to 24 brands in the UK and EU today All sources: ASOS internal operational records For one key sportswear brand, Partner Fufils sales accounting for c.20% of sales mix in countries where we are live THE NORTH FACE 10 asos#11© 2023 asos 02. Stronger order economics and lighter cost profile Mitigate the impact of inflation and improve profitability |-0- Opportunity Improved order economics, especially outside key strategic markets Optimise our cost base ■ I I ● Revisit our positioning outside key strategic markets Optimise prices and service levels Revisit price of our delivery services Reduce split deliveries Optimise our logistics costs Consolidation of warehouses ● Immediate focus ● Increase of operational efficiency Reduction of our overhead costs ● Simplification of processes and organisation Optimisation of promotional spend • Reduction of external spend Rationalisation of assortment Improvement of freight costs ● Outcome ◆ Margin per order ↑ Split shipments Logistics cost/order Overhead costs Intake margin 11 asos#12© 2023 asos 02. Stronger order economics and lighter cost profile Mitigate the impact of inflation and improve profitability |-0- Opportunity Improved order economics, especially outside key strategic markets Optimise our cost base All sources: ASOS internal operational records What we've achieved Over £100m of Driving Change benefits already realised Significant improvement in country-level profitability Discipline on marketing spend to drive ROI 12#13© 2023 asos 02. Stronger order economics and lighter cost profile Through Driving Change actions we have realised more than £100m of benefits in H1 split between four main categories Workstreams include... Buying Optimisation Examples include: Reduction in duty and reprocessing costs Product specific actions to improve profitability, e.g. on bridalwear Supply Chain ● Examples include: Winding down of ancillary storage Reduced fulfilment from Lichfield Streamlining UK returns All sources: ASOS internal operational records Pricing and Proposition Examples include: Changes to price and delivery proposition by country Dynamic pricing based on demand Other Examples include: Reduction of overheads Optimisation of marketing spend Consolidation of tech contracts 13 asos#14© 2023 asoS 02. Stronger order economics and lighter cost profile Profit optimisation measures have been taken to address unprofitable brands, geographies and customer behaviours From Oct 2022 From Nov 2022 From Mar 2023 Brand Target Country Customer All sources: ASOS internal operational records Example: ● ● Poland: ● Example ● Strategic partner with multiple brands Loss-making in FY22 Top 20 by sales Loss-making in FY22 • 6% customers Loss of c.£6 per order • Markdown focused, high returns, frequent orders ● ● ● Solution Removed promo on best performers Reduced markdown in red pen events Capped discount depth Standard delivery charge reduced / no free delivery Pricing changes Reduced markdown and marketing Disincentivise negative behaviours Personalise approach by cohort ● ● Outcome c.9m units sold in H1, +c.10% YoY Swing to positive contribution Swing to positive contribution Early stage 14 asos#15© 2023 asos 03. Robust and flexible balance sheet Enhanced flexibility to support agenda for change @ Opportunity Significantly enhanced financial flexibility Create more flexible and prioritised allocation of capex ■ ■ Immediate focus Proactively renegotiated the RCF and waiver of banking covenants Cash and undrawn facilities of over £650m at FY22 year end Reduced logistics capex and investment focused on priority digital initiatives Planned strategic investment in technology will be maintained in support of an improved customer experience, better data management and some critical priority initiatives such as Partner Fulfils ◆ Outcome Operational flexibility Capex 15 asos#16© 2023 asos 03. Robust and flexible balance sheet Enhanced flexibility to support agenda for change Opportunity Significantly enhanced financial flexibility Create more flexible and prioritised allocation of capex What we've achieved Amended and extended £350m RCF facility through to November 2024 Robust balance sheet with cash and headroom of >£400m at 28 February 2023 Capex scaled back in H2 capex via deferral of automation projects Investment re-prioritised to support innovation in key initiatives 16#172023 asos 03. Robust and flexible balance sheet Investment re-prioritised to support innovation in key initiatives Project Al-based pricing elasticity tool to optimise markdown approach "ASOS Drops" functionality Further development of Partner Fulfils Flowline forecasting for ASOS Design products Further development of personalisation functionality ↑ ↑ ↑↑ Result Reduced markdown depth for top 40 brands over peak Limited drops to give customers a fairer chance to access in-demand product Infrastructure to add additional partners with a more efficient onboarding process Improvement of out of stock rate Personalising view of recently stocked products and increasing exposure to wider product range asos drops THE place to get Air Jordan 1 Retro High OGS ENTER THE PRIZE DRAW UK arly Entry open 12/04/23 10:00 OM-13/04/2300 GMT mupport to purchneipar of Jonda A1Retre High00 entryper presc 17 asos#18© 2023 asos 04. Refresh leadership team and culture Focus the organisation on operations, simplify decision making and embed a high performance culture Opportunity Organisation focused on operations and commercial delivery Ensure the best internal and external talent Cultural refresh New structure focused on Operations and speed to market Simplified decision making (fewer layers) ■ Breaking down silos ■ ■ Ensure development of internal talent Attraction of capabilities we are missing Ensure diversity (including international talent) ■ Immediate focus ■ Simplicity and transparency ■ Ownership and entrepreneurial culture Excellence and innovation I Outcome Truly customer- focused organisation Speed and flexibility High performance culture 18 asos#19© 2023 asos 04. Refresh leadership team and culture Focus the organisation on operations, simplify decision making and embed a high performance culture Opportunity Organisation focused on operations and commercial delivery Ensure the best internal and external talent Cultural refresh What we've achieved New Management Committee operational Internal talent complemented by external hires Flatter structures enabling quicker decision-making Commitment to innovation and creativity ARC 19#20© 2023 asos 04. Refresh leadership team and culture The ASOS Management Committee blends best-in-class external hires with home-grown talent CEO José Antonio Ramos Calamonte Management Committee Senior Customer Director Dan Elton Chief People Officer Caroline Ross Interim General Counsel and Company Secretary Emma Whyte Technical Adviser to CEO & Senior Director of Operations Sean Trend Chief Financial Officer Sean Glithero Interim Senior Creative Director Vanessa Spence Senior Director of Strategy & Corporate Development Michelle Wilson Senior Global Logistics, Supply Chain & Customer Care Director Christoph Stark Chief Technology Officer Cliff Cohen Senior Global Commerce & Channels Director Fiona Gaughan Director of Corporate Transformation Jag Weatherley Senior Product Director Supported by WW, MW and Partner Brands Directors in the interim 20 asos#21© 2023 asos Agenda H1 FY23 Results Overview CEO Update H1 FY23 Financial Results Outlook 21 asos#22© 2023 asos Financial performance reflects focus on profit over top-line growth in a challenging trading environment Trading environment Online penetration declined YoY but remains notably higher than pre-pandemic¹ UK Online penetration 24 w/e 08 Mar 20 (c.100bps) 24 w/e 06 Mar 22 24 w/e 05 Mar 23 c.20% of 16-35 year old UK shoppers "financially struggling"2 UK market position maintained with growing share in UK 16-35 year old online market³ Driving Change actions ■ Profitability actions by geography, brand and customer cohort Reduced investment in markdown in P2 ■ Right-sizing of stock reducing options short-term Discipline on marketing spend ¹ASOS calculation of online penetration being online spend / spend in total market (store and online) from Kantar Worldpanel | GB Fashion Panel | Total clothing, footwear & accessories | Online | 24 w/e 3rd March 2023 vs. LY and LY-2 2 Kantar Worldpanel | GB Fashion Panel | Total clothing, footwear & accessories | Online | 24 w/e 5th Feb 2023 vs. LY 3 Kantar Total Market | Total Clothing, Footwear and Accessories | Top Retailers | Total, Online | 24 w/e 5th March 2023 vs. LY 22 asos#23© 2023 asos H1 FY23 Headline Results TOTAL SALES' (£'m) 2,004.1 H1 FY22 (7%) 1,840.6 14.8 ⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀ H1 FY23 ADJUSTED PBT (£'m) (102.2) (87.4) H1 FY23 ADJUSTED GROSS MARGIN (%) (20bps) 43.1% H1 FY22 86.5 CAPEX5 (£'m) H1 FY22 42.9% H1 FY23 33% 115.0 H1 FY23 ADJUSTED EBIT MARGIN (%) (510bps) 1.3% H1 FY22 FREE CASH OUTFLOW (£'m) (256.5) H1 FY22 H1 FY22 ¹Total sales growth based on constant currency sales growth and excludes Russian sales in H1 FY22 2 Excluding adjusting items totalling £124.6m in H1 FY23 (H1 FY22: £nil. Please see RNS for full breakdown 3 Excluding adjusting items totalling £203.1m in H1 FY23 (H1 FY22: £30.6m). Please see RNS for full breakdown 4 Excluding adjusting items totalling £203.5m in H1 FY23 (H1 FY22: £30.6m). Please see RNS for full breakdown 5 Capex reflects cash capex and excludes any fixed asset additions in relation to the right use of assets as part of IFRS 16 6Free cash flow is calculated by adding net cash used in operating activities, cash used in investing activities and cash generated from financing activities and excluding RCF drawdown All sources: ASOS internal operational records (3.8%) H1 FY23 (6.2) (262.7) H1 FY23 23 asos#24© 2023 asos Focus on profitability is delivering improved order economics and increased customer share of wallet at the expense of growth Group KPIs ABV CC² Visits Average Order Frequency³ Active Customers4 Premier Customer growth Conversion5 Adjusted gross profit per order +6% H1 FY23¹ £39.86 1,384.6m 3.7 24.9m 3.1% Change vs LY +5% (5%) (1%) (2%) (7%) (20bps) ABV growth due to higher ASP resulting from pricing and discipline in markdown ASOS UK Shoppers Share of Wallet6 +0.5% 28.1% 24 wks ended 6 Mar 2022 28.6% 24 wks ended 5 Mar 2023 Reduction in customers due to profit actions and post-pandemic churn Market Share (UK 16-35 year olds) +2.5% 5.9% 3.7% 6.2% 24 wks ended 24 wks ended 6 24 wks ended Mar 2022 8 Mar 2020 5 Mar 2023 24 Improving customer loyalty evidenced by 50bps increase in share of wallet 6 1 Group KPIs are on an ex-Russia basis in H1 FY22. 2 ABV quoted on a constant currency basis excluding Russia. 3 Calculated as last 12 months' total orders divided by active customers. 4 Active customers defined as having shopped in the last 12 months as at 28 February 5Calculated as total shipped orders divided by total visits Kantar ASOS Shoppers | Online | Spend % 124 w/e 5th March 2023 vs LY. 7 Kantar Total Market | Total Clothing, Footwear and Accessories | 16-35 year olds | Market Shares | 24 w/e 5th March 2023 vs LY and LY-2. All sources: ASOS internal operational records asos#25© 2023 asos Key financials by segment Sales impacted by weak consumer sentiment, with online penetration back YoY, and trading volatile UK Total sales CC² Visits Conversion³ CC ABV4 Active Customers5 Premier Customer growth EU UK (10%) (8%) (30bps) +4% Flat sales despite macroeconomic (13%) backdrop and profitability measures taken in the region 8.6m (-2%) EU Flat Flat (10bps) +6% US 10.6m (+1%) +13% Sales impacted by lower markdown and reduced marketing spend in a period of weak consumer sentiment 2Segmental sales based on total sales, which includes retail sales and income from other services, and growth rates calculated on a constant currency basis 3Calculated as total shipped orders divided by total visits 4ABV CC metrics is calculated as net retail sales/number of orders in the period on a constant currency basis 5Active customers defined as having shopped in the last 12 months as at 28 February All sources: ASOS internal operational records US (7%) (1%) (20bps) +6% 3.2m (-9%) (6%) ROW Substantial changes from the country profitability review undertaken in P1 and sharp reduction in marketing spend RoW¹ (12%) (18%) (10bps) +11% 2.5m (-7%) +78% 1 Calculation of metrics, or movements in metrics, on an ex-Russia basis involves the removal of Russia from H1 FY22 performance. This adjustment allows YoY comparisons to be made on a like-for-like basis following the decision to suspend trade in Russia on 2 March 2022. The exception to this is visits, where ASOS have also excluded any visits from Russia in H1 FY23, in addition to H1 FY22 25 asos#26© 2023 asos On an adjusted basis, gross margin was broadly flat versus both H1 FY22 and P1 FY23 in the face of significant headwinds 43.1% H1 FY22 ¹ASOS internal operational records H1 FY23 Adjusted Gross Margin Bridge¹ Freight (20bps) Trade Other 42.9% H1 FY23 000000 O Adjusted Gross Margin impacts Initial benefits from improved freight prices and reduction in air freight Adversity from trading activity including input cost inflation, partially offset by benefits from pricing Recent gross margin run rate up more than 300bps YoY driven by actions taken in the period combined with improving freight & duty rates 26 asos#27© 2023 asos Phasing of Driving Change benefits and headwinds resulted in an adjusted EBIT loss in H1 FY23 £26m H1 FY22 H1 FY23 Adjusted EBIT Bridge vs H1 FY22 (£'m)¹ Volume >£180m D&A Headwinds Freight & duty >£100m (£69m) Driving H1 FY23 Change agenda ¹Excluding adjusting items totalling £203.1m in H1 FY23 (H1 FY22: £30.6m). Please see RNS for full breakdown ASOS internal operational records Headwinds X Headwinds and mitigating Driving Change agenda initiatives X Inflation across all cost lines - average of mid-single digit on total cost base Return rate normalisation annualising in May 2023 Supply chain inefficiencies from overstocking at beginning of the year - UK LCPU +16% Annualisation of incremental costs in FY22 Driving Change agenda Profit optimisation and cost saving measures across 78 workstreams H1 initiatives include supply chain cost savings (c.£27m), overhead savings (c.£12m) and marketing (c.£6m) 27 asos#282023 asos Warehouse and other costs reflecting the majority of headwinds Adjusted Gross Margin¹ Distribution Costs Warehouse Marketing Other Costs Depreciation and Amortisation Other Income Adjusted EBIT Margin² H1 FY23 % of sales 42.9% (12.5%) (12.4%) (6.0%) (11.9%) (4.0%) 0.1% (3.8%) Change vs H1 FY22 (20bps) 30bps (210bps) Flat (260bps) (60bps) 10bps (510bps) ¹Excluding adjusting items totalling £124.6m in H1 FY23 (H1 FY22: £nil). Please see RNS for full breakdown. 2Excluding adjusting items totalling £203.1m. Please see RNS for full breakdown. Note: Above table subject to rounding. All sources: ASOS internal operational records Key Drivers ● ● ● Impact of Driving Change initiatives more than offsetting increased fuel surcharges Headwinds of labour, consumables & utilities inflation and return rate normalisation partially offset by Driving Change initiatives Investment optimised in light of economic conditions and focus on profitable growth Wage and other overhead inflation, contractual increases and annualisation of headcount build in H2 FY22 28 asos#29© 2023 asos Free cash outflow derived from reported EBIT loss and H1-weighted capex HEALTH 60126 UNIT ¹ASOS internal operational records 2Other is mainly driven by non cash impairments 2FCF outflow is excluding RCF drawdown of £250m H1 FY23 Free Cashflow Bridge (£'m)¹ HY23 HY23 Adjusted Adjusting Reported EBIT items EBIT (£69m) D&A (£203m) (£273m) £83m Working Capital Tax (£13m) £24m Capex Other 2 (£115m) £31m HY23 Reported FCF 3 (£263m) 29 asos#30© 2023 asos Agenda H1 FY23 Results Overview CEO Update H1 FY23 Financial Results Outlook 43 30 asos#31© 2023 asos Return to profit in H2 FY23 with headwinds abating and over 95% of Driving Change benefits from initiatives already in place H2 FY23 Adjusted EBIT Bridge vs H2 FY22 (£'m)¹ H2 FY22 Headwinds Starting to ease: ● Volume ● ● >£100m ¹ASOS internal operational records Headwinds Freight & duty c.£200m Driving Change Agenda Mid-single digit inflation Return rate annualising in May 2023 Improved efficiency from reduced inventory H2 FY23 H2 Driving Change agenda <5% Not yet implemented Driving Change agenda >95% Implemented More than 95% of c.£200m H2 profit optimisation and cost benefits based on initiatives already in place For example: supply chain initiatives all implemented and set to drive >£35m in H2 FY23 (c.£27m in H1 FY23) 31 asos#32© 2023 asos Current trading & H2 outlook Current trading: P2 sales momentum broadly continued into March and April (-15% CCY ex Russia) with approx. half of the sales decline driven by planned profitability measures. Gross margin run rate remains up over 300bps YoY. ● ● H2 guidance: Sales (CCY ex Russia) decline of low double digit YoY Adjusted gross margin improvement of c.200bps YoY expected in H2 FY23, inventory reduction of c.20% YoY at FY23 year end ● ● ● ● ● ● ● Adjusted EBIT of £40-£60m (c.3% adjusted EBIT margin) Free cash inflow of over £150m (excluding all incremental refinancing costs), which equates to >£125m free cash inflow including refinancing costs ● Interest expense of c.£30m, including amortisation of arrangement fees and related costs Capex of £60-85m (in-line with FY23 guidance of £175-200m) EBIT impact of adjusting items in the range of £25m-£30m in, of which £15m is non-cash (mostly relating to the Driving Change agenda). Full year guidance: FY23, free cash outflow (prior to incremental refinancing costs) will be around £100m (i.e. around the bottom end of the £0 to £100m outflow guidance provided at FY22 ¹Total sales growth based on constant currency sales growth and excludes Russian sales in H1 FY22 All sources: ASOS internal operational records 32 asos#33© 2023 asos Action taken over the last six months lays strong foundations for sustainable profitability and cashflow in H2 and beyond Good progress in the rollout of new commercial model Profit optimisation and cost initiatives on track Refinanced to deliver robust and flexible balance sheet Refreshed leadership team, simplified structure and focus on innovation 33 asos#34| © 2023 asos Q & A 34 asos#351 1 © 2023 asos 1 Ľ#36© 2023 asos EBIT adjusting items for H1 totalled £203.1m, with a cash impact of £23m. Adjusting items for H2 guided to be in the range of £25-£30m Stock write off Property impairments Other strategic initiatives of Driving Change agenda H1 23 (£'m) EBIT impact One-off non-cash impairment charge to write down assets for sites vacated 128.2 49.4 10.6 Topshop brands amortisation Non-underlying sales tax Total of Adjusting Items Cash impact of Adjusting Items Property impairments A number of Group-occupied sites were vacated in H1, including office and warehouse space, resulting in: 5.1 9.8 203.1 23.0 Accelerated depreciation charge on sites to be vacated in H2 H2 23 expected EBIT impact (£'m) c.3 5-10 c.12 c.5 25-30 10-15 Exit provisions relating to onerous contract costs on leased sites identified for closure A 28 36 P asos