ASOS : Annual Report and Accounts 2024

ASOS Plc Annual Report and Accounts 2024

STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS

Our mission is to be the world's number one fashion destination for fashion-loving 20-somethings.

Our values

Our behaviours

We are customer-first

Authentic	We are in it together
We are honest and transparent
	We bring our authentic self
	to work
Brave	We challenge each other
(with kindness)
	We aim high
Creative	We inspire
We move fast and innovate
	at speed
Deliver	We keep it simple and lead
with data
	We take ownership and aim
	for excellence

02	ASOS PLC  ANNUAL REPORT AND ACCOUNTS 2024

We believe in a world where you have the freedom to explore and express yourself without judgement, no matter who you are or where you're from. That is why our purpose is to give fashion-loving 20-somethings the confidence to be whoever they want to be.

STRATEGIC REPORT

1. Our mission, values and behaviours
2. Contents
3. ASOS brands and labels

1. Partner brands

1. 2024 highlights
2. Chair's statement
3. Chief Executive Officer's statement

1. Business model

1. Strategic review

1. Our people

1. Stakeholder engagement

1. Fashion with Integrity

1. Task Force on Climate-related Financial Disclosures

1. Streamlined Energy & Carbon Reporting

1. Key performance indicators

1. Financial review

1. Risk management at ASOS

1. Principal risks and opportunities

1. Long-termviability statement

GOVERNANCE REPORT

72 Board of Directors

76 Management Committee

1. Corporate Governance Report

1. Nomination Committee Report

1. Sustainability Committee Report

1. Audit Committee Report

1. Directors' Remuneration Report

1. Annual Report on Remuneration

1. Directors' Report

1. Non-financialand sustainability information statement
2. Statement of Directors' responsibilities

FINANCIAL STATEMENTS

122 Independent Auditors' Report to the members of ASOS Plc

1. Consolidated Income Statement
2. Consolidated Statement of Comprehensive Income
3. Consolidated Balance Sheet
4. Consolidated Statement of Changes in Equity
5. Consolidated Cash Flow Statement
6. Notes to the Consolidated Financial Statements

1. Company Balance Sheet
2. Company Statement of Changes in Equity
3. Notes to the Company Financial Statements

1. Related Undertakings of the ASOS Group

1. Alternative Performance Measures (APMs)

1. Company Information
2. Shareholder Information

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STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS

ASOS brands and labels

Our largest in-house brand, designed and sold exclusively for ASOS.com. Serving up all the major trends of the season for our fashion-loving 20-somethings, this is the go-to destination for your fashion fix. We create trends, head to toe looks and the ultimate pieces for your wardrobe.

Asos Luxe is serving elevated glam looks for those "standout" moments. Whether it's a birthday outfit or a poolside look - ASOS Luxe is the

go-to brand for making a showstopping entrance.

As our in-house premium brand, we create timeless essentials and unique occasion pieces with a feminine slant. From the perfect white tee to floor-sweeping showstoppers, everything is designed, draped and pattern cut in-house. Elevated but accessible too, in sizes 4-30. It's all in the detail. Bold embellishments, hand-painted prints, clean lines, premium fabrics. Craftsmanship and considered design run through every piece.

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4505 is our in-house activewear brand that covers your everyday uniform of workout essentials across studio, gym, run and winter sports. Inspired by the latest workout trends and culture, our fashion forward active product is designed for functionality, performance, and versatility - it's everything you need to keep you motivated, looking great, and feeling great on your wellness and fitness journey.

Miss Selfridge is about embracing your vibe with effortless feminine dreamy casual silhouettes, designed for a new generation. Soft girl meets blends of heritage boho with a fresh girl next door aesthetic. We take the latest trends and make them fun, wearable and a representation of you.

A brand for the coming of age, created for a new generation, pioneered for everyone. Collusion is diverse, authentic, fashion creditable and is competitively priced, delivering good quality. At the heart of the brand is inclusivity.

Weekend Collective is the brand that	Throwing it back to past eras, inspired
personifies off-duty glam leisurewear.	by nostalgia, encouraging individualism
Our range of quality everyday	and creativity. Each piece is created
essentials are perfect for the "it"	to be loved, worn and worn again, filling
girl of today, focusing on signature	your wardrobe with eclectic favourites
logo branded pieces.	and forever pieces.

Leading fashion authority. Iconic brands deeply rooted in fashion and culture alike. The creative direction ensures the brand heritage is cherished and evolved into the new era, remaining relevant to our customers.

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STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS

Partner brands

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Face + Body

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STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS

2024 highlights

Revenue	2023: £3.5bn

£2.9bn

Adjusted EBITDA1

2023: £124.5m

£80.1m

Operating (loss)	2023: (£248.5m)

(£331.9m)

Reaching our community of fashion lovers

We invested in impactful marketing activity including our first-ever ASOS pop-up shop, as well as brand partner and ASOS Media Group initiatives with the likes of adidas, Nike, On Running, and Sol de Janeiro.

Plus, we've grown our gifted influencer base to c.1,500 influencers across the UK, US and EU - all helping us grow our connection with our customers.

Delivering the best product

Our Test & React programme, which brings product from design to site in less than three weeks, met its FY24 target with over 10% of own-brand sales. We introduced over

50 new partner brands including customer favourites like Veja, TALA, Hugo Blue, Murci, and Laneige. Plus, we've expanded Partner Fulfils to reach c.5% of Gross Merchandise Value across c.100 brands, bringing customers even greater breadth and depth of products, fulfilled directly by our brand partners.

Active customers

19.6m

2023: 23.3m

Total orders

67.2m

2023: 83.7m

Building a destination for style

We launched our new Buy the Look feature, allowing customers to shop for entire outfits curated by ASOS in one click. Over 124,000 Looks have been created to date, with c.14 million unique visitors to ASOS interacting with the feature since

it launched, driving higher basket size and value.

Net average basket value

£41.07

2023: £40.33

Total visits

Reducing cost to serve

We enhanced our customer experience with improvements to sizing, how we display products, and greater use of videos and 360 imagery. We reduced our returns rate, while continuing to make free returns available to all customers in all our core markets subject to our fair use policy.

Using data and AI

We rolled out AI tools to improve productivity and efficiency across the business - including better demand forecasting, data-driven decision-making, and testing a customer- facing AI Stylist - all adding to our use of AI for the billions of product recommendations we deliver to our customers every day.

2.3bn

2023: 2.7bn

1 Adjusted EBITDA is an alternative performance measure. Refer to pages 188 to 193 for reconciliation to statutory measures.

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Chair's statement

"FY24 was about delivering on the next stage of ASOS' Driving Change agenda, and accelerating the transition to becoming a faster, more agile,

and more profitable business."

Jørgen Lindemann

Chair

FY24 was about delivering on the next stage of ASOS' Driving Change agenda, and accelerating the transition to becoming a faster, more agile, and more profitable business. Some of these changes

have impacted revenue growth in the short-term, but we have made considerable progress towards becoming a business that can deliver sustainably profitable growth in the future.

A detailed analysis of our performance in the year is contained in the following pages, but I am pleased that ASOS has delivered on its profitability and strategic targets for the year.

Notably:

• Delivering positive adjusted EBITDA of £80.1m, and reaching a second half adjusted EBITDA margin of 6.9%, despite significant volume de-leverage.
• Reducing the cost to serve through fundamental efficiency improvements, particularly across both our fixed and variable warehousing and distribution costs.
• Reducing stock levels by c.30% since the start of the year as a result of more disciplined buying and strong clearance through ASOS.com and third-party channels.
• Further embedding a faster stock model and improving speed to market, including achieving our target of scaling Test & React to >10% of own-brand sales, bringing product from design to site within three weeks.
• Scaling flexible models to bring customers even greater breadth and depth of products, including doubling our flexible fulfilment business to c.5% of third-party GMV1 across c.100 brands.
• Reviewing and revising our approach to Fashion with Integrity to ensure we're aligning with the latest best practice, focusing on the right issues, and preparing the business for future regulation.
• Strengthening our balance sheet by improving our financial flexibility through our re-financing and demonstrating our efficient and disciplined capital allocation with the recent Topshop and Topman joint venture2 in early FY25.

• Reinvigorating our company leadership, both at the Management Committee and Board levels.

I would like to thank our ASOSers for their hard work and passion which are the driving force behind the considerable progress ASOS has made over the last 12 months, and our shareholders for their support. I would also like to take this opportunity to thank Mai Fyfield who stepped down from the Board on 7 February 2024 and welcome the new Board members who have joined us during the year.

More details on our Board changes are included on pages 90 to 91.

Our Right to Win comes from leveraging our unique capabilities - having the best product, providing a destination for style, having a compelling and distinct brand, offering competitive convenience, and all underpinned by disciplined capital allocation. Having the best product is at the heart of this flywheel and, following two years

of significant focus and hard work, we leave FY24 with stock in the best position it has been in many years. At the same time, we've fundamentally improved the foundations of our business to be able to deliver sustainably profitable growth. This transition away from our old operating model while scaling our new commercial model has been our greatest challenge over the last two years, but it now represents our greatest opportunity. Fashion has the power to excite and inspire, and into FY25, we look forward to providing our c.20m customers with a market-leading destination for style.

Jørgen Lindemann

Chair

5 November 2024

1. Gross Merchandise Value.
2. The arrangement with Heartland, whilst referred to as a joint venture throughout this report, will be accounted for as an associate, as detailed in Note 30 of the Financial Statements.

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STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS

Chief Executive Officer's statement

"From the start of this journey, we've been determined to take the 'medicine' required and face our problems head on, even when it has been painful or unpopular. I'd like to describe that journey - what we've done as well as what's next

• and why I'm more confident than ever that we're on the right path to be the number one destination for fashion-loving 20-somethings."

José Antonio Ramos Calamonte

CEO

This journey of rebuilding ASOS started two years ago. In previous letters, I've described some of the challenges facing the business and some of the actions we're taking to build ourselves back faster, more agile, and better able to serve our fashion-loving 20-something customers. We know that by having the most exciting product, by focusing on inspiration over transaction, by providing an exciting customer journey enabled by a fast and agile operation, we can build a sustainable, profitable business and return to growth.

From the start of this journey, we've been determined to take the 'medicine' required and face our problems head on, even when it has been painful or unpopular. I'd like to describe that journey - what we've done as well as what's next - and why I'm more confident than ever that we're on the right path to be the number one destination for fashion-loving 20-somethings.

What have we achieved so far?

Since October 2022, with our Driving Change agenda, we were determined to make ASOS a healthy business ensuring that our operations were efficient and effective, and that all our efforts were creating value for our customers, our brand partners, our ASOSers and our shareholders. Internally, I spoke about this as a two-step plan: starting with 'Back to Basics', which was about bringing stability and laying solid foundations both operationally and financially, and 'Back to Fashion' which is focused on recapturing the hearts and minds of our target customers. ASOS needed time to cleanse and rebuild - such a transformation could only be built over a disciplined revision of everything we do, bringing

a refreshed level of rigour to each process in our value creation chain. Only then would we be in a position to grow again.

At the core of this process has been the transformation of our stock model and we can be proud that today our stock is in the strongest position it has been for many years. Two years ago, we had far too much inventory - c.£1bn for c.£4bn of sales, with a very large intake of new inventory arriving over the following year. We faced the problem head on and cut intake dramatically, we restructured the way that we buy, we prioritised speed and net realised margin, we incubated new commercial models like Test & React, which we have scaled to over 10%

of our own brand mix, and scaled our flexible fulfilment models - Partner Fulfils and ASOS Fulfilment Services - to c.5% of partner brand Gross Merchandise Value (GMV).

We have reduced stock levels by c.50% over the last two years, and completely refreshed our offering now with c.80% of fashion stock being product that has been on site for less than six months. We've also fundamentally restructured the way we buy and manage our inventory so that we never find ourselves back in such a heavily overstocked position. At the same time, we've cut our over-reliance on discounting and built a business focused on selling the best fashion at full-price. This has helped us attract exciting new brands for our customers like Arket, Laneige and Veja, all joining in recent months.

We have cleansed our logistics operation, rationalising excess space to increase efficiency, rebuilding our processes with increased visibility and speed to bring our customers a better experience. Over the last two years we have improved our missed customer delivery promise by halving the share of parcels delivered late. We transformed our performance marketing model, removing inefficient spend to increase return on advertising spend (ROAS) by +18% in Q4.

We rethought the economics of our international markets last year and all of our markets now deliver a positive contribution profit, with dedicated efforts in North America to restore profitability. In order to achieve this, we had to make changes to our propositions targeted at unprofitable customers and revenues. This resulted in a shrinking of the business, but was the right decision so that we can build from the strongest possible foundations.

We also continued the evolution of our leadership team to prepare for the next phase of our journey. We welcomed Anthony Ben Sadoun as Executive Vice President (EVP) Digital Product in February, Dave Murray as Chief Financial Officer in April, and Ras Vaghjiani as EVP of People Experience in July. We also welcomed Rishi Sharma as Interim General Counsel and Company Secretary in May (Emma Whyte is on maternity leave) and Hugh Williams as Interim EVP Technology in June.

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