Notice of AGM and Value Creation Plan Proposal

RNS Number : 5503T

AO World plc

21 July 2020

 

21 July 2020

AO WORLD PLC

Publication of Annual Report and Accounts and Notice of Annual General Meeting

Value Creation Plan Proposal

Publication of Annual Report and Accounts and Notice of Annual General Meeting

Following the release on 14 July 2020 of its preliminary results for the year ended 31 March 2020, AO World plc ("Company") announces that it is today publishing its 2020 Annual Report and Accounts. The Company also announces that its Annual General Meeting ("AGM") will be held at 8.00am on Thursday 20 August 2020 at AO Park, 5A The Parklands, Lostock, Bolton, BL6 4SD.  Please note that in light of the current UK Government measures on Covid-19 and the Company's desire to protect the health and safety of our shareholders and employees, our AGM this year will be run as a closed meeting and shareholders will not be permitted to attend in person. We strongly urge that shareholders vote by using the Form of Proxy, enclosed with the Notice of AGM.

In accordance with Listing Rule 9.6.1 of the UK Financial Conduct Authority (FCA) a copy of the Annual Report and Accounts, the Notice of AGM and Proxy Form have been submitted to the National Storage Mechanism and will shortly be available for viewing here .

Copies of the Annual Report and Notice of Annual General Meeting will also be shortly available to view on the Company's corporate website at www.ao-world.com/investor-centre/reports-and-presentations .

Value Creation Plan Proposal - All 3,000 AO employees to share in reward plan

· Payout for all "AOers" for sustained growth and exceptional performance; rewarding employees for value creation over a high hurdle

· Unique scheme incentivises loyalty and retention

· Founder says: it's a vote of confidence in our future and our people

· He pledges his share will go to youth charity

Today we are also announcing our proposal for an all employee Value Creation Plan.  Over recent months the Company's Remuneration Committee ("Remco") has spent substantial time in reviewing the remuneration structure in place at AO.  The outcome of this review, and following detailed consultation with a large number of shareholders, is that the Company is proposing to introduce a new, unique one-off all-employee incentive plan - the AO Value Creation Plan ("VCP").

The proposed VCP has been designed and developed to support AO's high growth strategy which is driven by an unwavering focus on customer proposition and excellent execution.  Both of these are underpinned by a unique culture and the One AO model.

The VCP is aimed at incentivising and rewarding exceptional performance and retaining the talented team whilst driving exceptional value creation for shareholders.  Measured over a five to seven year period, it rewards the value creation above a hurdle of £5.23 (equivalent to £2.5bn market cap) representing exceptional growth (c. 30% p.a.) from today and also compound annual growth of 5.7% since our IPO in 2014 (when the share price was £2.85).

Over that hurdle, 10% of value created will be shared between ALL AO employees, with the overwhelming majority  distributed to all employees in contrast to other UK VCPs. Awards to Executive Directors will be capped at £20million, but to realise the full benefit of the scheme, we would need to achieve a share price of at least £9.41 (equivalent to £4.5bn market cap) and that value must be maintained for at least two further years (March 2025 - March 2027). 

AO's Founder and Chief Executive, John Roberts, has committed to donate 100% of any VCP reward he receives to help disadvantaged young people in the UK.

It is an ambitious plan rewarding truly exceptional performance, designed with safeguards (such as phased vesting, enhanced Remco discretion and malus and clawback) to underpin sustainable value creation.

AO Founder and Chief Executive, John Roberts, said: "This is the AO Way of doing a Value Creation Plan.  The decision to create an opportunity for every AO employee to receive a meaningful reward for the value they create is one that I'm proud to tell my mum about.

"The AO VCP rewards exceptional performance and value creation and we will achieve it through our passion to serve customers brilliantly with a long term lens.  AO is now set up to benefit from the accelerated structural shift to online in the UK and Germany and our model is now truly scalable.

"It is a vote of confidence in our people and the future we're building as well as  the embodiment of our One AO model because it rewards the exceptional value that the AO team is capable of creating together."

For further information, please contact:

AO World plc Julie Finnemore, Company Secretary Mark Higgins, CFO Media Enquiries:	Tel: [phone] cosec @ao.com
Tulchan Communications Will Smith James Macey White William Booth

Notes

About AO

AO World plc, headquartered in Bolton and listed on the London Stock Exchange, is an online electrical retailer, with a simple mission: to have the happiest customers by relentlessly striving for a better way. We create value by providing electrical products and related services to our customers, offering a huge range, a price-match promise and market-leading customer service.

We sell major and small domestic appliances and consumer electronics in the UK and Germany and deliver them via our in-house logistics business and carefully selected third parties. We also provide ancillary services such as the installation of new and collection of old products and offer product protection plans and customer finance.

In the UK, AO operates in four main categories (Major Domestic Appliances "MDA", Small Domestic Appliances "SDA", Audio Visual "AV" and Consumer Electronics "CE"). Following the acquisition of Mobile Phones Direct Limited in December 2018, AO has significantly broadened its mobile phone offering.

AO launched in Germany in October 2014 with MDA and now sells Floorcare, AV and SDA categories..

AO also has a majority equity stake in AO Recycling, a WEEE processing facility, allowing AO to ensure its customers' waste is dealt with responsibly in the UK.

 

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