ASOS Plc Annual Report and Accounts 2023
ASOS Plc Annual Report and Accounts
2023
ASOS brands
and labels
A menswear, womenswear
and unisex brand for the
next generation coming of
age, with afresh, versatile
streetaesthetic.
A London-born, bold leisure
menswear and unisex brand that
takesits inspiration from pop
culture and the skate scene.
The menswear trend leisure label
for go-to, easy, everyday updates
with a twist, including minimalist,
laid-back styles and a strong
logoaesthetic.
A sports lifestyle brand, providing
accessible activewear made to
workout or hang out.
A feminine womenswear brand
witha girly, playful look, taking her
from day to night.
Influenced by old-school street
brands and style icons, Reclaimed
Vintage serves up fresh, vintage-
inspired menswear, womenswear
and unisexcollections.
A UK menswear brand with an
established smart to casual
aesthetic and a unique London
spirit, helping customers shop
for every moment from modern
essentials to formal wear.
An iconic UK brand with an
established fashion authority and a
unique London spirit. Championing
the very best of its heritage, while
embracing the new and celebrating
itsiconic styles.
The go-to womenswear brand for
off-duty glam leisurewear pieces
with a logo print focus.
The biggest brand in the ASOS
portfolio, an every day, every
night go-to for fashion-loving
20-somethings.
Serving elevated glam for every
day and night across both daywear
and occasion wear.
Unique occasion and daywear
designed for the most memorable
moments ofa 20-something’s life.
Our activewear range with
performance fabrics suited to
indoor training, outdoor exploring
or simply sporting the athletic
aesthetic.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 01
asos is a
destination for
fashion-loving
20-somethings
around the
world, with a
purpose to give
its customers
the confidence
to be whoever
they want to be.
STRATEGIC REPORT
01 Contents
02 Chair’s statement
03 Operational highlights
04 Chief Executive Officer’s statement
06 Our business model
08 Strategic review
12 Our values
14 Our people
16 Fashion with Integrity
19 Task Force on Climate-related
Financial Disclosures
31 Streamlined Energy & Carbon Reporting
32 Key performance indicators
34 Stakeholder engagement
38 Financial review
44 Risk management at ASOS
46 Principal risks and opportunities
52 Long-term viability statement
GOVERNANCE REPORT
54 Board of Directors
57 Management Committee
59 Corporate Governance Report
69 Audit Committee Report
75 ESG Committee Report
77 Nomination Committee Report
80 Directors’ Remuneration Report
84 Annual Report on Remuneration
94 Directors’ Report
97 Non-financial and sustainability
informationstatement
98 Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
100 Independent Auditors’ Report
to the members of ASOS Plc
108 Consolidated Income Statement
109 Consolidated Statement
of Comprehensive Income
110 Consolidated Balance Sheet
111 Consolidated Statement
of Changes in Equity
112 Consolidated Cash Flow Statement
113 Notes to the Consolidated Financial
Statements
160 Company Balance Sheet
161 Company Statement of Changes
in Equity
162 Notes to the Company Financial Statements
166 Related Undertakings of the ASOS Group
167 Alternative Performance Measures (APMs)
171 Company information
172 Shareholder information
FY23 has been a year of reset for ASOS, in
which we have scrutinised every aspect of our
business and taken decisive remedial action
to create the foundations for sustainably
profitable growth as part of our Driving
Change agenda. Some of these changes
have restricted our growth in the short-term,
but have also made important progress
in restoring the core profitability of our
operations.
A detailed analysis of our performance in
the year is contained in the following pages,
but I am pleased to say that ASOS has
delivered on all four pillars of the Driving
Change agenda set out by José in his
inaugural results announcement.
Notably:
• A return to profit in the second half of
the year, with adjusted earnings before
interest and tax up more than 100%
year-on-year, and FY23 free cashflow
improving by over £125m year-on-year.
• c.£300m of profit improvement and cost
savings realised under the Driving Change
agenda, mitigating headwinds from
inflation and an increasing return rate,
driving order profitability up more than
30% year-on-year.
• A reduction in stock levels of c.30% since
the start of the year as a result of improved
stock management, both in terms of more
disciplined buying and effective clearance
through ASOS.com and third-party channels.
• Good progress on embedding a faster
stock model including c.500 Test & React
options launched on c.2-week lead times,
with c.60% of each product launch selling
through in seven days and stock turning
c.3x faster than average.
• Completion of a comprehensive balance
sheet refinancing and accompanying
equity raise, resulting in a new, covenant-
light debt facility under a single lender
out to April 2026.
• Reinvigoration of company leadership,
both at the Management Committee and
Board levels.
I would like to take this opportunity to thank
those who have departed the ASOS Board
over the last year and welcome the new Board
members who have joined us (see pages 55
to 56 for more details about our Board).
I would also like to thank our shareholders
for their support and our ASOSers for
their commitment to delivering the changes
required over the last twelve months, against
what has been a challenging economic and
consumer backdrop.
ASOS’ future success is based on offering the
best product, both from our own-brands and
the most relevant partners, styled together in
compelling outfits that inspire our customers,
while also providing a seamless and convenient
shopping experience for over 23m customers
worldwide. We must also reinvigorate the
ASOS brand with an emphasis on fashion,
to further strengthen our connection with
our target 20-something demographic.
Now is the time to re-focus on our unique
fashion credentials to deliver value for all
our stakeholders.
Jørgen Lindemann
Chair
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202302
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Chair’s statement
CHAIR
Jørgen Lindemann
ASOS’ future success is based on
offering the best product, both
from our own-brands and the most
relevant partners, styled together
in compelling outfits that inspire
our customers, while also providing
a seamless and convenient shopping
experience for our c.23m customers
worldwide. Now is the time to re-focus
on our unique fashion credentials to
deliver value for all our stakeholders.
“
”
highlights
Homepage
refresh
This summer we
introduced a fresh new
homepage shopping
experience, with
a renewed focus
on inspiration and
compelling imagery
through our unique
fashion lens.
Together with the
Fashion Minority Report
we launched scaleUP: an
incubator programme to
support ethnic minority-
owned fashion brands in
growing their businesses.
We have continued to grow our Partner
Fulfils offer over the year, scaling to
33 brands across six markets – from
Tommy Hilfiger and Calvin Klein to
River Island and New Balance.
Face + Body growth
We’ve expanded our Face + Body offer
with 37 new brands launching this
year across all key categories, from
strategic partners like Kylie Cosmetics
and Milk Makeup to hyper relevant,
emerging brands like Hair Syrup,
Made by Mitchell, and The Beauty Crop.
We now have over 200 Face + Body
brands on site.
Partner Fulfils expansion
Test & React
Our Test & React pilot was successful in bringing c.500 options
from initial design to site in around two weeks, helping us to
react to fashion trends and launch product we know our
customers want. Our Test & React product sold through 3x
faster than our average stock with no investment in promotion.
+7% >30%
+60bps
Increased profit per order
Average basket value
Adjusted gross margin
Hirestreet
partnership
We introduced our first ever rental
edit trial in partnership with rental
marketplace Hirestreet. Over 180
styles focused on women’s occasionwear
dressing were available at launch
from ASOS DESIGN, ASOS EDITION
and ASOS LUXE. The top 10 styles
have each been rented an average
of 39 times, while the most popular
style – pictured – has been rented
over 55 times.
ASOS Sample
Sale Drops
In June, we launched
ASOS Sample Sale – a
dedicated site helping
our efforts to right-size
our stock portfolio, by
offering customers
access to thousands of
styles with discounts of
up to 90% off the retail
price on ASOS.
Our scaleUP 2023 Winners:
Dolapo Ososanya, founder
of Taideux, and designer
Isabelle Pennington Edmead
scaleUP launch
Revenue
£3.5bn
2022: £3.9bn
83.7m
Orders
2022: 98.3m
Active customers
23.3m
2022: 25.7m
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 03
ASOS has had the pleasure of growing at pace
over two decades, developing an exciting
customer experience for fashion-loving
20-somethings, centred around a unique
combination of our own brands and the best
product from the most relevant partner
brands brought to the customer in an
inspirational way. Helped by channel shift
into online, we grew at pace. When growing
very quickly, it’s often not optimal to do
things perfectly and to strive for operational
excellence. It isn’t the time to focus on every
detail. We found a way to get things done
quickly: we scaled up to £3.5bn in revenue
with more than 23m active customers; we
created our own brand and added new
partner brands; we expanded into different
categories; we built our app; we added
international fulfilment centres.
However, there comes a point when the
biggest opportunity stems not from
prioritising growth, but from focusing on
those details, and when embedding
operational excellence can generate a better
return than continuing in a quest for additional
growth at any cost. For ASOS, this moment
has come. While we benefited from the boost
to e-commerce created by the pandemic in
the short term, the subsequent re-balancing
of the economy has exposed weaknesses
in our old ways of doing things. This has
coincided with a significant shift in the
industry, triggered by high interest rates
and a cost-of-living crisis. As we focus on
returning to growth, this time it will be from
a strong foundation of profitability and
cash generation.
In FY22, when I became CEO, I launched our
Driving Change agenda. Internally I spoke
about this as a two-step plan starting with
‘Back to Basics,’ which was about bringing in
the right team, strengthening the balance
sheet to give us room to take the right
decisions in the long-term interest of the
business, and then beginning to make the
operational improvements needed for
exceptional execution. “Retail is Detail”, and
during the last year we have worked through
all our processes with the aim of improving
our costs to serve to then reinvest into
commercial opportunities. But much more
importantly, operational excellence will make
us faster, it will improve the experience for our
consumers and it will make us an even better
place to shop. We can grow better, that is,
more profitably and while generating cash,
by bringing ASOS back to being the most
inspiring destination for fashion-loving
20-somethings.
CEO
José Antonio Ramos Calamonte
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202304
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Chief Executive
Officer’s statement
We want to be synonymous with
fashion for our consumers, and
give them a seamless shopping
experience. Consumers can
trust that we will make them
look and feel good and we will
innovate and invest in the areas
that matter most to them.
“
”
Why can we win?
The recent challenges we have faced have
not taken away our differentiated value
proposition. The second step of our Driving
Change agenda, ‘Back to Fashion’, is focused
on doubling down on our strengths and the
characteristics that make ASOS unique.
The foundation of this program is the shift to
our new commercial model. With the objective
to always show our consumers the best and
most relevant product, we have started to
operate a new way of working that drives
faster development of new styles, faster
reaction on those that perform strongly,
faster management of the slow-moving
product during the course of the season, and
faster elimination of the older (and therefore,
less relevant) merchandise.
Our ambition is to be the most inspiring
fashion destination for 20-somethings. This is
a challenging level of ambition, but we are very
clear on what gives ASOS the right to win
market share. In this next phase, we will
obsess over curating the best assortment
for our consumer, through our own exclusive
brands and from the best brands on the
planet. We will continue to excite consumers
with the way we style the product and we’ll
help brands reach new consumers by
showcasing their product through our unique
fashion lens. We want to be synonymous with
fashion for our consumers, and give them a
seamless shopping experience. Consumers
can trust that we will make them look and feel
good and we will innovate and invest in the
areas that matter most to them. In doing this,
in cultivating our strengths, we will create
a win-win for all our stakeholders – our
customers, ASOSers, our suppliers, including
brand partners, our communities and our
shareholders.
A focus on speed
It is clear that a key enabler of our vision is
speed. We will culturally place speed at the
heart of the business, enabling us to bring the
best fashion and most engaging proposition
to our customers with significantly reduced
stock risk. It will also help us to build on our
improved profitability and cash generation.
For our own brands, the faster we operate,
the more relevant the data we’re acting on,
giving us better inputs into our creative
process. The closer our purchase decisions
are to those of our consumers, the more we
can bring them what they really want. For our
partner brands, the faster we operate, the
more we can sell in-season and at full-price.
It’s simple, but speed is determined by the
details. Ironically, as a consequence of
growing fast, our processes became too slow.
We didn’t have time to think about the best
way to do things. We often found workarounds
rather than solutions and added layers of
complexity, which ultimately slowed us down.
But we are already making great progress.
We have streamlined our decision-making,
we are improving the use of data within our
business and we have begun to simplify our
processes. Importantly, speed is already
helping us develop a more exciting and
differentiated product, to inspire our
customers. Speed is already helping us to
react to trends, to bring fashion-loving
20-somethings what they want and to reduce
waste. It means we can attract younger
customers, it means we can turn stock faster,
it means we can sell more product at full price.
Ultimately, we want everyone at ASOS to ask
themselves at least once a day, am I going
fast enough for our consumers?
José Antonio Ramos Calamonte
Chief Executive Officer
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 05
Business model
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202306
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Operational excellence
in all parts of our business, from buying and managing stock
through the value chain to our products arriving with our
customers, all underpinned by our commitment to Fashion
with Integrity.
Our tech and data
with continuous innovation at the right level of cost.
Our international model
which efficiently allocates capital to generate the best returns
from our overseas operations, influencing decisions such as
the degree of localisation in the assortment to the level of
investment in marketing in non-UK markets.
Our people, culture and values
with a refreshed leadership team, best-in-class Board and
disruptive mindset at all levels of the business and a focus
on driving positive change, diversity, equity and inclusion for
all our people.
Disciplined Capital Allocation
Our distinct model is enabled by disciplined allocation of capital with a focus on four key areas:
Our proposition is unique in the world of mass market fashion, set apart from peers by the combination of:
Our right to win
The best and most
relevant product
from both exclusive own brands manufactured
to strong ethical standards, and a curated
assortment from selected partner brands
which resonate with our target audience.
02
03
01
04
A compelling and
distinctbrand
famous for fashion, with widespread recognition,
a clear point of difference, and a high level of
engagement with our customers.
A destination for style
with items from different brands styled into
outfits, in context, and in our differentiated
visual language.
Competitive convenience
offering a delivery, returns and payment
experience at least comparable with our best
competitors.
05
ASOS is a leading global destination
for fashion loving 20-somethings,
with more than 23m active customers
in over 200 countries worldwide.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 07
Strategic priorities on page 9
Stakeholder engagement on pages 34 to 37
Financial review on pages 38 to 43
Creating Stakeholder Value
Delivering on our right to win creates value for our stakeholders.
Our Customers
Our Shareholders
who benefit from access to quality fashion at an attractive
price, with an unparalleled selection of brands and
inspirational, targeted styling.
who will benefit from a focus on delivering profitable
growthand sustainable cash generation through the
efficientallocation ofcapital.
Our ASOSers
Our Communities
who are empowered to contribute, learn, and grow through
our open and entrepreneurial culture.
both through our work on human rights and modern slavery
inpartnership with NGOs and unions in our sourcing countries,
and through the ASOS Foundation and long-term charity
partnerships aimed at breaking down barriers for young
people by instilling confidence and unlocking talent.
Our Suppliers
with whom we collaborate to foster trusted, mutually
beneficial partnerships over the long-term and support
incontinuous improvement to meet our FWI standards.
Our Brand Partners
a
who gain access to a large, global and often hard-to-reach
customer base as well as the flexibility to work with us under
arange of different models, including our direct-to-consumer
offering, and the opportunity to work and learn from other
brands on sustainability and ethical trade.
Where were we a year ago?
In my first CEO review 12 months ago, I explained that we had more
stock than we’d like, which had eroded our profitability and destabilised
our balance sheet; and that some of our customers, brands or
activities were simply unprofitable. While external factors had
amplified the situation, our focus on growth without due consideration
for the cost had contributed significantly and our high level of stock
was exacerbated by poor operating practices – we were too slow and
inefficient. We launched our Driving Change agenda, framed internally
as a two-step plan. Firstly ‘Back to Basics’, which involved reducing our
stock levels, transitioning to a new commercial model; improving
profitability; refreshing our leadership team with the energy and talent
required to turn things around; and refinancing our balance sheet.
This first stage was ultimately about bringing stability and laying solid
foundations. Our next step, ‘Back to Fashion’, is focused on regaining
the hearts and minds of our target consumer, accelerating towards
our new commercial model, and retaining a disciplined approach to
profitability and cash generation.
What have we achieved over the last 12 months?
In FY23 we have refinanced our balance sheet and removed profit-
based covenants, providing the flexibility to take the right decisions
in the long-term interests of the business, and also returned to
cash generation in the second half of the year. Operationally, we
comprehensively re-defined our commercial model to align with
best-in-class fashion principles: focusing on speed and flexibility of
intake with better planning; incentivising sell-through in-season; and
clearing stock as-we-go to maintain a healthier stock profile.
We have begun to embed an intense focus on speed and operational
excellence throughout our organisation and successfully piloted our
best-in-class Test & React model for our highest fashion product, which
moves from design to site within two weeks. To increase speed and
flexibility with our partner brands, we invested in new technology
infrastructure that will enable the rollout of ASOS Fulfilment Services
(‘AFS’) to support our stockless Direct to Consumer (‘DTC’) model,
Partner Fulfils. We empowered a Central Merchandise Planning team
with greater control and oversight over forecasting and managing our
stock. We sold through 84% of the £1.1bn of inventory brought forward
from FY22 (£130m or 13ppt of which was through the write-off of our
oldest stock), reduced intake levels to better align with demand, began
to operate Spring Summer intake on the new commercial model, and
ended the year with a cleaner stock position and c.30% less stock
(ahead of our c.20% guidance).
As part of the profit focus under our Driving Change agenda,
we delivered the c.£300m of profit improvement and cost saving
measures designed to mitigate the inflationary and returns rate
headwinds and improve core order profitability by over 30%, by exiting
or correcting unprofitable brands, customers, and activities. The cost
savings are particularly evident in our outbound supply chain with
distribution costs as a percentage of sales improving by 120bps due
to measures including the discontinuation of UK split orders and
favourable negotiations with carriers. We did this while bedding in
a new leadership team committed to establishing a culture of
operational excellence.
Our progress has been the result of a huge effort by ASOSers,
a transformation of our mindset, and a resilience to keep pushing
when our results aren’t yet reflective of our actions. While some
of these initiatives inevitably led to lower customer acquisition and
higher levels of churn, the customers that remain are more profitable
and therefore sustainable.
Where are we going?
ASOS has over 23m active customers globally, c.£3.5bn in revenues,
and a highly successful collection of own brands operating at scale.
We have an enviably strong position from which to build our future.
We have churned unprofitable brands, activities, and customers, many
of the latter picked up over the pandemic, but we remain c.30% bigger
than FY19, with c.4m additional active customers. In FY24 we will
accelerate our plans to transition to our new commercial model,
prioritising near-term cash generation and the long-term interests
of the business over short-term revenue growth and profitability. The
benefits of our new model will become clearly visible in our profitability
and growth in FY25 and beyond.
While fashion has always been a fiercely competitive industry, I am
very clear on what makes ASOS unique and why we have the right to
win market share with a profitable and cash generative model. ASOS
is structurally set up to win again by putting speed at the heart of
its culture and operations. By obsessively focusing on cultivating our
strengths, we can offer an exciting proposition to consumers while
also generating attractive returns for our shareholders.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202308
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Strategic review
This stems from five strategic priorities:
1. Best & most relevant product
We must offer our customers the best assortment – the most exciting
fashion from the most relevant brands for fashion-loving 20-somethings,
perfectly blended with a set of our own unique brands that can only be
found at ASOS. Our own brands are already a key differentiator, with
more than two-thirds of our global customer base having purchased
an own brand item in the last twelve months, and they are a great
customer acquisition tool, with 55% of new customer orders
containing an own brand product. The combination of exclusive and
relevant own brands with the curation of the most exciting and additive
product from partner brands is our critical competitive advantage.
This is where we must strive for leadership, invest our energy, and
focus our innovation. As a pure-play online retailer, without the volume
demands of stocking a global store estate, we can move faster with
less risk, but we have not been maximising this competitive advantage.
We will move faster in everything we do, work more closely with our
brand partners, and obsess over bringing the most relevant fashion
product to consumers.
2. Destination for style
ASOS is the only place where brands can show their potential in a
perfectly blended fashion context, and the only place where consumers
can experience their favourite brands with our differentiated visual
language, creating an inspirational, rather than transactional,
customer experience. This is a core competitive advantage and where
we must continue to differentiate. Our in-house studio shoots all our
product, creating a distinct visual identity. This not only drives better
engagement with our customers but is critical to our relationships with
brand partners, who see a huge opportunity to reach a different
customer segment than is often their core. This approach is not new:
it has always been a core part of the ASOS proposition. But we will
make improvements to our customer experience to translate this
critical differentiator more directly into economic benefits.
3. A customer journey created around fashion and excitement
Our target market is fashion-loving 20-somethings. This tightly-
defined market segment means we can authentically offer our
customers an exciting, engaging, and relevant fashion experience,
connecting with them at the earliest stage of their fashion journey
and providing inspiration, not just a transaction. Their fashion
journey does not begin with performance marketing and promotions
– by relying on these activities to drive sales, we can miss the key
stages in a customer’s journey and risk losing them to peers. Our ability
to inspire is a significant competitive advantage, but we must bring
that to life for our customers however we engage with them. As we
improve our product and double-down on our unique style, we must
reignite our brand heat and remind consumers we are first and
foremost about fashion, not convenience or discounting. It is our
ambition to restore our share of voice and show up at every stage
in the customer journey – from discovery to purchase through to
loyalty and advocacy. We will build stronger relationships with our
best customers and turn them into advocates for our brand.
4. Competitive convenience
Convenience remains a key reason to shop online and we do not
overlook its role in our future growth, but we will not look to convenience
as a core differentiator. We must always offer a seamless experience,
easy to shop, with a competitive delivery proposition, returns policy,
and methods of payment. We keep ourselves at the level of our best
competitors in this area and will be a fast follower of innovation. We
made changes to our proposition over the last year to reflect this, yet
we continue to offer delivery within two days to 95% of our customers
globally. We also go beyond many peers in our commitment to free
returns in core geographies. In some geographies, we have recently
introduced paid returns after 14 days, encouraging quicker returns,
and increasing the likelihood of the product being resold at full price,
thus aligning the incentives of our customers with our own interests.
We will constantly reassess whether we are investing into the areas
that matter most to our customers.
5. Disciplined capital allocation
Our unique value proposition has a flywheel effect on our financials,
supporting higher average basket value, stronger full price sell-
through, lower returns rates, reduced churn, and faster stock turn,
ultimately improving our profitability and cash generation and
providing the resources to drive our growth. This is underpinned by
operational excellence and efficient capital allocation, allowing us to
invest behind our strengths in a disciplined way, relentlessly removing
waste to invest into opportunity. We remain committed to our
international model, with every region making a positive variable
profit contribution in FY23, and we see long-term growth potential
in all our core markets. Our core markets (UK, Germany, France, US),
are already – or have the potential to be – large and profitable.
Accordingly, we will invest our resources significantly into these markets,
with dedicated marketing, localised assortment and a best-in-class
convenience proposition supported by local infrastructure (i.e., distribution
centres). Outside of our core markets, we will typically use central
marketing and assortment, leverage adjacent infrastructure, and
consider wholesale of our own brand to build brand awareness and
supplement our scale. We will constantly reassess the classification
of our markets and adapt our approach where necessary to maximise
the return on our investment over the mid-term.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 09
Priorities for the year ahead
In FY24 we will focus on delivering three things to develop our
competitive advantage:
1. More relevant product through disciplined stock
management and an obsession with speed
Managing our stock to optimise value creation
We have significantly intensified our focus on stock management as
a critical enabler of our plan to bring the newest and most compelling
assortment to our customers. Optimising our stock position and fully
transitioning to our new commercial model requires three elements:
(i) Eliminating old stock, turning it into cash
From FY18 to FY22, our stock levels doubled and so too did our
discounts, significantly eroding our gross margin and with it our
profitability. While external factors amplified the situation, our
stock build-up was driven by poor operating practices – we were
too slow and inefficient and held stock for too long, believing
we had limitless “shelf space” and in the knowledge that we could
eventually sell the stock profitably. We have made good progress
over the last 12 months, but we must finish the job over the course
of the coming months.
(ii) A more disciplined, flexible stock purchasing model
We must also increase the accuracy and flexibility of our purchasing
to improve the quality of available product and reduce older stock
carried forward in the future. We have put in place more rigorous
planning of stock purchasing, with oversight from a central
merchandising team, and we are significantly increasing our speed
to market and the flexibility of our intake. By reducing the time
from design to site, we have better data to support our purchasing
decisions. For our highest fashion product developed under our
Test & React model, we can test the demand for a product before
committing in significant depth. For our partner brands, we are
rolling out Partner Fulfils and AFS alongside our wholesale model
to increase flexibility for both parties and maximise the availability
of the most exciting product while balancing inventory risk.
(iii) In-season stock management
Under our new commercial model, we manage our high-fashion stock
in-season, to guarantee that we reach the end of the season with
the minimum level of stock unsold, and hence our future operations
will not be “polluted” with old stock. This releases cash to invest in
new stock, removes detractors from the site, and creates space for
newness. We will tackle non-performing stock immediately, which
leads to a better realised price as discounting closer to the season
requires shallower markdown. Ultimately, we focus on new, in-season,
full-price product and underscore our value as a reliable source
of fashion.
Obsession with speed
Our obsession with speed is key to unlocking more relevant product
across both our own brands and our partner brands. Through our very
successful pilot, we have launched c.500 Test & React options going
from design to site in around two weeks, with strong sell-through and
minimal promotional activity. At present, Test & React makes up less
than 1% of own brand sales but scaling this up to over 10% of own
brand by the end of FY24 and c.30% in the medium term will bring more
exciting product, have a meaningful impact on our gross margin and
support a cleaner stock profile.
Our refreshed commercial leadership team will also bring new ways of
working with our brand partners, further strengthening relationships
with strategic brands. Our flexible fulfilment model, encompassing
Partner Fulfils and AFS, is an important tool, giving access to both
additional product and better availability from highly relevant brands.
Over the course of FY23, we have scaled our Partner Fulfils offer to
33 brands in six markets and invested in our technology and team to
support twice the number of brands in double the number of markets
in FY24 as well as launching AFS.
Better sourcing
We will also offer better, more relevant product by improving our
sourcing. Simply by sourcing from the right locations, simplifying our
processes and consolidating our supplier base we see a 2 to 3ppt
intake margin opportunity over the mid-term, which brings benefits
not just in terms of own brand pricing, but also quality, speed and
corporate responsibility standards in our supply chain. In H2 FY23
we have already achieved a c.2 ppt YoY increase in intake margin
on ASOS Design Womenswear, where our changes are furthest
progressed. This has supported investment into lower prices, ensuring
our own-brand product is competitive in terms of price and quality.
2. Strengthen our relationship with consumers
ASOS pioneered the use of cultural marketing, content marketing and
organic social media to build engagement and relevance with young
fashion lovers. In recent years, exacerbated by our stock build-up,
ASOS customer experience and engagement has too often centred
around discounting or convenience, not fashion and brand storytelling.
Over time, ASOS has become overly focussed on promotion and
performance marketing and we must re-focus on building higher
quality customer engagement centred around fashion inspiration
and excitement. Customers will love ASOS because we have the best
and most relevant product, because we are a destination for style,
because we offer a customer experience geared around fashion and
excitement and, but not only, because of the convenience of our offer.
We must bring that to life in our communication, in our products and
in all our experiences. We will do this by re-igniting our brand, growing
appeal amongst our target audience by being present with our fashion
message in the earlier stages of the customer journey and by focusing
every interaction with our customers on fashion.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202310
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
In FY24, we will invest a greater proportion of our marketing budget
into reigniting our brand, making ASOS famous for fashion again. This
will include a £30m incremental investment focusing on the UK market.
We will iterate our plans throughout the year as we understand what
resonates most with our target customer. The benefits of brand
marketing are lagging, within 3-6 months we expect to see greater
share of voice on social and increased brand search and over H2,
we will start to see increased visits, improved conversion, new active
customers, greater order frequency and a halo effect of stronger
returns on performance marketing.
3. We will reduce our costs to serve, remove waste and
improve our use of data
While we begin to look again towards growth, we will retain our focus
on operational excellence, simplifying all of our processes and removing
wasted time and cost to reinvest into productive commercial activities.
One aspect of this is better prioritisation, ensuring we are allocating
resource to projects that will generate a return. This culture of
operational excellence will be aided by increased access to an
improved use of data throughout our organisation and we continue
to innovate in this area. We continue to develop our data science and
machine learning capabilities which we deploy across our business
areas and to improve the customer experience.
A key focus area is returns. While we continue to believe that free
returns are a core part of our customer proposition, there are good
returns and bad returns. Good returns help acquire new customers,
increase basket size and are an integral part of a profitable customer
lifetime. Bad returns are from unprofitable customers, serial returners
or for an unnecessary cause – for example, poor quality or inaccurate
sizing. We will constantly strive to eliminate bad returns by closer
scrutiny of returns data to identify high returning products, brands
or materials and taking corrective action and improving the size, fit
and quality of our products alongside AI forecasting to drive better
decision-making.
ASOS has ended FY23 a smaller but more resilient business and
remains one of the leading players in online 20-something fashion.
While the market has evolved and our model has adapted accordingly,
we mustn’t lose sight of our core purpose. Our strength in the past
came from our relentless focus on bringing the most exciting fashion
to consumers with a focus on inspiration and style. By doubling down
on that winning formula and evolving our culture to place speed at the
heart of everything we do, we can win again.
José Antonio Ramos Calamonte
Chief Executive Officer
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 11
12
Our values
Our mission is to be the world’s number
one destination for fashion-loving
20-somethings. We believe in a world
where you have the freedom to
exploreand express yourself without
judgement, no matter who you are
orwhere you’re from.
We are
guided by
our values
Authentic
We celebrate what makes us
unique and stay true to ourselves.
Our business is built on an inclusive culture
whichencourages passion, enthusiasm and
development so our ASOSers can bring their
best selves to work. We recognise that it’s our
differences which make us stand out from the
crowd, giving our ASOSers and customers the
confidence to be whoever they want to be.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
13
Brave
We’ve been bold and ambitious
from the start – it’s in our DNA.
We’re empowered to try something different
with the freedom to fail, turning left when
others turn right. We use our voice to drive us
forward, speaking up on the things our people
and customers care about and challenging
the status quo.
Creative
We have a curious and
adventurous spirit – it’s who
we are and runs through
everything we do.
We balance leadership with learning by
beingcomfortable as an innovator and
whenfollowing in the footsteps of others.
Ourproducts and platform are fuelled by
creative passion and adeep understanding
ofour customers, allowing us to empower
millions of people aroundthe world.
Disciplined
Great work doesn’t
happen by chance.
We need to take time in our pursuit of
excellence, honing our skills, perfecting
our craft, executing our plans, being
comfortable with the uncomfortable
and bridging the gap between goals
and accomplishments. It’s a strategy
that allows us to create an ASOS
that’s built for future success.
13
The people behind the brand
We want the experience of our people to be
like no other – an experience that ASOSers
love, where they learn, collaborate, embrace
change and can be authentic, brave, creative
and disciplined in everything they do.
Understanding our people
It’s more important than ever to listen to our
people and understand how they’re feeling.
We continue to use our employee engagement
survey, ASOS Vibe, as another tool alongside
our employee forum, the Voices Network, to
get feedback from employees and managers.
This way we know how our people really feel
about working at ASOS, so we can then focus
action on the areas that matter most.
Attracting and retaining
amazing people
This year has seen a shift in the talent
landscape across the Technology and Retail
sectors, with many organisations focusing
more on retaining high-performing talent
1
.
Wehave adopted an internal-first approach,
to give our people greater opportunity to
progress, develop and leverage their skills in
new areas. Approximately one third of our
vacancies are currently filled by internal
talent and we want to continue to build on this
through succession planning and developing
our people, whilst also ensuring we are
going to the market to bring in different
demographics and diversity of thought and
skills for the roles that we hire externally.
A key part of our attraction and retention
strategy continues to be engaging and
attracting diverse, international talent and
we have developed new partnerships this year
to enable us to connect with, and inspire,
diverse talent communities. We have hosted
aseries of careers insights events and run
campaigns together with our partners,
including myGwork, The Outsiders Perspective,
The Prince’s Trust, Centrepoint, Fashion
Minority Report and Black Girls in Tech –
all with our Employee Value Proposition
‘Bewhoever you want to be at ASOS’ at
theheart.
Reinforcing this important message is our new
ASOS Careers site, which was successfully
launched in February. The new site provides
aseamless user experience that gives
candidates an authentic insight into the
ASOSculture, and the breadth of exciting
career opportunities that we offer.
It features dynamic job adverts that
recommend personalised content based on
the department that the user is interested in,
including our Tech Blog and the career profiles
of many of our ASOSers. There is also a chatbot,
which enhances the candidate experience
by providing real-time responses to queries.
Since launch we have seen a significant
increase in visits and applications as a result,
highlighting the continued strength of our
employer brand.
In June, we launched new hiring at ASOS
training for all managers, to upskill hiring teams
and support our mission to create equitable
and inclusive hiring experiences. Thecontent
of the training focuses on inclusive hiring
practices and reducing unconscious bias,
to help break down barriers for talent from
traditionally under-represented backgrounds.
To support our commitment towards building
a diverse workforce, we strive to ensure our
job adverts and descriptions are supported
by inclusive language and that all applicants
are granted accommodations to help them
thrive through the application process.
We also offer guaranteed interviews to any
candidates with disabilities or neurodiverse
conditions who meet the minimum eligibility
criteria for the role.
We are also excited to have launched our
new business-wide inclusive hiring committee
this year, which will enable us to have
consistently balanced representation
on our interview panels.
Developing our people
In March 2023, we launched our leadership
curriculum, Liberating Leaders, with further
investment in licensed content, podcasts,
articles, video and workshops to support the
enterprise of the development of our leaders.
We also have the imminent launch of our
employee development curriculum, Liberating
Self, that will support all ASOSers’ personal
and career development in areas of self-
awareness, building relationships and business
know-how. This year we have also initiated
investment in an organisation-wide learning
management system to significantly enhance
employee performance, streamline training
processes, and promote a culture of
continuous learning and development within
the organisation.
Apprenticeships
We are a proud apprenticeship employer and
have enrolled over 500 individuals since 2017.
We believe in the power of apprenticeships
to unlock potential and understand their
importance in building critical skills,
contributing not only to the future of our
business but the wider UK economy.
We have 142 ASOSers (5% of our workforce)
currently enrolled across 14 apprenticeship
standards, including pathways for data,
finance, and leadership and management.
1 Source: LinkedIn Global Talent Trends, May 2023.
Apprentices
500
Individuals enrolled since 2017
Our people
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202314
We use our apprenticeship levy to create
memorable development experiences that
allow for workplace application whilst
studying towards achieving recognised
qualifications. This year we have invested
over £600,000 of our apprenticeship levy
in approved training.
We have launched our new leadership and
management apprenticeship offer, The
Greatness Programmes, across two cohorts.
This is designed to equip our managers with
the skills, behaviours and mindset to become
aleader at ASOS. It covers topics including
self-awareness, relationship building, project
management and operational management.
74 ASOSers are currently enrolled, with 20
due to complete in FY24 along with 37 of our
other apprentices.
We are passionate about recognising success
and raising the profile of apprenticeships
across the UK. This year we hosted our
biggest National Apprenticeship Week
celebration to date, including an event with
our CEO, José, and 83 apprentices from the
FY23 academic year who had successfully
completed their qualifications.
We are committed to investing further in
this space by creating new opportunities
to provide access to education for all and
continuing to support the growth of lifelong
skills for our ASOSers. We have showcased
our commitment by joining The 5% Club,
an industry-led initiative focused on driving
momentum into the recruitment of ‘earn and
learn’ roles and we are also a member of the
Institute of Student Employers, the biggest
student recruitment and development
community in the UK.
Supporting our people
The health and wellbeing of our people is a
huge priority for us. We have continued to
run an ongoing campaign of events to raise
awareness of the support we offer and break
down the stigma that sadly still exists around
various health and wellbeing challenges. Some
of the things we have done this year include:
a series of panel events featuring our
ASOSers sharing their stories about mental
health for Mental Health Awareness Week,
bringing in guest speakers to debunk myths,
rebranding our Employee Assistance
Programme, making the service more visible
and appealing. We have run five training
sessions for managers in order to support
them in proactively managing their team’s
wellbeing, including the tools to enable them
to positively intervene at the right times.
Most recently, we’ve trained 106 ASOSers
across the world to be Mental Health Aware
with Mental Health First Aid England. Our
‘Reach Out Reps’ are now on hand to lend a
listening ear, and provide first line support,
for mental health and wellbeing.
As we step into FY24 we are building a new
framework that will position wellbeing
through a holistic frame to help guide
ASOSers on a more informed journey of
sustainable wellbeing, resilience and self-care.
A continued focus on Diversity, Equity
&Inclusion (DEI)
FY23 saw the activation of our award-winning
ALL IN Learning Programme. This is an
opportunity for diverse learning experiences,
engaging activities and exploring the actions
that support our culture of inclusion. We also
continue to drive our successful Reverse
Mentoring programme, expanding the
experience from our Management Committee
to now include all Senior Leaders across
the business.
This year we were delighted to showcase
and recognise our LGBTQ+ employees and
customers as well as the wider community
at this year’s Pride celebrations, extending
our presence across three parades: London,
Berlin and Belfast.
Our disability and neurodiversity network
“Same but Different” is dedicated to driving
change in the areas that matter most and
we have collaborated with disability and
accessibility experts through internal events.
We have begun to review our approach to
accessibility, working with external specialists
to identify improvements. ASOS now has
accessibility guidelines and a full framework
for our digital learning content, including more
information round the assistive technologies
that are available.
We are proud that our Northern Ireland
Tech Hub team achieved a national Autism
NI Impact Award through implementing
reasonable adjustments and wider interventions
for ASOSers with autism. The site is now
accredited up to July 2026, and we intend to
roll out this programme to more of our sites,
as we work towards becoming a certified
autism friendly organisation.
Our partnership with Fashion Minority Report
is focused on bridging the gap between the
fashion industry and under-represented
talent. We continue to fund projects that
support the creative and professional
development of young people from
marginalised groups and connect them
with the industry, including:
• Secondary School programme: industry
workshops to promote the fashion industry
as a career path;
• Online learning hub: A community hub for
emerging talent to upskill and network with
industry professionals;
• Mentorship Programme: Multi-brand
industry-led mentoring programme for
young professionals. We fulfilled three
placement roles for mentees, with one
mentee securing a permanent position,
with a total of four ASOSers becoming
mentors; and
• Intro to Industry: an insight day at ASOS
HQ for 25 students from Newham College.
Three ASOSers provided secondary school
students with insight into the fashion
industry and discussed the varying roles
within the business.
We’ve been addressing the diversity of
ownership in our brand portfolio, with the
long-term goal of reducing economic
inequality by increasing the percentage of
ethnic minority brand partners. The launch
of scaleUP: our first incubator programme is
designed to support the upscaling of ethnic
minority owned brands. We launched our
third ASOS Design South Asian Wedding
range with the support of our South Asian
sounding board, including style guidance for
studio teams and onboarded four new South
Asian-owned brands.
In 2022 we committed to hiring a dedicated
DEI Director. With this person now in place
we are actively engaged in creating a robust
strategy that actively supports the specific
needs of our ASOSers.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 15
1 Defined as ‘Head of’ and above positions. Please see pages 78 to 79 of our Nomination Committee Report
for further information on our Senior Leadership diversity.
MaleFemale
Management Committee
50%
50%
Senior Leadership¹
42% 58%
All ASOSers
36%64%
Management Committee
50%
Senior Leadership¹
All ASOSers
Ethnic MinorityWhite
Not specified
25%
184
72%
22% 6%
21
80%
11%
9%
25%
Ethnic Diversity
As at 3 September 2023
Gender Diversity
As at 3 September 2023
12 roles
236 roles
3,038 roles
12 roles
236 roles
3,038 roles
Fashion with Integrity is our
programme for managing
sustainability and corporate
responsibility at ASOS.
First launched in 2010, Fashion with Integrity
was refreshed in 2021 with the introduction
offour goals: Be Net Zero, Be More Circular,
Be Transparent, and Be Diverse (for more on
these, including definitions and KPIs, head to
asosplc.com/fashion-with-integrity). While not
a full view of all our work in this area, these goals
are a key tool in managing and prioritising our
activity across People and Planet.
As with last year, we published a Fashion with
Integrity Progress Update alongside our
half-year results, looking back on the previous
financial year. This FY22 Progress Update can
be accessed on the ASOS plc website.
Within our Progress Update we cover our
performance across our FWI KPIs and metrics
(pages 8-41). We also summarise how we
currently define and measure our KPIs
(page 46 onwards). The report marked our
first sustainability reporting in reference
to the Global Reporting Initiative (GRI) and
Sustainability Accounting Standards Board
(SASB) reporting standards.
The regulatory and legislative landscape on
ESG matters is evolving rapidly across our
keymarkets. We are closely monitoring
sustainability legislation including upcoming
reporting requirements and will be adapting
our future approach to sustainability and
reporting accordingly. Implementing
technology, systems, and processes to enable
compliance with new and evolving legislation
(in particular around the capture and
assurance of data), remains a key area of
focus for our business.
As part of a broader review of environmental
claims used across the fast fashion retailer
sector, in July 2022, the UK Competition and
Markets Authority (CMA) opened an
investigation into ASOS and two other fashion
retailers in relation to environmental claims
used in connection with the promotion and
sale of fashion products (CMA Green Claims
Investigation). ASOS continues to co-operate
with the CMA Green Claims Investigation.
We are currently reviewing and where
necessary revising our FWI goals and KPIs.
This will ensure we are remaining true to our
Fashion with Integrity programme, while being
transparent on our progress using the most
relevant metrics. The revised FWI programme
is due for publication in FY24.
Fashion
with
integrity
Integrity
Below we have summarised our key activities
for FY23 across the four goal areas of Fashion
with Integrity. We have also continued to
deliver activity outside of these goals. This
includes publishing our 2030 Chemicals
Strategy (available at asosplc.com/
fashion-with-integrity/reports-and-policies)
for ASOS own brand products to ensure we
consistently deliver chemically-compliant
product to our customers, working closely
with our suppliers, dyehouses, printers,
leather processors and laundries.
FY23
in focus
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202316
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Be Net Zero
An important component of this year’s
Fashion with Integrity Progress Update was
our announcement of plans to update our net
zero ambition (see page 10 of the Progress
Update). This reflected the publication of the
latest Science Based Targets initiative
Corporate Net-Zero Standard
1
for businesses,
which focuses on setting and achieving
stringent, long-term emissions reductions
targets before neutralising residual emissions.
We are also reviewing our existing verified
science-based targets to ensure they align
with the latest best practice.
Our energy management system covers all
our direct operational sites globally. This year,
we have continued to identify and resolve
spikes in our energy consumption. We are
also in the process of conducting a feasibility
assessment to phase-out gas consumption
across these sites to reduce our emissions.
We are continuing to explore initiatives to
reduce emissions associated with not only
deliveries in our key territories, but also
returns and inbound shipment of goods.
Engaging with our suppliers to understand and
support their decarbonisation journey is key
to reducing our emissions. We have continued
to work with Worldly (formerly known as Higg)
to encourage sharing of detailed environmental
data from our top suppliers.
2
Through the
Worldly FEM (Facility Environmental Module),
suppliers must provide us with information on
their carbon emissions and other environmental
data and are encouraged to set targets and
devise action plans to reduce their emissions.
As more suppliers complete the FEM, we can
better estimate carbon emissions for our
ASOS own brand supply chain and identify
areas for improvement.
To read our latest performance data
against Be Net Zero, head to our Fashion
with Integrity: FY22 Progress Update.
For FY23 Scope 1 and 2 emissions data,
head to pages 30 and 31.
Be More Circular
Our focus on materials and embedding our
circular design principles
3
has continued
under our Be More Circular goal. This year we
have intensified our work to change the type
of materials we use in our products to more
sustainable alternatives (meaning raw
materials whose production has been proven
to have a lower environmental impact than
the production of conventional forms of these
materials). We have set clear interim internal
targets for use of more sustainable materials,
started rolling out mandatory training for our
product teams on more sustainable materials
and certification, and stepped up support to
our suppliers – including mandatory webinars
explaining their crucial role in switching
materials. We have also continued the
development of systems and processes
to better record and validate our use of
these materials, as described on page 20
of our Fashion with Integrity Progress Update
for FY22.
4
In 2022 we developed nine jeans styles and
seven denim styles that met The Jeans
Redesign guidelines.
5
The project was run
by the Ellen MacArthur Foundation from
2019-2023 and brought together leading
brands, fabric mills, and garment
manufacturers to follow a set of guidelines
and common definitions to redesign and
make jeans fit for a circular economy.
You can read more about the project, the
circular economy, and our participation on
the Ellen MacArthur Foundation’s website at
ellenmacarthurfoundation.org/the-jeans-
redesign/overview.
Products developed must meet a number
of mandatory guidelines to ensure they are
made to be used more (able to withstand 30
home washes), made from safe and recycled
or renewable inputs (such as using organic
cotton), and made to be made again (with
removable components such as buttons or
rivets replaced with bar tacks). Each product
also included a QR code printed inside
and linked to a webpage with information
on material composition and components
for disassembly.
Watch our Senior Sustainability Partner
Rebecca Garner discuss The Jeans
Redesign on the Ellen MacArthur
Foundation’s Circular Economy Show.
6
Through our ongoing partnership with Centre
for Sustainable Fashion (CSF), a research,
education and knowledge exchange centre
based at London College of Fashion, UAL, we
gathered lessons learned and feedback from
the product development teams who worked
on our previous circular design collections.
7
This feedback was used to create a circular
design tool which identifies the steps required
to successfully plan, develop, and release
a circular design collection. This tool will be
important in supporting the implementation
of our circular design strategies at scale
during the design stage and to empower
commercial teams.
Be Transparent
We say that we can’t fix what we don’t know,
which is why ensuring transparency and
visibility of our supply chain is so important to
protect those who work within it. We currently
have visibility of all manufacturing sites
(Tiers 1-3)
8
involved in the production of
ASOS own brand products, which we have
maintained for several years.
As part of our efforts to achieve greater
transparency into our material supply chain,
we implemented several key initiatives in
FY23. This includes developing and launching
a Tier 4 traceability policy, requiring all Tier 1
manufacturing suppliers to declare their
fabric mills; delivering internal fabric
management training, helping ensure fabrics
used in ASOS products are fit for purpose;
and implementing a fabric specification form
requiring all Tier 1 suppliers to complete fabric
information including name of weaver or
knitter, dyeing, and finishing and printing house.
For the first time this year, we also collaborated
with a mill and cotton farm based in Brazil and
a mill in Turkey to ensure we have visibility to
Tier 5. This project was completed with our
Womenswear denim team for three product
styles. Following its successful completion, we
are now looking to scale the project amongst
other product categories.
To support the delivery of our human rights
strategy, this year we completed a salience
human rights review. This supports the
prioritisation of our human rights work based
on the risks to people (as expected under the
UN Guiding Principles on Business and Human
Rights)
9
and based on an internationally
recognised methodology (described in the
UNGP Reporting Framework).
10
One of the key tools we use to ensure the
human rights of workers in garment factories
are respected and protected is social (ethical)
audits. We have developed a new social audit
methodology for our supply chain to support
us in meeting forthcoming obligations on
human rights due diligence. Through the new
audit methodology, we are collecting data
on the salient human rights risks in our supply
chain, which will help us to tailor our work
to specific needs in different regions and
support our suppliers to address issues.
Read our latest modern slavery statement
for more on how we manage risk in our
supply chain, available at asosplc.com
1 Read more at sciencebasedtargets.org/net-zero
2 More detail on this is provided on page 14 of our
Fashion with Integrity: FY22 Progress Update.
3 asos.com/discover/circular-design
4 asos-12954-s3.s3.eu-west-2.amazonaws.com/
files/8816/8501/9871/ASOS_Fashion_with_Integrity_
FY22_Progress_Update.pdf
5 emf.thirdlight.com/link/1jxg1ysqnxil-mz55wp/@/#
6 ellenmacarthurfoundation.org/videos/episode-65-
redesigning-jeans-and-buildings
7 asos.com/discover/circular-design
8 For a description of our Tier levels, head to: asosplc.
com/fashion-with-integrity/people/our-approach/
9 ohchr.org/sites/default/files/documents/publications/
guidingprinciplesbusinesshr_en.pdf
10 ungpreporting.org
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 17
Fashion with integrity continued
Working with our brand partners remains
akey part of our approach to driving
transparency and human rights in the fashion
industry. Throughout 2023 we have further
strengthened our approach towards our
brand partner due diligence: developing
new environmental and ethical screening
processes for vintage and pre-loved sellers
and working with the Fashion Minority Report
through the scaleUP project (detailed under
Be Diverse below) to understand how we
can make our on-boarding processes more
accessible for ethnic minority-owned brands.
We have also re-launched our self-assessment
questionnaire (SAQ) as an annual review
process for all existing brand partners to
enable us to identify potential adverse risks
within our extended supply base and develop
learning opportunities to further support
ourbrand partners to make improvements.
Within the FY24 self-assessment cycle,
all brands are asked to describe how
they monitor and assess the social and
environmental impacts of their business
operations. Additional support will be
available for small and growing brands over
the year ahead, including through the launch
of an FWI learning hub scheduled for FY24.
Be Diverse
This year saw the delivery of the final
chapters of our award-winning ALL IN
Learning Programme, offering our ASOSers
an opportunity to participate in diverse
learning experiences and engaging activities
and explore the interventions that support a
culture of inclusion at ASOS. We also continue
to drive our successful reverse mentoring
programme, expanding the experience from
our Management Committee to now include
all Senior Leaders across the business.
Our Talent Acquisition team continues to
playa key role in helping us build a diverse
workforce across ASOS by ensuring our
recruitment process is fair, inclusive, and
equitable. This year we have worked to deliver
a new talent sourcing approach that is fully
embedded into our Talent Acquisition team’s
recruitment process – introducing new
measures such as balanced shortlists, inclusive
job descriptions and hiring manager training.
We stepped up our Pride activity this summer,
continuing our partnership with global charity
Safe Space Alliance for a second year. This
two-year partnership and £40,000 donation
are all about supporting the sustainable
growth of the organisation, raising awareness
and expanding its directory of safe spaces
across as many locations as possible globally,
and strengthening the safety interventions
and support it offers members. We were
delighted to celebrate our LGBTQ+ employees
and customers at this year’s Pridecelebrations
across London, Berlin, andBelfast.
Our partnership with the Fashion Minority
Report (FMR) is focused on bridging the gap
between the fashion industry and
underrepresented talent. We continue to fund
and participate in projects that support the
creative and professional development of
young people from marginalised groups and
connect them with the industry. This includes
participating in the industry-led mentoring
programme for young professionals, with
four ASOSers becoming mentors and ASOS
fulfilling three placement roles for mentees –
with one mentee securing a permanent
position within the business. We were also
proud to host an insight day at our headquarters
for 25 students from NewhamCollege,
offering insight into the fashion industry
and the varying roles within the business.
Together with FMR we have also launched
scaleUP: an incubator programme to support
the upscaling of ethnic minority-owned brands
on ASOS and within the industry. Developed
collaboratively, the programme will provide
two successful candidates with insight and
guidance from leading industry experts,
wholesale opportunities including the launch
of one collection available exclusively on
ASOS, and one year of mentorship from
business leaders. The two successful
businesses will also pitch for up to £20,000
of funding each to support their growth.
In addition, the programme will also onboard
up to five additional emerging brands who will
benefit from workshops, mentoring, and the
opportunity to showcase their brand as part
of the February 2024 scaleUP press and
buyers’ showroom.
Read about scaleUP, our incubator
programme for ethnic-minority owned
brands delivered with the Fashion
Minority Report: www.asosplc.com/
news/fashion-minority-report-and-
asos-launch-scaleup-incubator-
support-ethnic-minority-owned-
fashion-brands
Pictured left:
One of our scaleUP
2023 winners,
designer Isabelle
Pennington Edmead
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202318
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Task Force on
Climate-related Financial
Disclosures (TCFD)
We recognise the importance of playing our
part in combatting climate change by working
to reduce our impact on the planet.
We acknowledge that our transition to being
alower carbon business and the physical
effects of global warming could impact our
operations, strategy and financial planning.
Climate change is an important issue for our
stakeholders. We’ve demonstrated our
commitment to sustainability and corporate
responsibility since 2010 within our Fashion
with Integrity (FWI) programme. Further
details can be found on pages 16 to 18.
Understanding and effectively monitoring our
risks and opportunities enables us to set
appropriate climate-related goals. Being able
to track our progress in a transparent way
and to make useful climate-related disclosures
is essential to maintain the trust and
engagement of our stakeholders. We fully
support the recommendations of the Task
Force on Climate-related Financial Disclosures
(TCFD) and welcome the positive impact that
these have on the integrity and comparability
of climate reporting.
Statement of consistency
The Group’s climate-related financial
disclosures below are set out with reference
to Sections 1 – 4 of the TCFD ‘Recommended
Disclosures’ from chapter ‘C. Guidance for
AllSectors’ within the TCFD’s publication
‘Implementing the Recommendations of the
Task Force on Climate-related Financial
Disclosures (2021)’ (the TCFD Guidance).
Wehave achieved consistency with six of the
11 Recommended Disclosures and partial
consistency for the remaining five. As we
continue to evolve and mature our processes
that support these disclosures, we are
working towards enhancing the quality and
consistency of our reporting. For transparency,
below we have outlined the Sections and
Recommended Disclosures where we are
not fully consistent and our planned response
to address these:
• Section 2 – Strategy
– Recommended Disclosures a), b),
andc): our disclosures only consider
theGroup’s direct operations and
own-brand supply chain. Although the
elements we have included represent
the largest and most direct areas of risk
to our business (making up 66.6% of our
total Greenhouse Gas (GHG) emission
footprint in FY22), we recognise there
are also physical climate risks associated
with our partner brands’ operations and
associated supply chains.
Our planned response: The breadth
and differing structures of our brand
partners’ operations and supply chains
make the task of incorporating them into
our analysis of climate-related risks and
opportunities complex. During FY23 we
have engaged with our partners to
identify the best approach to assess
these areas of risk and improve our
future disclosures. As part of updating
our scenario analyses in FY24, we work
towards incorporating these learnings
and improve our understanding of the
quantitative financial impacts of our
climate-related risks and opportunities,
with the aim of being consistent with the
TCFD Guidance in the next 1-2 years.
– Recommended Disclosure b): we have
not provided a transition plan to show
how we will meet the requirements of
the UK Climate Change Act 2008
(2050 Target Amendment) Order 2019,
although we acknowledge that we fall
under the jurisdiction of this legislation.
Our planned response: During FY24,
whilst updating our FWI Strategy and
reviewing its metrics and targets, the
Group will develop our Climate Transition
Plan. This will be aligned to the Transition
Plan Taskforce’s (TPT’s) recommendations
and will outline our plans for transitioning
to a low-carbon economy, meeting our
updated GHG emissions reduction and
net zero targets, and specific initiatives
supported by associated capital and
operational expenditure modelling that
will show how we can achieve our plan.
We expect this to be published in FY24.
• Section 4 – Metrics and Targets
– Recommended Disclosures a) and c):
we have not reported metrics or targets
relating to the following cross-industry
climate-related metric categories
(shown in bold) that are described
within Table A2.1 of the TCFD Guidance:
– Transition Risks – Amount and extent
of assets or business activities vulnerable
to transition risks
– Physical Risks – Amount and extent of
assets or business activities vulnerable
to physical risks
– Climate-Related Opportunities –
Proportion of revenue, assets, or other
business activities aligned with climate-
related opportunities
– Capital Deployment – Amount of
capital expenditure, financing, or
investment deployed towards climate-
related risk and opportunities
Our planned response: We are in the
final stages of developing and embedding
our new commercial model. This focuses
on improving our speed to market, and
reducing our stockholding and product
volumes, and will therefore impact our
supply chain and resulting inputs needed
when calculating appropriate metrics.
These changes could particularly impact
metrics relating to our physical risks as
the sources and structure of our product
intake evolves. In FY24 we are also
updating our FWI Strategy and
completing a review of its associated
metrics and targets. Updates to plans
for our Be Net Zero goal in particular,
willaffect the inputs for analysing our
transition risks and opportunities.
Once these changes have stabilised,
we will have better certainty over the
assumptions and mitigation plans needed
to enable calculation of accurate
quantitative financial metrics for our
climate-related risks and opportunities,
with the aim of being consistent with the
TCFD Guidance in the next 1-2 years.
In making this statement we consider
that these disclosures also meet
the requirements of LR 9.8.6 (8)
(UK ListingRules).
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 19
Task Force on Climate-related Financial
Disclosures (TCFD) continued
TCFD Guidance – 11 Disclosure Recommendations
Recommendation Description Consistency Pages
Governance
a) Describe the Board’s oversight of climate-related risks and opportunities. 20 – 21
b) Describe management’s role in assessing and managing climate-related
risks and opportunities.
20 – 21
Strategy
a) Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.
22
b) Describe the impact of climate-related risks and opportunities on the
organisation’s businesses, strategy, and financial planning.
22 – 27
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
22 – 27
Risk Management
a) Describe the organisation’s processes for identifying and assessing
climate-related risks.
28
b) Describe the organisation’s processes for managing climate-related risks. 28
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall
risk management.
28
Metrics and Targets
a) Disclose the metrics used by the organisation to assess climate-related
risks and opportunities in line with its strategy and risk management process.
28 – 29
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
28 – 29
c) Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
29 – 30
Key
Full Partial – as we have only considered
our direct operations and own-brand
supply chain
Partial – as we have only considered our
direct operations and own-brand supply
chain and are yet todevelop and publish
our Climate Transition Plan
Section 1: Governance – Disclose
the organisation’s governance
around climate-related risks
and opportunities
The paragraphs below capture our response
to Recommended Disclosures:
a) Describe the Board’s oversight of
climate-related risks and
opportunities, and
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities
The Group’s oversight of climate-related
risks and opportunities is delivered through
the Board, Committees and management
governance structures set out below.
Regular reporting and clear management
information enable effective oversight,
escalation of risks and timely responses.
Climate change risks and opportunities are
critical for the Group and are recognised and
tracked as one of our principal risks (shown
on page 48). The Board has established an
Environmental, Social and Governance (ESG)
Committee to oversee ESG matters and
delivery of the Group’s FWI Strategy. During
the year we have refreshed and strengthened
the skills and experience of the Committee
through new appointments. The Committee
is now formed of three Independent Non-
executive Directors, Anna Maria Rugarli (also
the Chair), Wei Gao and Jose Manuel Martínez
Gutiérrez, alongside Non-independent
Non-executive Director and Founder Nick
Robertson. For more information on the
Committee members’ relevant skills and
experience, please see the Board biographies
on pages 55 to 56.
The focus areas of the ESG Committee
include:
• Defining the Group’s ESG Strategy
(our FWI Strategy) and ensuring it aligns
with our Group Strategy and business
model. Under this focus area, the Committee
is driving an ongoing refresh of our FWI
Strategy and related goals for launch
later in FY24.
Partial – as we have not reported
metrics or targets relating to certain
cross-industry climate-related
categories shown in Table A2.1 of
the TCFD Guidance
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202320
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
• Overseeing the ESG practices and
initiatives of the Group to ensure they
remain appropriate, relevant and effective
in delivering our FWI Strategy. Monitoring
the output of these activities totrack
progress against our goals.
• Monitoring relevant legal and regulatory
requirements and ensuring our compliance
with these in conjunction with the activities
of the Board, Audit Committee and
Management Committee.
• Ensuring all stakeholders receive
appropriate and accurate information
about the Group’s ESG activities.
The ESG Committee meets as a minimum
bi-annually under its Terms of Reference and
provides feedback to the Board on climate-
related risks, opportunities, issues and
activities after each meeting. Within the
wider business other management forums
are in place which regularly report to the
ESG Committee and Board to support with
discharging their responsibilities.
Our Audit Committee is also formed of
Independent Non-executive Directors and
oversees and ensures the appropriateness of
the Group’s governance, risk management
and external reporting. Their activities include
providing oversight of the Group’s principal
risks, monitoring whether risks are being
managed within the Group’s risk appetite,
andthe identification and assessment of the
emerging risks, including those relating to
ESG. The Audit Committee meets quarterly
and provides feedback to the Board after
each meeting. For further details see our
Audit Committee Report on pages 69 to 74.
Our FWI Working Group is a management
forum attended by a cross-functional team
ofSenior Leaders from our Branded
Engagement, Sustainability, Ethical Trade,
Corporate Responsibility, Corporate Affairs,
Procurement, DEI, and Product teams. It is
chaired by the Senior Director of Strategy &
Corporate Development, Michelle Wilson, who
is also the Group’s lead for ESG activities. The
focus of the FWI Working Group is on managing
the risks and implementation of our FWI
Strategy, monitoring progress of initiatives
and against commitments, horizon scanning
requiring escalation and action, and ensuring
alignment of the FWI Strategy with the
overallASOS Strategy and business model.
The FWI Working Group feeds back to the
Management Committee on a regular basis.
Our Governance Working Group is a
management forum chaired by the General
Counsel & Company Secretary, Emma Whyte,
and is formed of a cross-functional group of
Senior Leaders. In addition to the General
Counsel & Company Secretary, the Group’s
members include the Interim Chief Financial
Officer, Senior Director of Operations,
Chief Information Security Officer, Head of
Compliance and Head of Internal Audit & Risk.
The Governance Working Group focuses
on ensuring effective management and
accountability of key governance processes,
procedures and controls, making sure we
are disciplined in our approach to business
and do the right thing, and acts as an
escalation point when significant unmitigated
risks are identified. The Governance Working
group reports to the Management Committee
on relevant topics as they arise.
Our Investor Relations team, Senior Director
of Strategy & Corporate Development and
CEO are responsible for ongoing engagement
with investors, and regularly raise and discuss
ESG topics throughout the year.
Due to the importance we place on climate-
related matters and to ensure that
management incentives continue to be
aligned with performance against our FWI
targets, including those linked to managing
climate change, the ASOS Long Term
Incentive Scheme includes an ESG modifier
(for further details see our Directors’
Remuneration Report on pages 80 to 93).
Responsibility for day-to-day management
ofthe Group’s risk profile sits with our
Management Committee, which includes our
CEO and Interim CFO. Our overall approach
to risk and opportunity management is
delivered under the ASOS Risk Management
Standard which applies to all areas of our
business and all types of risk and opportunity,
including those related to climate change. The
Interim Chief Financial Officer is accountable
for ensuring effective risk management
processes are in place, supported by the
Head of Internal Audit & Risk.
A formal review of our principal and functional
risks is conducted by management bi-annually
to assess current risk exposure, track
progress with mitigating actions, and
determine whether further activities are
needed to manage risks within our risk
appetite. An updated principal risk profile
is reviewed by the Audit Committee and the
Board following each review. ‘Sustainability
and climate change’ is identified as one of
our principal risks (page 48) and is included
within this review process. For more details
on our approach to risk management see
pages 44 to 45.
We have also provided details of how
climate-related risks and opportunities have
been identified and assessed through our
scenario analyses in Section 2: Strategy
on pages 22 to 27 and managed in Section 3:
Risk Management on page 28.
PLC Board
Responsibility for oversight of ESG matters delegated by the Board to the ESG
Committee. The Board receive updates from the ESG Committee following each meeting.
Board Committee chaired by an
Independent Non-executive Director.
Our ESG Committee shape and provide
governance over the Group’s FWI
Strategy and activities.
Board Committee chaired by an
Independent Non-executive Director.
Our Audit Committee oversee and
ensure the appropriateness of the
Group’s governance, risk management
and external reporting.
Management Committee
Formerly our Executive Committee and includes our CEO and Interim CFO.
Meets weekly and holds day-to-day responsibility for the management
of climate-related risks and opportunities.
FWI Working Group Governance Working Group (GWG)
Cross-functional team responsible for
tracking and steering business activities to
deliver our FWI Strategy. Chaired by our
Senior Director of Strategy & Corporate
Development and meets bi-monthly.
Ensures effective management and
accountability of key governance
processes, procedures and controls
across the company. Chaired by our
General Counsel & Company Secretary
and meets bi-monthly.
Be Net Zero*
Be More Circular*
Be Transparent*
Be Diverse*
Governance
* The four goals are set out in our FWI Strategy – further details are available on pages 16 to 18.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 21
Audit Committee
Environmental, Social and
Governance (ESG) Committee
Task Force on Climate-related Financial
Disclosures (TCFD) continued
Section 2: Strategy – Disclose
the actual and potential impacts
of climate-related risks and
opportunities on the organisation’s
businesses, strategy, and financial
planning, where such information
is material
a) Describe the climate-related risks
andopportunities the organisation
hasidentified over the short, medium,
and long term
In FY22 we completed deep dive scenario
analyses to better understand our potential
climate-related risks and opportunities, and
the impacts they could have on our business
and strategy, over relevant time horizons.
Thework was completed with Willis Towers
Watson using an approach underpinned
bydata from leading models and databases
utilised within the insurance industry for
pricing risk, climate models, published
research, and information from the
Intergovernmental Panel On Climate Change
(IPCC). This ensured that our results are both
robust and comparable to other organisations.
Further details on the specific scenarios
considered and assumptions made when
assessing our transition and physical risks
are set out in the table below.
Whilst these scenarios are useful in analysing
our potential climate-related risks and
opportunities, they are not predictions or
forecasts. The assumptions made may or
maynot become accurate depending on how
climate change trends continue or change.
In FY21 we engaged a specialist third party
service provider to complete a qualitative
materiality assessment by identifying
important sustainability and responsible
business topics that are material to ASOS.
The approach used in determining materiality
was based on guidance provided by the
Global Reporting Initiative (GRI). GRI states
companies should focus their efforts on
topics that reflect the organisation’s
economic, environmental and social impacts,
and the issues that most influence the
decisions of stakeholders. We have applied
this measure of materiality when selecting
our identified transition and physical risks
reported below, all of which are considered
material by nature.
The ‘Transition risks and opportunities’
and ‘Physical risks’ tables on pages 23 to 27
capture our response to Recommended
Disclosures:
b) Describe the impact of climate-related
risks and opportunities on the
organisation’s business, strategy,
andfinancial planning, and
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2ºC or lower
scenario
Our identified material climate-related risks
and opportunities under our assessed climate
scenarios are outlined on the following pages.
For each we have provided an indication of
their potential impact and how they have
or may affect our business, strategy and
financial planning. We have also provided
an overview of possible mitigations available
to us. Our analyses did not identify any
opportunities related to the physical impacts
of climate change, but opportunities relating
to the transition to a lower-carbon economy
were identified and have been presented in
line with Table A1.2 of the TCFD Guidance.
Risk and opportunity types Scenarios and assumptions Assessment
Transition risks and opportunities from moving
toa lower-carbon economy
• Caused by a requirement for rapid changes
in business models or operations, climate
regulation/legislation, technology, market
dynamics; as well as resulting reputation impacts
• Impacts which could occur within the time horizons
assessed include Policy & Legal (e.g., regulatory,
compliance, litigation costs or pricing of
emissions), Technology (e.g., replacing higher
emission technology), Market (e.g., customer
behaviours, raw materials costs, cost of capital),
and Reputation (investment, stakeholder risk)
• Impacts are expected to manifest more quickly so our
analysis focused on outcomes in the Short Term (2025)
andMedium Term (2030)
• Two temperature scenarios assessed aligned with projected
requirements to keep global warming below +1.5ºC and
+2.0ºCabove pre-industrial temperatures, in line with
theParisAgreement (NGFS Net Zero 2050) and scenario
analysisrecommendations and recommendations within
theTCFD Guidance
• Assessment of potential risks
under each scenario made with
reference to the impact
measurement scales used under
our risk management processes
2
• The scale of transition
opportunities has not yet been
fully assessed
Physical risks from the effects of climate change
on the environment, weather and extreme events
• Caused by global warming leading to more
extreme weather events including drought,
excessive heat, wildfires, flooding, heavy
precipitation and cyclones
• Issues which could occur within the time horizons
assessed include Acute risks (i.e., events based
including storms, tornadoes, floods, lightning,
wildfires etc) and Chronic (i.e., longer-term effects
including heat stress, precipitation, droughts,
sea level rises etc)
• Risks are expected to manifest more slowly so our analysis
focused on outcomes in the Long Term (2050)
• Temperature scenarios assessed:
– Global warming kept below +2.0ºC above pre-industrial
temperatures
1
(1.5ºC scenario) in line with the Paris
Agreement (NGFS Net Zero 2050) and scenario analysis
recommendations within the TCFD Guidance
– Alternative +4.0ºC above pre-industrial temperatures
1
• Transition to lower-carbon economy has occurred under the
+1.5ºC scenario whilst only minimal transition has occurred
under the +4.0ºC scenario
• Asset exposure assessment completed on all our own
operations, Tiers 1 – 3 of the our own-brand supply chain
(covering 45 of top 50 suppliers, 265 locations, 60% of
own-brand intake value, and 62% of all materials by weight in
FY22), and key raw material sourcing regions (Tier 5) for two
most used natural materials (cotton & viscose)
• Assessment of potential risks
under each scenario made with
reference to scales tailored for
each type of acute or chronic risk
that formed part of the scenario
model, and were benchmarked
using external public domain data
sources and resources
2
• Partner brands were outside of
the scope of this first analysis.
We are aiming to incorporate
related areas of risks during our
refresh of our analysis in FY24
1 Scenarios in line with the Intergovernmental Panel On Climate Change (IPCC) representative concentration pathways RCP 2.6 and RCP 8.5 respectively.
A Representative Concentration Pathway (RCP) is a GHG trajectory adopted by the IPCC. The pathways describe different climate change scenarios,
all of which are considered possible depending on the amount of GHG emitted in the years to come.
2 Please note, our approach to subsequently determining the materiality of identified risks is explained above.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202322
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
As outlined in the table on page 22, we note
that our approaches used to analyse and
assess potential transition and physical
impacts differ. As a result, the assessments
below are based upon different scales with
transition risks assessed on a minor/
moderate/major scale (we note the scale of
transition opportunities in each scenario has
not yet been fully assessed), and physical risks
assessed as very-low/low/moderate/high/
very-high. Additionally, the potential
transition risks are reported after controls
and mitigations (residual risks) whilst potential
physical risks are reported before controls
(inherent risks). Whilst this variation in the risk
assessment methodologies does not enable
direct comparisons, all risks reported are
considered material by nature as explained
under Section 2: Strategy, Recommended
Disclosure a). We will look to improve on the
comparability of our physical and transition
risks when refreshing our underlying scenario
analyses during FY24.
Our ‘Statement of consistency’ on pages 19
to 20 notes we are in the final stages of
developing and embedding our new
commercial model and are updating our FWI
Strategy including reviewing its associated
metrics and targets. The resulting changes
impact the certainty we have over
assumptions and mitigation plans needed to
enable accurate quantitative financial impact
analysis for our climate-related risks and
opportunities. During FY24, following our
review, we will update our scenario analyses
and aim to provide enhanced reporting in
these areas within our FY24 Annual Report.
As noted in Note 14 on pages 134 to 135 of our
financial statements, we have been unable
to model a specific climate-related impact
on cash flows for use in impairment testing.
A sensitivity analysis is included showing how
much revenue and gross margin can reduce
by (vs forecast amounts) before an
impairment is required.
The results of our analyses confirm the
importance of continuing our work to
enhanceour understanding of the critical
dependencies of climate change on our
business and to ensure we have action plans
inplace to help mitigate these risks. When
refreshing our analyses in FY24 we will also
work towards including risks and opportunities
from our partner brands’ supply chains.
This will be further strengthened by the
development of our Climate Transition Plan,
aligned to the TPT’s recommendations. Our
updated scenario analyses will enable new
insights into how climate risks and opportunities
may impact the resilience of the Group’s
strategy and allow us to prepare for this.
Transition risks and opportunities
Category Risks and opportunities Analysis
Scenario
Potential risk exposure assessed over:
Short Term (2025) Medium Term (2030)
Key
Policy &
Legal
Greenhouse gas (GHG)
pricing/taxation
+2.0ºC Pathway
+1.5ºC Pathway
Product mandates
+2.0ºC Pathway
+1.5ºC Pathway
Climate litigation
+2.0ºC Pathway
+1.5ºC Pathway
Enhanced reporting
requirements
+2.0ºC Pathway
+1.5ºC Pathway
Technology Low-carbon technology
+2.0ºC Pathway
+1.5ºC Pathway
Market Changing consumer
preferences
+2.0ºC Pathway
+1.5ºC Pathway
Increased cost of
raw materials
+2.0ºC Pathway
+1.5ºC Pathway
Cost of capital
+2.0ºC Pathway
+1.5ºC Pathway
Emissions offset
+2.0ºC Pathway
+1.5ºC Pathway
Reputation Investment risk
+2.0ºC Pathway
+1.5ºC Pathway
Stakeholder risk
+2.0ºC Pathway
+1.5ºC Pathway
Employee risk
+2.0ºC Pathway
+1.5ºC Pathway
Assessment
Underway in
FY24
Major
Risk
Minor
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 23
Task Force on Climate-related Financial
Disclosures (TCFD) continued
Category Transition impact – risk description Business response and opportunities
01 Policy &
Legal
Greenhouse gas (GHG) pricing/taxation – As expected, this risk
is more acute under a +1.5ºC scenario as this would require more/
quicker transition activities. The pricing of UK GHG emissions is
expected to increase. This could increase our operating costs and
reduce profitability.
Uncertainty around future UK GHG emission pricing and cost
implications of other climate-related regulations (e.g., cap and
trade schemes) could require us to change strategy and could
make the replanning of future operations more difficult or less
profitable.
Business response: We are focused on reducing carbon
emissions, with the setting of science-based targets which have
been approved by the Science Based Targets initiative (SBTi).
During FY24, we will update our FWI Strategy and will set updated
absolute targets to ensure alignment with the latest climate
science and to ensure full transparency on our progress towards
net zero.
Opportunity: Committing to reducing absolute emissions in line
with an updated net zero target will require the implementation
of resource efficiency initiatives across our operations. This could
have positive financial impacts through reducing our operating
costs in both the Short and Medium Term.
Product mandates – Under both temperature scenarios,
regulation of products is likely to intensify, with increased
requirements over the Medium Term.
Changes could include mandated emission reporting/carbon
footprint labelling per product and/or enhanced regulatory
scrutiny of green credentials of products and could increase
compliance costs and reduce our profitability.
Business response: Some impacts of these changes are already
being experienced or are being introduced across parts of our
value chain (e.g., extended producer responsibility legislation in
the UK and EU). We expect the number of changes in this area to
increase significantly in the Medium Term from 2025 and beyond
and for it to then affect wider categories of products.
We may be able to offset some of the impact from this risk by
switching to more sustainable materials (packaging and products).
We are already undertaking activities in this area and intend to
accelerate this work to pre-empt future regulation of products.
Opportunity: Switching to more sustainable materials could
improve our competitive advantage where this reflects shifting
consumer preferences, and as a result increase our revenue or
profitability in the Short and Medium Term.
Climate litigation – Climate-related litigation claims brought by
investors, insurers, shareholders and public interest organisations.
Claims could relate to a failure to adapt to climate change
requirements, greenwashing through overstating positive
environmental impacts or understating risks/insufficient
disclosure around material financial risks. The fashion industry
produces between 3% and 10% of carbon emissions globally,
hence it could be a sector of focus in the future.
Settling claims could increase our costs and related negative
publicity could impact our reputation and customer sentiment
leading to a reduction in revenue.
Business response: We could minimise potential costs through
developing and embedding effective processes and infrastructure
to capture and address compliance with emerging legislative
requirements.
Effective management of litigation processes and any public
communications when dealing with claims could reduce our
reputational risk.
Opportunity: This potential climate-related impact was not
assessed to provide any opportunities.
Enhanced reporting requirements – Additional emissions-
related reporting requirements apply to ASOS by 2030. This
includes the Corporate Sustainability Reporting Directive (CSRD),
the Corporate Sustainability Due Diligence Directive (CS3D), and
the UK Sustainability Disclosure Standards (SDS). Such changes
could add a significant reporting burden.
These increasing requirements can increase compliance costs
and so reduce our profitability.
Business response: We are aware of and are preparing to make
disclosures in line with CSRD, CS3D and UK SDS with adoption
in the mid to late part of this decade. Early planning for the
requirement will help us to manage implementation costs and
additional time will facilitate us identifying the most cost-effective
solutions for compliance.
Opportunity: This potential climate-related impact was not
assessed to provide any opportunities.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202324
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Category Transition impact – risk description Business response and opportunities
02 Technology
Low-carbon technology – To meet emission reduction targets
under both temperature scenarios, we will need to invest in new
technologies (e.g., increasing digitisation of steps within garment
production) to both reduce existing emission levels and prove the
sustainability of its products to customers. This could increase
required property, plant and equipment (PPE) investment and
reduce capital available to invest in other strategic priorities.
We could also fail to implement or take full advantage of these
technologies, potentially reducing our competitiveness and
increasing other costs, such as through GHG taxation.
There is also a risk that suppliers pass on the associated cost of
their investment in this technology to us, which could increase our
input costs and reduce our profitability.
Business response: Across our value chain, technology changes
for lower-carbon alternatives will provide us the opportunity to
reduce emissions, drive efficiency and improve resilience.
We work closely with our partners to help ensure the best joint
outcomes. Our agreements with third parties contain clauses
which manage the levels of cost increase which can be passed on
during the life of the agreement. We could also retender to seek
better price alternatives for goods and services at appropriate
break points in agreements.
Opportunity: Reacting quickly to embrace new technologies
could ensure we retain competitive advantage, for example the
use of Artificial Intelligence and advanced analytics to respond
quicker to demand and reduce waste associated with over-
stocking. This opportunity could be realised over both a Short
and Medium Term horizon.
03 Market
Changing consumer preferences – Consumers are increasingly
aware of climate change and its impacts which leads to increasing
consumer expectations around the sustainability of products.
Where we are unable to supply what our consumers want or
customers are more engaged by our competitors, we may lose
sales, leading to a reduction in revenues.
Business response: Through our FWI Strategy we will continue
to work towards our climate change goals to keep and grow
the engagement of our customers and stakeholders, through
effective communication of our efforts and successes.
Opportunity: We could capitalise on this opportunity in the
Short and Medium Term by catering to increased consumer
demand for more sustainable products to provide a positive
business impact in the future through growth of sales and
profitability.
Increased cost of raw materials – As the wider market moves
to using more sustainable materials in packaging and products,
it may result in increased input costs including where demand
outstrips supply. This could increase our costs, reduce our
profitability or reduce our market competitiveness if we were
unable to source these products but our competitors could.
Business response: While wider market changes may create risk
by increasing potential cost of raw materials, increased demand
coupled with support from governments and greater investment
from the fashion industry could increase supply and reduce these
costs in the Short and Medium Term.
Opportunity: Building increased transparency of the supply
chain and investing in sustainable materials will enable better
security of supply and pricing.
Cost of capital – As credit ratings begin to incorporate climate
change considerations, there is a risk that credit ratings could
be influenced by climate change and the cost and availability of
capital increased/decreased.
Business response: We are seeing across industry that the cost
of capital can be reduced when linking financial instruments to
ESG targets and positive performance. As our activities mature
in line with our FWI Strategy, the opportunities to realise these
benefits will increase.
Opportunity: Obtaining green financing bonds could lower our
cost of capital and reduce our interest costs.
Emissions offset – The supply of carbon credits currently
exceeds demand (carbon credits currently costing between
$3 -$13 per tonne). As more companies commit to net zero target,
the demand for carbon credits could increase, resulting in higher
prices in the market. This additional spending could reduce our
profitability and reduce our capacity to invest the related capital
in other strategic priorities.
Business response: The pricing and mechanisms for securing
appropriate offsets across the value chain is uncertain. As we
decarbonise the business and work to deliver our updated FWI
Strategy, the accuracy of these forecasts will improve.
Opportunity: In line with the latest SBTi best guidance, we will
move towards plans to reduce emissions, and only use offsets to
remove residual amounts after securing a minimum 90% absolute
emission reduction. This will reduce our exposure to carbon credit
cost increases that would reduce our profitability.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 25
Task Force on Climate-related Financial
Disclosures (TCFD) continued
Category Transition impact – risk description Business response and opportunities
04 Reputation
Investment risk – Failure to meet publicly stated sustainability
goals and/or disclosure requirements could negatively impact
our reputation with investors. This could decrease our investment
attractiveness and thereby potentially increase our cost of
capital if our options for access to funding reduced.
Business response: We will continue to improve transparency in
ESG reporting including further external assurance on reported
data in line with our assurance plans.
Opportunity: We could gain new and greater investment
from investors in both the Short and Medium Term, through
our proposition and reporting on progress against our updated
FWI Strategy (to be published in FY24).
Stakeholder risk – By 2030, social pressure regarding
sustainability and increased public awareness could create
a reputational risk. This could reduce our revenue as customers
shop elsewhere due to perceptions of our sustainability activities
or ethical practices within our supply chain.
Business response: Key stakeholders such as NGOs and brand
partners are increasingly interested in our ESG performance and
strategy. Continuing to meet the requirements and expectations
of those stakeholders will be important to maintain positive
relationships.
Opportunity: Through being transparent about our ESG
performance, we have potential to secure reputational benefits
resulting in increased demand for goods/services and that could
increase revenue and profitability over a Short and Medium Term.
Employee risk – As employees become increasingly concerned
with climate change issues, negative publicity around failure to
deliver sustainability targets, and failing to effectively incorporate
climate change considerations into decision-making could make
it difficult for us to attract and retain the best talent. This could
negatively impact delivery of our strategy or increase our
employment costs if we were required to pay above market
rates to access talent.
Business response: Our Management Committee members,
and Senior Leaders already have part of their remuneration
linked to delivery of the FWI Strategy.
Opportunity: Ensuring effective communication of our updated
strategy and progress with climate action will ensure employee
understanding of progress with our activities to attract and
retain talent in the Short and Medium Term.
Physical risks
Risk Analysis scenario Potential level of risk exposure by 2050 assessed over:
ASOS Operations ASOS Supply Chain
A
Drought
(Chronic)
+4.0ºC pathway (RCP8.5)
+1.5ºC pathway (RCP2.6)
B
Heat Stress
(Chronic)
+4.0ºC pathway (RCP8.5)
+1.5ºC pathway (RCP2.6)
C
Wildfire
(Acute)
+4.0ºC pathway (RCP8.5)
+1.5ºC pathway (RCP2.6)
D
Flooding
(Chronic &
Acute)
+4.0ºC pathway (RCP8.5)
+1.5ºC pathway (RCP2.6)
Key
Risk
InsignificantVery High
Very Low
Moderate
High
Low
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202326
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Physical
risk
Risk description Business response and mitigations
A Drought
(Chronic)
Scarce water resources could impact utilities, cotton growing
regions and forestry.
Our operational locations have a low or very low exposure to
drought, with no major impacts identified.
Under a +4ºC scenario, there could be a significant impact for our
supply chain, particularly where facilities rely heavily on water for
manufacturing, such as dyeing materials and viscose production.
By 2040, under a +4ºC scenario, all of our main cotton sourcing
regions are atmoderate to very high risk of short-term and
long-term drought.
Short-term drought can affect cotton yields particularly at key
stages of the growth cycle. Multi-year drought events can also
have a significant effect.
Lower cotton or viscous yield could increase our input prices and
reduce our profitability.
No mitigation actions are currently considered for our operations
due to low levels of risk but we will continue to monitor and review
our approach accordingly.
In FY22, 200 of our Tier 1-4 supplier facilities responded to the
Worldly (formerly known as Higg) Index Facility Environmental
Module (FEM). This represented 70% of our top suppliers by business
volume intake and included an assessment from either the World
Wildlife Fund (WWF) Water Risk Filter or the World Resources
Institute (WRI) Aqueduct Tool. Completing these submissions
supported suppliers with understanding their water use and their
water risk in a local context.
Switching input materials to 100% more sustainable cotton will
reduce our risk. This could include sourcing recycled cotton as an
alternative to virgin cotton, as well as sourcing cotton from a
certified standard such as Organic, which provides farmers with
support and training in climate mitigating strategies, such as
managing drought and identifying drought-resistant cotton seed
varieties. Please refer to Section 4 Metrics and Targets for
information on our related targets and progress againstthese.
B Heat
Stress
(Chronic)
Could impact working conditions and require a level of adaptation
such as air conditioning to ensure the health & safety of workers.
Even under a +1.5ºC scenario, our US Fulfilment Centre location was
identified as having a high exposure to heat stress, meaning 80-180
number of days in a heatwave annually.
Cotton crops also cannot survive prolonged exposure to heat
stress; temperatures over 40°C pose a significant risk to yields.
Under a +4ºC scenario, cotton growing regions of Pakistan have
significant exposure to heat stress.
Adaptions, a lack of workers and lower cotton yield could increase
our input costs and reduce our profitability.
We could mitigate this risk by ensuring appropriate health & safety
measures in own operations, including heat management systems
and air conditioning.
Working with suppliers closely and inspecting factories could reduce
this risk by ensuring presence of sufficient ventilation systems and
other relevant mitigation measures addressing humidity, air quality
and temperature. Further, increased transparency of our supply
chain will support identification of direct risks andimpacts.
Reducing our reliance on virgin cotton by increasing the volume of
recycled cotton in our ranges could also reduce our exposure to
thisrisk.
C Wildfire
(Acute)
Could impact key infrastructure including buildings, roads and
utilities; present a threat to human life, agricultural crops and
forests; or cause large scale disruption to our supply chain and
distribution.
These factors could increase our input costs and reduce our
profitability. Ethical issues in our supply chain could also negatively
impact our reputation leading to lost customers, revenue and
reduced investment attractiveness.
Under a +4ºC scenario, we found cotton growing regions in India,
Pakistan and the USA had significant exposure to wildfire by 2040.
In our operations mitigation measures could include:
• Reviewing local plans for warning and evacuation and
implementing an early warning system;
• Reviewing surroundings to assess if there is sufficient separation
from other buildings, trees and material that can act as fuel; and
• Reviewing building/factory design for levels of building
protection.
Increased visibility and monitoring of our supply chain will give us
a greater understanding of our exposure to high-risk regions and
opportunities to work with our suppliers on physical mitigation.
D Flooding
(Chronic
& Acute)
Could cause physical damage to buildings and equipment, impact
to utilities, facility access issues and possible delays in resuming
operations in supply chain and distribution, with an associated
impact on our costs.
Flooding could impact cotton crops and cotton plantations.
This includes the impacts from river as well as coastal floods
and sea level rises and could increase our input costs.
In the short term, under a +4ºC scenario, river flood changes for
the cotton growing regions might not be significant but there
is a notable baseline risk today for countries like Bangladesh and
Pakistan. By 2040 coastal flood and sea level rise pose a significant
risk to Bangladesh, regions of India and China under a +4ºC scenario.
No mitigation actions currently due to low levels of risk but no
mitigation actions currently for our operations due to low levels
of risk but we will continue to monitor this risk and review our
approach accordingly.
Engaging high risk suppliers to assess their preparedness and
engage with cotton producers to understand how the risk is
managed could provide assurance over controls in our supply
chain for managing this risk.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 27
Task Force on Climate-related Financial
Disclosures (TCFD) continued
Section 3: Risk Management –
Disclose how the organisation
identifies, assesses, and manages
climate-related risks
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks
Climate-related risks (including those related
to existing and emerging regulation and
legislation) are within the scope of our overall
risk management approach described on
pages 44 to 45, which sets out our processes
for identifying, assessing and escalating
risks where appropriate. Our ASOS Risk
Management Standard includes defined
measures of impact and likelihood for
assessing all risk types. Our universal
approach enables us to understand what
material risks are to ASOS, to ensure
assessments are comparable between
different types of risk, and to drive the right
outcomes for avoiding, treating, or accepting
risks in line with our risk appetite. Through this
approach, Climate Change and Sustainability
has been identified as a principal risk.
b) Describe the organisation’s processes
for managing climate-related risks
A formal review of all business risks is
completed every six months, which considers
the level of exposure, progress with mitigating
actions, and whether additional activities are
needed for existing risks, as well as scanning
the horizon to identify and assess new
potential risks before they emerge. Risk
reviews are the responsibility of functional
Management Committee members and their
Senior Leaders, supported by our Risk
Management team. For risks outside of our
risk appetite, appropriate treatments are put
in place to either mitigate, control, or accept
the risk. This can include transferring risks
outside of the organisation, e.g. by ensuring
we have appropriate insurance.
Where results of completed reviews indicate
changes to our principal risks these are
updated as part of the formal bi-annual
review. Our principal risks include our
recognised risk across Climate Change and
Sustainability (see page 48). Our ASOSers are
also guided to continually Identify, Analyse,
Treat, Report and Monitor risks under our
Protect, Anticipate and Grow framework
within the ASOS Risk Management Standard.
If our updated scenario analyses in FY24
uncover material new or emerging risks, not
currently addressed in our principal risks,
then these will be reported to our
Management Committee and subsequently
our Audit Committee and Board, in line with
the escalation process set out in the ASOS
Risk Management Standard.
c) Describe how the processes for
identifying, assessing, and managing
climate-related risks are integrated
into the organisation’s overall risk
management
Our FWI Working Group maintains an ESG Risk
Register which captures cross-functional
climate-related risks and opportunities that
could impact our business. This includes risks
and opportunities related to those identified
through our deep dive analyses outlined in
Section 2: Strategy on pages 22 to 27).
These risks are reviewed as part of our
outlined processes for overall risk
management and feed into our principal risks.
Section 4: Metrics and Targets –
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material
The paragraphs below capture our response
to Recommended Disclosures:
a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process
b) Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks
The key metrics we currently use to measure
and manage our climate-related risks and
opportunities are our GHG emissions, as
these are the key driver of temperature
increases and so are the key root cause of all
climate-related risks and opportunities we
have identified. Other metrics and targets
are being considered by and may form part of
the updated FWI Strategy due to be finalised
during FY24.
We have presented our Scope 1, 2 and 3
emissions metrics on page 30 (sources of
emissions included within each Scope measure
are show in the table below, which covers our
entire value chain), and are calculated and
reported on an annual basis. In calculating
our emission metrics, we apply best practice
laid out in the GHG Reporting Protocol –
Corporate Standard (Operational Control
Boundary). Emissions relating to category 8
(upstream leased assets) have been included
in our Scopes 1 and 2 footprint and emissions
relating to categories 9 (downstream
transport and distribution), 10 (processing of
sold goods), 13 (downstream leased assets),
14(franchises) and 15 (investments) have
been excluded from our Scope 3 value chain
footprint, as these either fall outside our
operational boundary of control or have been
determined to be irrelevant or immaterial.
We also use the latest emission factors from
the UK Government’s Conversion Factors for
Company Reporting combined with industry-
specific factors such as the Sustainable
Apparel Coalition’s Worldly Materials
Sustainability Index (MSI).
Our Scope 3 emissions footprint for our most
recent full-year reporting cycle (covering
FY22) amounts to 1,738,708 tCO
2
e (FY21
1,506,834 tCO
2
e). A full breakdown of the
sources of Scope 3 emissions can be found
onpage 9 of our FY22 FWI Update Report,
published in May 2023. Please note that due
tooutlined changes to the calculation
methodology between FY23 and FY22, the
Scope 3 figures are not directly comparable.
In FY24, we plan to re-baseline our methodology
to ensure it can be applied consistently going
forward. Once set we will update and restate
our historical emissions in our next climate-
reporting, applying the latest methodology
to allow for transparent trend analysis.
Our existing processes and access to the
data needed to calculate our Scope 3
emissions mean that we currently report our
full year emission figure within our subsequent
FWI Update Report published at the following
half year. We have been working on improving
our approach and next year expect to publish
both our FY23 and FY24 Scope 3 emissions
metrics in our FY24 Annual Report, as well
asour re-baselined historical emissions.
Following this we will include all financial and
sustainability related data and disclosures
in a singular comprehensive Annual Report
following each year end.
For FY22 we obtained external assurance on
our FY22 Scope 1 and 2 emissions metrics for
the first time. PricewaterhouseCoopers LLP
(PwC) conducted an independent limited
assurance engagement on these selected
GHG emissions figures for the year ended
31 August 2022, in accordance with
International Standard on Assurance
Engagements 3000 (revised), and the
International Standard on Assurance
Engagements 3410, issued by the
International Auditing and Assurance
Standards Board. A copy of PwC’s report
and methodology is available on the ASOS
Plc site at www.asosplc.com/fashion-with-
integrity/limited-assurance/.
For FY23 we have decided not to seek
external assurance over our Scope 1 and 2
emission metrics or any other areas of this
disclosure, as our methodology for collecting
the required data and calculating our
emissions metrics has remained largely
unchanged. As noted above we are currently
updating our FWI Strategy including reviewing
its associated metrics and targets. Where
our review results in methodology changes for
calculating our Scope 1 or 2 emissions we will
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202328
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
reassess the need for assurance when
preparing our FY24 Annual Report.
In addition to GHG emissions, we previously
reported on a sector-specific metric: the %
ofraw materials in our own-brand products
made from recycled or more sustainable
materials calculating our more sustainable
fibres percentages using internal systems
and working with suppliers and external tools
(such as the Sustainable Clothing Action Plan
calculator). Better Cotton Initiative data was
obtained directly from the external Better
Cotton Platform (BCP). We are in the process
of reviewing our systems and processes for
material attribution, so therefore did not
disclose our performance against this metric
in our latest FWI Update Report or here.
The metric and associated target is being
reviewed as part of the update to our FWI
Strategy in FY24. For further detail, please
see page 18 of our FY22 FWI Update Report.
c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and
performance against targets
Since the launch of our updated Fashion with
Integrity Strategy in 2021, the SBTi has
published its Corporate Net-Zero Standard
for businesses on how to define achieving net
zero carbon emissions. It focuses on setting
and achieving stringent, long-term absolute
emissions reductions targets before pursuing
net zero via other means such as offsetting.
Following publication of the Standard, this
year we have decided to revise our previous
Be Net Zero target (to be net zero across our
value chain by 2030 against a 2018/19
baseline), as this relied heavily on carbon
offsetting, which we acknowledge is no longer
best practice. In line with the latest SBTi best
guidance, we will focus on achieving net zero
by prioritising the absolute reduction of
carbon emissions, and only using offsets to
remove residual amounts after securing a
minimum 90% absolute emission reduction.
Our original emissions reduction targets
were aligned to the Paris Agreement
and were supported by intensity-based
(measured as a proportion of output) KPIs
measured annually covering our operations,
transport, supply chain and partner brands.
These KPIs, verified by the SBTi, are:
• Reduce our Scope 1 and 2 emissions/order
by 87% by 2030 vs 2018/19 baseline;
• Reduce transportation emissions
1
/£profit
by 58% by 2030 vs 2018/19 baseline;
• Reduce own-brand product
emissions
2
/£profit by 58% by 2030 vs
2018/19 baseline; and
• Two thirds of partner brands (by emissions)
signed up to setting targets in line with
Science Based Targets initiative (SBTi)
requirements by 2025
3
.
As part of our ongoing review of our FWI
Strategy and related metrics, this year we
willbe updating our existing verified science-
based targets and our net zero ambition to
ensure we align to the latest climate science.
We will be setting absolute emissions
reduction targets across our operations
and value chain, which will be enabled through
an update to our carbon baseline to reflect
recent improvements in data visibility across
our Tier 1 – 4 suppliers. This will ensure that
our new near-term and net zero targets
are robust, realistic and supported by data,
which will be demonstrated through a
Climate Transition Plan aligned to the TPT’s
recommendations. By updating our Be Net
Zero goal, we can better allocate capital
that would have been used in offsets
resources towards decarbonisation and
emissions reduction.
In relation to our sector-specific metric
disclosed in Section 4: Metrics and Targets,
Recommended Disclosures b), we have a
target addressing the need to switch to more
sustainable materials, as highlighted in our
transition risks and opportunities table in
Section 2: Strategy, Recommended
Disclosure b). Investing in sustainable
materials will enable better security of
material supply and pricing, whilst also
securing a better competitive position for
the Group, reflecting expected shifts in
consumer preferences and demand.
Although this target is being revised as part
of our wider FWI Strategy update, the original
target is as follows:
• 100% of own-brand products made from
recycled or more sustainable materials
4
by 2030, with pathways in place for
prioritising high-impact materials.
For further detail on the methodologies for
calculating these metrics and progress
against targets, please refer to pages 10-20
of our FY22 FWI Update Report.
1 Covering GHG emissions associated with all
transport covered in Scope 3 Category 4
Upstream Transportation and Distribution
(inbound, inter-warehouse transfers, outbound,
and returns).
2 Cradle to gate Scope 3 GHG emissions
associated with the manufacture of all products
purchased by ASOS as part of our 17 own brands.
3 Calculated using the ASOS Value Chain Carbon
Footprint Model developed by Carbon Trust.
4 We previously calculated our more sustainable
fibres percentages using internal systems,
working with suppliers and external tools
(such as the Sustainable Clothing Action Plan
calculator). Better Cotton Initiative data is
obtained directly from the external Better
Cotton Platform (BCP).
Sources of emissions included within our presented Scope 1, 2 and 3 measures
Scope 1 – Direct emissions fromfuels Scope 2 – Indirect emissions
fromelectricity
Scope 3
Upstream Downstream
• Gas consumption and F-gas leakage
in our offices and fulfilment centres
• Electricity consumption in our
offices and fulfilment centres.
Location-based (LB) Scope 2
emissions reflect the average
emissions intensity of the regional
grid. Whilst, market-based (MB)
Scope 2 emissions take into
consideration our purchasing
decisions, such as renewable
energy contracts
• Category 1a. Own-brand product and packaging
• Category 1a. Partner brand product and
packaging
• Category 1b. Non-product purchased goods
and services
• Category 2. Capital goods
• Category 3. Fuel and energy related activities
(Transmission and Distribution, and Well-to-tank)
• Category 4. Inbound, Outbound and inter-
warehouse transport and distribution
• Category 5. Operational waste and wastewater
• Category 6. Business travel and hotel stays
• Category 7. Employee commuting
• Category 11. Product
use-phase
• Category 12. Product
end-of life
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 29
UK Portion Total Global
Unit of measurement FY23 FY22 % change FY23 FY22 % change
Scope 1 emissions from combustion of gas tCO
2
e
2,147
2,258 -5% 2,785 3,351 -17%
Location-based (LB)
Scope 2 emissions – emissions from purchased
electricity (LB)
tCO
2
e 4,065 4,507 -10% 10,770 11,497 -6%
Total of Scopes 1 and 2 (LB) tCO
2
e 6,212 6,765 -8% 13,555 14,848 -9%
Intensity Ratio – total tCO
2
e/£m revenue (LB) tCO
2
e/£m revenue – – – 3.82 3.77 +1%
2
Market-based (MB)
Scope 2 emissions – emissions from purchased
electricity (MB)
tCO
2
e – – – 2,896 2,860 +1%
1
Total of Scopes 1 and 2 (MB) tCO
2
e 2,147 2,258 -5% 5,681 6,211 -9%
Intensity Ratio – total tCO
2
e/£m revenue (MB) tCO
2
e/£m revenue 1.60 1.58 +1%
2
1 This 1% increase in MB Emissions is due to the expansion of our operations in the US. Currently our US fulfilment centres are not supplied by renewable electricity,
however we are committed to resolving this in FY24 and eliminating all Scope 2 MB emissions.
2 The increase in emissions intensity is driven by the 10% drop in revenue from FY22 to FY23.
In addition to the updates to the original FWI
metrics and targets detailed in Section 4:
Metrics and Targets above, we are
expanding the breadth of our FWI Strategy,
including plans to map our water footprint
across our operations and supply chain and
develop targets to address this, in line with
emerging Taskforce on Nature-related
Financial Disclosures (TNFD) and CS3D
requirements. We are also seeking to
introduce energy efficiency targets for our
direct operations, which will be supported
by energy performance metrics. We expect
these targets to form part of our updated
FWI Strategy. We also expect our Climate
Transition Plan to be published in FY24.
Task Force on Climate-related Financial
Disclosures (TCFD) continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202330
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Streamlined Energy
&Carbon Reporting
Our reporting period for energy and carbon emissions is aligned to our financial period, from 1 September 2022 to 3 September 2023.
Unit of
measurement UK Portion Total Global
FY23 FY22 % change FY23 FY22 % change
Energy Consumption Used to
calculate emissions – for gas
and electricity
MWh 31,366 33,551 -7% 53,896 59,434 -9%
Scope 1 – emissions from
combustion of gas
tCO
2
e 2,147 2,258 -5% 2,785 3,351 -17%
Location Based
Scope 2 emissions – emissions
from purchased electricity (LB)
tCO
2
e 4,065 4507 -10% 10,770 11,497 -6%
Intensity Ratio – tCO
2
e/£m
revenue (LB)
tCO
2
e/£m
revenue
3.82 3.77 +1%
2
Market Based
Scope 2 emissions – emissions
from purchased electricity (MB)
tCO
2
e – – – 2,896 2,860 +1%
1
Intensity Ratio – tCO
2
e/£m
revenue (MB)
tCO
2
e/£m
revenue
1.60 1.58 +1%
2
1 This 1% increase in Market Based Emissions is due to the expansion of our operations in the US. Currently our US fulfilment centres are not supplied by renewable
electricity, however we are committed to resolving this in FY24 and eliminating all Scope 2 market-based emissions.
2 The increase in emissions intensity is driven by the 10% drop in revenue from FY22 to FY23.
Quantification and reporting methodology: We have followed
the 2020 HM Government Environmental Reporting Guidelines.
We have also used the GHG Reporting Protocol – Corporate Standard
(Operational Control boundary), Ofgem environmental impact
measurements for fuel sources, and have used the 2023 UK
Government’s BEIS Conversion Factors for Company Reporting.
Other intensity factors were acquired through EIA and EEA for US
and German markets. Energy data is obtained from a hierarchy of
HH data, meter readings, invoices and finally estimates if necessary.
Only 0.4% of total energy data presented is estimated.
External Data Assurance: In FY22, we also enhanced our reporting by
seeking external assurance for our Scope 1 and 2 emissions for the first
time. PricewaterhouseCoopers LLP (PwC) conducted an independent
limited assurance engagement on selected greenhouse gas (GHG)
emissions data for the year ended 31 August 2022 in accordance with
International Standard on Assurance Engagements 3000 (revised),
and the International Standard on Assurance Engagements 3410,
issued by the International Auditing and Assurance Standards Board.
Acopy of PwC’s report and our methodology to which it relates is
available on our website. For FY23 we have decided not to seek external
assurance over our Scope 1 and 2 emission metrics or any other areas
of this disclosure, as our methodology for collecting the required data
and calculating our emissions metrics has remained largely unchanged.
We will instead develop a longer-term assurance strategy covering all
Scopes of emissions and our redeveloped FWI KPIs.
Energy Management Statement: Our energy management system
covers all our direct operational sites globally. This year, we have
continued to identify and resolve spikes in our energy consumption.
Weare also in the process of conducting a feasibility assessment to
phase out gas consumption across these sites, in support of our net
zero ambitions. We are continuing to explore initiatives to reduce
emissions associated with not only deliveries in our key territories,
but also returns and inbound shipment of goods.
Greenhouse Gas Management Statement: This year we will be
updating our existing verified science-based targets and our net zero
ambition, in order to ensure we align to the latest climate science
aligned with a 1.5-degree global warming scenario. We are committed
to setting absolute emissions reduction targets across our operations
and value chain, underpinned by a more accurate emissions baseline
reflecting our improved data visibility across our Tier 1 – Tier 4 suppliers.
This will ensure that our new near-term and net zero targets are robust,
realistic and supported by actual data, which will be demonstrated
through a Climate Transition Plan aligned to the Transition Plan
Taskforce’s (TPT) recommendations. We expect this Plan to be
published in FY24.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 31
Key performance
indicators
Our key performance indicators help us measure
both the financial value we create for our
shareholders, and our strategic value, as we
grow our business and deliver our purpose.
£3,549.5m
£3,936.5m
2
023
2
022
23.3m
25.7m
2023
2022
Group
revenue
Retail sales, delivery receipts
and other revenues from
continuing operations
£3.5bn
Adjusted gross
margin
2
Adjusted gross profit as
a percentage of adjusted
revenue
Adjusted EBIT
2
Adjusted earnings before
interest and tax
Adjusted EBIT
margin
2
Adjusted earnings before
interest and tax as a
percentage of revenue
Active customers
Number of customers having
shopped in the last 12 months
as at 3 September
Total orders
Total orders placed
Key financial measures
Key strategic measures
44.2%
-11%
1
60bps
-£29.0m
-£29.0m
£44.1m
2
023
2
022
-0.8%
-0.8%
1.1%
2
023
2
022
23m
-9%
83.7m
98.3m
2
023
2
022
84m
-15%
3.59
3.83
2023
2022
Average order
frequency
Last 12 months’ total orders
divided by active customers
Net ABV
Average basket value,
being total order value
after returns and discounts,
excluding VAT, divided by
total orders
3.6
-6%
£40.33
£37.59
2023
2022
£40
+7%
44.2%
43.6%
2
023
2
022
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202332
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Our key financial measures have been chosen
to show the core business’s growth (group
revenue) and profitability (adjusted gross
margin, EBIT and profit before tax and diluted
EPS). Free cashflow and net debt have been
added as new KPIs to aid understanding of the
business’s ability to generate cash through
its operations and its balance sheet strength
respectively. Together these KPIs provide a
view of how effectively the Group is balancing
each of these priorities in generating a return
for shareholders.
Our key strategic measures have been chosen
to provide insight on the Group’s customers
for the reporting period, allowing users of
the accounts to determine historic and future
trends. Orders, visits, average order
frequency, and conversion all help to show
how engaged customers have been with
ASOS’ proposition during the period, whilst
the number of active customers provides a
view of how effectively the group has driven
customer acquisition and managed churn
during the period. Net ABV is a function of
average selling price (ASP) and average
basket size (ABS) and gives a view of order
value before taking into account operating
costs. Mobile device visits is no longer a KPI.
A number of these (where indicated) are
Alternative Performance Measures which
should be considered in addition to, and not
as a substitute for, IFRS measures. As they
are not defined by International Financial
Reporting Standards, they may not be
directly comparable with other companies’
Alternative Performance Measures.
Adjusted profit
before tax
2
Diluted EPS
Profit after tax divided
by the weighted average
number of shares in issue
during the period, adjusted
for the effects of potentially
dilutive share options
Free cash flow
2
Free cash flow is net cash
generated from operating
activities, less payments
to acquire intangible and
tangible assets, payment
of the principal portion
of lease liabilities and net
finance expenses
1 Change in total sales, on a CCY basis, excluding Russia from H1 FY22,
and removing the impact of non-underlying jobber income and 3 extra
trading days in FY23.
2 Alternative Performance Measure – see page 167 for reconciliation.
-£70.3m
-£70.3
£22.0
2
023
2
022
-213.0p
-213.0p
-30.9p
2
023
2
022
-£213.0m
-£213.0m
-£339.8m
2
023
2
022
Net debt
2
Net debt comprises cash
and cash equivalents less
any borrowings but excluding
outstanding lease liabilities
£319.5m
£319.5m
£152.9m
2
023
2
022
2,661.3m
2,896.2m
2
023
2
022
Total visits
Number of visits to ASOS.com
via any device
2.7bn
-8%
3.1%
3.4%
2
023
2
022
Conversion
Percentage of visits that
convert into an order
3.1%
-30bps
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 33
Stakeholder
engagement
We are committed to actively
engaging with our stakeholders.
O
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01 02 03 04 05
Our mission is to be the
world’s number one
destination for fashion-
loving 20-somethings.
Our key stakeholders play a fundamental
role in helping us achieve this mission, and
therefore strong stakeholder engagement is
pivotal in achieving our long-term objectives
and driving long-term value creation.
Details of how we engaged with our stakeholders,
considering the long-term goals for each,
are set out on pages 35 to 37. How the Board
considered our key stakeholders in their
principal decision-making during the year
can be found on page 66.
S.172(1) statement and stakeholder engagement
The Board is accountable to its
stakeholders and understands
the importance of incorporating
stakeholder considerations
into the Board discussions and
decision-making.
The Directors continue to ensure
they act in a way which is in good
faith and most likely to promote
the success of the Group over
the long term for the benefit of
shareholders, and in doing so, also
having regard for the Group’s key
stakeholders and other matters
set out in section 172(1) (a) to (f)
of the Companies Act 2006, being:
• the likely consequences of
any decision in the long term;
• the interests of the Group’s
employees;
• the need to foster the Group’s
business relationships with
suppliers, customers and others;
• the impact of the Group’s
operations on the community
and the environment;
• the desirability of the Group
maintaining a reputation for high
standards of business conduct;
and
• the need to act fairly as between
members of the Company.
The Directors have identified the
Group’s key stakeholders to be our
customers, ASOSers, shareholders,
suppliers and communities. Each
stakeholder group has their own
individual priorities, of which the
Directors are aware and have
regard to. These priorities are
considered, where appropriate,
in the Board’s decision-making. This
is not only the right thing to do but
is also vital in achieving the Group’s
long-term objectives.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202334
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Our Customers
Why they are important…
Our goal is to create and curate products
and experiences to inspire fashion-loving
20-somethings. To stay relevant to our
20-something audience, it is essential we
never lose touch with what matters to them,
whoever and wherever they are. It’s vital
we engage frequently with our customers
to ensure we can provide them with what
they want, when they want it. Being in regular
contact with our customers helps us to tailor
our product offering and content to stay
relevant to our customers, which is key to
our long-term success.
How ASOS engaged during the year
• Regular customer focus groups were held,
where we invited groups of customers to
our head office to meet with ASOSers,
including members of our Management
Committee and broader leadership, and
talk about what they love about ASOS
and what they’d love to see changed (and
received letters of thanks from those
who’ve noticed the improvements they
requested made). We also conducted
remote focus groups with customers in our
global markets, to understand perceptions
of our brand and business outside the UK.
• Engaged with customers at scale both
through our NPS Customer Experience
survey programme, which was expanded to
capture feedback on the full end-to-end
journey, and through our bi-annual target
market survey, which captures perceptions
and behaviours for 20-something
consumers across key markets.
• Members of the Management Committee
take part in regular Customer Voice
sessions, whereby they hear and discuss
the latest insight about our customers
and our target market and what it means
for our business.
• Engaged more frequently with customers
and influencers on social media to inspire
our customers’ style choices.
• Our Design teams regularly use insight
from social media platforms to understand
emerging trends and stay in touch with
customers.
How the Board engaged during
theyear
• The Board received an update on brand
and customer health at the Board
strategy day.
• Certain members of the Board spent time
with our Customer Care colleagues to
understand our customers’ perceptions
of ASOS, and common experience issues.
• The CEO, José, regularly engages in focus
groups with customers, both in the UK
and remotely in the U.S., and provides
feedback to the Board.
Why they are important…
We’re determined to create an employee
experience like no other, where our
ASOSers can be whoever they want to be.
An experience that ASOSers love, where they
learn, collaborate, embrace change, and can
be authentic, brave, creative and disciplined
ineverything they do. Where ASOSers can
push boundaries, challenge expectations
andhelp drive our journey to becoming the
world’s number one destination for fashion-
loving 20-somethings and, ultimately, our
long-term success.
How ASOS engaged during the year
• Direct feedback through our employee
engagement survey ASOS Vibe helped us to
identify key focus areas for improvements.
A full ASOS Townhall was held to share the
ASOS Vibe results and initial action plan,
with local action planning led by the
Management Committee.
• Recruited new members to join our
employee forum, the Voices Network,
which continues to be a key internal driver
of employee engagement, enabling
two-way conversations, building a positive
social partnership between ASOSers and
Senior Leaders and amplifying all voices
to help shape the current and future ASOS
experience. We held regular townhall
meetings hosted by José with all of the
Management Committee on hand for Q&A
to connect ASOSers with our strategic
goals for FY23, provide company updates
and an opportunity for our ASOSers to ask
any questions they may have.
• Hosted a series of ‘Meet the Management
Committee’ informal sessions for Leaders
to get to know our refreshed Senior
Leadership team, learn about their
careers and hear about their roles and
priorities at ASOS. Shorter videos were
made available to all ASOSers.
• Launched ‘Coffee Roulette’, a speed
networking style programme where our
ASOSers could sign up to be randomly
paired with an ASOSer across the business.
Over 100 people were involved in the first
series which launched in March 2023.
• Hosted monthly product and brand
showcases with ASOSers so they can
meet our top brand partners and learn
about the products.
• Refreshed our approach to digital internal
communications and:
– strengthened engagement through our
Viva Engage (formerly Yammer) platform
with activity trebling since lastyear; and
– launched ‘The Edit’ weekly newsletter
providing ASOSers with everything they
need to know, be that business
performance, key upcoming activities,
new campaigns, employee initiatives,
events, training programmes and other
important organisational updates.
How the Board engaged during
theyear
• José continued his monthly ‘CEO coffee
chats’ where 10 to 15 of our ASOSers
can sign up each month and meet with him
to discuss any matters that our ASOSers
feel important.
• In February 2023, our Chair, Jørgen, and
José hosted a fireside chat with ASOSers
to discuss their career insights and
experiences – a shorter recording was made
available to those who couldn’t attend.
• Nick Robertson attended and presented
at our Leaders Day in March 2023 and
reflected on ASOS’ journey so far.
• Karen Geary, whilst in her capacity as
designated employee engagement
representative, met with our employee
representative group, the Voices Network,
in September 2022 to discuss Executive
pay and remuneration decisions that had
been made and strategy going forward.
Key views were fed back to the Board.
• Since being elected designated employee
engagement representative in April 2023,
Jørgen attended two Voices Network
meetings to discuss various matters such
as our ASOS Strategy, ASOS Vibe, our
Diversity, Equity & Inclusion Strategy and
an additional Voices Network meeting
specifically relating to the customer care
team following feedback from the ASOS
Vibe survey.
• Jørgen visited our Leavesden office to
conduct focus groups with our ASOSers
regarding life at ASOS, spent time with the
Customer Care Leadership team and
attended a full Customer Care team
cascade meeting focusing on their progress
delivering their strategic priorities so far
and celebrating team success.
Our ASOSers
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 35
Our Shareholders
Why they are important…
A key objective for the Board is to create
value for shareholders. Our mission, purpose,
values and strategy strive to deliver
long-term, profitable growth for our
shareholders.
How ASOS engaged during the year
• Regular calls and meetings were held
between shareholders and the CEO,
Interim CFO, and/or Investor Relations
team throughout the year.
• Our Chair, Jørgen, held several meetings
and calls with major shareholders to
discuss governance matters.
• Our Investor Relations team organised
roadshows and conferences with
institutional investors following key events
such as our full year and half year results.
• All shareholders have an opportunity to
ask questions or represent their views at
any time through the dedicated Investor
Enquiries email address.
• Whilst appointed as Remuneration
Committee Chair, Karen Geary led a
shareholder consultation process in
September 2022 to gauge investor
sentiment regarding remuneration
practices and policies.
How the Board engaged during
theyear
• Following any investor engagement by
a Board member, that Board member
provides shareholder feedback at Board
meetings.
• The Board receives feedback from our
corporate brokers and Investor Relations
team regarding market reaction and
investor views after announcements
and roadshows.
• The Investor Relations team provide the
Board with a market update at each
scheduled Board meeting, which includes
shareholder feedback.
• All shareholders have an opportunity to ask
questions or represent their views formally
to the Board at the Annual General Meeting.
Our Suppliers
Why they are important…
Maintaining close working relationships and
open dialogue with our suppliers and brand
partners is key to creating and curating the
most relevant product range for fashion-
loving 20-somethings.
How ASOS engaged during the year
• We collaborated closely with our suppliers
to optimise inventory levels through
data-driven demand forecasting and
demand-sharing initiatives, ensuring that
we maintain the right-sized inventory to
meet customer demand while minimising
excess stock.
• Our dedicated Ethical Trade team operates
globally, engaging in due diligence with our
supply base and local and international
stakeholders to manage region-specific
ethical risks.
• We continued our industry-leading factory
audit programme and continued to support
our suppliers in the remediation of any
issues identified during these audits to
ensure that any corrective action plans
had been implemented.
• We conducted workshops in Morocco and
Sri Lanka with women’s rights and labour
rights organisations. We formed a network
of grassroots women’s organisations from
different regions in Morocco and rolled out
our gender equality policy across our whole
supply chain.
• We continued our partnership with the
Fashion Workers Advice Bureau (FAB-L) and
introduced FAB-L and the GMB union to our
factories in the UK to build relationships
with suppliers.
• We continued our partnership with The
Centre for Child Rights and Business,
conducting a pre-assessment and two-day
workshop in an eyewear factory to educate
them on workplace harassment.
• We partnered with GoodWeave
International, a non-profit organisation
that promotes transparency in global
supply chains. We are initially focused on
supporting three of our primary suppliers
based in India to ensure that products are
free of child, forced and bonded labour.
• We strengthened our approach to Branded
supplier due diligence, introducing
additional minimum requirements into our
screening processes for prospective brands,
and mandating annual self-assessment
for all existing brands, for greater
transparency of extended supply chains.
• We maintained transparent communication
with our suppliers, minimising the impact
on ASOS and our partners following the
reduction of trade credit insurance,
offering alternative solutions where
appropriate and providing clarity of
strategic direction.
• We continued to engage with our key
brands to maintain and build our strong
relationships.
• We commenced a ‘brand listening model’ –
where we engage quarterly with our key
brands to serve, discuss and validate
key qualitative and quantitative insights.
This framework and feedback loop will
be key to our ongoing relationships with
our key brand partners.
How the Board engaged during
theyear
• Through our ESG Committee, the Board
monitors the way we manage our supply
chain to ensure we continue to operate
responsibly in line with our Fashion with
Integrity commitments.
• Through the Audit Committee, the Board
receives updates on trade credit insurance
impacts and actions taken.
• The Board received updates on our supply
chain network.
• The Board reviewed our supply chain
challenges and opportunities.
Stakeholder engagement continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202336
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Our Communities
Why they are important…
Operating responsibly in everything we do is
not just incredibly important to our business
and our people, it is also key to driving positive
outcomes for the communities in which we
operate. From the way we manage our supply
chain, to how we address environmental
challenges such as plastic waste, it all matters.
We want to be a force for good, so we can
support the people who support us. That’s
why we’ve continued to actively engage with
local communities, charities and government
– helping drive positive change.
How ASOS engaged during the year
• We continued our partnership with
Fashion Minority Report to support the
professional development of young
creatives across the UK.
• In partnership with national anti-bullying
charity, Ditch The Label, we developed
a free unconscious bias module for UK
schools to educate students on challenging
harmful stereotypes.
• The ASOS Foundation (“Foundation”)
continued to partner with charities to
provide infrastructure, training and
support to enable disadvantaged young
people to reach their potential in the UK,
Kenya and India.
• The Foundation launched a new
partnership this year with an East London
Fashion Education charity Caramel Rock.
The funding enabled 60 young people to
access a BTEC fashion course as well as
additional guidance to help them break
into the industry. Since the programme
launch over 20 ASOSers have been
actively involved in mentoring Caramel
Rock students.
• This year the Foundation’s support of
Centrepoint surpassed the £2m milestone
since the partnership began in 2016. This
year, alongside continuing to support their
dedicated Helpline for young people at risk
of homelessness, we have been funding
the improvement of their Young Persons
Portal. An online tool to aid young people
access services. Alongside the funding,
a group of volunteers from our Tech team
have been providing pro bono support to
help implement improvements to the portal.
• In Barnsley, we continued our partnership
with Onside Youth Zones, and received
exciting news that planning permission has
been granted for the building of their first
Youth Zone in Yorkshire. The Centre aims
to be a safe and aspirational place for
young people, with first class sports, arts,
performance and enterprise facilities. The
Foundation has pledged £1.2m to support
this project which is planned to commence
the building phase later in 2023.
• We have also become a Major Corporate
Sponsor of the Barnsley Youth Choir,
a registered charity formed to inspire
and change lives through music.
• To help celebrate multiculturalism and
diversity, ASOS sponsored the third
‘Gender Project’ exhibition, by Italian artist
Veronique Charlotte, at the Alte Münze,
Berlin. A week-long multimedia exhibition
exploring the meaning of gender identity,
gender expression and gender equality
through portrait exhibitions, immersive
experiences, performances, talks and
DJ sets.
• Also in Berlin, we returned to support
Christopher Street Day again this year,
bringing along our biggest group of
ASOSers and partners yet in celebration
of the LGBTQ+ community, and our charity
partnership with Safe Space Alliance.
Our funding is helping the charity to
expand its directory of safe spaces for
the LGBTQ+ community across the globe
and strengthen the safety interventions
and support it offers members.
• We continued to engage with the
Government on key policy issues including
the proposed Online Sales Tax, which
was formally ruled out in the Chancellor’s
Autumn Statement in November 2022.
• ASOS.com Limited donated £300,000
to the Foundation.
How the Board engaged during
theyear
• The Board received feedback on the
work ofThe Foundation through the
ESG Committee.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 37
Financial review
Overview
ASOS realised an adjusted loss before tax of £70.3m, reflecting
a challenging market backdrop characterised by weak consumer
sentiment and high inflation; alongside delivery of the Driving Change
agenda, which included wide-ranging actions to improve the business’s
profitability and increased financing costs, including those associated
with the refinancing announced in May 2023. Within this, profitability
improved substantially in the second half of the year as the initiatives
under the Driving Change agenda began to yield benefits and the impact
of an increasing returns rate first seen in May 2022 was annualised.
The reported loss before tax of £296.7m includes the impact of
adjusting items totalling £226.4m. These included the stock-write off
programme announced at the start of the year (£133.2m), property
related costs resulting from a reduction in the business’s head office
and warehouse footprint (£60.7m) and consultancy and restructuring
costs (£31.0m), as well as amortisation relating to the Topshop brands
(£10.7m) and immaterial items relating to prior years £9.2m. The total
cash outflow relating to adjusting items in the period was £53.4m of
which £30.8m related to refinancing fees. Further detail on each of
these items can be found in Note 3 on pages 117 to 119.
To simplify our processes and make our reporting more efficient we
have aligned our internal and external reporting periods. Previously
our external reporting was on a twelve-month basis from 1 September
to 31 August, whereas internally the weekly nature of our trading is
captured in either a 52-week or 53-week year. As such, FY23 ran from
1 September 2022 to 3 September 2023 and therefore included an
additional three trading days compared to FY22 (1 September 2021
to31 August 2022). The impact of this on group sales growth was
c.1%for FY23 and c.3% for P4 (1 June 2023 to 3 September 2023), with
like-for-like sales growth disclosed in the P4 Trading Statement issued
on 26 September 2023. The associated profit and cash flow impact
was immaterial. FY24 will be a 52-week period to 1 September 2024.
Revenue
FY23 total sales declined by -11%
5
(-10% on a reported basis) year-on-
year (‘YoY’), with the decline accelerating to -15% (-12% on a reported
basis) in the second half of the year from -7% (-8% reported) in the
first half.
Across the year, the group’s top-line sales performance has been
impacted by a combination of market and company-specific factors.
From a market perspective, there have been three major headwinds:
weak consumer sentiment based on cost-of-living concerns; the
apparel market underperforming relative to total retail; and gains in
online penetration during the pandemic reverting to a more normalised
long-term trajectory as consumers return to stores. All these
headwinds have particularly impacted younger consumers
6
.
The second half of the year was also more affected by deliberate
profitability actions taken under the Driving Change agenda, which
were introduced from January onwards, as well as a trough in new,
fashion-led product entering the business during July and August as
action taken to reduce intake coincided with usual seasonal factors.
KPIs excluding Russia
7
Period to
3 September
2023
Year ended
31 August
2022 Change
Active customers
8
(m) 23.3 25.7 (9%)
Average basket value
9
£40.33 £37.59 7%
Average basket value
CCY
10
£39.65 £ 37.59 5%
Average order
frequency
11
3.59 3.83 (6%)
Total shipped orders (m) 83.7 98.3 (15%)
Total visits (m) 2,661.3 2,896.2 (8%)
Conversion
12
3.1% 3.4% (30bps)
All revenue growth figures are stated at constant currency (‘CCY’) throughout this document unless otherwise indicated.
Period to 3 September 2023
UK
£m
EU
£m
US
£m
RoW
1
£m
Total reported
£m
Adjusting items
2
£m
Total adjusted
£m
Retail sales
3
1,494.6 1,127.3 443.6 322.7 3,388.2 (11.5) 3,376.7
Revenue from
other services
4
59.8 29.4 57.5 14.6 161.3 – 161.3
Total revenue 1,554.4 1,156.7 501.1 337.3 3,549.5 (11.5) 3,538.0
Cost of sales (2,090.5) 115.9 (1,974.6)
Gross profit 1,459.0 104.4 1,563.4
Distribution expenses (429.7) – (429.7)
Administrative expenses (1,279.8) 115.1 (1,164.7)
Other income 2.0 – 2.0
Operating loss (248.5) 219.5 (29.0)
Finance income 5.0 – 5.0
Finance expense (53.2) 6.9 (46.3)
Loss before tax (296.7) 226.4 (70.3)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202338
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Active customers declined -9% YoY as we continued to churn lower
quality customers acquired during the pandemic and employed more
discipline in our marketing approach in respond to weaker demand.
Ourprofitability actions also included remedial action to improve
profitability among loss-making customer segments, driving higher
levels of churn. Premier customers declined -11% YoY, reflecting
increases to subscription prices and the introduction or increase
ofminimum order thresholds for free delivery. Average basket value
(‘ABV’) increased by 5%, as pricing increases more than offset the
markdown investment used to clear aged inventory. Accordingly,
profit per order is over 30%higher
13
.
Both visits and conversion stepped back YoY, as customers made more
considered purchases.
Performance by market
UK
UK KPIs Period to 3 September 2023
Total Sales -12% (-13% LfL)
Visits -10%
Orders -17%
Conversion -40bps
ABV +5%
Active Customers 8.1m (-9%)
Sales in the UK declined by -13% against a difficult consumer backdrop
characterised by high inflation and weak sentiment, particularly
among the younger ASOS demographic
6
, and deteriorated further in
the summer months as challenging weather conditions impacted the
wider apparel sector. These factors favoured lower price points and
resulted in aggressive discounting in the market as competitors acted
to clear excess inventory. The step up in online penetration witnessed
during the pandemic continued to reverse, albeit remaining above
pre-pandemic levels
14
.
Sales in the period were also impacted by planned profitability actions,
including a demand-based approach to deploying marketing spend,
pricing changes and fine-tuning the delivery proposition. The price of a
Premier subscription was increased in November 2022 but subsequently
reversed in May 2023 due to a larger than expected impact on Premier
sign-ups. Active customers in the UK were down -9%, also reflecting
market conditions as well as measures taken by the business to
improve its profitability. These included initiatives designed to minimise
the impact of loss-making customers which in some instances resulted
in elevated (but intentional) churn, including of certain Premier
customer segments.
An increase in average selling price (‘ASP’) underpinned an ABV
increase of 5% to partially offset the impact of fewer orders (-17%),
which may also reflect proposition changes designed to encourage
our customers to consolidate purchases into fewer, larger orders and
hence minimise delivery and returns processing costs. Meanwhile visits
(-10%) and conversion (-40bps) reflect more considered purchasing
behaviour in a cost-of-living crisis alongside restraint on marketing
spend in a weak demand environment.
EU
EU KPIs Period to 3 September 2023
Total Sales -1% (-4% CCY)
Visits -6%
Orders -9%
Conversion -10bps
ABV +9%
ABV (CCY) +7%
Active Customers 10.1m (-7%)
Sales in the EU were more resilient than other regions, down -4% CCY
as ABV growth (7% CCY) partially offset lower order volumes (-9%).
Inaddition to price increases, ABV benefitted from a stronger
performance in Autumn/Winter categories (which are higher ASP)
relative to Spring/Summer. As in the UK, visits and conversion were
both back (-6% and -10bps respectively) due to a combination of
business specific and market factors.
On a country level, the Netherlands and Southern Europe continued
tooutperform while Scandinavia and Rest of Europe countries were
weaker in response to the more aggressive profitability measures
being implemented. Our core European geographies of France and
Germany traded below the EU average but broadly in line with the
localmarkets.
US
US KPIs Period to 3 September 2023
Total Sales -6% (-14% CCY)
Visits -5%
Orders -17%
Conversion -40bps
ABV +13%
ABV (CCY) +4%
Active Customers 2.9m (-12%)
Total US sales fell by -14% CCY, reflecting challenges in visits (-5%) and
conversion (-40bps), with all three metrics deteriorating in response to
wide-ranging actions to improve the region’s profitability from January
onwards. A -17% decline in orders was not offset by the 4% CCY
increase in ABV, and active customers were also back -12% reflecting
discipline on paid media spend in a weaker demand environment.
Wholesale performed well relative to the rest of thesegment.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 39
Financial review continued
Rest of World
RoW KPIs
Period to 3 September 2023
excluding Russia
7
Period to 3 September 2023
including Russia
Total Sales -15% (-16% CCY) -29% (-30% CCY)
Visits -15% -37%
Orders -23% -38%
Conversion -20bps Flat
ABV +11% +14%
ABV (CCY) +10% +12%
Active Customers 2.2m (-17%) 2.2m (-35%)
Rest of World (‘RoW’) sales fell by -16% CCY and excluding Russia from
the base period, reflecting widespread profitability measures outside
our core geographies from January onwards. As in other regions,
RoW was impacted by price increases and changes to the delivery
proposition including price increases and changes to thresholds,
resulting in higher ABV (10% CCY) but fewer orders (-23%), with
active customers (-17%), visits (-15%) and conversion (-20bps) back
as marketing investment was rebased. From a country perspective,
Middle East and North Africa (‘MENA’) performed well while Australia
and Asia Pacific (‘APAC’) were more challenging.
Gross margin
Adjusted gross margin
2
rose 60bps YoY to 44.2% with margin
expansion in the second half of the year largely driven by pricing and
freight but partially offset by trading activity including higher levels
ofdiscounting as the clearance of older inventory was prioritised in
apromotional apparel market during the final months of the year.
Reported gross margin was 41.1% (-250bps YoY), with the key
difference versus adjusted gross margin being the impact of the
stockwrite-off programme of £118.5m
2
announced to facilitate
thetransition to the new commercial operating model alongside
FY22results.
Operating expenses
£m
Period to
3 September
2023
% of
sales
Year
ended
31 August
2022
% of
sales
Change
in £ value
Distribution
costs
(429.7) 12.1%
15
(523.7) 13.3% 18%
Warehousing (416.4) 11.8%
15
(427.0) 10.8% 2%
Marketing (195.0) 5.5%
15
(223.5) 5.7% 13%
Other
operating
costs
(400.4) 11.3%
15
(380.7) 9.7% (5%)
Depreciation
and
amortisation
(152.9) 4.3%
15
(13 9.1) 3.5% (10%)
Total
operating
costs (excl.
adjusting
items)
(1,594.4) 4 5.1%
15
(1,694.0) 43.0% 6%
Adjusting
items
2
(115.1) 2.9% (53.9) 1.4% (114%)
Total
operating
costs
(1,709.5) 4 8.1% (1,747.9) 44.4% 2%
Total operating costs excluding adjusting items decreased by -6% YoY,
with an 18% reduction in distribution costs and a 13% fall in marketing
spend contributing to the improvement. However, the deleverage
resulting from reduced volume caused adjusted operating costs as
apercentage of sales to increase by 210bps despite strong control
offixed costs.
Distribution costs at 12.1% of sales decreased by 120bps YoY as the
impact of stronger basket economics, simplification of our network
and successful supplier negotiations offset higher fuel charges.
The reduced number of orders in the year (-15%) resulted in lower
outbound delivery costs. Cost saving measures under the Driving
Change agenda included the simplification of our UK network through
the discontinuation of “split orders”, fulfilling individual customer
orders from one stock pool and negating double carrier costs. Rate
negotiations with certain regional suppliers combined with a scaling
back of our delivery proposition in some markets reduced distribution
cost per parcel. These benefits have more than offset the headwinds
from higher fuel charges.
Warehouse costs as a percentage of sales increased by 100bps YoY
to11.8% due to inflation across labour, consumables, and utilities in all
fulfilment centres. This increase was weighted to the first half the year
(+210bps to 12.4% in H1), as higher stock levels caused inefficiencies
in our warehouses at the start of FY23. As inventory reduced in the
second half of the year, ancillary and offsite storage locations were
closed while changes were made to simplify our UK returns network
and drive improvements in pick and pack efficiency. As a result,
warehouse costs were 30bps lower YoY in H2.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202340
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Marketing costs decreased by 13% YoY and fell 20bps to 5.5% of sales
as spend on performance marketing was optimised to deliver the
greatest return on investment. This included a more dynamic approach,
scaling back marketing spend in response to softer demand and
instead investing in discounting to drive sales in a highly promotional
market. Spend was optimised within different channels and geographies
generating efficiencies, which helped to offset some of the elevated
customer acquisition costs experienced in H1.
Other operating costs increased 160bps YoY as a percentage of sales
(excluding adjusting items). The annualised payroll cost at the start of
the year was much higher than the average for FY22 as the annual pay
rise compounded higher entry headcount, in part due to new headcount
added across FY22 and a higher level of vacancies in FY22. This was
partly mitigated by headcount reduction and tighter control of
vacancies through the year, such that by the end of the financial year
headcount was on average 11% lower YoY. Contractual increases in
third party technology services and overhead costs (including
electricity, insurance, rates, and waste management costs) have also
contributed to the overall increase, however these have been partly
offset by rationalisation across our central cost base as part of the
Driving Change agenda.
Across the P&L, and in line with the targets that were set earlier in the
year, profit improvement and cost mitigation measures have delivered
c.£300m of benefits in FY23, mitigating headwinds from inflation and
an increasing returns rate. These include the pricing increases and
sourcing improvements that have impacted gross profit, as well as
the actions taken to rationalise the supply chain network and reduce
overhead costs. Initiatives were also launched to minimise the impact
of unprofitable geographies, customers, and brands on our platform,
including reversing historical over-investment in our convenience
proposition, changing the way we service specific customer segments,
and refining our approach to branded promotion. These changes have
initially reduced customer numbers and sales, but ultimately support
ASOS’ ambition to deliver sustainably profitable and cash generative
growth in the medium-term.
Depreciation and amortisation costs (excluding adjusting items)
as apercentage of sales increased by 80bps YoY. The increase in
depreciation and amortisation relates to growth in intangible assets
including data services, operations systems and improvements to
web and payments platforms.
Interest
ASOS incurred a finance expense (excluding adjusting items) of £46.3m
compared to £23.0m in FY22. This reflected an increase in the level
of drawn borrowings, rising interest rates (SONIA at 5.2% at the end
of the year from 1.7% at the start), and a higher margin payable post
theMay 2023 refinancing (see Net Debt, Refinancing and Liquidity
section below).
Fees in relation to the covenant waiver, either ineligible for
capitalisation or written off once the Revolving Credit Facility (‘RCF’)
was replaced by the new Bantry Bay Capital Limited (‘Bantry Bay’)
refinancing, have been treated as adjusting items.
Finance income of £5.0m includes interest earned on deposits at
financial institutions. A higher level of return in FY23 compared to the
£0.9m in FY22 reflected a higher average cash balance and a rising
global interest rate environment.
Taxation
The reported effective tax rate is 24.8% based on the reported loss
before tax of £296.7m. This loss creates a deferred tax asset,
recognised at 25%. This is broadly in line with the HY23 effective tax
rate of 25%.
Earnings per share
Both basic and diluted loss per share were 213.0p (FY22: basic and
diluted loss per share of 30.9p). The higher loss was a function of
ahigher reported loss before tax of £296.7m (FY22: £31.9m last year)
partially offset by more shares in issue following the equity raise in
May 2023. The potentially convertible shares related to both the
convertible bond andASOS’ employee share schemes have been
excluded from the calculation of diluted loss per share as they are
anti-dilutive for the period ended 3 September 2023.
Free cash flow
£m
Period to
3 September
2023
Year ended
31 August
2022
Operating cash flow 16.4 (120.4)
Purchase of property, plant &
equipment and intangible assets
(177.9) (182.9)
Payment of lease liabilities
(principal)
(22.4) (26.3)
Interest received 4.5 0.9
Interest paid (33.6) (11.1)
Free cash flow (before financing) (213.0) (339.8)
Issuance of equity 77.6 –
Proceeds from borrowings 200.0 –
Repayment of borrowings (1.7) –
Refinancing fees (30.8) –
Cash flow 32.1 (339.8)
There was a free cash outflow
16
(before items relating to financing)
of £213.0m for the year, including a cash inflow of £45.8m in H2 FY23
after a £258.8m outflow in the first half of the year.
The inflow from adjusted EBITDA of £124.5m and closing inventory
being £180.4m lower YoY (excluding the impact of the one-off stock
write-off) was more than offset by adverse working capital movements
due to a decrease in trade and other payables. This was largely due to
lower intake receipts and operating costs in the second half of the year.
Cash was also used to fund a capital investment of £177.9m, including
committed spend in relation to the delayed automation projects in
Lichfield and Atlanta, and technology projects including in support
of the Partner Fulfils expansion. Finally, interest and refinancing
costs increased due to the drawdown of the group’s previous RCF
in September 2022 (the ‘Old RCF’) and the utilisation of the £200m
term loan from Bantry Bay (‘Term Loan’) during the year, with a small
offset from interest income as surplus cash was invested as interest
rates increased.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 41
Financial review continued
Refinancing fees in the year totalled £30.8m relating firstly to a waiver
of the covenants applicable to the Old RCF in October 2022, then the
subsequent amendment and extension of the Old RCF in May 2023
(prior to announcement of the Bantry Bay refinancing). Together with
interest payable on the new refinancing of £8.0m, consultancy spend
of £1.2m and the accelerated payment of interest on the Old RCF,
the incremental cash cost of refinancing in the year was £45.5m.
Net debt, Refinancing and Liquidity
£m
Period to
3 September
2023
Year ended
31 August
2022
Convertible Bond
(fair value of debt component)
464.4 451.0
Term Loan 184.8 –
Nordstrom loan 20.4 22.0
Put option liability 3.2 2.9
Borrowings 672.8 475.9
Cash & Cash equivalents (353.3) (323.0)
Net Debt
(excluding lease liabilities)
319.5 152.9
Excluding lease liabilities, the business started the year with
borrowings of £475.9m and net debt of £152.9m after cash and cash
equivalents of £323.0m. On 8 September 2022, £250m was drawn
under the £350m Old RCF. Following the May 2023 refinancing with
specialist lender Bantry Bay the Old RCF was repaid in full using the
new Term Loan with the balance funded from the proceeds from the
issuance of equity. TheTerm Loan is stated net of directly attributable
unamortised refinancing costs.
Cash and undrawn facilities totalled £428.3m at year-end (FY22:
£673.0m) and included cash and cash equivalents of £353.3m (FY22:
£323.0m) and the undrawn new RCF provided as part of the Bantry
Bay refinancing of £75.0m (FY22: undrawn Old RCF of £350.0m).
Outlook & guidance
Over FY23, we improved our core profitability, delivering c.£300m
of benefits under the Driving Change agenda; made good progress
on improving our stock profile; gained confidence in our operational
initiatives including our new commercial model, Test & React, and
Partner Fulfils; and laid strong foundations for the years ahead.
Our mid-term priorities are leveraging our strengths: to offer the
best and most relevant product; be a destination for style; build a
customer journey created around fashion and excitement; and offer
competitive convenience. These things will drive our economic model,
delivering stronger order economics and delivering better customer
lifetime value.
In FY25 we expect to deliver revenue growth and return EBITDA
margin to around pre-COVID levels (c.6%). In the medium-term
we have confidence in our ability to return to double-digit growth;
steadily improve gross margin back towards c.50%; maintain EBITDA
sustainably ahead of capex, interest, tax, and leases; reduce capex
to 3-4% of sales; and deliver inventory of c.100 days.
FY24 is about taking the necessary action to get us to that path.
We expect the annualisation of Driving Change agenda profit initiatives
to broadly mitigate the impacts of fixed cost deleverage from our
expected revenue decline. However, our priorities of accelerating
towards our new commercial model and strengthening our relationship
with consumers require investment in the near term. These
investments are twofold:
i) Incremental marketing investment of c.£30m (c.1% increase in
our operating cost ratio) into re-igniting our brand, making ASOS
famous for fashion again.
ii) The discounting of stock carried forward to exit the year with
a clean stock position. We may use off-site clearance channels,
sacrificing margin to limit cannibalisation.
As such, our expectations for FY24 are:
• Sales decline of 5 to 15%, with P4 FY23 trends (i.e., high double-digit
declines) continuing through the first half of FY24 and a return to
growth in the final quarter of FY24.
• Adjusted EBITDA positive.
• Stock back to pre-COVID levels (c.£600m as previously
communicated).
• Capex of c.£130m.
• Positive cash generation, reducing our net debt position.
Under our new commercial model, we will operate with less stock going
forward. Having reduced stock levels by c.30% over the last 12 months,
we have a further c.20% reduction planned for FY24. In this context,
post the year-end, we have reviewed our capacity requirements and
started a process to mothball our second UK fulfilment centre in
Lichfield in late FY24 following the completion of our automation work.
The decision to open and automate Lichfield was taken in 2019 without
the ability to break the contract. Mothballing the site provides an
annual cost saving of c.£20m and provides the flexibility to either sell
the facility or re-open it depending on our capacity needs. As a result
of this decision, the remaining £45m automation spend, which would
usually be classified as capital expenditure, will be recorded as an
adjusting item in the FY24 income statement.
Sean Glithero
Interim Chief Financial Officer
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202342
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Notes
1 Rest of World.
2 The adjusting items and the alternative performance measures used by
ASOS are explained and defined in Note 3 on pages 117 to 199 and page 167
respectively.
3 Retail sales are internet sales recorded net of an appropriate deduction for
actual and expected returns, relevant vouchers, discounts and sales taxes.
4 Income from other services comprises of delivery receipt payments,
marketing services, commission on partner-fulfilled sales and revenue
from wholesale sales.
5 Total adjusted sales, on a CCY basis, excluding Russia from H1 FY22, and
removing the impact of the 3 extra trading days in FY23.
6 Kantar Total Market | Spend YoY % Change | Online | Total Adultwear | 24 &
52 w/e 20th August 2023 vs LY.
7 Calculation of metrics, or movements in metrics, on an ex-Russia basis
involves the removal of Russia from 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
isvisits, where ASOS have also excluded any visits from Russia in FY23,
in addition to FY22.
8 Active customers defined as having shopped in the last 12 financial months.
9 Average basket value is defined as adjusted net retail sales divided by
shipped orders.
10 Average basket value CCY is calculated as adjusted constant currency net
retail sales divided by shipped orders.
11 Average order frequency is calculated as total shipped orders divided by
active customers.
12 Conversion is calculated as total shipped orders divided by total visits.
13 Profit per order is calculated as variable contribution divided by billed orders.
14 BRC-KPMG Retail Sales Monitor for August 2023.
15 As a percentage of adjusted revenue.
16 Free cash flow is net cash generated from operating activities, less
payments to acquire intangible and tangible assets, payment of the principal
portion of lease liabilities and net finance expenses.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 43
Risk management
at ASOS
Meeting our strategic agenda and objectives
will require us to take the right risks whilst
protecting ASOS and our ASOSers from
unrewarded threats. To achieve this balance,
we are guided by our Risk Management
Standard and Framework.
Our Standard applies to all parts of our Group
and is designed for the needs of our fast
paced and rapidly changing business with
its unique culture. It empowers our ASOSers
to consciously take appropriate risks after
pausing and thinking about how and when to
manage, control, mitigate and escalate risks,
to keep our risk exposure within appetite.
Our approach to Risk Management
We maintain a continual cycle of risk and
opportunity identification and response
throughout our day-to-day decision-making
and operations. We understand that creating
a culture of risk awareness whilst remaining
opportunity-driven enables us to continue
to move at pace in everything we do. Our
approach to risk management is categorised
by three phases of activity:
Protect
At its core, our Risk Management Framework
seeks to protect our ASOSers and ASOS’
established value. Protect involves managing
today’s risks, including those relating to
compliance with laws, regulations, our own
policies, and those that could negatively
impact our brand and reputation.
Anticipate
The external environment within which we
operate exposes us to a range of continually
evolving and changing risks. We have limited
ability to prevent some of these risks from
materialising including regulatory change,
conflict and civil unrest, pandemics, and
cyber-attacks. What we can control is how
prepared we are to respond in the event
they do occur. Anticipate involves identifying
risks on our horizon and planning how we
would respond to minimise or mitigate their
impact if they occurred. Whilst external risks
may be threats to achieving our strategic
objectives, they can also present significant
opportunities as effective responses can give
us competitive advantage.
Grow
We continually innovate and improve how we
do things to remain competitive in our markets.
Success requires multiple strategic decisions
that accept taking proportionate levels of
risk for sustainable growth and competitive
advantage. Grow involves building on our
Protect and Anticipate activities, using our
knowledge and understanding of our risks
to manage them in line with our risk appetite.
Grow is about taking the right risks at the
right time in the right way.
Roles and Responsibilities
Our Board and our Management Committee
are responsible for overseeing and managing
the risks across our Group. To help them
achieve this we have captured our complete
risk universe in the ASOS Risk Taxonomy within
our Risk Management Standard. Each risk
captured in our risk registers is linked to a
Taxonomy category so risk information can
beaggregated, and risk appetite (see below)
shared with risk owners in an organised way.
Having a clear picture of our risk exposure
enables effective strategic decisions and
allocation of resources. Understanding what
risks may prevent us from achieving our
strategic goals and how we are going to
respond is key, underpinned by information
provided by ASOSers recording and
escalating risks in a consistent way.
Proactive and forward-thinking, with real insights and intelligence to inform decision-makers.
Focus on the right things, with effective and efficient control proportionate to the risk.
Take the right risks, at the
right time, in the right way.
Make great things happen.
Grow
for tomorrow
Take risk to
Look beyond today and bring the
outside in.
Build resilience and beat the competition.
what is on
the horizon
Anticipate
Establish the foundations to protect
against unrewarded threats.
Make it easy to manage risk.
today’s values
Protect
At ASOS, we strive to take the right risks,
atthe right time in the right way.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202344
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Risk appetite
Our risk appetite is how much risk we are
willing to take or not take in pursuit of value,
set separately for each different risk
category within our Taxonomy. Understanding
our risk appetite helps us take the right risks,
at the right time, in the right way, to take
advantage of our opportunities. This is at the
heart of our risk management approach. Our
risk appetite has been set by the Management
Committee and approved by the Board and
Audit Committee (AC), enabling ASOSers to
take and avoid risk in line with their mandate.
Our risk appetites are set by category of
riskon a 3-point scale: (i) risk averse, (ii) risk
balanced, and (iii) risk seeking. This scale
informs our desired approach for risks
associated with each area including for the
related control environment, assurance plans,
balancing risk and opportunity, and risk
treatment. Applying the scale requirements
provides a framework for our ASOSers to
operate within.
Risk assurance
Assurance and oversight over our Risk
Management Framework controls are guided
by our risk appetites as described above. Our
approach echoes the ‘Three Lines of Defence’
model, where day-to-day responsibility for
risk management lies with business control
owners in the first line. Our Risk Management
team provide second line guidance, oversight,
and challenge on risk management activities.
They also facilitate the risk management
process to provide insights and assurance
tothe Audit Committee and Board. Internal
Audit deliver third line risk-based audits to
provide independent assurance over our
keyrisks.
R
i
s
k
T
a
x
o
n
o
m
y
R
i
s
k
A
p
p
e
t
i
t
e
Monitor & Review
Risk Identification
Risk Analysis
Risk TreatmentCommunicate
Protect
Anticipate Grow
Our Risk appetite cascades down
Our Risk exposure aggregates up
Board,
AC and
Management
Committee
Top risks from Company-wide basis
Management Committee Member
with their Senior Leaders
Top risks from divisional
or departmental basis
Risk & Control Owners
Individual risks and controls
Oversight and Strategy
• Obtain assurance over key risks and controls
• Company-wide focus on top risks and opportunities
• Set risk appetite – where to take risk, where to avoid risk
• Allocate resources proportionate to exposure and appetite
Oversight and Execution
• Departmental focus on top risks and opportunities
• Make decisions in line with the ASOS risk appetite
• Implement controls and mitigations proportionate
to exposure and appetite
Oversight and Management
• Individual assessment of risk and controls
• Manage risks within appetite
• Escalate key risks and concerns
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 45
Principal risks
and opportunities
As a global company, our principal risks and opportunities are created
through the complex nature of our operations, scale and ambition,
and we know that emerging risks can change quickly and can be heavily
influenced by the macroeconomic environment.
Cost and wage inflation, wider global financial instability, and the
impacts of climate change have continued to affect our risk landscape
and how we manage our risks to minimise the impact on our people,
customers, and partners.
As we navigate these uncertainties and changes, we continue to
scan the horizon to ensure that we identify emerging risks as soon
as possible and react early where needed to either mitigate or take
advantage of opportunities.
Risk movement key
↑ Increased risk ↓ Decreased risk ↕ Stable ∆ New risk
1 Macroeconomic changes 2 Supply chain disruption
Risk movement
↕
Risk movement
↑
Risk owner Interim Chief Financial Officer
What’s the risk?
Specific macroeconomic and geopolitical changes and uncertainty can
influence our business by impacting our ability to trade across borders,
influencing customer behaviours, diminishing our customer proposition,
and ultimately impacting our financial performance and assessments.
We have continued to face instability, and significant inflation in key
markets leading to the ongoing cost-of-living crisis and associated
challenges through the risk of recession. Our ASOSers and our
customers have been affected by the increased cost-of-living, with
changes in customer purchasing behaviour including increased returns
as disposable incomes reduce. Cost inflation also has been felt
throughout our supply chain.
How do we manage the risk?
• Monitoring and anticipating ongoing and future shifts in the
macroeconomic environment to ensure we are prepared to
minimise or mitigate risks wherever possible.
• The Management and Commercial Committees continue to
monitor, model, and assess the potential outcomes and supply and
demand impact of potential recession, inflation, geopolitical events,
and the cost-of-living crisis. These can include further shifts in
customers behaviours and market dynamics and further economic
volatility (see also ‘Market dynamics and impact on our business’
principal risk on page 49).
• We have a diverse, multifaceted sourcing and supply chain involving
multiple suppliers and locations to minimise over-reliance on any
individual location, supplier, or brand. We can use our extensive
network to pivot our sourcing approach in the event of capacity
or capability changes and other disruptions.
• Continuing to strengthen our balance sheet and cash generation
to improve resilience.
Risk owner Senior Global Logistics & Supply Chain Director
What’s the risk?
Global or local supply chain disruption, operational issues, and/or
crises (caused by events such as political unrest and natural disasters)
can cause issues in our inbound (e.g. supplier or carrier failures) or
outbound (e.g. carrier or fulfilment centre disruptions) supply chain.
This could impact our ability to deliver what our customers want when
they want it.
The impact of the COVID-19 pandemic and Brexit has stabilised
throughout our end-to-end Supply Chain operations. This has been
supported in part through reduced disruption in our operating
environment with a significant increase in inbound freight and carrier
reliability through FY23.
How do we manage the risk?
• Monitoring & Forecasting – we continuously monitor our demand
and availability to adjust intake accordingly.
• We have multiple delivery methods, routes, ports, and carrier
strategies to minimise risk of disruptions.
• Continuously evolving Supply Chain Business Continuity strategies
and plans to respond to incidents, including feeding in the lessons
learnt from past events into our operations and processes.
• Improvements in inventory visibility delivered through embedding
a new global inbound Supply Chain partner during FY23, improving
lead times and costs.
• Ongoing relationship management with carriers and suppliers to
ensure early warnings of disruption and to agree mitigation actions,
also enhancing our contracts with carriers to drive clearer terms
and requirements.
• Our reduced stock holding has enabled our Supply Chain operations
to become more efficient and more robust in case of managing
disruption.
• Automation of our fulfilment centres to increase throughput
capacity and productivity.
• Designing and building our own inbound visibility platform to be
rolled out across all suppliers in FY24.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202346
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
3 Strategic programmes fail to deliver required outcome 4 Data breach
Risk movement
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Risk movement
↕
Risk owner Senior Director of Operations
What’s the risk?
Our focus remains on delivering transformational change, leveraging
technology, systems, and processes to achieve our strategic
objectives and evolve and grow at pace.
Success relies on having the right capability and capacity to deliver
change and can be dependent on both internal and external inputs.
It is complex and can cause business disruption and delays, increased
costs, and lost opportunities as changes are implemented.
Failed transformation execution can lead to outcomes not being
delivered or changes not being successfully embedded, which in turn
can cause challenges in achieving strategic objectives.
We will build on the foundations already established during the Driving
Change agenda as we continue to focus on profit optimisation and cost
savings whilst extending this to also focus on delivering growth; actively
managing any risks potentially impacting the success of our strategic
programmes as set out below.
How do we manage the risk?
• An established Programme Management Office (PMO) overseen
by the Senior Director of Operations is in place to govern delivery
of our strategic programmes.
• Organised the portfolio into strategic programmes, with each
programme responsible for a set of aligned workstreams with an
assigned Management Committee Sponsor and responsible lead.
• Maintained a cadence of tracking and review activities, standing
upSteering Committees and regular meetings with Management
Committee Sponsors and leads to assess progress, risks,
dependencies and impacts.
• Utilised a programme management tool to track progress,
benefits, and risk indicators; providing visibility of project readiness
including delivery gates and programme health checks.
• Provided regular updates on progress and key issues and risks to
the Management Committee, ASOS Plc Board and Audit Committee.
Risk owner Chief Technology Officer and General Counsel &
Company Secretary
What’s the risk?
As an online retailer, we use data for many reasons including to process
orders, receive payments, and engage with our customers on a regular
basis. We have 23.3m active customers worldwide and employ
thousands of ASOSers. With this comes significant responsibility
to protect the data we hold, use and process through our internal
activities and whilst working with a variety of third-party suppliers.
The deliberate theft, unauthorised access, or accidental loss of ‘ASOS
Confidential’ data, due to inadequate technical controls, employee
error, or a targeted attack could cause reputational damage and
non-compliance with laws and/or regulations. This could result in
significant financial penalties, regulatory investigations, and data
subjects losing confidence in ASOS.
How do we manage the risk?
• Our Data Protection Officer (DPO) is an independent role and is
responsible for defining and implementing an effective privacy
control framework to mitigate the risk of a data breach.
• The Data Protection team works across the business to make
sure we have visibility of the collection, use and reuse of data and
any new projects/contracts that require customer, ASOSer, or
information relating to other data subjects, while also putting in
place the right training and awareness.
• Our Chief Information Security Officer and DPO work closely to
ensure key data risk areas are prioritised and effective remediation
or mitigation is put in place.
• Data protection and cyber security policies, procedures, and
response plans in place, communicated, available to all ASOSers,
and are reviewed regularly. We also have established processes
in place for assessing and reporting data incidents/breaches,
both internally and externally.
• Security controls and processes are in place and continuously risk
assessed and updated. The Cyber Security team continuously
monitor for any internal or external signs of confidential data loss.
Secure physical and logical storage controls are also employed for
‘ASOS Confidential’ data.
• We complete a regular cadence of Data Privacy internal audits,
in accordance with ASOS’ risk appetite, on related key areas of risk
management and control across the Group.
• Data protection and security requirements and assessments are
embedded within our Procurement and Legal processes for
selecting, acquiring and embedding new assets, services, and
partnerships. The Data Protection team are involved in reviewing
all contracts that involve personal data.
• Data protection training is provided to ASOSers on at least an
annual basis and regular awareness campaigns are shared with
ASOSers through internal communications.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 47
Principal risks and opportunities
continued
5 Foreign exchange rate exposure 6 Sustainability and climate change
Risk movement
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Risk movement
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Risk owner Interim Chief Financial Officer
What’s the risk?
We are a UK-based global online retailer selling products to customers
across the world in many different currencies. Our global proposition,
customers shopping with us in international markets and a reporting
currency in pound sterling gives rise to both a transaction and
translation risk exposure. These foreign exchange risk exposures
could have an adverse impact on our profitability.
Although FX volatility on a macroeconomic level has increased in the
last year, the ASOS FX exposure risk has decreased in FY23 primarily
due to the exit of the Russian market in 2022 and through our new
operating model which has reduced stock payments made in USD.
How do we manage the risk?
• We adapt and maintain our foreign exchange risk management
policy, so it remains robust and appropriate to our business
operating model.
• Our foreign exchange risk management approach considers
emerging macroeconomic risks, which could give rise to heightened
volatility in foreign exchange markets.
• We continue to preserve profitability through capitalising on
natural hedges where possible and supplementing them with the
use of foreign exchange hedging instruments in line with our foreign
exchange risk management policy.
For more details on how we manage our foreign currency risk,
see pages146 to 147.
Risk owner Senior Director of Strategy & Corporate Development
What’s the risk?
Managing sustainability and the impact we have on the planet is central
to our purpose and business model. We face both risks related to the
transition to a lower-carbon economy and the physical impacts of
climate change, throughout our operations and supply chain. These
include changes in technology, market risks, and how our response
toclimate change affects our reputation. Physical risks can be event
driven (acute) or longer-term shifts (chronic) in climate patterns.
Failure to manage these risks effectively could impact business
performance through reduced market share, increased costs, and
tax penalties.
In our Taskforce on Climate-related Financial Disclsoures (TCFD)
section on pages 19 to 30, we have presented a full overview of
our material transition and physical climate-related risks and
opportunities. This is based on scenario analyses prepared in FY22
and reviewed in FY23 to ascertain if any material changes were
needed. In FY24 we will be updating our analyses to reflect any
changes needed following the finalisation and implementation for
our new commercial model, and any changes to our related plans,
metrics and targets through updating our Fashion with Integrity (FWI)
Strategy. The new analyses will improve our understanding the related
risks and opportunities and support our aim of being consistent with all
recommendations of the TCFD Guidance in the next 1-2 years.
Our FWI programme in part seeks to evolve our exposure to external
risks in this area and has been embedded within our operations for
many years. We still know that there is more to do to meet our own
expectations and those of our stakeholders, and to make sure ASOS
remains viable in the future.
How do we manage the risk?
• FWI Strategy covering targets for Net Zero, Circularity, DEI and
Transparency. Progress is monitored by our established ESG
Committee of the Board and driven by associated management
working groups.
• Working with partners to conduct specific climate risk assessments
to better understand risks and impacts to the business.
• Working to reduce our emissions through efficiency and carbon
reduction projects, in support of our net zero goals.
• Implemented materials sourcing and circularity strategies which
seek to reduce our impact on the planet. Proactive engagement
with suppliers to work toward meeting our FWI goals.
• Activities towards improving our systems and processes to
accurately measure our environmental impact and enable tracking
and measurement of our progress towards our goals.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202348
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
7 Cyber security incidents 8 Market dynamics and impact on our business
Risk movement
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Risk movement
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Risk owner Chief Technology Officer and Chief Information Security
Officer
What’s the risk?
A successful malware infection, phishing attempt, ransomware or
disruptive attack, or Distributed Denial of Service (DDoS) attack due
to malicious activity by an internal or external threat actor, enabled
by inadequate internal or third-party technical controls to prevent,
detect, or respond. This could result in data loss, operational
disruption, non-compliance with regulations, and loss of customer
confidence.
The cyber security risk landscape has continued to evolve, with
threats becoming increasingly prevalent, sophisticated, organised
and aggressive. This increase in environmental risk requires continual
improvement activities by our Cyber Security team to manage our
ongoing risk exposure.
How do we manage the risk?
• Our refreshed security strategy sets out our security and fraud
prevention plan along with roadmaps for delivery of ongoing control
and process enhancements.
• Our Cyber Security team implements and monitors security tools
and controls to ensure effective and efficient security and fraud
prevention operations. Improvements to security policies,
procedures, and capabilities have continued during FY23 including
the outsourcing of our security operations centre to a specialist
managed security services provider to improve our detection and
response capabilities.
• We have continued to seek out and work with independent third-
party security specialists that provide periodic penetration tests.
• Access management controls across our business increase our
protection against phishing and malware attacks, while our
refreshed programme of cyber awareness campaigns improves
ASOSers’ knowledge of cyber security management approaches
and requirements.
• We monitor evolving threats and adapt our controls and processes
to minimise or mitigate their potential impacts.
Risk owner Senior Director of Strategy & Corporate Development
What’s the risk?
E-commerce is a rapidly evolving and highly competitive market,
populated by large multi-brand marketplaces, well-established fashion
brands, disruptive new entrants and a growing online re-seller market.
Online penetration is also experiencing a period of normalisation
following abnormally high growth during the COVID-19 pandemic and
increasing competition from traditional, store-based retailers who
have also invested heavily in their online offers. Failure to keep pace
with the sector, both in terms of proposition and customer awareness,
could result in declining relevance and market share among our target
demographic of fashion-loving 20-somethings.
How do we manage the risk?
• Our focus in FY23 has been to ensure the business is operating in
a way that is sustainably profitable, resulting in declining sales and
a loss of customers against a challenging economic backdrop.
• Looking ahead to FY24 and beyond, we are committed to
strengthening our competitive advantage through our business
model and right to win, including:
– Ensuring we have the best product, both from our own and
partner brands, with increased flexibility supported by our new
commercial model.
– Positioning ASOS as a destination for style via our differentiated
visual language and inspiring customers based on whole outfits.
– Creating a compelling and distinct brand and unparalleled
customer experience.
– Providing a competitive level on convenience in terms of delivery,
returns and payment options.
• We continue to apply a disciplined approach to all capital allocation.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 49
Principal risks and opportunities
continued
9 Availability of technology services 10 Ethical trade issues
Risk movement
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Risk movement
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Risk owner Chief Technology Officer
What’s the risk?
We rely on many different technical services and systems throughout
the customer journey, from website to fulfilment, to the product itself.
This means that failure of our systems and services due to a lack of
resilience, system or service provider over-reliance, or a lack of
disaster recovery planning could disrupt our operations and overall
business. Any failure in day-to-day operations can impact how we
process or fulfil customer orders, potentially resulting in reduced
customer proposition, lost opportunity and lost customer confidence.
Migration of our remaining corporate systems to the cloud has
decreased the likelihood of the risk materialising and the Tech Service
Recovery Programme that will improve our capability in recovering
our data through mechanisms such as automation in the event of a
disaster is also underway. The availability of our customer experience
across our website and app has significantly exceeded our internal
service targets over the past year.
How do we manage the risk?
• The Tech Service Recovery Programme is the next phase in
maturing our capability to recover our data in the event of a
cyber-attack through further development of playbooks and
embedding as much automation into the process as possible.
Continuity plans continue to be in place to ensure we can recover
key services in the event of a disaster or disruption.
• Our Reliability Engineering practice regularly reviews the service
providers critical to our customer journey to ensure they have the
necessary level of resilience in place.
• All new suppliers go through a rigorous selection and onboarding
process and supplier performance is monitored on an ongoing basis.
• Our Service Governance function is maturing its capability to
ensure any risks are appropriately managed, our third parties
are effectively governed, and we have appropriate controls in
place to minimise any risk of our services becoming unavailable.
Risk owner Senior Product Director
What’s the risk?
Illegal or unethical practices are one of the key risks in our supply chain.
The violation of labour rights and of worker safety can be caused by,
or go undetected through, a lack of systems, processes, or resources
to monitor traceability and transparency. At ASOS, we believe that
it is our responsibility to ensure that those working in our supply
chain have a safe working environment where their human rights are
respected and protected. Our stakeholders, including customers,
want to be confident about where their products come from and to
be reassured that workers are not harmed in their manufacture
and fulfilment. Failure to manage this risk effectively could lead to
incorrect reporting and product claims, prevent us from managing
progress against our improvement targets, fines and litigation, and
a loss investor and customer confidence.
As global regulatory scrutiny in this area is increasing so is our risk
exposure, which requires us to be even more diligent when monitoring
risks in our supply chain with a clear focus on prevention. Upcoming
mandatory legislation in this area will also impact our monitoring and
prevention of these risks in our supply chain. These changes have been
considered when assessing our ‘Failure to comply with legislation or
regulation’ principal risk on page 51.
How do we manage the risk?
• We have developed a series of policies and guidelines based on
the Ethical Trading Initiative base code and International Labour
Organisation Fundamental Conventions, which suppliers are
contractually obliged to agree to and comply with as part of the
onboarding process. This includes the ASOS Code of Integrity
which includes a link to the ASOS Whistleblowing tool.
• Our in-country Ethical Trade teams and third-party auditors
monitor our supply chain and support mitigation/remediation
where we do identify risks/issues.
• We monitor compliance with our ethical trade policies and
requirements through our industry-leading audit programme.
This includes an Unapproved Subcontracting Policy to enable
full visibility of our supply chain in tiers 1-3.
• Our Garment Technology teams check that the products we
receive from our suppliers meet our quality standards and
expectations before they go on our website. We also use in-country
compliance testing and quality control facilities, with enhanced
testing and reporting capabilities to identify issues at source.
• We have global partnerships with NGOs such as Anti-Slavery
International, and the trade union IndustriALL Global Union, as well
as in-country partnerships with local independent workers’ rights
organisations. We work with these organisations to ensure we
are proactive in identifying and remediating issues within our
supply chain.
• We continue to work closely with our supply chain to monitor and
mitigate unauthorised subcontracting in factories.
• In FY23 we completed a Human Rights Saliency Assessment focused
on gender, freedom of association, modern slavery and wages.
The output has been used to devise our updated Human Rights
Strategy which we expect to publish in January 2024.
• Rolled out our mandatory Modern Slavery training for all ASOSers.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202350
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
11 Failure to comply with legislation or regulation 12 Engagement, capability, and retention of talent
Risk movement
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Risk movement
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Risk owner General Counsel & Company Secretary
What’s the risk?
Strategic expansion into new business sectors creates new legal,
regulatory and governance complexities. Our existing markets are
subject to complex and increasing regulatory or legislative changes
and policies across a range of areas including digital, product,
supply chain, technology, payments, consumer protection, financial,
data privacy, climate and environmental, corporate governance
(including ongoing reforms), and taxation (including indirect taxes).
It is sometimes difficult to anticipate and plan for such changes before
resulting requirements are clear. All of this increases our risk exposure.
The speed and severity of evolving requirements requires robust
processes to identify and monitor upcoming changes, model their
impacts and identify appropriate and timely responses. These
developments could lead to increased operating and compliance costs
and other financial impacts, including in relation to our competitiveness
and market share, as well as exposure to potential fines, litigation,
business disruption and reputational damage if emerging risks are not
adequately managed or mitigated.
As part of a broader review of environmental claims used across the
fast fashion retailer sector, in July 2022, the UK Competition and
Markets Authority (CMA) opened an investigation into ASOS and two
other fashion retailers in relation to environmental claims used in
connection with the promotion and sale of fashion products (CMA
Green Claims Investigation). ASOS continues to co-operate with the
CMA Green Claims Investigation.
How do we manage the risk?
• Our Governance Working Group is in place to monitor, review and
manage wider governance risks across the ASOS business, and
ensure ASOS is disciplined in its business activities.
• Horizon scanning processes (which include the Horizon Scanning
Working Group that meets bi-monthly) which aim to identify
upcoming legislative and regulatory change, and identify key risks
and the required actions needed to ensure ASOS remains compliant.
• Clear policies and procedures in place and regularly reviewed and
updated to ensure ASOS complies with legislative and regulatory
requirements.
• Providing regular training to ASOSers on relevant legislative or
regulatory requirements, including an annual compliance passport
which all ASOSers are required to undertake to ensure they are
aware of their responsibilities.
Risk owner Interim Chief People Officer
What’s the risk?
Inability to retain and keep talent with the relevant capabilities and
calibre engaged due to increased workloads, increased external
progression opportunities, and inflationary pressures on pay, could
impact our ability to successfully achieve our objectives and lead to
a loss of institutional knowledge. Although we have seen a reduction in
attrition rates during FY23, significant changes in leadership combined
with the amount of ongoing organisational development could cause
short-term uncertainty and a potential spike in attrition.
How do we manage the risk?
• Putting processes in place for assessing ASOSer leadership
capabilities and behaviours, taking actions to retain top talent,
and understanding present and potential future leadership gaps
and progression needs.
• Workstreams to amplify our Employer proposition around DEI,
reward, development, culture and dynamic working.
• Workforce planning and sourcing activities for both current and
future requirements.
• Continue to manage employee sentiment through engagement and
culture surveys with resulting action plans and engagement with
our ASOSers.
Risks on our horizon
A key part of our Risk Management approach
is identifying, monitoring and planning
mitigation or response for risks on our
horizon. The complex and challenging macro
economic landscape including inflation and
cost-of-living crisis continues to evolve,
shifting necessary focus and response
needed. We expect this to continue to
impact supply chain, people, operations
and customer behaviours as these events
progress and continue to interact. We will
continue to monitor the related risks over the
coming year to ensure we are prepared to
respond proactively and adapt to these
increasing challenges.
In addition to the areas of significant
uncertainty already discussed in this report,
we are also mindful of the following emerging
risks and opportunities and continue to
monitor them:
• The accelerated use of Artificial
Intelligence and Machine Learning across
all industries with both free and cost-
effective off-the-shelf tools coming to
market. Whilst there are opportunities
from using such technology there are also
potential risks, including with the
Intellectual Property rights of data
uploaded or created, and cyber security
and data privacy implications.
• Economic and financial pressures including
the cost-of-living crisis could increase
ASOSer, third-party supplier, and
customer motivation or perceived
justification for fraud, two of the three
elements of the fraud triangle. We are
monitoring data and reporting for possible
increases in fraudulent activity.
• Under the latest timetable, upcoming
changes to Corporate Governance
requirements by the Financial Conduct
Authority must be implemented by ASOS
for the start of our FY26 period. As for
many affected businesses, based on
current understanding the changes
ASOS must make are both complex and
significant. An effective transformation
approach will be needed to ensure we
can meet our future obligations. Changes
are also still subject to the outcome of
consultation so some requirements could
still be subject to change.
• Fast-paced technological change and
development could lead to unexpected
disruption including through changes in
how customers interact with us, how we
must do business, and what customers
want, if we are not prepared.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 51
Long-term
viability statement
The group’s prospects are assessed primarily through its strategic
planning process, which covers a period of five years, and is reviewed
by the Board with involvement throughout from both the CFO and CEO.
Whilst the Board reviews a five year plan, the final two years are
indicative movements, with the initial three years considered an
appropriate time period for the Group’s long-term plan as it facilitates
an appropriate balance between the short-term characteristics
of the business, such as uncertain demand cycles and changing
consumer behaviour, and the need for longer term planning in relation
to financing, investment and supply chain planning.
The Group considers the following in the assessment of the strategic
planning cycle and the long-term assessment of the business:
• the principal risks and opportunities associated with the Group,
and identification of new or changing emerging risks and how the
Group responds to these;
• macroeconomic trends within the global economy, geopolitical
events, increasing costs, and market share;
• changes in customer and competitor behaviour, driven particularly
by the potential wider consequences of reduced disposable income
(from increased interest rates and inflation); and
• scope for further cost mitigation.
i. The assessment period:
ASOS continues to adopt a three-year assessment period to assess
the Group’s viability. The Board has determined that this assessment
period to 31 August 2026 is appropriate because:
• The Group does not earn revenue from long term contracts.
Therefore changes to the Group’s long term plan are predominantly
as a result of changes to sales and cost assumptions which are
inherently more difficult to predict beyond three years. Both have
been stress-tested as part of the viability assessment.
• This period is also consistent with the Group’s long-term planning
cycle as detailed above, and the structure of the long-term
incentive scheme for senior management.
ii. Assessment of viability:
The assessment of the Group’s viability commenced with a review of
the liquidity headroom as at 3 September 2023, available through the
Group’s cash, cash equivalents and debt facilities, utilising a three-
year forward forecast (the base case). Sales growth rates utilised for
the first year of the base case reflect year-on-year declines of (5)%
to (15)%, with subsequent periods thereafter returning to double digit
year-on-year growth. The base case also assumes modest year-on-
year improvements in adjusted gross margin during FY24, with up to
c300bps growth vs FY23 for the remainder of the assessment period.
The forecasted cashflows across the assessment period were tested
against the single covenant of £90m minimum liquidity.
In the latter stages of the assessment period, the Group’s two key
financing arrangements expire or require renewal. Details of the
financing arrangements are as follows;
• £500m convertible bond issue maturing in April 2026, which the
Group does not expect to be exercised based on the conversion
price of £79.65.
• £275m debt facility with a specialist lender, comprising of a £200m
term loan and £75m revolving credit facility (“RCF”). This agreement
is due for renewal in April 2026, with an option to extend if certain
conditions are met.
The Group also estimated the impact of severe but plausible downside
scenarios aligned to the Group’s principal risks and opportunities,
identifying the principal risks from pages 46 to 51 which could have
a significant impact on the viability of the Group. These were then
stress-tested using a combined scenario where the below risks were
modelled as materialising over the three-year period. Available
mitigating actions were considered as part of the assessment.
These include deferring capital investment spend and enhancing cost
management practices in order to support a sufficient level of liquidity
headroom during the viability assessment period.
In the unlikely scenario of additional risks materialising, ASOS has
control measures in place and additional mitigations that in practice
would prevent or nullify the impact of any such occurrences.
Reviewing the forecasted liquidity across the viability assessment
period, the Group would be required to refinance to replace
a proportion of the liquidity lost upon the convertible bond expiry
under both the base case and severe yet plausible downside case.
Based on these assessments and other matters considered by the
Board, on the assumption that additional funding is secured ahead
of the convertible bond maturity, the Directors confirm that they
have a reasonable expectation that the Group will continue in
operation and meet its liabilities as they fall due through the three
year viability period ending 31st August 2026.
iii. Going concern:
The Directors considered it appropriate to adopt the going concern
basis in preparing the financial statements which are shown on
pages 99 to 165.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202352
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Scenario Associated principal risk Description
Macroeconomic downturn
and loss of market share
Macroeconomic changes
Strategic programmes fail to
deliver required outcome
Market dynamics and impact
on our business
A global economic downturn began in FY22 following the invasion of Ukraine
and has continued into FY23, forecast to continue into late FY24. More
recently, increased levels of inflation and interest rate increases have led
to a reduction in disposable income for the Group’s core customer group,
contributing to a contraction in consumer demand, driving like-for-like declines
across the business.
Management have applied a downside scenario with suppressed trading due to
the economic uncertainty experienced during the last 12 months. The scenario
reflects an uncertain consumer outlook which reduces the projected annualised
like-for-like sales growth contained within the base case during the 3-year
period under review by 7% per annum, resulting in Year 3 of the assessment
being 20-25% lower than base case. The severe downturn in sales modelled
reflects the volatile and uncertain nature of the macro-economic environment.
Gross Margin Performance Macroeconomic changes
Strategic programmes fail to
deliver required outcome
Market dynamics and impact
on our
A degradation in gross margin of c.200bps vs the base case across the
assessment period due to:
• Increased discounting required to satisfy consumer spending habits if the
challenging macro economic impact was prolonged
• Increased requirement for stock clearance in the transition to the new
operating model, if sales were not to meet the base plan
Management has applied a downside scenario to reflect a potential increase
in discounting and stock clearance in the event of the macro economic
environment not improving throughout the assessment period. A lack of
improvement could result in both the consumer demand being geared towards
discounted product, but also a slower sell through of existing stock resulting
in increased levels of clearance being required.
Working capital cash
impact
Data breach
Cyber security incidents
Market dynamics and impact
on our business
An incremental working capital outflow of up to £100m has been modelled,
constituting an outflow of cash in Year one of the assessment period. This
would capture any potential impact of regulatory fines or impacts in relation
to potential data breaches, cyber security events or any other events
impacting the Group’s ongoing working capital.
Climate change Sustainability and climate
change
The Group’s transition to being a lower carbon business and the physical
effects of global warming could potentially impact the business, in particular
through changes to regulations, legislation and resulting requirements, the
need to implement low-carbon technology, changing customer preferences,
and increases in the cost of raw materials and capital. Areas of the Group’s
operations and supply chain are also exposed in varying degrees to the risks
associated with extreme weather events in the longer-term, which include
drought, heat stress, and flooding. The business has a range of possible full
or partial mitigations available for these risks. Further details are provided
in the Task Force on Climate-related Financial Disclosures section on page 19.
The Group is in the final stages of developing and embedding its new
commercial model and is updating its FWI Strategy, metrics and targets.
These activities could affect the Group’s current understanding of the
potential risks, the details of possible mitigations, and so the inputs and
assumptions needed to accurately calculate potential quantitative outcomes.
Due to this the Group has not been able to model a specific scenario in relation
to climate-related risks but note that the impact of the risks outlined above
would be to reduce revenue or gross margin, or to increase operating costs,
and hence are covered by other assessments above.
The Strategic report has been prepared in accordance with the requirements of the Companies Act 2006, has been approved and signed
on behalf of the Board.
José Antonio Ramos Calamonte
Chief Executive Officer
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 53
Board of DirectorsBoard of Directors
Jørgen Lindemann
Chair
José Antonio Ramos
Calamonte
Chief Executive Officer
Emma Whyte
General Counsel & Company
Secretary
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
01 02
Mai Fyfield
Senior Independent Director
03
Wei Gao
Independent Non-executive
Director
05
Marie Gulin-Merle
Independent Non-executive
Director
06
Natasja Laheij
Independent Non-executive
Director
07
Jose Manuel Martínez
Gutiérrez
Independent Non-executive
Director
08
Nick Robertson
Founder and Non-executive
Director
09
Anna Maria Rugarli
Independent Non-executive
Director
10
William Barker
Non-executive Director
04
11
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202354
José Antonio Ramos Calamonte
Chief Executive Officer
Appointed: June 2022
External Appointments: None
Experience: José joined ASOS in January 2021 as Chief Commercial
Officer, where he was responsible for leading and driving our product
and trading strategy globally.
Prior to joining ASOS, José was Chief Executive Officer at Portuguese
fashion company, Salsa Jeans between 2019 and 2021. Before that,
heled on commercial strategy for high-profile brands including Esprit,
Carrefour Spain and Inditex.
José has extensive multichannel experience, having worked across
both online and physical retail, with expertise in trading, merchandising,
price and promotion. He started his career at McKinsey & Company.
Jørgen Lindemann
Chair
Appointed: Non-executive Director in November 2021 and Chair in
August 2022
External Appointments: CEO of Viaplay Group and Board Member
of Vivino APS
Experience: Jørgen has strong experience of leading digital-first
businesses. He is currently CEO of Viaplay Group, the Swedish-based
entertainment streaming service.
Jørgen is the former President and CEO of Modern Times Group (MTG),
the Swedish based digital entertainments business, where he worked from
1994 to 2020. He also sat on the board of Zalando as a Non-executive
Director from 2016 to 2021. His other previous roles include Kongregate,
Non-executive Director; DreamHack, Chair; Turtle Entertainment, Chair;
NOVA Broadcasting Group, Chair; Reach for Change, Board Member;
FTV Prima, Non-executive Director and Co-Chair; CTC Media Inc,
Non-executive Director and Co-Chair; and, most recently, Chair of Miinto,
the Danish-based online fashion marketplace.
Committees
N
Committee key
A
Audit Committee
N
Nomination Committee Denotes Chair of a Committee
R
Remuneration Committee
E
ESG Committee
02
01
Mai Fyfield
Senior Independent Director
Appointed: November 2019
External Appointments: Non-executive Director of Roku, a US-listed
entity, BBC Commercial Holdings and The Football Association Premier
League Limited
Experience: Mai was Chief Strategy and Commercial Officer at Sky
Plc until October 2018, responsible for leading strategy and Sky’s
commercial partnerships across the Sky Group. During her time at Sky,
she was a key player in the growth and diversification of the business
and has extensive international and digital experience. Prior to joining
Sky in 1999, Mai spent eight years working as an economic advisor to
blue-chip companies in a number of different industries, both in the UK
and the US.
Committees
A N R
03
William Barker
Non-executive Director
Appointed: September 2023
External Appointments: CEO of Camelot Capital Partners LLC,
Executive Chairman of Tapi Carpets & Floors Limited and Synnovia
Limited and Board Member of Re:Build Manufacturing LLC
Experience: William is the founder and CEO of Camelot Capital Partners
LLC, a California-based investment management company and has a
wealth of retail and commercial experience. William is also the Executive
Chairman of Tapi Carpets & Floors, Executive Chairman of Synnovia,
a UK manufacturing conglomerate and is also a founding investor and
Board Member of Re:Build Manufacturing LLC. Previously William was the
Executive Chairman of Life is Beautiful, a music and entertainment festival
in the USA and was an advisor to Tony Hsieh, the founder of Zappos.
04
Wei Gao
Independent Non-executive Director
Appointed: February 2023
External Appointments: Venture Partner at Madrona
Experience: Wei has a wealth of e-commerce and operating
experience, having worked in various roles at Amazon over 16 years,
latterly as Technical Advisor to the CEO and Vice President Grocery,
Tech, Product and Supply Chain. Most recently Wei was Chief
Operating Officer of Hopin, the online events platform, until July 2022.
Wei brings a depth of relevant industry knowledge across international
commerce, business transformation and data-driven decision-making.
Committees
A E N
05
06
Marie Gulin-Merle
Independent Non-executive Director
Appointed: February 2023
External Appointments: Global Vice President of Ads Marketing
of Google and Advisor to the Marketing Standards Board of the
General Assembly, a company which focuses on education and career
transformation
Experience: Marie has more than 20 years of experience in marketing
and digital transformation, working in technology and fashion. Prior to
joining Google in 2019, Marie was Chief Marketing Officer of Calvin Klein
Inc and Chief Digital Officer of its parent company, PVH Corp. Marie also
spent 17 years of her career at L’Oréal, latterly as Group Chief Marketing
Officer USA, where she successfully transformed the company’s
marketing functions.
Committees
R
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 55
Nick Robertson
Founder and Non-executive Director
Appointed: Co-founded ASOS.com Limited in 2000, and served as
its Chief Executive Officer until September 2015, when he became
a Non-executive Director
External Appointments: Non-executive Director of AFCW Plc and
Gandys International Limited
Experience: Nick’s career began in 1987 at the advertising agency
Young & Rubicam. In 1991, he moved to Carat, the UK’s largest media
planning and buying agency. In 1995, he co-founded Entertainment
Marketing Ltd, a marketing services business. Nick is Chair of the
ASOS Foundation, a registered charity funded by ASOS which
works to improve the lives of young people in the UK and overseas
through long-term partnerships with established local charities.
Nick was awarded an OBE in 2011 for his achievements in the world
of fashion retailing.
Committees
E
09
Natasja Laheij
Independent Non-executive Director
Appointed: April 2023
External Appointments: Senior Finance Director at Google EMEA,
Chair of Google Payments Limited and Audit Chair of Vandemoortele
Experience: Natasja has more than 25 years of experience in
international commercial and financial management, e-commerce,
tech, consumer electronics, telco and retail in B2C and B2B
environments through her roles in Deloitte Australia, Sony Ericsson,
Apple and as CFO Amazon Fashion Europe.
Committees
A R
07
Jose Manuel Martínez Gutiérrez
Independent Non-executive Director
Appointed: April 2023
External Appointments: CEO and Executive Director of Bimba y Lola
and Independent Non-executive Director of Ecoalf
Experience: Jose Manuel has more than 30 years of experience in
the retail and fashion industry, initially as a Strategy Consultant at
McKinsey before moving into leadership roles at international fashion
businesses. At Inditex, he was Director of Distribution and Operations,
responsible for the global product distribution model of the group.
He later served for six years as CEO and Executive Director of Esprit.
Committees
A E
08
Emma Whyte
General Counsel & Company Secretary
Appointed: March 2023
External Appointments: None
Experience: Emma is General Counsel & Company Secretary,
leading ASOS’ Legal, Company Secretarial, Data Protection and
Compliance teams. As Company Secretary, Emma supports the
ASOSPlc Board and Committees.
Emma joined ASOS in 2021 as Group Legal Director. Previously she
was the Associate General Counsel at the Fung Group and Global
Brands Group Plc, and prior to that a senior lawyer at Tesco Plc.
Emmaspent five years at Slaughter and May, where she qualified
as a UK solicitor in the Corporate team.
Anna Maria Rugarli
Independent Non-executive Director
Appointed: June 2023
External Appointments: Vice President of Japan Tobacco
International, Executive Director of Japan Tobacco International SA
and Non-executive Director at Prada Group
Experience: Anna Maria is a sustainability and CSR expert with more
than 20 years of experience working with leaders in global apparel,
including Nike Inc. and VF Corporation. She has specialised in creating
innovative strategies to address some of the most pressing environmental
and social challenges faced by the industry today, as well as providing
end-to-end oversight through implementation and roll-out.
Committees
E
10
11
Board of Directors continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202356
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Management
Committee
José Antonio Ramos Calamonte
Chief Executive Officer
See biography on page 55
Sean Glithero
Interim Chief Financial Officer
12
13
Cliff Cohen
Chief Technology Officer
Emma Whyte
General Counsel & Company
Secretary
See biography on page 56
17
Vanessa Spence
Senior Creative Director
15
Fiona Gaughan
Senior Global Commerce
& Channels Director
18
Christoph Stark
Senior Director Global
Logistics & Supply Chain
21
Michelle Wilson
Senior Director of Strategy
& Corporate Development
14
Dan Elton
Senior Director – Customer
19
Sean Trend
Senior Director of North
America
20
Jag Weatherley
Senior Director of Operations
16
Elena Martínez Ortiz
Senior Product Director
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 57
Sean joined ASOS in February 2023 and took over as Interim
CFO in May 2023. Sean supports the CEO in implementing the
Group’s strategy and is responsible for setting, and reporting
on, financial goals, objectives andbudgets and for overseeing
risk, internal controls and InternalAudit.
Prior to ASOS, Sean was CFO at Matchesfashion and Funding
Circle Holdings Plc where he led their IPO in 2018. Prior to this,
Sean spent 11 years at Auto Trader Group Plc helping to
transition to business from print to online as well as helping IPO
the business in 2015 as CFO. Sean started his career in audit
and then corporate finance at EY.
12
Fiona, since 2014, has held positions at ASOS, including
Womenswear Merchandising Director and her current role as
Senior Global Commerce and Channels Director. In her current
capacity, Fiona leads Global & Digital Trading, Planning, Pricing,
Intake, Wholesale, and Markets at ASOS. She oversees
commercial activities in all markets, aligning with ASOS’
strategic and commercial objectives, both short-term and
long-term.
Before joining ASOS, Fiona spent 14 years at Arcadia,
managing Merchandising and Branch Planning in various
product areas. She also serves on the Board of Governors for
the Fashion Retail Academy and Fashion Retail and Awards.
15
Vanessa joined ASOS in 2007 and has held a number of roles
relating to Design, Studios & Creative, developing a cohesive
look and feel to the ASOS ranges, trends and collaborations.
Having worked in fashion retail for over 20 years, Vanessa is
responsible for the creative direction of the ASOS brand.
Prior to joining ASOS, Vanessa held design roles at Arcadia
and Pepe Jeans. Vanessa sits on the Board of Governors for
the Fashion Retail Academy and Creative UK and joined the
Fashion Minority Alliance in 2020 as one of their resident
experts in Fashion Retail.
17
Sean joined ASOS in 2017 and is recently responsible for our
North America Operations. Previously Sean acted as a Senior
Director supporting the CEO in day-to-day operations as well
as running Insights, Analytics, Data Governance and several
strategic projects.
Prior to this role, Sean has had various roles in ASOS across
finance including, most recently, Director of Commercial
Finance, as well as other senior roles across Finance including
Financial Planning and Analysis and Financial Control. Before
ASOS Sean spent several years as Group Financial Controller
at CRUK and in Audit and Advisory at Deloitte.
19
Christoph joined ASOS in January 2023 and leads the Supply
Chain, Logistics and Customer Care teams.
Christoph has over 15 years’ experience across fulfilment,
supply chain and logistics and has held senior leadership roles
in several high-profile international online retailers, including
serving as Vice President Logistics for fashion retailer Zalando
in Berlin, Germany, and Vice President Global Fulfilment for
Wayfair (home & living) in Boston, USA.
18
Cliff joined ASOS in May 2015 and is responsible for driving
thetechnology strategy, delivery and operations globally,
encompassing all of our customer online experiences, data
platforms, supply chain, operational and business systems.
Prior to ASOS, Cliff spent eight years delivering major
technology change for M&S and his final role at M&S was
Interim CIO. Prior to this Cliff spent the first 12 years of
his career delivering major technology transformation
programmes with Accenture within their retail industry group.
13
Michelle joined ASOS as Senior Director of Strategy &
Corporate Development in April 2023 and is responsible for
Strategy, Corporate Responsibility (FWI), Investor Relations
and Communications.
Michelle joined ASOS from Berenberg Investment Bank, where
she led Retail and Ecommerce Equity Research before moving
into Investment Banking acting as board advisor to retail and
consumer businesses and most recently leading Berenberg’s
Corporate Finance team for Continental Europe. Previously
she held audit and mergers & acquisitions roles at EY.
21
Dan joined ASOS in March 2023 and is responsible for
customer experience and marketing across the business.
Dan was most recently Chief Customer Officer at Made.com,
where he was responsible for the end-to-end customer
experience. He also brings diverse experience in fashion and
sports from his time at Google, as well as in senior marketing
roles at both Sainsbury’s and Tesco.
14
Jag joined ASOS in 2012 and is currently Senior Director of
Operations. In her role, Jag is responsible for streamlining
strategic initiatives, overseeing programme management and
communicating objectives to departments, ensuring we remain
focused. Jag oversees the PMO, Transformation, Change,
Business Technical L&D Academy and Procurement teams.
Prior to this, Jag has held a number of roles in the business,
starting as a Head of Merchandising in Womenswear for both
our own brands and our third-party brand partnerships,
before moving into the Operations, Change and Transformation
space in 2019. Prior to joining ASOS Jag was aMerchandiser
for Topshop where she started her career.
20
Elena joined ASOS in 2022 as ASOS Design Womenswear
Director before becoming Senior Product Director in 2023.
Elena is responsible for the entire Product division including
own brands such as ASOS Design Womenswear, ASOS Design
Menswear, Topshop, Topman, Venture Brands and third-party
Brands, Face + Body and Sportswear.
Prior to joining ASOS, Elena built her career working at Inditex
for Stradivarius, in a multitude of roles which saw her working
in Barcelona and across Asia, setting up Sourcing
Representative offices in Shanghai, Dhaka and Delhi and
leading multi-disciplined teams of designers, buyers,
merchandisers, planners and technicians.
16
Management Committee continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202358
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Corporate
Governance Report
Dear shareholder
I am pleased to present the Corporate Governance Report for the
period ended 3 September 2023. This should be read in conjunction
with the compliance report on page 61, which shows how the Company
has complied with the UK Corporate Governance Code 2018.
It has been a challenging year amidst a tough macroeconomic
environment and cost-of-living crisis, and I am proud of the way the
Board, management team and our ASOSers have worked together
to make progress towards our new commercial model, deliver profit
optimisation and cost saving initiatives under the Driving Change
agenda. In addition, we negotiated a successful £275m debt
refinancing alongside a £75m institutional equity raise and £5m equity
retail offer, which creates a stable base for the continued execution of
our strategy and future return to growth. We have a great culture at
ASOS, which shines through when colleagues pull together to deliver
solid performance. As a Board we continued to operate within our
robust governance framework and kept a focus on business as usual
activities throughout this period of strategic change. Solid governance
underpins everything we do as a Board, and we are clear about our
responsibilities to deliver against our strategic priorities.
We continued to make important changes to the Board’s composition
during the year, as explained in detail below. My role as Chair was to
ensure that high standards of corporate governance were maintained
throughout the transition periods and that our new Board members
received thorough inductions and training to enable them to carry out
their duties as listed company Directors.
I was delighted to take on the role of designated Non-executive
Director for employee engagement. I am passionate about ensuring
we maintain the disruptive culture that we are known for and have
thoroughly enjoyed meeting more of our ASOSers through our Voices
Network employee forum, ‘fireside chats’ and site visits to listen to our
ASOSers’ views and experiences whilst working at ASOS, as explained
in more detail on pages 35 and 68.
Leadership changes
As disclosed last year, Mat Dunn stepped down as Executive Director
on 31 October 2022. Mat was instrumental in ensuring the Group
continued to make strategic progress despite difficult market conditions
post-pandemic and on behalf of the Board I would like to thank him again
for his hard work and support throughout his time with us.
Sean Glithero took over from Katy Mecklenburgh as Interim CFO in
May 2023. Katy made a valuable contribution throughout her time as
Interim CFO and we wish her all the best in her new external CFO role.
Sean brings a wealth of financial experience with a track record of
delivery across a range of digital and fashion businesses. We are
continuing with our search for a CFO to lead our finance function
on a permanent basis.
We also reported in last year’s Annual Report that Karen Geary, Luke
Jensen and Eugenia Ulasewicz would not seek re-election at the FY22
Annual General Meeting (AGM). Luke stepped down from the Board on
31 October 2022, Karen stepped down from the Board on 1 December
2022 and Eugenia stepped down from the Board at the conclusion of
the AGM on 11 January 2023. I would like to reiterate my thanks to them
all for their contribution to the Board and the Committees they served
on throughout their tenure.
Patrick Kennedy stepped down from the Board and his roles as Senior
Independent Director, Chair of the Audit Committee and member
of the Remuneration and Nomination Committees on 5 April 2023 to
focus on other business activities. I would like to extend my gratitude
to Patrick for the contribution he made to ASOS throughout his tenure,
in particular his contribution to our move to the Main Market and his
support during a period of management and Board transition. We wish
him well for the future. Mai Fyfield was appointed as Senior Independent
Director with effect from 5 April 2023 following Patrick’s departure
from the Board.
Following a review of the balance of skills, knowledge and diversity of
the Board, and an extensive search process led by myself as Chair
and Chair of the Nomination Committee, we strengthened our Board
with five new Independent Non-executive Directors during the period
to 3 September 2023, each of whom brings varied experience and
a differentiated skill set. We also took the opportunity to review
and refresh the membership of our Board Committees throughout
theperiod.
Marie Gulin-Merle joined the Board as Independent Non-executive
Director and was appointed as a member of the Remuneration
Committee on 1 February 2023. Wei Gao also joined the Board as
Independent Non-executive Director on 1 February 2023, and was
appointed as a member of the Audit Committee with effect from
the same date. Wei was subsequently appointed as a member of the
Nomination Committee with effect from 5 April 2023 and as a member
of the ESG Committee with effect from 26 June 2023.
Natasja Laheij and Jose Manuel Martínez Gutiérrez both joined the
Board as Independent Non-executive Directors on 11 April 2023.
Natasja was appointed Chair of the Audit Committee and as a member
of the Remuneration Committee with effect from 11 April 2023 and
Jose Manuel was appointed as a member of the Audit Committee with
effect from his date of appointment. Jose Manuel was subsequently
appointed as a member of the ESG Committee on 26 June 2023.
Chair’s
Governance
statement
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 59
Anna Maria Rugarli joined the Board as Independent Non-executive
Director and was appointed as Chair of the ESG Committee on
26 June 2023.
Post-period end, William Barker was appointed as Non-executive
Director on 20 September 2023. William is the founder and CEO
of Camelot Capital Partners LLC (“Camelot Partners”) which, as at
the date of his appointment and as at the date of this report, held
a 14.02% interest in the Company. Given William’s relationship with
Camelot Partners, which is a significant shareholder, in accordance
with the UK Corporate Governance Code 2018, William joined the
Board as a Non-independent Non-executive Director.
Biographies of the Board, including the Committees on which our
Non-executive Directors serve, can be found on pages 55 to 56 and
further information on the selection and appointment process can
be found in the Nomination Committee Report on pages 77 to 79.
We are now well placed to benefit from the refreshed skills that our
new Directors bring to the Board as we enter FY24.
Strategy
We are equipped with a highly experienced Board with expertise
across Product, Brand, Marketing, Supply Chain, Technology,
Sustainability, Strategy and Finance. We held a collaborative Board
strategy day in July 2023 in conjunction with the Management
Committee where we were able to discuss and debate our Right to
Win, analyse the risks and opportunities for the business, conduct
deep dives into important strategic matters and identify our key
focus areas for the year ahead. As a Board, we will closely monitor
Management’s execution of their strategy and continue to provide
challenge and support on the strategic direction of the Company.
Board evaluation
Due to the Board and Leadership changes throughout the year, we
took the decision not to do a Board evaluation prior to year-end, aswe
would normally do. Instead, we are currently conducting an externally
facilitated Board evaluation which commenced late in FY23 and will
complete in early FY24. This decision allowed our new Board members
more time to embed within the Company, attend more Board and
Committee meetings and for us all to work together as a Board, albeit
for a short time in order to provide more valuable feedback as part of
the review. The process of our external Board evaluation is explained
further on page 67.
Governance
Maintaining appropriate standards of corporate governance is
essential for good management of the business. As a Board, we
recognise the need for ensuring an effective corporate governance
framework is in place to give our stakeholders the confidence that
the business is being run effectively.
The Company has applied the principles and complied with the
provisions ofthe UK Corporate Governance Code 2018, with the
following exceptions:
• Provision 5: Between the period of Karen Geary stepping down from
the Board on 1 December 2022 and my formal appointment as
designated Non-executive Director for employee engagement on
5 April 2023, we did not have a designated Non-executive Director
to engage with the wider workforce. However, in the interim period
José and I held a ‘fireside chat’ with our ASOSers and since I took
on this role I have conducted numerous employee engagement
activities to ensure the role was covered thoroughly. See pages 35
and 68 for more information.
• Provision 21: Although a Board evaluation commenced in late FY23,
it has not yet concluded. It was agreed that the evaluation would
be more beneficial once the new Directors had more time to embed
within the Board. See page 67 for further information.
• Provision 24: Between the period of Eugenia Ulasewicz stepping
down from the Board and Audit Committee on 11 January 2023
and Wei Gao’s appointment to the Board and Audit Committee on
1 February 2023, the Audit Committee had two members rather
than three – no Audit Committee meetings were held during this
time. In addition, between the period of Patrick Kennedy stepping
down from the Board and Audit Committee on 5 April 2023 and the
appointment of Natasja Laheij to the Board and Audit Committee
on 11 April 2023, the Audit Committee had two members rather than
three – no Audit Committee meetings were held during this time.
• Provision 32: Between Eugenia Ulasewicz stepping down from the
Board and Remuneration Committee on 11 January 2023 and
Marie Gulin-Merle’s appointment to the Board and Remuneration
Committee on 1 February 2023, the Remuneration Committee had
two members rather than three – no Remuneration Committee
meetings were held during this time.
• Provision 36: The Remuneration Policy, which includes a policy for
post-employment shareholding requirements, received shareholder
approval at the AGM on 11 January 2023 and subsequently ASOS
became compliant with this provision. ASOS was not compliant from
the beginning of the financial year up until the date of the AGM.
• Provision 38: With effect from 1 December 2022 the pension
contribution rate for Executive Directors was set to 5% to align
pension contribution rates for Executive Directors with those
available to the workforce. From the start of the period until
31 October 2022, Mat Dunn held office as Executive Director with
a pension contribution of 10%, therefore ASOS was non-compliant
with this provision during this time.
Details of our compliance with the Code, the composition of our Board,
corporate governance arrangements, processes and activities during
theyear, and reports from each of the Board’s Committees, are set
out on the following pages. A full version of the Code is available from
the Financial Reporting Council website at frc.org.uk.
Jørgen Lindemann
Chair
31 October 2023
Corporate Governance Report
continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202360
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Compliance with the UK Corporate Governance Code 2018
1 Board Leadership and Company
Purpose
Page(s)
A
B
C
D
E
Effective Board
Purpose, values and culture
Governance framework
Stakeholder engagement
Workforce policies and practices
61 to 67
35, 64, 68
63
34 to 37, 66, 68
14 to 15, 74, 95, 97
2 Division of Responsibilities
Page(s)
F
G
H
I
Role of the Chair
Independence
External commitments and conflicts
of interest
Board resources
63
61
64
64
3 Composition, Succession and
Evaluation
Page(s)
J
K
L
Appointments to the Board
Board skills, experience and knowledge
Annual Board evaluation
64, 77 to 79
55 to 56, 77 to 79
60, 67
4 Audit, Risk and Internal Control
Page(s)
M
N
O
External Auditor and Internal Auditor
Fair, balanced and understandable
review
Internal financial controls and risk
management
70, 73
70, 98
44 to 51, 73 to 74
5 Remuneration
Page(s)
P
Q
R
Linking remuneration with purpose
and strategy
Remuneration Policy review
Performance outcomes in 2023
80 to 85
80 to 93
82
Board composition
The Board is currently composed of an Independent Non-executive
Chair, one Chief Executive Officer (CEO) who is an Executive Director
and eight Non-executive Directors, six of whom are considered to be
independent. Nick Robertson, Founder and Non-executive Director, is not
considered to be independent under the Code due to his former role as
CEO of the Company. William Barker is not considered to be independent
under the Code due to his relationship with Camelot Capital Partners
LLC, which is a significant shareholder of the Company.
There were several changes to the composition of the Board of Directors
during the year with the retirement of Mat Dunn, Luke Jensen, Karen
Geary, Eugenia Ulasewicz and Patrick Kennedy and the appointments
of Marie Gulin-Merle, Wei Gao, Natasja Laheij, Jose Manuel Martínez
Gutiérrez and Anna Maria Rugarli. In addition, Mai Fyfield took over as
appointed Senior Independent Director with effect from 5 April 2023
when Patrick Kennedy stepped down from the Board. The Company’s
Interim CFO is not an Executive Director, however an extensive search is
underway for a permanent CFO who will join the Board as an Executive
Director. Biographies for the Directors as at the date of this report
are set out on pages 55 to 56.
Board diversity
We recognise the importance of diversity across our organisation
andsee it as a key driver of business success. We are committed to
creating an inclusive culture where our ASOSers reflect the diversity
ofthe customers we serve. We are passionate about creating an
environment where every ASOSer is given the opportunity to contribute
and use their talents, skills and experiences to help make ASOS the
number one online destination for fashion-loving 20-somethings.
We believe that a diverse Board, with a broad range of skills,
backgrounds, knowledge and experience, is essential to maintaining
Board effectiveness and competitive advantage. When making new
appointments to the Board and its Committees, suitably qualified
applicants from a diverse pool will be considered with no restrictions
on protected characteristics such as age, gender, sexual orientation,
religion, ethnic background or other personal attributes.
We are pleased to report that we meet the target for women on
Boards set by the FTSE Women Leaders Review and Financial Conduct
Authority and currently have a 50% female representation on our
Board with a female Senior Independent Director. We also meet the
Parker Review target to have at least one Director from an ethnic
minority. It is our intention that we maintain a diverse Board noting
that all appointments are made on merit, taking into account suitability
for the role, composition and balance of the Board, to ensure that
the Board has the right mix of skills, experience, independence and
knowledge to perform effectively.
BOARD DIVERSITY
Female
Gender
Male
5 5
Ethnicity
9 1
White Ethnic minority
How the Board operates
Board meetings
The Board held six scheduled meetings during the year. Additional
Board meetings were held in relation to projects as and when required
such as the re-financing.
The table on page 62 sets out attendance at all scheduled Board and
Committee meetings held during the period ended 3 September 2023.
Directors are expected to attend all Board and relevant Committee
meetings, however certain pre-existing commitments meant that
some Directors could not join all meetings, as explained in the notes
to the table.
Where possible, Board meetings are scheduled at least one year in
advance. When adhoc meetings are scheduled, sometimes at short
notice for time critical matters, it may not always be possible to ensure
attendance by the full Board. However, Board papers for the meeting
are shared with all Board members and any Board member who’s not
able to attend is able to comment on matters to be discussed and is
able to receive a full briefing from the Chair.
In conjunction with the Company Secretarial team, forward-looking
agendas are prepared for the Board and its Committees to ensure
that the Board discharges its duties on a timely basis throughout the
year taking into account strategy, forecast and budget planning and
the Company’s financial reporting cycle. The Chair meets with the
CEO and Company Secretary in advance of each Board meeting to
agree the agenda and papers for each meeting. Board and Committee
meeting packs are distributed well in advance of each meeting to allow
appropriate time to review the information to be discussed.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 61
Corporate Governance Report
continued
Board meetings Committee meetings Strategy day
Audit Remuneration Nomination ESG
Eligible to
attend
Scheduled
meetings
attended
Eligible
to
attend Attended
Eligible
to
attend Attended
Eligible
to
attend Attended
Eligible
to
attend Attended
Eligible
to
attend Attended
José Antonio
Ramos
Calamonte
6 6/6 – – – – – – – – 1 1/1
Mat Dunn¹ 2 2/2 – – – – – – – – – –
Mai Fyfield² 6 6/6 5 5/5 7 7/7 2 2/2 1 1/1 1 1/1
Wei Gao³ 2 2/2 2 2/2 – – 2 2/2 1 1/1 1 1/1
Karen Geary⁴ 2 1/2 – – 4 4/4 – – 1 1/1 – –
Marie Gulin-
Merle⁵
2 2/2 – – 2 1/2 – – – – 1 1/1
Luke Jensen⁶ 2 2/2 2 2/2 – – – – – – – –
Patrick Kennedy⁷ 4 4/4 3 3/3 5 4/5 2 2/2 – – – –
Natasja Laheij⁸ 1 0/1 2 2/2 2 1/2 – – – – 1 0/1
Jørgen
Lindemann
6 6/6 – – – – 4 4/4 – – 1 1/1
Jose Manuel
Martínez
Gutiérrez
9
1 1/1 2 2/2 – – – – 1 1/1 1 1/1
Nick Robertson
10
6 6/6 – – – – – – 2 1/2 1 1/1
Anna Maria
Rugarli
11
1 1/1 – – – – – – 1 1/1 1 1/1
Eugenia
Ulasewicz
12
4 3/4 3 3/3 5 5/5 – – 1 1/1 – –
1 Mat Dunn stepped down from the Board on 31 October 2022.
2 Mai Fyfield stepped down from the ESG Committee with effect from 26 June 2023 following Committee composition changes and her additional time commitment
as Senior Independent Director and member of the Nomination Committee with effect from 5 April 2023.
3 Wei Gao was appointed to the Board and joined the Audit Committee on 1 February 2023, joined the Nomination Committee on 5 April 2023 and joined the ESG
Committee on 26 June 2023.
4 Karen Geary stepped down from the Board on 1 December 2022. She was unable to attend a Board meeting in October 2022 due to pre-existing commitments,
however a full briefing was given to Karen following the meeting.
5 Marie Gulin-Merle was appointed to the Board and joined the Remuneration Committee on 1 February 2023. Marie was unable to attend a Remuneration
Committee meeting due to a pre-existing commitment, however a full briefing was given to Marie following the meeting.
6 Luke Jensen stepped down from the Board on 31 October 2022.
7 Patrick Kennedy stepped down from the Board on 5 April 2023. Patrick was unable to attend a Remuneration Committee meeting in September 2022 due to a
diary conflict. A full briefing was given to Patrick following the meeting.
8 Natasja Laheij was appointed to the Board and appointed as Audit Committee Chair and a member of the Remuneration Committee with effect from 11 April 2023.
She was unable to attend the first scheduled Board meeting, Strategy day and a Remuneration Committee meeting following her appointment due to an existing
diary conflict which was set prior to joining the Board. A full briefing was given to Natasja on the proceedings at the meetings.
9 Jose Manuel Martínez Gutiérrez was appointed to the Board and joined the Audit Committee with effect from 11 April 2023. Jose joined the ESG Committee with
effect from 26 June 2023.
10 Nick Robertson was unable to attend an ESG Committee meeting in November 2022 due to a diary conflict. A full briefing was given to Nick following the meeting.
11 Anna Maria Rugarli joined the Board and was appointed as Chair of the ESG Committee with effect from 26 June 2023.
12 Eugenia Ulasewicz stepped down from the Board on 11 January 2023. She was unable to attend a Board meeting in December 2022 due to pre-existing
commitment. A full briefing was given to Eugenia following the meeting.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202362
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Board Structure: The table below sets out our governance framework and outlines the division of responsibilities between the Chair and the CEO, as agreed by
the Board, along with a summary of the roles of the Senior Independent Director, the Executive Directors, the Non-executive Directors and our Committees.
Division of responsibilities
The Board is collectively responsible for the long-term sustainable
success of the Group by ensuring that ASOS, its subsidiaries and
all its businesses are managed for the long-term benefit of all
shareholders, while having regard for our employees, customers,
suppliers, and our operational impact on our communities and the
environment. It sets the Group’s purpose, strategy and values and
is accountable to shareholders for ensuring that the Group is
appropriately managed and achieves its objectives in a way that is
supported by the right culture and behaviours. The Board sets the
Group’s risk appetite, and reviews the controls applied to operate
the business in line with that appetite. It determines, monitors
andoversees risk management processes, financial controls and
audit processes to ensure ASOS operates effectively and
sustainably in the long term.
Chief Executive Officer Chair Senior Independent Director Non-executive Directors
The Board has delegated specific responsibilities to the Board Committees: Audit, Nomination, Remuneration and ESG. The duties of each Committee are set out in
the Committees’ Terms of Reference, which are available on the website at asosplc.com. Details of each of the Committee’s activities during the period are set out
in the Committee reports on pages 69 to 93. Each Committee has access, at the cost of the Group, to the resources, information and advice that it deems necessary
to enable the Committee to discharge its duties.
Audit Committee
The Audit Committee’s principal
responsibilities areto:
• Monitor the integrity of the Group’s
financial statements in relation to
the Group’s financial performance.
• Review the Group’s accounting
policies, critical estimates and
significant judgements
• Review the effectiveness of
the internal and external audit
processes and report internal
and external audit findings to
the Board
• Review the effectiveness of the
Group’s internal controls, including
the process for the evaluation,
assessment and management
ofrisk
• Oversee the Group’s
whistleblowing, compliance,
security and fraud prevention
procedures
More information on the composition,
responsibilities and activities of the
Audit Committee are set out in the
Audit Committee Report on
pages 69 to 74.
Nomination Committee
The Nomination Committee’s
principal responsibilities are to:
• Monitor the structure, size and
composition of the Board and its
Committees
• Identify the balance of skills,
knowledge, diversity and
experience on the Board and
recommend new Board and/or
Committee members to the Board
as appropriate
• Review the time commitment and
independence of the Non-executive
Directors, including potential
conflicts of interest
• Oversee talent and succession
plans for Senior Leaders
• Ensure that an appropriate and
tailored induction is undertaken
by all new Board members and that
training and development
is available to existing Board
members
More information on the composition,
responsibilities and activities of the
Nomination Committee are set out
in the Nomination Committee Report
on pages 77 to 79.
ESG Committee
The ESG Committee’s principal
responsibilities are to:
• Approve the Group’s Fashion
with Integrity (FWI) Strategy,
including related targets and key
performance indicators (KPIs)
• Provide oversight on the execution
of the FWI Strategy and the
Group’s progress against its
targets and KPIs in relation to ESG,
including ESG risk management
• Provide oversight of the key policies
and programmes required to
implement the ESG strategy
• Review practices and initiatives of
the Group relating to ESG matters
to ensure they remain effective
• Oversee how the Group’s ESG and
FWI Strategies are communicated
to all stakeholders
• Offer recommendations to
the ASOS Plc Remuneration
Committee on ESG-specific
targets for executive remuneration
packages
More information on the composition,
responsibilities and activities of the
ESG Committee are set out in the
ESG Committee Report on pages 75
to 76.
Disclosure Committee
Assists the Board in discharging
obligations under the Market Abuse
Regulation and Listing Rules with
regard to the management and
disclosure of inside information, and
provides oversight of the accuracy and
timeliness of the Group’s financial and
corporate disclosures, or any other
material information, as per the
regulatory framework.
Management Committee
The Board delegates responsibility for the day-to-day management of the Group to the Management Committee.
Led by the CEO, the Management Committee is collectively responsible for developing and implementing the strategy,
operational plans and budgets; monitoring overall operational and financial performance; overseeing key risks;
and management development.
• Responsible for proposing the
strategic focus to the Board.
• Implementation and execution
ofstrategy.
• Leading the engagement of
ASOS through the Management
Committee.
• Responsible for running the business
of the Board.
• Ensures the effectiveness of the
Board and appropriate strategic
focus and direction.
• Promotes high standards of
corporate governance.
• Encourages open debate between
the Executive and Non-executive
Directors.
• Provides a sounding board for the
Chai r.
• Serves as an intermediary for the
Non-executive Directors, where
necessary.
• Leads the Non-executive Directors’
performance appraisal of the
Chair and is available to meet
with shareholders, if and when
necessary, if they have any
concerns about the business which
have not been resolved through
normal channels.
• Exercise independent judgement
and constructively challenge the
Executive Directors and the senior
management team, scrutinising
performance against objectives.
• Provide strategic guidance to the
Company, utilising their wealth of
knowledge, insight and experience
in their specialist areas.
• Have a pivotal role in the
appointment and removal of
Executive Directors and the
Company’s corporate governance
framework as a whole.
The
Board
Remuneration Committee
The Remuneration Committee’s
principal responsibilities are to:
• Determine and recommend to
the Board the Group’s overall
Remuneration Policy and monitor the
ongoing effectiveness of that Policy
• Determine and recommend to
the Board the remuneration of
the Executive Directors, the
Chair and other members of the
Management Committee
• Monitor, review and approve
the levels and structure of
remuneration for other Senior
Leaders and employees
• Determine the headline targets
for any performance-related bonus
or pay schemes
• Determine specific targets and
objectives for any performance-
related bonus or pay schemes
for the Executive Directors and
the other members of the
Management Committee
• Review and approve any material
termination payment
More information on the composition,
responsibilities and activities of the
Remuneration Committee are set out
in the Directors’ Remuneration Report
on pages 80 to 93, along with our
Remuneration Policy and details of
how that policy was implemented
during the period to 3 September 2023.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 63
How the Board operates
Board meetings (continued)
Matters to be approved by the Board are constructively challenged
and decisions are taken democratically following discussion, and any
actions arising from Board and Committee meetings are recorded and
then followed up by the person responsible.
Any concerns that a Director may have would be noted in the minutes
of the meeting. Furthermore, if any Director resigns and has any
concerns about the business, the Chair would engage with the
resigning Director and ensure that the Board receives feedback
of those concerns in the form of a letter addressed to the Chair.
During the year, the Chair met with the Non-executive Directors
without the Executive Directors being present.
The Board has access to the advice and services of the Company
Secretarial team, including the General Counsel & Company
Secretary, who is responsible for ensuring that all Board procedures
have been complied with. The appointment and removal of the
Company Secretary is a matter reserved for the Board as a whole.
Individual Directors are also able to take independent legal and
financial advice at the Group’s expense when necessary, to support
the performance of their duties as Directors. The Directors are also
updated on the Group’s business areas and the regulatory and
industry-specific environments in which they operate by way of written
briefings and meetings with Senior Leaders and, where appropriate,
external parties. Appropriate training is also available to all Directors
to develop their knowledge and ensure they stay up to date on matters
for which they have responsibility as a Board member. Directors’ and
Officers’ Liability insurance is maintained for all Directors.
Time commitment
The Nomination Committee has primary responsibility for monitoring
time commitments of Directors and ensuring that each Non-executive
Director has the requisite time to discharge their duties as Directors
effectively. The Nomination Committee, led by the Chair, is satisfied
that all Non-executive Directors have sufficient time to commit to their
role on the Board. Any changes to the time commitments and interests
of its Directors are reported to and, where appropriate, agreed with
the rest of the Board. The Board is satisfied that the number of
external appointments held by each Director are appropriate and
none of the Directors are considered to be over-boarded and have
the requisite time to fulfil their obligations to the Company.
Board appointments and inductions
On the recommendation of the Nomination Committee, the Board
makes decisions regarding the appointment and removal of Directors
and there is a formal, rigorous and transparent procedure for
appointments. Each new Director receives a full, structured and
tailored induction. A comprehensive information pack is provided
to Directors during the onboarding process containing detailed
management information pack on the business, corporate governance
and compliance. Meetings are organised with other Board members,
relevant members of the Management Committee and external
advisors. Directors are also invited to a tour of the ASOS offices
and studios in London.
Succession planning
The Nomination Committee, and the Board as a whole, regularly
discuss succession planning for all Directors and Senior Leaders
of the Company, taking into account the challenges and opportunities
facing the Company, the leadership needs of the organisation and
the skills and expertise needed on the Board and Senior Leaders in
the future. The work of the Nomination Committee for this area is
described in detail on pages 78 to 79.
Risk management and internal controls
The Board has overall responsibility for determining the nature and
extent of the significant risks the Company is willing to take in achieving
its strategic objectives, maintaining sound risk management and
internal control systems and commenting on such matters in line with
the Company’s reporting obligations. During the period the Board
conducted a robust assessment of the Company’s emerging and
principal risks. Further information on the Company’s approach to
risk management and internal controls can be found on pages 44 to 45
and 73 to 74.
Conflicts of interest
Each Director has a duty to declare any potential conflict of interest
prior to appointment, and on an ongoing basis. We have effective
procedures in place to monitor and deal with any potential or actual
conflict of interest that could impair judgement. No Director would
be included with a discussion where there was a conflict of interest.
If a conflict required approval this would be appropriately minuted,
together with the rationale behind the decision, and appropriate
records would be kept.
Board leadership and Company purpose
Our purpose, culture and strategy
The Board is responsible for setting ASOS’ vision, purpose and
values, as well as satisfying itself that there is an appropriate culture
throughout the Group to ensure the necessary resources are in place
to execute the Group’s vision – to be the world’s number one fashion
destination for fashion-loving 20-somethings – and to ultimately
deliver long-term growth of the Group and generate value for our
shareholders. In order to achieve this vision, we are focused on our
purpose to give our fashion-loving 20-somethings the confidence to
be whoever they want to be, as well as being guided by our values –
to be authentic, brave, creative and disciplined, in everything we do.
The Group is built on an inclusive culture which encourages passion,
enthusiasm and development so ASOSers can bring their best selves
to work. We recognise that it is our differences which make us stand
out from the crowd.
The Board acknowledges that it is accountable to stakeholders for
ensuring that the Group is appropriately managed and achieves
its objectives in a way that is supported by the right culture and
behaviours. The Board is responsible for ensuring that its activities
reflect the culture of the Group, set the tone from the top and drive
the right behaviours with our ASOSers.
The Board assesses culture in a variety of ways as detailed on
pages 35 and 68.
Corporate Governance Report
continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202364
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Board activities
The main topics reviewed, monitored, considered, debated and approved by the Board during the period are outlined below. Meeting agendas are
agreed in advance by the Chair in conjunction with the CEO, Interim CFO and Company Secretary to ensure the appropriate balance of standing
agenda items, strategic or functional deep dives and governance matters. The Board recognises the importance of weaving the views of its key
stakeholders into its deliberations and decision-making process, as well as promoting the long-term success of the Company, so this forms a key
part of the Board’s discussions.
Strategy
• Reviewed and approved changes to the Group’s commercial operating model including a re-allocation of
resources and improved inventory management.
• Approved an amendment and extension to the Company’s £350m Revolving Credit Facility (RCF), with existing
covenants ceasing to apply until February 2024, providing the Group with enhanced flexibility.
• Subsequently approved a new £275m financing facility alongside a fully underwritten non-pre-emptive cash
placing of new ordinary shares to raise proceeds of c.£75 million and a retail offer to raise c.£5m, which
replaced the previous RCF.
• Considered strategic matters at a designated strategy day.
Financial and
operational
performance
• Received detailed and transparent updates from the CEO and Interim CFO at each scheduled meeting.
• Monitored financial performance against budgets and forecasts and discussed any deviations from
expectations at each scheduled meeting.
• Reviewed performance against the Group’s KPIs.
• Regularly reviewed progress against the Company’s Driving Change agenda.
• Reviewed and approved the Company’s trading updates, full and half-year results and the Annual Report
and Accounts.
• Reviewed and approved Group budgets for FY23.
• Review performance updates relating to technology infrastructure, technical capabilities, cyber and
data privacy.
People and culture
• Received periodic leadership updates including key actions for succession planning for senior executives and
leaders within the Group to ensure the Group has the required capabilities and readiness to successfully
execute our medium-term goals.
• The Board received an overview of the results of the employee engagement survey (ASOS Vibe) to understand
the culture, values and current levels of engagement within the Group.
• The Board received feedback from the designated Non-executive Director for employee engagement on their
experiences meeting ASOSers.
• Reviewed progress made against our Be Diverse KPIs as part of our Fashion with Integrity strategy.
Governance and
risk
• Reviewed and approved Group policies including an updated Share Dealing Policy and Anti-Money Laundering,
Anti-Fraud and Anti-Facilitation of Tax Evasion policies.
• Reviewed the results of the Board and Committees’ FY22 internal evaluation, discussed recommendations and
agreed key themes to focus on for FY23.
• Received updates and recommendations from the Committee Chairs following each Committee meeting.
• Received updates from the General Counsel & Company Secretary regarding legal, governance and compliance
matters at each meeting.
• Reviewed and approved changes to the Disclosure Committee’s Terms of Reference to expand its remit to
include oversight of the management and disclosure of inside information in line with the regulatory framework.
• Reviewed the Group’s principal risks taking into account the risk appetite, and discussed how these risks and
opportunities should best be managed within the Group.
• Received feedback and insights from the Chair gathered from meetings with the Company’s top shareholders.
• Received briefings from the Company’s brokers and training from the Company’s lawyers.
Markets
• Reviewed reports from the Investor Relations team at each scheduled meeting, containing market updates
and shareholder feedback.
• Assessed performance relative to peers.
• Assessed our target customers and considered customer acquisition models and the customer experience.
• Received an update on brand and customer health at the Board strategy day.
• Considered geographical markets.
Fashion with
Integrity (FWI)
• Oversight of FWI Strategy through our ESG Committee.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 65
Principal decisions FY23
The table below sets out the key topics the Board discussed and debated during the period and identified how the Board considered its
stakeholders and their priorities during their discussions and decision-making.
Matter considered Deliberations Stakeholders
Commercial
Operating Model
In October 2022 we announced that the Board had deliberated and approved a new
commercial model to enhance our customer proposition and improve the business’s
profitability. ASOS should be a destination for fashion, and our historical approach to
buying and clearance resulted in a large amount of older, less relevant product on site.
The new model will result in more relevant product, higher full-price sales, and a lower
inventory requirement in the medium term. To facilitate a faster transition, the Board
agreed to a one-off write down of certain inventories to reshape the inventory
portfolio – further information is included within Note 3 of the financial statements.
The needs of stakeholders including customers, suppliers, employees and
shareholders were considered in this decision and it was agreed that the new
commercial model would generate benefits for all groups.
Customers
ASOSers
Shareholders
Suppliers
Re-Financing and
Equity Raise
In May 2022 the Board approved a new long-term £275m financing facility alongside
afully underwritten non-pre-emptive cash placing of new ordinary shares to raise
proceeds of c.£75m thus strengthening the Company’s balance sheet. The Board
agreed that the new capital structure would provide increased flexibility against
a challenging macroeconomic backdrop and the stability to focus on long-term value
creation. The new asset-based financing facility provides simplicity under a single
lender and is covenant light.
The Board agreed that retail investors should be given the opportunity to participate in
the equity raise, and therefore approved a separate c.£5m retail offer of new ordinary
shares in the capital of the Company alongside the institutional Placing, in line with
Pre-Emption Group guidelines, to balance the needs of other stakeholders.
The Board considered its stakeholder groups when approving the new financing
package, and concluded that the re-financing and the equity raise were in the best
interests of the Company and would promote the success of the Company for the
benefit of our stakeholders over the long term.
Customers
ASOSers
Shareholders
Suppliers
Corporate Governance Report
continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202366
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Board evaluation
The Board recognises that a formal evaluation of the Board, its
Committees and individual performance is an important tool to
identify opportunities for improvement and to enhance overall Board
effectiveness on an ongoing basis. The Company completed an internal
Board evaluation in FY22. Given the Board and Leadership changes
during the period, noting that we onboarded five new Non-executive
Directors between February and July 2023, we concluded that it would
be more valuable to allow our new Directors to settle into their roles
and for the Board to have the opportunity to get to know each other
and go through more Board and Committee cycles together before
embarking on a formal evaluation process. However, it was felt
important to commence a review as soon as practical, once all
Directors had been through at least one Board and Committee cycle.
As such, the Chair and the Senior Independent Director agreed to
appoint an external specialist firm to conduct a Board effectiveness
review and evaluation.
Following consideration of various external Board evaluation providers,
Mr Chris Saul of Christopher Saul Associates was appointed to
facilitate an external evaluation process. Chris Saul is highly respected
in this area and has assisted a number of FTSE organisations to
assess and improve Board effectiveness. Chris Saul does not have
any connection with the Company or any individual Director.
A description of how the Board evaluation has been conducted thus
far is asfollows.
Scoping
Chris Saul initially met with the Chair, Senior Independent Director
andthe General Counsel & Company Secretary to discuss and agree
the objectives of the review and any areas of specific focus and a
timetable was drafted based on the Board calendar.
Document review
Chris was provided with a selection of relevant Board and Committee
agendas, papers and minutes for review.
Board and Committee observation
Chris attended the next scheduled Board and Committee meetings,
which took place in early October 2023, to review the practical
arrangements and proceedings at meetings and to assess the Board
and Committee dynamics.
Interviews
Chris held one-to-one interviews with each Board member that held
office in FY23 in October 2023, eight of which were held in person
and one was via video conference. Chris also met with the Company
Secretary, the Interim CFO and other Senior Leaders including the
Chief People Officer and Head of Internal Audit & Risk, who regularly
participate in parts of Board and Committee meetings.
Feedback
Due to the timing of the Board and Committee meetings cycle, and the
close proximity to finalising this Annual Report and Accounts, there has
not been sufficient time for the Board evaluation process to conclude
and for the Board to receive and discuss feedback. However, we will
share the findings, together with resulting actions and how those
actions have been followed up on, in next year’s report.
As a result of the previous internal Board evaluation, the key areas of focusfor FY23
areshown below, together with resulting actions throughout the period:
Stakeholders: Improve the Board’s
insights into each stakeholder group
by regularly reporting against agreed
KPIs; increase the Board’s exposure
to employees and more deep dive
sessions on stakeholders, particularly
customers and suppliers.
• The Board received regular reports of performance
against KPIs throughout the period. Information on
how the Board engaged with each stakeholder group
during the period can be found on pages 34 to 37
and 68.
Executive team: Improve the
Board’s dynamic with the Executive
Committee by increasing engagement
and providing support onboarding
new members of the Executive team.
• Throughout the period, the Management team was
refreshed, and the Executive team was formally
replaced by a wider Management Committee to allow
simplification of ASOS’ decision-making processes
andto enable greater agility within the business.
TheManagement Committee attended a strategy
daywiththe Board in July 2023 which was extremely
beneficial to build relationships between the
Management Committee and the Board. Many
Management Committee members have regular
interaction with the Non-executive Directors who
provide advice and support where necessary.
Board resources: Improve the
quality of Board papers by reducing
the length and introducing a summary
cover note.
• Standard Board paper templates were rolled out
during the period to provide consistency across all
Board and Committee papers, and to provide more
structure, with summary cover notes and more
awareness regarding what is being asked of the
Board. Board papers have reduced in length to draw
out key points for discussion and approval.
FY23
focus
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 67
Engagement with ASOSers
Our ASOSers are the people behind our brand. Our purpose is to give
people the confidence to be whoever they want to be and we want to
allow our employees to do just that. The priorities of our ASOSers are
carefully considered as part of the Board’s decision-making.
During the period, our designated Non-executive Director for
employee engagement was Karen Geary until she stepped down from
the Board on 1 December 2022 and thereafter Jørgen Lindemann with
effect from 5 April 2023.
The Board engages with our ASOSers and monitors the Company’s
culture in a variety of ways:
Direct engagement
Through direct engagement, our Board members are able to witness
first-hand how our values are lived and embedded throughout the
Group, to assist the Board in monitoring and assessing culture.
During their respective tenures as Board employee engagement
representatives during the period, Karen and Jørgen were able to
gauge the sentiment of our ASOSers first hand through numerous
meetings with a cross section of our ASOSers to discuss topics
including cost-of-living, ASOS culture, wellbeing and remuneration as
described in more detail below and on pages 35 and 83. Updates were
provided to the Board following all engagement activities to ensure
ASOSers’ views are kept at the centre of the Group’s decision-making.
In September 2022, Karen Geary met with the Voices Network
employee forum to provide our Voice representatives with an
opportunity to engage with the Board on Executive remuneration.
The Q&A session was hosted by Caroline Ross, our Interim Chief
People Officer, and covered both Executive remuneration and wider
workforce pay, including outlining the structure and different elements
to an Executive Director’s remuneration package, and how pay is
determined for the wider workforce.
In February 2023, Jørgen and José hosted a fireside chat with
ASOSers to discuss their career insights and experiences, with people
not able to join in person offered the opportunity to join and ask
questions online. A shorter recording was made available to those
who couldn’t attend.
Since April 2023, Jørgen has engaged with our ASOSers on numerous
occasions to discuss various matters such as our ASOS Vibe survey,
ASOS strategy and our Diversity, Equity & Inclusion Strategy. Jørgen
has attended two Voices Network meetings and, more recently, he
attended our Leavesden office to conduct focus groups with our
ASOSers regarding life at ASOS, spent time with the Customer Care
Leadership team and attended a full Customer Care team cascade
meeting focusing on their progress delivering their strategic priorities
so far and celebrating team success.
Our CEO regularly engages directly with our ASOSers through regular
townhall meetings and hosts ‘CEO Coffee Chats’ where 10 to 15 of
our ASOSers can sign up each month and meet with him to discuss
any matters that our ASOSers feel are important.
Nick Robertson, Non-executive Director and Founder, attended and
presented at our Leaders Day in March 2023 and reflected on ASOS’
journey so far.
Indirect engagement
The Board received the results of the employee engagement survey,
ASOS Vibe, which provides key insights into people data and trends
and levels of engagement, together with the areas of focus for the
Company for the forthcoming year.
For more information on Our People see pages 14 to 15.
Shareholder engagement
The Board is committed to creating value for its shareholders and
takes its responsibility to maintain effective dialogue with investors
very seriously. The Company has a single share class in issue and all
shareholders benefit from the same rights. The Board does not take
any decisions or actions, such as selectively disclosing confidential
information, that would unfairly advantage any one shareholder or
group of shareholders over our wider shareholder base. The CEO and
Interim CFO of the Company meet all major shareholders after interim
and full year results while the Investor Relations team are in regular
contact with investors throughout the year.
During FY23 we engaged with investors on a range of topics including
Company performance against its strategy, its approach to ESG
issues, governance and Board composition, and Directors’
remuneration as explained in detail on pages 36 and 82.
In a new initiative for FY23, the Investor Relations function is represented
at the most senior level in the business by the Senior Director of
Strategy & Corporate Development, with a seat on the Company’s
Management Committee. Steps have been taken to ensure that
full-year and other public announcements are as meaningful,
understandable, transparent and comparable as possible, with this
information also made available on the Company’s corporate website
asosplc.com.
Our Section 172 Companies Act Statement on page 34 details how
the views of our employees, shareholders and other stakeholders
have been considered and shared with the Board during the period.
Constructive use of the AGM
The AGM is the principal forum to meet, and engage in dialogue with,
allshareholders who wish to attend to enable the Board to hear their
views and enable shareholders to ask questions, although engagement
is possible at other times upon request. The most recent AGM was held
on 11 January 2023 at our head office in London. The Chair and all
other Directors with exception of Eugenia Ulasewicz (who did not offer
herself for re-election and stepped down from the Board at the AGM)
attended the AGM and were available to answer shareholder questions.
Shareholders were also given the opportunity to ask questions to the
Directors ahead of the meeting via email. Shareholders vote on each
resolution by way of a poll and the results of voting were published on
our website asosplc.com.
Website and shareholder communications
Our website asosplc.com provides a range of corporate information
on our business, results and financial performance, including copies
of our Annual Report and Accounts, announcements and presentation.
Corporate Governance Report
continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202368
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Committee Chair
Natasja Laheij
Members
Mai Fyfield Wei Gao Jose Manuel Martínez
Gutiérrez
Committee responsibilities
The Committee’s principal responsibilities are to:
• Monitor the integrity of the Group’s financial statements in relation
to the Group’s financial performance.
• Review the Group’s accounting policies, and significant estimates
and judgements.
• Review the effectiveness of the internal and external audit processes
and report internal and external audit findings to the Board.
• Review the effectiveness of the Group’s internal controls, including
the process for the evaluation, assessment and management of risk.
• Oversee the Group’s whistleblowing, compliance, security and fraud
prevention procedures.
Terms of Reference
The full Terms of Reference for the Audit Committee are available
on our website, asosplc.com.
The Audit Committee’s attendance at meetings is detailed
in the table on page 62.
Audit Committee Chair’s statement
I am pleased to present the Audit Committee (“Committee”) Report
for the period ended 3 September 2023. This report should be read in
conjunction with the compliance report on page 61, which shows how
the Company has complied with the UK Corporate Governance Code
2018 (the “Code”).
This report provides an insight into the Committee’s activities during
the period, sets out how the Committee operates and the key areas
of focus for the year ahead.
The composition of the Committee changed during the period as a
result of Board changes:
• I joined the Committee as Chair upon my appointment to the Board
on 11 April 2023, replacing Patrick Kennedy who stepped down from
the Board and as Committee Chair with effect from 5 April 2023.
• Luke Jensen stepped down from the Board and Committee with
effect from 31 October 2022.
• Eugenia Ulasewicz stepped down from the Board and Committee
with effect from 11 January 2023.
• Wei Gao was appointed to the Board and Committee on 1 February
2023.
• Jose Manuel Martínez Gutiérrez joined the Committee upon his
appointment to the Board on 11 April 2023.
The Board considers all Committee members to be independent
Non-executive Directors for the purposes of the Code.
I would like to thank my predecessor as Audit Chair, Patrick Kennedy,
for his valued contribution to the Committee throughout the period.
I was appointed as Committee Chair given my extensive international
commercial and financial experience in e-commerce and retail
environments, and given my external role as Chair of the Audit
Committee of Vandemoortele, an international food company.
The Board is therefore satisfied that I have the requisite recent and
relevant financial experience to Chair the Committee. Furthermore,
all Committee members have competence relevant to the sector
in which the Company operates. The biographies of the Committee
members can be found on pages 55 to 56.
We continue to track developments with the UK Government’s
corporate governance reforms so that we are ready to adapt to the
changes to requirements in the forthcoming years. As a Committee,
we are considering the implications of the recently published Audit
Committees and External Audit: Minimum Standard, which became
effective in May 2023, to identify any actions we need to take to ensure
our compliance.
Natasja Laheij
Audit Committee Chair
31 October 2023
Audit Committee
Report
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 69
Audit Committee Report continued
Committee activities
The Committee operates with a forward-looking agenda which is
prepared in conjunction with the Chief Financial Officer and Company
Secretarial team, to ensure the Committee’s duties are fulfilled on
a timely basis around the Group’s financial reporting cycle.
The Committee held five scheduled meetings during the period and
the attendance by Committee members can be seen on page 62.
The Committee, on behalf of the Board, provides oversight of the
Group’s risk management processes. Following each meeting, the
Committee Chair reports to the Board on the main discussion points
of the Committee.
Although not members of the Committee, the Board Chair, CEO,
Interim CFO, General Counsel & Company Secretary and Head of
Internal Audit & Risk are also invited to attend Committee meetings
unless they have a conflict of interest. The Group’s External Auditor,
PwC, is also invited to attend Committee meetings. The Committee
Chair and members regularly meet with both the External and Internal
Auditors in private. As is needed, the Committee also receives advice
from advisors on any tax or legal issues which may arise.
Fair, balanced and understandable
One of the Committee’s key roles is to advise the Board that it is
satisfied that the Annual Report and Financial Statements are fair,
balanced and understandable (see page 98) and provide the
information necessary for shareholders to assess the Company’s
position, performance, business model and strategy. In doing so, the
Committee ensures that disclosures reflect the underlying supporting
information whilst challenging management where appropriate,
with any required updates made if necessary. The External Auditor
supports this process, in the course of its statutory audit, by auditing
the accounting records of the Group against agreed accounting
practices, relevant laws and regulations. Inaddition, the Committee:
• Reviewed the processes and controls that underpin the Annual
Report preparation including confirmation that the reporting team
and senior management were fully aware of the requirements and
their responsibilities.
• Received an advanced draft of the whole Annual Report and
provided feedback on it, with amendments made to incorporate
any feedback ahead of final approval.
• Was provided with a list of the key matters included in the Annual
Report, highlighting both positive and negative influences.
• Reviewed and discussed the key factors considered in determining
whether the Annual Report is fair, balanced and understandable.
The Committee recommended to the Board that the Annual Report
2023 is fair, balanced and understandable while providing the
necessary information to assess the Company’s position and
performance, business model and strategy.
External Auditor
PwC continued as the Company’s auditor for FY23 following
re-appointment at the Company’s Annual General Meeting on
11 January 2023.
The Committee has primary responsibility for recommending the
re-appointment of the External Auditor to the Board before the
resolution is put to shareholders at the Company’s Annual General
Meeting. The Committee believes that it is in the best interest of its
members for PwC to remain as External Auditor and we therefore
recommend that PwC be re-appointed as Company auditors for FY24.
External audit effectiveness
The Board has delegated authority to oversee the relationship with the
External Auditor, and to review audit effectiveness to the Committee.
The audit scope, approach, materiality and areas of focus are agreed
well in advance of the audit to align on expectations and timeframes.
A feedback session is held following each audit to discuss what went
well and to identify areas for continuous improvement to feed into the
next audit planning process.
The Committee assesses audit effectiveness through review of the
quality of the audit reports and ancillary documents provided by the
auditors, consideration to the views of the Interim CFO and his senior
finance team and through collective views of the audit partner and
histeam.
The Committee holds private sessions with PwC without management
present to discuss feedback from the audit. The Committee ensures
that the External Auditor has challenged management and received
the access it required to conduct an effective audit, and in a timely
manner. If PwC has any concerns about access to information, or the
information received, it would be reported to the Committee in order
for the Committee to fulfil its delegated responsibilities.
The Committee Chair also meets with the audit partner, Neil Grimes,
privately and he is authorised to contact the Committee Chair at any
time if he wishes to raise any matters of concern.
Based on this collective analysis, the Committee is satisfied that PwC
had applied appropriate and robust focus and challenge throughout
theaudit.
External Auditor independence and objectivity
Any non-audit services provided must be in accordance with the
Group’s Non-Audit Services Policy, which states that:
• the CFO has pre-approved authority to commission the
External Auditor to undertake non-audit work for a specific
project expected to be less than £50,000;
• non-audit services expected to be between £50,000 and
£250,000 must be approved by the Committee Chair;
• non-audit services expected to be over £250,000 must be
approved by the Committee Chair and one other Committee
member before being carried out.
Before commissioning non-audit services, the Committee must ensure
that there is no issue as regards to independence and objectivity
and other potential providers are adequately considered. PwC may
only provide such services if the service does not conflict with their
statutory responsibilities and ethical guidance. When reviewing
requests for permitted non-audit services, consideration is given
to whether the skills and experience make the External Auditor the
most suitable supplier of the non-audit service, taking into account
independence or objectivity, and the fee to be incurred for non-audit
services, both for individual non-audit services and in aggregate,
relative to the Group audit fee.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202370
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
The Committee’s principal activities during the period included:
Financial reporting
Integrity of the financial statements and formal announcements
• The Committee reviewed the Annual Report and Accounts, and supporting information, and concluded
that the Annual Report was fair, balanced and understandable as detailed above.
• Reviewed the full and half-year results announcements.
Significant financial and reporting matters
• Reviewed key accounting judgements and estimates applied in the preparation of the Group’s financial
results. These included inventory provisioning, particularly updates following the Group’s transition
to its new commercial model, management’s assessment of items to be excluded from adjusted profit
before tax and the assumptions/judgements included within management’s going concern, viability
and impairment reviews. More information can be found in Significant financial reporting matters and
judgements on page 72.
Assumptions in support of going concern and viability assessments
• The Committee considered the viability and going concern statements and their underlying assumptions.
• The Committee evaluated going concern over an 18-month period, which included a review of financial
plans and assumptions, access to financing and the challenging economic environment and the
adaptability of financial plans.
• The Committee also considered the appropriateness of a three-year viability assessment period
after modelling the impact of certain scenarios arising from the Group’s principal risks.
• More information can be found in the Long-term viability statement on pages 52 to 53, the Going
Concern statement on page 113, and the Significant financial reporting matters and judgements on
page 72.
Financial Reporting Council (FRC) review letter
• In June 2023, ASOS received a letter from the Corporate Reporting Review Team of the FRC in relation
to its regular review and assessment of the quality of corporate reporting in the UK.
• The letter focused on FY22 with queries on the following main areas:
– The assumptions and disclosures made in relation to the carrying value of inventory ,specifically
with regards to the Group’s new commercial model, and whether it represented an adjusting or
non-adjusting post balance sheet event as at the FY22 year-end.
– Disclosures in relation to inventory provisions.
– The assumptions and disclosures made in relation to going concern.
– The impact of changing discount rates on the dilapidation provisions held.
– The FRC’s review was based solely on the 2022 Annual Report and Financial Statements and
therefore did not benefit from prior discussion with the Company on the underlying detail. ASOS
responded to the FRC and proposed additions to future disclosures, following which the review
was closed. Enhanced disclosures have been included in the 2023 financial statements.
External audit
• Reviewed and agreed the scope of the external audit process prior to commencement of the FY23 audit.
• Considered the External Auditor’s reports on the full year and half year results.
• Appraised the effectiveness and performance, independence, and objectivity of our External Auditor.
• Considered the external audit fees and terms of engagement.
• Reviewed and approved non-audit services and approved updates to the Non-Audit Services Policy.
Risk and internal controls
• Reviewed and provided oversight of the Group’s risk management and internal controls processes and
ensured that effective controls, processes, assessments and mitigations were maintained.
• Monitored the Group’s Risk Register, including the completeness of the process, to identify the Group’s
principal and emerging risks and movements in such exposures.
• Received updates on current or threatened material litigation.
• Reviewed the Group’s Whistleblowing Policy and escalation matrix and updates on whistleblowing matters.
• Reviewed the Group’s Gifts & Hospitality Policy, approach to training, and updates on Gifts &
Hospitality matters.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 71
Audit Committee Report continued
Committee’s principal activities continued
Internal audit
• Monitored and reviewed the effectiveness and independence of the Internal Audit function.
• Reviewed Internal Audit reports and monitored the implementation of Internal Audit actions.
• Reviewed Internal Audit’s strategy and operating model.
• Oversaw the implementation and status of outstanding actions arising from the Financial Position and
Prospectus Procedures undertaken as part of the Company’s move to the Main Market.
• Reviewed and approved changes to Internal Audit’s FY23 plan of work and broader strategy to ensure
this remained aligned to priorities under our Driving Change agenda.
• Reviewed and approved Internal Audit’s plan of work for FY24 based on assessment of the Group’s key
financial, operational and compliance risks, and strategic aims.
Other matters
• Considered matters relating to the Company’s refinancing activities during the period including
the equity raise.
• Received updates on tax matters and approved the Group’s Tax Strategy.
• Received an update on the Group’s approach to Business Continuity Management.
• Received regular updates from the Chief Information Security Officer and Chief Technology Officer
for monitoring and reviewing cyber security activities.
• Reviewed cyber security processes and systems including a review of the Group’s ransomware
response and recovery plan.
• Received updates relating to the UK Government’s activities following the 2022 consultation in
restoring trust in audit and corporate governance.
Significant financial reporting matters and judgements
Area of focus Actions taken
Going concern and viability
The Committee undertook a detailed review of the financial liquidity of the Group over an 18-month
period to support the going concern assessment, and a three-year period to support the viability
assessment. In doing so, the Committee challenged management’s assessment of forecast cash flows,
including sensitivity to trading and expenditure plans, and for the potential impact of certain scenarios,
including reductions to forecast revenues and margin, and working capital outflows. The Committee
also considered the Group’s financing facilities and compliance with the related liquidity covenant.
Based on this, the Committee confirmed that the application of the going concern basis for the
preparation of the financial statements continued to be appropriate, with no material uncertainties
noted. It was also concluded that the Group is able to meet its liabilities as they fall due over the viability
period of three years, however on the condition that the Group successfully refinances the convertible
bond that matures in April 2026. This has been clearly highlighted within the Long-term viability
statement. For further information, see pages 52 to 53.
Inventory provisions
The Committee considered the inventory provision for FY23, noting its increase since FY22. Gross
inventory as at 3 September 2023 totals £892.4m against which an inventory provision of £124.4m has
been recognised – this is significant compared to FY22 (£31.3m) due to the material stock write-off
provisions recognised during the year following the approval of the Group’s new commercial model.
Management provided the Committee with updates on the work performed to validate the
appropriateness of key estimates used in respect of inventory provisions. Particular consideration was
given to the overall level of provisioning and updates to methodology as the Group transitions to its new
commercial model.
The Committee concluded that the methodology for calculating the net realisable values of inventories,
including management’s estimates on provisions, was appropriate.
Alternative performance
measures (APMs)
The Committee considers it important to take account of both the statutory measures and the APMs
when reviewing these financial statements. In particular, items excluded from adjusted profit before
tax were reviewed by the Committee. The adjusted loss before tax this year was £(70.3)m, and adjusted
EBIT £(29.0)m (2022: £22.0m and £44.1m) – the excluded items are detailed within Note 3 of the
financial statements. The Committee is satisfied that the presentation of these items is clear, applied
consistently across years, in line with Group policy and that the level of disclosure is appropriate.
Impairment of non-financial
assets
The Committee reviewed and challenged management’s impairment testing of tangible and intangible
assets, including goodwill. The Committee considered the key assumptions and methodologies for value
in use models in order to conclude on their appropriateness. This included challenging projected cash
flows, discount rates and reviewing sensitivities. No impairments were noted as a result of the review.
The Committee was satisfied with the outcomes of the impairment reviews and that appropriate
disclosures had been made.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202372
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
External Auditor independence and objectivity
(continued)
The fees paid to PwC for the financial period to 3 September 2023
were £1.6m (2022: £1.2m). This included £1.3m for audit services. The
Committee reviewed and discussed the fee proposal and was engaged
in agreeing the audit scope.
In FY23, PwC provided non-audit services of £0.3m for its work on the
half year review of our interim results. The total fees for non-audit
services represented 35% of the Group audit fee payable to PwC
during the period.
The Committee agreed that the non-audit services provided during
the financial period should be provided by the External Auditor due to
their in-depth knowledge of the business and is therefore an efficient
means of receiving non-audit services.
The Committee also assesses the independence and objectivity of
the External Auditor through open dialogue with the auditor, feedback
from the Board, the Internal Audit team and management and through
analysis of judgements, audit findings and audit actions.
Furthermore, consideration is given to the length of service of the
audit partner. Neil Grimes was appointed as audit partner for FY22,
following the former audit partner rotating off and is considered by
the Committee to have a good understanding of the Group and acts
with integrity.
The Committee was comfortable with PwC’s confirmation that it
maintains appropriate internal safeguards in line with applicable
professional standards, fulfilment of the agreed external audit plan,
thecontent, insights and value of their reports to the Committee,
thepolicies we have in place to safeguard PwC’s independent status
and the tenure of the audit engagement partner not being greater
thanfive years.
Following review, the Committee concluded that PwC remained
objective and independent in its role as External Auditor.
External audit tender
PwC has acted as the Group’s statutory External Auditor since 2008.
A competitive tender process for the Group’s statutory External
Auditor contract took place in FY22, whereby it was concluded that
PwC would remain as the Company’s External Auditor.
The Company is not currently in compliance with the requirements
of the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes and
Audit Responsibilities) Order 2014 for the financial year under review
as the audit tender undertaken on the step up to the Main Market was
for FY24 rather than FY22, being the first year end following entry
to the Main Market. The Committee considered that it was beneficial
to delay the appointment to FY24 to ensure that the tender process
was conducted in line with the FRC’s best practice, to ensure the new
Committee Chair could take an active role in the tender process,
to allow the newly appointed External Auditor to shadow an audit
(should we have appointed a different firm) and considering
independence requirements which would restrict two audit firms
from participating in the tender, meaning the tender would not be as
fulsome as possible. We communicated our plan to the Competition
and Markets Authority (CMA), who stated that, subject to the
Company providing written confirmation of the completion of the
tender process by the end of July 2022, enforcement action against
the Company would not be an administrative priority for the CMA.
We complied with the CMA’s request. We will be compliant with the
Order in FY24 and plan to conduct our next tender process in 2027
for the audit of the financial year ending 31 August 2028.
Employment of former External Auditors
Any employment of former employees of External Auditors would be
considered on a case-by-case basis and would take into account the
Auditing Practices Board’s Ethical Standards on such appointments.
Any such appointments would require approval from the CFO, the
Committee or the Board depending on the seniority of the appointment.
Internal Audit
The Internal Audit function supports the Board and Committee
by providing independent assurance as to the adequacy and
effectiveness of the internal controls which manage risks across the
Group and support delivery of its objectives. The Committee review
and approve Internal Audit’s plan of work for each financial period
and monitor progress against it in each meeting, The plan is based on
Internal Audit’s assessment of the Group’s key financial, operational
and compliance risks and strategic aims. During the period the
Committee additionally reviewed and approved changes to Internal
Audit’s FY23 plan of work to ensure this remained aligned to the
Group’s priorities under the Driving Change agenda.
The following key internal audits were completed during the period:
Key Fraud Controls, Payroll Phase 1 – General IT Controls, Cloud
Resilience Follow-Up, Authorised Economic Operator (AEO)
Reauthorisation Project, Partner Fulfils, Payroll Controls, IT Security
Hygiene & Basics, Fashion with Integrity Update Report FY22 – Data
Validation, and Barnsley WMS IT General and Security Controls.
The reports outline Internal Audits findings on the risk management
systems and processes which are in place and are shared with
the relevant Management Committee member. The Management
Committee member is responsible for ensuring the timely
implementation of any report recommendations and subsequent
actions resulting from the audit. Summaries of reports are also
shared with the Committee for review and discussion and any actions
arising are monitored by the Committee.
During the period the Committee reviewed the effectiveness of
Internal Audit using an in-house assessment, actions from Internal
Audit’s ongoing Quality Assurance and Improvement Programme
(QAIP), and feedback provided by management and Committee
members. The Committee considers the Internal Audit function to
operate effectively and that the quality, experience and expertise
of the function is appropriate for the Group.
Risk management and internal controls
The Board has delegated responsibility for overseeing the effectiveness
of the Group’s internal controls and risk management systems to the
Committee. This includes matters in relation to financial reporting, the
preparation of Group accounts, the implementation of Group policies,
including whistleblowing matters and risk management. The Committee
has a policy of continuous identification and review of principal business
risks, review of assurance over internal controls and considers how
risks may affect the achievement of business objectives to determine
appropriate mitigation, taking into account the Group’s risk appetite.
The Management Committee implements the internal controls and
processes and provides assurance on compliance with these processes.
On a day-to-day basis, the Group risk management process is managed
and co-ordinated by the Interim CFO and the Head of Internal Audit &
Risk, to ensure there is an integrated focus on applying and evolving
risk management and internal controls throughout the Group.
The key elements of the Group’s internal controls in relation to financial
reporting and risk management include:
• Established organisation structures with clear lines of responsibility
and management and committee structures to facilitate regular
performance reviews and decision-making.
• Robust budgeting, forecasting and financial reporting processes.
• Board discussion and approval of strategy, objectives, annual
planning process and budgets.
• Regular management monitoring and consideration of
developments in accounting regulations and best practice in
financial reporting, including keeping the Committee updated
on upcoming changes. Where appropriate, developments are
reflected in the Group’s financial statements. Financial reporting
recommendations from the External Auditor, the FRC and others
are assessed to ensure continuous improvement in the quality of
the Group’s financial statements. The Committee and the Board
review the draft Annual Report and Accounts, and receive reports
from management and the External Auditor on significant
accounting judgements, changes in accounting policies and
estimates and any other significant matters relating to Group’s
financial reporting.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 73
• Key policies, procedures and guidelines that underpin the
development, financing and operations of the business. This
includes policies for Delegation of Authority, Whistleblowing,
Anti-Bribery and Corruption, Anti-Facilitation of Tax Evasion, and
Anti-Fraud that are embedded within and enforced through ASOS’
procedures, processes and controls. Compliance is monitored
through the activities of central functions including Finance, Risk
Management, Legal, Compliance, People Experience, Technology,
Data Privacy, Tax, Treasury, Company Secretarial, Health and
Safety and Security.
• Regular management reviews of the risks to achieving the Group’s
objectives that include identifying mitigating controls and actions
and tracking their completion.
• Embedded whistleblowing processes that enable concerns to be
reported confidentially and on an anonymous basis for investigation.
The Committee reviews a summary of whistleblowing reports and
outcomes every quarter.
• Ongoing Committee review of the scope and results of Internal
Audit’s work across the Group and monitoring of management’s
implementation of identified remedial actions.
• Regular discussion of the Group’s principal risk profile and emerging
risks, including review of how inherent and residual risk exposures
have changed during the period, and any developments regarding
mitigating controls and actions.
Based on the activities above, the Committee can confirm that it
reviewed the Group’s internal controls and risk management systems
and concluded that there was an effective control environment in
place across the Group during FY23 and up to the date on which these
financial statements were approved. No significant failings or
weaknesses were identified.
Our functional Risk Registers are formally reviewed every six months to
ensure that all existing risks are captured and their potential likelihood
and impact are understood. The process also identifies mitigating
factors, controls and any further actions needed to manage the risks,
as well as considering any new emerging risks that require monitoring.
The reviews feed into a robust assessment of the Group’s principal and
emerging risks which the Committee and the Board review bi-annually.
Progress and key themes coming out of the risk reviews are reported
to the Management Committee and the Audit Committee.
More details on our approach to risk management are provided on
pages 44 to 45.
Whistleblowing
The Whistleblowing Policy, which was reviewed and re-approved by the
Committee during the period, outlines the ways the Group’s employees
can report concerns about suspected impropriety or wrongdoing
(whether financial or otherwise). The Company has an independent,
confidential and anonymous whistleblowing tool (Spot) which is
externally hosted. Employees can use the portal or contact a
Whistleblowing Officer to raise and report any problems or concerns
they may have. Any matters reported are investigated by one of
our nominated Whistleblowing Officers and are escalated to the
Committee as appropriate. Whistleblowing is a standing item on
the Committee’s agenda with reporting on the nature, and where
appropriate content, of submissions received during the prior quarter
submitted to each meeting. The Committee also receives updates on
training in this area.
Cyber security
The Committee received and endorsed an updated security strategy
in January this year. A new Chief Information Security Officer (“CISO”)
joined ASOS at the end of the last fiscal year and updated the strategy
using a threat and risk-based approach which identified four priority
improvement areas for delivery this year. The Group keeps up to date
with progress on a quarterly basis where emerging threats and key
cyber and physical security incidents are reviewed. In addition to the
updated strategy, a key focus for the year has been rebuilding the
Cyber Security leadership team, led by the CISO.
Anti-bribery and corruption
We have a zero-tolerance approach to bribery and corruption and is
committed to conducting business in an ethical and honest manner.
We are committed to acting professionally, fairly and with integrity,
in all business dealings and relationships, wherever in the world we
operate. Anti-bribery and corruption training forms part of the new
starter training when ASOSers join, and is then completed annually
thereafter, to ensure all ASOSers are aware of their responsibilities in
this area and we implement and enforce systems to prevent bribery.
Audit Committee Report continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202374
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ESG Committee Report
Committee Chair
Anna Maria Rugarli
Members
Wei Gao Nick Robertson Jose Manuel
Martínez Gutiérrez
Committee responsibilities
The Committee’s principal responsibilities are to:
• Approve the Group’s Fashion with Integrity (FWI) Strategy,
including related targets and key performance indicators (KPIs).
• Provide oversight on the execution of the FWI Strategy and the
Group’s progress against its targets and KPIs in relation to ESG,
including ESG risk management.
• Provide oversight of the key policies and programmes required to
implement the ESG strategy.
• Review the practices and initiatives of the Group relating to ESG
matters to ensure they remain effective.
• Oversee how the Group’s ESG and FWI Strategies are
communicated to all stakeholders.
• Offer recommendations to the ASOS Plc Remuneration Committee
on ESG-specific targets for executive remuneration packages.
Terms of Reference
The full Terms of Reference for the ESG Committee are available
on our website, asosplc.com.
The ESG Committee’s attendance at meetings is detailed in the
table on page 62.
ESG Committee Chair’s statement
I am pleased to present the ESG Committee (“Committee”) Report
for the period ended 3 September 2023 and my first report as
Committee Chair.
The composition of the Committee changed during the period following
Board changes:
• I joined the Committee as Chair upon my appointment to the Board
on 26 June 2023, replacing Eugenia Ulasewicz who stepped down
from the Board and Committee with effect from 11 January 2023.
• Karen Geary stepped down from the Board and Committee with
effect from 1 December 2022.
• Mai Fyfield stepped down from the ESG Committee with effect
from 26 June 2023 given the additional time commitment required
following her appointment as Senior Independent Director.
• Wei Gao and Jose Manuel Martínez Gutiérrez joined the Committee
with effect from 26 June 2023.
The Committee members bring a wide range of skills and experience.
As Chair, I have more than 20 years of experience working with leaders
in global apparel and specialise in creating innovative strategies to
address some of the most pressing environmental and social changes
facing the industry.
I am delighted that Wei and Jose Manuel have joined the Committee
this year and am grateful for the continued expertise of Nick;
they willall help in driving the ESG strategy forward through the
FWI programme. Nick also remains Chair of the ASOS Foundation,
a position he has held since 2013.
The Committee met twice during the period and provided updates
to the Board following each meeting. Whilst not members of the
Committee, the CEO, Senior Director of Strategy & Corporate
Development and other Senior Leaders with responsibility for ESG
are invited to attend the Committee meetings.
The Committee’s first meeting in November 2022 focused on:
• A review of the FY22 KPIs and initiatives review as well as the
FY23 priorities for the four goals: Be Net Zero, Be More Circular,
Be Transparent and Be Diverse.
• Consideration of the changing regulatory landscape for ESG
reporting and how these changes would be prepared for internally
and implemented into the strategy over the coming years.
• A review of the process for the preparation of the ESG-related
disclosures in last year’s Annual Report, following the first year of
disclosures relating to the Task Force on Climate-Related Financial
Disclosures.
• An overview of, and updates in relation to, the CMA Green Claims
Investigation, including ASOS’ responses to the CMA’s various
requests for information.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 75
As there were many changes to the Committee’s composition at the
end of June 2023, including the appointment of myself as Chair, the
Committee’s second meeting in August 2023 focused on:
• Introductions to the FWI team with an overview of the current FWI
Strategy, history and approach taken.
• An overview of ASOS’ reporting and compliance responsibilities
and obligations.
• Horizon scanning for the Committee to understand the upcoming
changes to legislation, such as the EU Corporate Sustainability
DueDiligence Directive, to ensure we can be ready for the new
requirements which will require additional reporting in the future.
• A deep dive on the four key goals of the FWI Strategy.
• An update in relation to the latest status of the CMA Green Claims
Investigation.
FWI is our programme for managing sustainability and corporate
responsibility at ASOS. First launched in 2010, it was refreshed in 2021
with the introduction of four goals: Be Net Zero, Be More Circular,
Be Transparent and Be Diverse. These goals are a key tool in managing
and prioritising our activity across People and Planet.
As with last year, we published a Fashion with Integrity Progress
Update alongside our half-year results, looking back on the previous
financial year. This FY22 Progress Update can be accessed on the
website at asosplc.com and further information can be found on
pages 16 to 18 of this report.
Since the relaunch of the strategy in 2021, legislation around ESG
has evolved and reporting requirements have increased both in volume
and complexity.
Therefore, this year we are reviewing and, where necessary, revising
both our FWI targets and the KPIs that we use to track and monitor
progress. This will ensure we are remaining true to our core FWI
principles, whilst also being transparent on our performance using the
most relevant metrics. The revised FWI Strategy is set to be published
in 2024.
Anna Maria Rugarli
ESG Committee Chair
31 October 2023
ESG Committee Report continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202376
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Nomination Committee Chair’s statement
I am pleased to present the Nomination Committee (“Committee”)
Report for the period ended 3 September 2023. This report should
be read in conjunction with the compliance report on page 61, which
shows how the Company has complied with the UK Corporate
Governance Code 2018 (the “Code”).
Throughout the period, the Committee has concentrated on the
composition of the Board and its Committees, succession planning,
including assessing the talent pipeline and diversity and inclusion.
Composition of the Board and its Committees
There were several Board changes during the period. As reported in
last year’s Annual Report and Accounts, Mat Dunn stepped down from
the Board as Executive Director on 31 October 2022 and Luke Jensen,
Karen Geary and Eugenia Ulasewicz did not seek re-election at our
last Annual General Meeting and stepped down from the Board on
31 October 2022, 1 December 2022 and 11 January 2022 respectively.
This created the opportunity for the Board, led by the Nomination
Committee and myself as Chair, to refresh the Board. We assessed
the balance of knowledge, skills and diversity of our remaining Board
members and conducted an assessment to identify the key traits,
experience and skillsets that potential board candidates should have.
This led to an extensive search process to find at least three new
Non-executive Directors to complement our Board, together with
a search for a permanent Chief Financial Officer.
True Search, an independent executive search consultancy, which has
no connection with ASOS or any of its Directors, was engaged during
the period to assist us with our search and provided us with a list of
diverse candidates from different backgrounds based on our rigorous
selection criteria. We also used our network to source a strong list
of candidates.
Following interviews with the Chair and other Board members, the
Nomination Committee recommended to the Board that Marie
Gulin-Merle and Wei Gao be appointed to the Board as Independent
Non-executive Directors given Marie’s extensive marketing and digital
experience and Wei’s wealth of e-commerce and operating experience.
Furthermore, the Committee recommended that Marie should join the
Remuneration Committee and that Wei should join the Audit
Committee with effect from their joining date. The Board approved the
recommendations and Marie and Wei were both appointed to the Board
and Committees as set out above with effect from 1 February 2023.
Following Patrick Kennedy’s departure from the Board on 5 April 2023,
the Committee discussed and approved the recommendation to the
Board that Natasja Laheij should be appointed as Independent
Non-executive Director and, given her extensive financial experience
and experience as Audit Chair, that she should replace Patrick as Chair
of the Audit Committee, and as a member of the Remuneration
Committee.
The Committee also agreed that Jose Manuel Martínez Gutiérrez
would be an ideal candidate to join the Board given his strong commercial
and fashion experience and recommended his appointment as
Independent Non-executive Director and as a member of the Audit
Committee. The Board subsequently approved the appointments and
Committee positions as above with effect from 11 April 2023.
Nomination
Committee Report
Committee Chair
Jørgen Lindemann
Members
Mai Fyfield Wei Gao
Committee responsibilities
The Committee’s principal responsibilities are to:
• Monitor the structure, size and composition of the Board and its
Committees.
• Identify the balance of skills, knowledge, diversity and experience on
the Board and recommend new Board and/or Committee members
to the Board as appropriate.
• Review the time commitment and independence of the Non-
executive Directors, including potential conflicts of interest.
• Oversee talent and succession plans for Senior Leaders.
• Ensure that an appropriate and tailored induction is undertaken
by all new Board members and that training and development is
available to existing Board members.
Terms of Reference
The full Terms of Reference for the Nomination Committee are
available on our website, asosplc.com.
The Nomination Committee’s attendance at meetings is detailed
in the table on page 62.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 77
Nomination Committee Report continued
Given our commitments to our Fashion with Integrity (FWI) programme,
it was felt that the Board would benefit from someone with strong ESG
and sustainability experience to chair the ESG Committee. Following an
extensive search and interview process, the Committee recommended
the appointment of Anna Maria Rugarli to the Board as Independent
Non-executive Director and ESG Committee Chair, which was approved
by the Board and Anna Maria joined our Board on 26 June 2023.
Given the many changes to the Board and its Committees, the
Committee further recommended that the ESG Committee be
reshaped. Given Mai Fyfield’s appointment as Senior Independent
Director in place of Patrick Kennedy with effect from 5 April 2023, and
the fact Mai represents the Board on the Audit Committee, Nomination
Committee and chairs the Remuneration Committee, Mai stepped
down from the ESG Committee and the Committee recommended
that the ESG Committee should comprise Anna Maria Rugarli as Chair,
with Jose Manuel Martínez Gutiérrez and Wei Gao as fellow members
along longstanding ESG Committee member, Nick Robertson. These
changes were approved with effect from 26 June 2023 to coincide
with Anna Maria’s appointment. Post-period end, the Committee
recommended the appointment of William Barker to the Board as
Non-executive Director as set out on page 61.
I am delighted to have Marie, Wei, Natasja, Jose Manuel, Anna Maria
and William on the Board to share their extensive experience,
knowledge and insights with their fellow Directors and Senior Leaders.
The Committee deemed Marie, Wei, Natasja, Jose Manuel and Anna
Maria as independent upon appointment in accordance with the
independence requirements cited within the Code. Due to the fact
William is founder and CEO of Camelot Capital Partners LLC, which is
asignificant shareholder of the Company, William joined the Board as a
Non-independent Non-executive Director in accordance with the Code.
The Committee was satisfied that all our new Non-executive Directors
have the requisite time to carry out their role and fiduciary duties as
a Director and any additional external appointments of Directors
would require approval by the Board. The Committee and the Board
periodically assesses the external time commitments of Directors
to ensure that they continue to have sufficient time to fulfil their
responsibilities as a Director and that no one is over-boarded.
Succession planning
In addition to focusing on Board succession planning throughout the
period, last year we reported that a key focus for FY23 would be on
the composition of the Executive Committee and succession planning
for senior roles. The Company made great strides during the period
and, asexplained on page 67, we replaced the Executive Committee
with a Management Committee model and several senior hires were
onboarded during the period.
Ethnic background as at 3 September 2023
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board (CEO, CFO¹,
SID and Chair)
Number of
Management
Committee
members
Percentage of
Management
Committee
White British or other White (including
minority-white groups)
9 90% 3 6 50%
Mixed/Multiple Ethnic Groups – – – 1 8%
Asian/Asian British 1 10% 1 8%
Black/African/Caribbean/Black British – – – 1 8%
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – 3 25%
1 The Interim CFO is not a Director therefore the CFO has been excluded from this analysis.
Gender Identity as at 3 September 2023
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board (CEO, CFO¹,
SID and Chair)
Number of
Management
Committee
members
Percentage of
Management
Committee
Men 5 50% 2 6 50%
Women 5 50% 1 6 50%
Other categories – – – – –
Not specified/prefer not to say – – – – –
Board and Management Committee diversity
Our gender identity and ethnic background data in accordance with Listing Rule 9.8.6(R)10 in the format set out in Listing Rule 9 Annex 2.1
is presented below. For this purpose, our Management Committee represents our Executive Management as defined by Listing Rule 9.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202378
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
The search for a permanent CFO is ongoing and the Committee will
continue to focus on the Senior Leader talent requirements, and the
key actions being taken around talent management, to ensure the
continued ability of the Company to compete effectively in the
marketplace. We are moving towards a more proactive and future
focused approach to identify and grow top talent, taking tangible
actions to grow our talent pipeline. The Committee will continue to
monitor progress in this area.
Board evaluation
As explained in detail on page 67, the annual Board evaluation process
was delayed to allow our new Non-executive Directors time toembed
within the Board. The Nomination Committee will review theresults
of the Board evaluation when feedback is provided from the external
Board evaluator.
Diversity, Equity & Inclusion
A Board comprising the right balance of skills, experience and diversity
in its broadest sense, including diversity of thought, encourages more
effective discussions and better decision-making and is best placed
to support a company in delivering its strategic objectives. When
recommending new appointments to the Board and its Committees,
suitably qualified applicants from a diverse pool will be considered,
withno restrictions on protected characteristics such as age, gender,
sexual orientation, religion or ethnic background and Board
appointments will always be made on merit.
Diversity targets
We continue to monitor targets set by the FTSE Women Leaders
Review, the Financial Conduct Authority and the Parker Review
regarding gender and ethnic diversity and the Committee is pleased
toreport that we meet these external target. As at the date of
this report:
• We have 50% of the Board represented by women
• The position of Senior Independent Director is currently held
by awoman
• We have one Board member from an ethnic minority background.
Senior Leaders’ diversity
Our approach to Board diversity sets the tone for Diversity, Equity &
Inclusion (DEI) throughout the business. We are committed to treating
everyone the same, encouraging our differences and aim for our
ASOSers to reflect our diverse customer base.
As a Committee, we have reviewed progress made against our
‘Be Diverse’ goal of our FWI Strategy, which sets out our commitment
to driving DEI across every aspect of our business. Internally, we define
our senior leaders as those with ‘Head of’ roles and above (“Senior
Leaders”), but we are conscious that the UK Corporate Governance
Code 2018 (the “Code”) defines senior management as the first layer
of management below board level, in our case the Management
Committee, and their direct reports. Under the Code definition, which
covers 100 roles, we have 56% female representation across senior
management roles. However, when using our broader internal Senior
Leaders metric, which covers our top 236 leaders, we have 42% female
representation and aspire to increase this. For transparency, we are
reporting both metrics. We are pleased that we have strong female
leadership but hold ourselves to a higher standard, to ensure balanced
representation under a broad definition of leaders.
There was no difference to our ethnic diversity between the two
definitions. We would like to see a more diverse representation of
our society within our Senior Leadership team and this remains a key
focus of our hiring approach at senior level. Although we continue to
encourage employees to provide demographic information, this is
optional therefore it can hinder us having a true understanding of our
employee base. DEI will continue to be a focus area for the Committee
in FY24.
As at our financial period end of 3 September 2023, our gender and
ethnicity balance across Senior Leadership roles was:
Senior Management¹
Senior Leadership Roles²
79% 12%
9%
80% 11%
9%
MaleFemale
Senior Management¹
56% 44%
Senior Leadership Roles²
42% 58%
Ethnic MinorityWhite
Not specified
1 Defined as the Management Committee and their direct reports across
100 roles in accordance with the UK Corporate Governance Code 2018.
2 Defined as ‘Head of’ and above positions across 236 roles.
Further information on our Be Diverse goal, and our approach to DEI
can be found on pages 15 and 18.
Our Committee’s focus for FY24
Our focus as a Committee as we enter FY24 is on:
• Executive succession planning, notably the search for a
permanent CFO.
• Senior Leadership succession planning below Board level,
including oversight of the talent pipeline and development.
• Progress against DEI commitments and objectives.
Jørgen Lindemann
Nomination Committee Chair
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 79
Committee Chair
Mai Fyfield
Members
Marie Gulin-Merle Natasja Laheij
Committee’s responsibilities
The Committee’s principal responsibilities are to:
• Determine and recommend to the Board the Group’s overall
Remuneration Policy, and monitor the ongoing effectiveness of
thatPolicy.
• Determine and recommend to the Board the remuneration of
Executive Directors, the Chair and the other members of the
Management Committee.
• Monitor, review and approve the levels and structure of
remuneration for other Senior Leaders and employees.
• Determine the headline targets for any performance-related
bonus or pay schemes.
• Determine specific targets and objectives for any performance-
related bonus or pay schemes for the Executive Directors and the
other members of the Management Committee.
• Review and approve any material termination payment.
Terms of Reference
The full Terms of Reference for the Remuneration Committee are
available on our website, asosplc.com.
The Remuneration Committee’s attendance at meetings is
detailed in the table on page 62.
Dear shareholder
On behalf of the Board, I am pleased to present the Remuneration
Committee’s report for the period to 3 September 2023. Itook over
as Chair of the Committee at the beginning of 2023, and Iwould like
to thank my predecessor, Karen Geary, for her contribution as
Committee Chair since 2019 and her support to me during the
transition. I would also like to thank Patrick Kennedy and Eugenia
Ulasewicz, who stepped down from the Board and Committee during
the year, for their service.
Business context
In October 2022, we set out our Driving Change agenda, which focuses
on delivering key operational improvements and disciplined capital
allocations, to turn the business around and ensure that we are well
positioned to drive profitable growth over the longer term. The agenda
consists of four pillars: 1. Renewed commercial model; 2. Stronger
order economics and lighter cost profile; 3. Robust and flexible balance
sheet; and 4. Reinforced leadership and culture.
The Driving Change agenda is delivering. Whilst ASOS realised a loss
for the full year against a very challenging trading environment, we
delivered on our target of returning to profit in the second half of the
year. On realising £300m of cost savings and profit initiatives, we
delivered more than a 30% year-on-year improvement in order
profitability and H2 adjusted EBIT was up more than 100% year-on-
year, despite the decline in sales. We have delivered sales and profit
broadly in line with guidance and whilst weak sales in July and August
significantly impacted year-end cash, this is mainly a timing effect. The
Board and management continue to focus on executing the final stages
of the Driving Change agenda and developing the foundations for the
next phase of growth.
Directors’
Remuneration Report
Remuneration
Committee
Chair’s
statement
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202380
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Directors’ Remuneration Policy
ASOS plc listed on the Main Market of the London Stock Exchange in
February 2022 and our first binding vote on the Directors’ Remuneration
Policy took place at our AGM in January 2023. This rolled over the
policy we had operated as an AIM-listed company for a number of
years, with the addition of some enhanced governance features
reflecting expected practice for Main Market listed companies.
The Committee was very pleased that c.99% of our shareholders
supported the Policy.
Given that this is a time of significant turnaround for ASOS, the
Committee is keeping the Policy under regular review to ensure it
remains well aligned to our strategy. Therefore, in FY23, we carried
outa full review of the framework, which included several detailed
conversations with management and our appointed advisors in which
we considered a range of approaches. The conclusion of that review
was that for FY24, our current framework of an annual bonus and
ASOS Long-Term Incentive Scheme (ALTIS) remains the most suitable
and will best motivate management to achieve the strong operational
performance required to deliver our strategy. This next period is
pivotal in the turnaround of the business, and the Committee firmly
believes that an incentive structure linked to robust, relevant financial
and strategic performance metrics is right for us at this time. The
Committee believes that given the current share price level, the
existing ALTIS framework presents an opportunity for sufficient upside
potential to motivate management during this critical time.
Our Annual Report on Remuneration sets out how the Policy was put
into practice during FY23 and how it will be implemented in FY24.
Together with this statement it will be put to an advisory vote at the
upcoming Annual General Meeting.
Activities during the period and up to the date of this report
• Considered the alignment of executive remuneration with the
strategy of ASOS and the effectiveness of the Directors’
Remuneration Policy, including a review of alternative structures.
• Shared the proposed implementation of the Policy for FY24 with our
largest shareholders in advance.
• Reviewed and confirmed the outcomes of the FY23 annual bonus
and the FY21 three-year ASOS Long Term Incentive Scheme (ALTIS)
awards for Executive Directors and senior management.
• Reviewed and approved the Chair’s, CEO’s and Senior Leaders’ pay
and benefits during FY23, in the context of their performance,
Company performance, stakeholder and shareholder experiences.
• Set performance measures for the FY24 annual bonus and ALTIS
awards for the CEO and senior management, in line with our
Remuneration Policy.
• Considered the treatment of the impact of corporate activity and
financing activity on reward schemes.
• Reviewed and approved changes to the structure of incentives
below Board.
• Considered the relationship between executive pay and wider
workforce pay, and reviewed gender and ethnicity pay gap data.
• Considered corporate governance developments and market
practice relating to executive and wider workforce pay.
• Engaged with employee representatives on executive pay and pay
across the wider workforce.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 81
Directors’ Remuneration Report continued
Remuneration outcomes for the period ended
3 September 2023
Below sets out the performance outcomes of our FY23 annual bonus
and FY21 ALTIS.
FY23 annual bonus
The annual bonus for FY23 was based 15% on revenue, 25% on adjusted
profit before tax, 35% on adjusted free cash flow and 25% on strategic
and ESG measures. The strategic and ESG element was measured on
DEI (female and ethnic minority leadership goals), stock turn and cost
mitigation performance.
Whilst some progress was made against the strategic measures,
the financial metrics were not met and the Committee determined
that no bonus will be paid to the Executive Directors for FY23.
FY21 ALTIS
The FY21 ALTIS was based on revenue growth (35%), diluted EPS (35%)
and relative TSR (30%) over the three-year period to 3 September 2023.
Performance against the three measures was below threshold and so
the overall vesting level for the FY21 ALTIS was 0%.
Remuneration in FY24
Salary
The Committee reviewed the CEO’s salary and determined to award a
salary increase of 4% with effect from 1 December 2023. This is slightly
below the average increase for the wider workforce.
The salary for the new CFO will be set on appointment.
Annual bonus
The maximum opportunity remains as 150% of salary under the Policy.
The Committee reviewed the performance measures and determined
that for FY24, the bonus would include a single financial measure
(weighting 75%): adjusted earnings before interest, tax, depreciation
and amortisation (EBITDA) less capital expenditure (Capex). This
measure of performance has been chosen because it is a good proxy
for operational cash, and iswhat management will be focused on
delivering for the year ahead. The remaining 25% will be measured
against targets for closing stock, adjusted gross margin and cost to
serve. These strategic measures were carefully chosen to ensure that
they are aligned to our most critical business priorities for FY24 which
are in turn pivotal to the turnaround of the business.
ALTIS
To align with our strategic focus on profitability and cash generation
over growth, the Committee determined that for the FY24 grant,
performance will be measured entirely on adjusted EBIT.
While the Committee recognises that this is a change from our recent
practice, where we have included three or four measures in the ALTIS,
given our strategic focus on returning the business to profit and
ensuring that future growth is sustainable and profitable, we considered
it absolutely right that the FY24 ALTIS award should entirely align with
the achievement of stretching EBIT targets. The targets are disclosed
on page 84.
ESG continues to be a vital component of our strategy. To ensure that
management incentives continue to be strongly aligned to the delivery
of our Fashion with Integrity pillars, the ALTIS will include an ESG
modifier. As we do not wish to detract from our emphasis on
profitability and believe that including a downwards only modifier
is more appropriate than providing the potential to earn additional
reward, we concluded that we would not incorporate ESG as a
standalone measure. The modifier will allow the Committee to reduce
the level of awards vesting by up to 15% if, based on a holistic
assessment of performance over the three-year period by the
ESG Committee, appropriate progress has not been achieved.
The maximum opportunity is 250% of salary under the Policy. The
Committee is conscious that the share price has declined since the
last ALTIS award was granted in November 2022 and has carefully
considered whether it would be appropriate to reduce the award
to reflect this. Following discussions, the Committee decided not to
reduce the award levels as it believes the upside potential that could
be delivered through share price growth will ensure that management
are fully motivated to deliver the strategy during this critical time. The
EBIT targets will only be achieved if there is a significant turnaround
in performance, which should in turn lead to an improvement in the
share price and increase the value of awards, allowing for significant
management rewards for delivering improved shareholder value.
We believe this will also provide an attractive reward proposition for
an incoming CFO.
To ensure that the value of awards vesting is appropriate, as is our
usual practice and consistent with our Policy and market norms, the
Committee will review performance outcomes in the context of wider
business and share price performance prior to confirming any vesting.
We shared our approach for the FY24 ALTIS with our largest shareholders
in September 2023. The feedback we received was broadly supportive
of the change in measures. One significant shareholder felt that
the ESG modifier was too low. We responded to this feedback by
increasing the modifier to 15 per cent. Where ESG measures are
included with a LTIP within the FTSE 350, their typical weighting would
be 15%. Management are also supportive of the approach.
Annual remuneration votes FY 2022 AGM
Total votes cast
Directors’
Remuneration
Report
67,445,531 97.23% 2.77% 1,511
Directors’
Remuneration
Policy
67,378,489 98.95% 1.05% 68,553
Votes for Votes against Votes withheld
(abstentions)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202382
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Wider workforce remuneration
During the period, the Committee reviewed the remuneration
framework for the population below Board. In order to align with our
strategic focus on profitability and retain critical talent, it is imperative
that the broader leadership team and senior management are
appropriately incentivised. The Committee therefore reviewed
ALTIS participation below Board and determined to make some
adjustments to the approach. Below Executive Director level, ALTIS
eligible participants may receive either ALTIS awards, a combination
of ALTIS and restricted shares, or just restricted shares, depending
on their grade.Where restricted shares are awarded, these are
subject to anunderpin.
Whilst not formally accredited, ASOS is formally committed to being
aLiving Wage employer and the Committee receives updates from
management to ensure we continue to honour this commitment.
We also brought forward the implementation of the UK real Living
Wage pay rates by three months in December 2022. To ease cost
ofliving pressures, and prior to the New Living wage announcement,
effective 1 September 2022, employees earning a full time equivalent
base salary of below or equivalent to £25,000 per annum received an
exceptional salary increase of 4.5%, and a one-off payment of £500,
and an additional support with lunch vouchers. Our annual pay review
also targeted higher increases at our lower paid employees.
Colleague engagement
My predecessor, Karen Geary, held a dedicated session with our
employee engagement network, the ASOS Voices Network. The session
covered both executive remuneration and wider employee remuneration
matters, including outlining the structure and different elements of
an Executive Director’s remuneration package, and the proposed
Remuneration Policy for Executive Directors. During the course of
the year, Jørgen Lindemann met regularly with the Voices Network
so providing another opportunity for employees to provide feedback
on actions taken on reward during the past year and we regularly ask
employees for their feedback on how fair they feel they are rewarded.
Board changes
Mat Dunn stepped down as Chief Operating Officer and Chief Financial
Officer on 31 October 2022, and left the Company on 31 December
2022. Details of his remuneration arrangements on departure were
fully disclosed in last year’s Directors’ Remuneration Report, but are
provided again on page 88.
Wei Gao, Marie Gulin-Merle, Natasja Laheij, Jose Manuel Martínez
Gutiérrez and Anna Maria Rugarli all joined the Board as Non-executive
Directors in the year. Their fees are in line with the Policy; current
Non-executive Director fee levels are shown on page 86.
Reporting changes
As noted earlier in this Annual Report, the FY23 financial period covers
the period from 1 September 2022 to 3 September 2023. The reporting
in this Directors’ Remuneration Report has been adjusted to reflect this.
Concluding remarks
On behalf of the Committee, I would like to thank shareholders for their
consideration of the changes to the measures for our FY24 incentive
schemes. The Committee looks forward to engaging with investors
over the year ahead as we consider our future remuneration approach.
In the meantime, we look forward to receiving your support for the
Directors’ Remuneration Report at the upcoming AGM.
Mai Fyfield
Remuneration Committee Chair
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 83
Summary of FY24 implementation of Remuneration Policy
ASOS Plc listed on the Main Market of the London Stock Exchange in February 2022 and submitted our Remuneration Policy (“the Policy”)
for binding shareholder approval for the first time at the 2023 AGM. In line with the regulations, the approved Policy for ASOS’ Executive
andNon-executive Directors will operate for up to the three years from the date of approval.
The purpose of the Policy is to attract, retain and motivate high-calibre, high-performing, engaged employees with the necessary skills to
implement the Group’s strategy in order to create long-term value for shareholders. Our Policy must reward people for their contributions
to the success of ASOS in a fair and responsible manner, over both the short and the long term.
The following table summarises the main elements of the Policy, along with details of the implementation for the year ending 1 September 2024.
The full Policy can be found in our 2022 Annual Report (available at asosplc.com).
Element
Purpose and link
tostrategy Operation Implementation for FY24
Base
salary
Reflects an individual’s
responsibilities,
experience and
performance in
their role.
Reviewed annually, with changes effective from
1 December. Salary increases will normally be in line with
the typical level of increase awarded to other employees.
The CEO will receive an increase of 4% which is
slightly below the average increase for the wider UK
workforce. His salary will therefore be £728,000.
The salary of the new CFO will be set upon appointment.
Pension
To contribute
financially during
post-retirement.
Defined contribution arrangement or salary supplement.
Contribution aligned to the wider workforce, which is
currently 5% of base salary.
The pension allowance for the CEO is 5% of salary,
in line with the rate available for the majority of
the workforce.
The pension allowance for new Executive Directors
including the new CFO will follow the same approach.
Other
benefits
To support the
personal health
and wellbeing
of employees.
To reflect and
support ASOS
culture.
Package of taxable benefits offered through our flexible
benefits scheme, ASOS Extras, which offers all employees
a fixed value depending upon their seniority, and can be
used either to buy a variety of benefits or be taken in cash.
The Executive Directors currently receive a flexible
benefits allowance of £12,500 per annum.
Other benefits include private medical insurance, life
assurance and group income protection.
No change.
Annual
bonus
Provides a link between
remuneration and both
short-term Group and
individual performance.
Annual bonus deferral
encourages the
delivery of sustainable,
longer-term
performance and
strengthens the
alignment of Executive
Directors with
shareholders’ interests.
Maximum opportunity of 150% of salary with a one-year
performance period.
Performance may be based on a mix of financial,
operational, strategic and individual measures, with
at least 50% based on financial measures.
Any bonus earned up to 50% of salary will be paid in cash,
and any additional bonus earned above this will be split
equally between a portion paid in cash and a portion
deferred into shares for three years.
The Committee retains the discretion to adjust bonus
payouts if it considers that the outcome does not reflect
the underlying performance of the business or
participants during the year.
Malus and clawback provisions apply.
The CEO’s maximum will be 150% of salary.
The performance measures will be:
• 75% financial: EBITDA less capex
• 25% strategic: closing stock, adjusted gross
margin and cost to serve
Adjusted EBITDA less capex has been selected
because it is a good proxy for operational cash and
is what management will be focused on delivering
for the year ahead. The strategic measures were
carefully chosen to ensure that they are aligned to
our most critical business priorities for FY24 which
are in turn pivotal to the turnaround of the business.
The annual bonus targets are commercially sensitive
and will be disclosed at the end of the performance
year, as in prior years.
ASOS Long
Term
Incentive
Scheme
(ALTIS)
Supports the strategy
and business plan by
incentivising and
retaining the ASOS
senior management
team in a way that is
aligned with both
ASOS’ long-term
financial performance
and the interests of
shareholders.
Maximum opportunity of 250% of salary in normal
circumstances (although the ALTIS rules allow for grants
of up to 500% of salary in any given year).
Three-year performance period and two-year holding
period.
Awards may vest based on financial, non-financial and
strategic performance conditions which are aligned to
the Company’s strategy.
The Committee retains the discretion to adjust the vesting
level if it considers that the vesting outcome does not
reflect the underlying performance of the business or
participants during the three-year performance period.
Malus and clawback provisions apply.
The CEO will receive an award of 250% of salary.
To align with our strategic focus on profitability, the
Committee has determined that for the FY24 grant,
performance will be measured entirely on adjusted
EBIT performance. Page 82 of the Annual Statement
provides further discussion on the reasons for the
change. For the FY24 grant the Committee decided
that, at threshold performance, vesting will be 15%,
rather than the 25% set out in the Policy.
The targets for FY26 are therefore as follows:
• Threshold (15% vesting): £60m
• Target (62.5% vesting): £120m
• Maximum (100% vesting): £165m
To preserve the link between long-term incentives
and ESG performance, a modifier will apply whereby
any awards vesting due to EBIT performance may be
reduced by up to 15%, based on a holistic assessment
by the ESG Committee of performance against our
FWI pillars over the three-year period.
Annual Report
onRemuneration
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202384
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Element
Purpose and link
tostrategy Operation Implementation for FY24
Share
ownership
guidelines
Increases alignment
between the Board
and shareholders.
Shows a clear
commitment by all
Executive Directors
to creating value for
shareholders in the
long term.
The shareholding guideline for Executive Directors is 200%
of salary and they will normally be expected to hold 50%
of any shares acquired on vesting until the guideline have
been met.
The post-employment shareholding requirement is for
Executive Directors to retain their full shareholding
guideline (i.e. 200% of salary) for the first year following
cessation of employment and half of this amount
(i.e. 100% of salary) for a second year thereafter.
Where a departing Executive Director has not built up
this level of shareholding, their actual shareholding on
departure will be subject to the guideline.
No change.
All-
employee
share plan
Increase alignment
between employees
and shareholders in a
tax-efficient manner.
Supports retention of
employees.
Participation in any all-employee share plan is subject
to the same maximum as for all other participants, which
is determined by the Company in accordance with the
applicable legislation.
No change.
Non-
executive
Director
fees
Provide fees
appropriate to time
commitments and
responsibilities of
each role.
Paid monthly in cash, with fees reviewed periodically.
Supplementary fees are paid for holding additional roles,
for example Committee Chairs, Committee members
and the Senior Independent Director. The Chair receives
a consolidated fee.
Reasonable business expenses (together with any tax
thereon) may be reimbursed.
There is no prescribed maximum. In aggregate, fees paid
to all Directors will not exceed the limit set out in the
Company’s Articles of Association.
The Non-executive Directors’ fees were last reviewed
in October 2022. No changes were made to the annual
fees set out below:
• Non-executive Chair £350,000
• Non-executive Director £56,230
• SID Fee £10,000
• Committee Chair Fee £10,000
• Committee Membership Fee £2,500 per
Committee
Provision 40 disclosures
In developing our approach to remuneration, the Committee was mindful of Provision 40 of the UK Corporate Governance Code 2018.
The Committee considers that the Company’s executive remuneration framework addresses the following factors:
Clarity The Committee has provided clear disclosures regarding our Policy, its alignment to our purpose and
strategy, and the necessary performance requirements. The changes we made to the Policy in FY23 and
our approach to implementation for FY24 support the delivery of our strategy. We consulted with our
shareholders and employees on the new Policy and provided clarity on the relationship between the
successful implementation of our strategy and executive remuneration and we shared our approach to
implementation of the FY24 Policy with shareholders in advance.
Simplicity Our remuneration structures, including their rationale and operation, are simple to understand and familiar
to stakeholders.
Predictability Our Policy contains details of the range of opportunity levels available for each component of pay, including
the maximum opportunity level. Actual incentive outcomes vary depending on the level of performance
achieved against specific measures.
Proportionality The link between the annual bonus and ALTIS schemes and the achievement of ASOS’ strategy and the
long-term performance of the Group is clearly defined. The use of ALTIS holding periods and our shareholding
guidelines (including post-employment) ensure that Executive Directors have a strong drive to ensure that
performance is sustainable over the long term. The discretion available to the Committee ensures that
outcomes do not reward poor performance.
Risk The Committee has satisfied itself that the remuneration arrangements do not encourage risk taking or
other behavioural risks. The Committee has the discretion to apply malus and clawback in certain
circumstances, including in the event of any behavioural risks.
Alignment to
culture
The Committee ensures that the performance measures for the annual bonus and ALTIS support the Group’s
purpose, strategy and culture. This is supported by the inclusion of ESG-related performance measures, by
ensuring the Committee understands the remuneration of the wider workforce and engaging with stakeholders.
Executive Directors’ service contracts
It is our policy that any Executive Director should have a rolling service contract with an indefinite term, but a fixed period of notice of termination.
The services of any Executive Director may be terminated on a maximum of 12 months’ notice by the Company or the individual. Our usual approach
to remuneration when an Executive Director leaves is explained in our Policy. Executive Directors’ contracts are available to view at the Company’s
registered office.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 85
Details of how the Policy has been applied in the financial period to 3 September 2023 are set out below. The Committee considers that the Policy
operated as intended in the period. Certain information within this section has been audited and is highlighted as such.
Directors’ remuneration table (audited)
The remuneration of the Directors for the financial period to 3 September 2023 and the year to 31 August 2022 is set out in the tables below.
Executive
Director
Base salary
£
Benefits
1
£
Pensions
2
£
Total fixed
£
Bonus
£
LTIP
3
£
Total variable
£
Total
remuneration
£
José Antonio
Ramos
Calamonte
4
2023 705,753 73,734 35,288 814,775 – – – 814,775
2022 126,615 23,254 5,833 155,702 – – – 155,702
Mat Dunn⁵ 2023 87,500 2,831 8,750 99,081 – – – 99,081
2022 566,932 23,160 54,924 645,016 – 16,708 16,708 661,724
Total 2023 793,253 76,565 44,038 913,856 – – – 913,856
2022 693,547 46,414 60,757 800,718 – 16,708 16,708 817,426
Non-executive
Director
Base fee
£
Additional fee
£
Total expenses
6
£
Total
remuneration
£ Basis for additional fee
Jørgen
Lindemann
7
2023 352,876 0 64,410 417,286 –
2022 71,339 3,750 35,516 110,6 05 Member of Audit and Nomination Committees until
appointed Chair of Board on 1 August 2022
Mai Fyfield 2023 56,692 17,346 – 74,038 SID, Remuneration Committee Chair and Member
ofAudit and Nomination Committees
2022 55,922 5,208 – 61,13 0 Member of Audit, Remuneration and ESG Committees
Wei Gao
8
2023 33,263 3,005 35,714 71,982 Member of Audit, Nomination and ESG Committees
2022 – – – – –
Karen Geary
9
2023 14,271 3,807 1,105 19,183 Remuneration Committee Chair, Member of Nomination
and ESG Committees until 1 December 2022
2022 55,922 13,750 12,218 81,890 Remuneration Committee Chair, Member of Nomination
and ESG Committees
Marie
Gulin-Merle
10
2023 33,263 1,479 8,373 43,115 Member of Remuneration Committee
2022 – – – – –
Luke Jensen
11
2023 9,372 833 60 10,265 Member of Audit and Nomination Committees until
31 October 2022
2022 55,922 3,750 1,430 61,10 2 Member of Audit and Nomination Committees
Patrick
Kennedy
12
2023 33,504 14,896 2,615 51,015 SID, Audit Committee Chair, Member of Remuneration
and Nomination Committees until 5 April 2023
2022 35,702 15,744 19,590 71,036 SID, Audit Committee Chair, Member of Remuneration
and Nomination Committees
Natasja Laheij
13
2023 22,486 4,999 – 27,485 Audit Committee Chair and Member of Remuneration
Committee
2022 – – – – –
Jose Manuel
Martínez
Gutiérrez
14
2023 22,486 1,484 7,997 31,967 Member of Audit and ESG Committees
2022 – – – – –
Nick 2023 56,692 2,521 – 59,213 Member of ESG Committee
Robertson
15
2022 55,922 1,458 – 57,38 0 Member of ESG Committee
Anna Maria
Rugarli
16
2023 10,899 1,938 – 12,837 ESG Committee Chair
2022 – – – – –
Eugenia
Ulasewicz
17
2023 20,447 5,455 27,988 53,890 ESG Committee Chair, Member of Audit and
Remuneration Committees until 11 January 2023
2022 55,922 9,583 122,750 188,255 ESG Committee Chair, Member of Audit and
Remuneration Committees
Total 2023 666,251 57,763 148,262 872,276
2022 386,651 53,243 191,504 631,398
1 José Antonio Ramos Calamonte is entitled to a relocation allocation allowance of £40,000 per year until 4 January 2024, related to his relocation from Portugal
to the UK to take up his previous role as Chief Commercial Officer. His 2022 benefits figure has been restated to reflect qualifying amounts for 2022 and any
expenses not captured in time for the prior year’s report.
Executive Directors receive a flexible benefits allowance of £12,500 per annum, which can be used either to buy a variety of benefits or be taken in cash through
our flexible benefits scheme, ASOS Extras. Other benefits include private medical insurance, group income protection and life assurance.
2 Since his appointment, José has received a pension contribution of 5% of salary, in line with the wider workforce. Mat Dunn’s contribution level reduced from 10%
to 5% of salary on 1 December 2022.
3 For 2023, this includes the FY21 ALTIS award as detailed on page 87. The performance targets were not met and no part of the award vested. The figures for 2022
are the adjusted figures to show the share price of £5.59 on the vesting date of 31 October 2022 (previously shown as £29,561 for Mat Dunn).
4 José was appointed CEO on 16 June 2022, therefore only his remuneration between 16 June 2022 and 31 August 2022 is shown in his 2022 figure.
5 Mat stepped down from the Board on 31 October 2022 and remained employed until 31 December 2022. His 2023 remuneration is calculated to 31 October 2022.
He received an additional temporary salary allowance of £5,000 per month to reflect the additional responsibilities he undertook, leading the day-to-day
operation of the business on a temporary basis until we appointed a new CEO. This is reflected in his 2022 base salary in the table. He did not receive any such
allowance for any part of 2023.
Annual Report on Remuneration continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202386
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
6 The taxable expenses include travel and other expenses related to their role and have been grossed up for tax, where applicable. The 2022 expenses for
Jørgen Lindemann, Patrick Kennedy and Eugenia Ulasewicz have been restated to reflect qualifying amounts for 2022 and any expenses not captured in
time for the prior year’s report.
7 Jørgen Lindemann was appointed as Non-executive Director on 1 November 2021 and Chair of the ASOS Plc Board on 1 August 2022.
8 Wei Gao was appointed to the Board on 1 February 2023.
9 Karen Geary stepped down from the Board on 1 December 2022.
10 Marie Gulin-Merle was appointed to the Board on 1 February 2023.
11 Luke Jensen stepped down from the Board of 31 October 2022.
12 Patrick Kennedy was appointed Non-executive Director, Senior Independent Director and Chair of the Audit Committee on 13 January 2022. He stood down
from the Board on 5 April 2023.
13 Natasja Laheij was appointed to the Board on 11 April 2023.
14 Jose Manuel Martínez Gutiérrez was appointed to the Board on 11 April 2023.
15 Nick Robertson donated all of his base service fee and his additional fee to the ASOS Foundation.
16 Anna Maria Rugarli was appointed to the Board on 26 June 2023.
17 Eugenia Ulasewicz was appointed Chair of the newly established ESG Committee on 1 February 2022. She stepped down from the Board on 11 January 2023.
Annual bonus for the period ended 3 September 2023 (audited)
The annual bonus plan for the period ended 3 September 2023 was based on the following financial metrics:
Weighting Threshold Target Maximum Performance achieved Outcome
Financial metrics
Adjusted PBT¹ 25% £18m £35m £52m £(70.3)m 0%
Revenue growth² 15% (7)% (5)% (1)% (11) % 0%
Adjusted Free Cash Flow³ 35% £(70)m £(35)m £0m £(190.4)m 0%
1 Adjusted for £226m of adjusting items. See page 117.
2 Constant currency basis.
3 See page 169 for reconciliation.
The remainder of the bonus (25%) was based on a combined ESG and strategic measure with performance measured against targets for
Diversity, Equity & Inclusion (DEI), group stock turn and cost mitigation.
Whilst progress was made against the strategic measures, the financial metrics were not met and the Committee determined that no bonus
will be paid to the Executive Directors for FY23.
FY21 ALTIS awards vesting for performance to 3 September 2023 (audited)
The ALTIS awards with a performance period ending on 3 September 2023 are due to vest on 31 October 2023. These awards were based
on revenue growth, diluted EPS and relative TSR over the three-year performance period from 1 September 2020 to 3 September 2023.
The performance targets and level of achievement against those targets were as follows:
Measures Weighting Targets Percentage vesting
Actual
achievement Vesting
Revenue growth
1
35% Below 12.2%
12.2%
Between 12.2% and 22.2%
22.2% or above
0%
25%
Between 25% and 100%
2
100%
2.7% 0%
Diluted EPS
1
35% Below 161.2p
161.2p
Between 161.2p and 206.7p
206.7p or above
0%
25%
Between 25% and 100%
2
100%
(38.3)p
3
0%
Relative TSR 30% Below median
At median
Between median and upper quartile
At or above upper quartile
0%
25%
Between 25% and 100%
2
100%
Below median 0%
1 The targets were adjusted in May 2021 for the Topshop brands acquisition (in February 2021) and the convertible bond issue (in April 2021). Details were disclosed
on pages 91-92 of the 2022 Annual Report and Accounts.
2 Straight-line interpolation between points in the range.
3 Consistent with the approach taken in previous years, actual performance for the diluted EPS condition has been assessed using an adjusted profit before
tax of £(70.3)m, an adjusted tax rate, and with the convertible bond treated as dilutive. This is also consistent with how adjusted measures are used as the
basis for assessing the outturn of the Group bonus plan and with the restatement of the ALTIS scheme targets as described in footnote 1.
Performance against the three measures was below threshold and so the overall vesting level for the FY21 ALTIS was 0%.
ALTIS awards granted in the year (audited)
In the period under review, an ALTIS award was granted to the CEO, José Antonio Ramos Calamonte, on 28 November 2022. Details of the award
are as follows:
Details of vesting:
Basis of award Type of award
Number of shares
granted Face value of award¹
% vesting for threshold
performance Performance period
250% of base
salary
Conditional share
award at nil cost
271,739 £1.75m 25% 01.09.22 – 31.08.25
1 Based on the 28-day average share price of £6.44 as at 25 November 2022.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 87
The performance conditions for these awards are in the table below, with performance measured over the three-year period from 1 September
2022 to 31 August 2025, and vesting on 31 October 2025:
Measures Weighting Threshold performance (25% vesting)
2
Maximum performance (100% vesting)
EPS growth¹ 30% 61.2p 128.8p
Revenue growth (CAGR)¹ 30% 2.1% 8.0%
Relative TSR 25% Median Upper quartile
ESG – FWI goals 15% See below
3
See below
3
1 EPS targets are for the final year of the performance period. Revenue growth targets represent average p.a. growth rates compared to FY22 reported revenue.
2 For Revenue and EPS growth, there is straight-line vesting between threshold and target (62.5% vesting) and between target and maximum. For TSR, there is
straight-line vesting between threshold and maximum.
3 ESG performance will be assessed based on the extent of the Company’s progress toward the Company’s four FWI goals: (1) Be Net Zero; (2) Be More Circular;
(3)Be Transparent; (4) Be Diverse and achievement of the FY23 and FY25 externally stated commitments. The Committee will determine what level of vesting
is appropriate considering the overall progress achieved, taking advice from the ESG Committee.
The relative TSR comparator group consists of the following companies: Boohoo Group, Boozt, Brown Group, Farfetch, Global Fashion Group,
H&M, Inditex, JD Sports Fashion, Joules Group, Marks & Spencer, Next, Revolve Group, THG Holdings and Zalando.
Payments for loss of office (audited)
Mat Dunn
On 17 August 2022 it was announced that Mat Dunn would step down from his Chief Operating Officer and Chief Financial Officer (CO&FO) roles
as ASOS restructured its Executive team. The combined CO&FO role was discontinued after the restructuring. Mat continued in his roles and as
amember of the Board until 31 October 2022 and remained employed until 31 December 2022 to provide transitional support.
Details of payments and entitlements made to Mat Dunn during the period to 3 September 2023, following his stepping down from the Board on
31 October 2022 and until he left employment on 31 December 2022, are set out below:
£
Base salary
87,500
Pension
6,563
Benefits
2,834
Payment in lieu of notice period
327,174
Legal and outplacement costs
35,000
Total
459,071
Mat’s remuneration arrangements on departure were in line with the leaver treatment set out in the Policy and are summarised as follows:
• Mat received his usual salary and normal benefits during the remainder of his employment and thereafter received an amount in lieu of his
salary for the remainder of his 12-month notice period to 15 August 2023.
• Mat was eligible to receive a bonus in respect of FY23, pro-rated to the date he stepped down from the ASOS Plc Board (31 October 2022),
assessed and paid in the normal way.
• Mat’s FY20 ALTIS vested as normal on 31 October 2022 (as outlined on page 91 of the 2022 Annual Report and Accounts). Given that the
combined CO&FO role was not retained in the new executive team, the Committee treated Mat as a good leaver in respect of outstanding
ALTIS awards granted on 20 November 2020 and 23 November 2021, which will be assessed and pro-rated to 31 December 2022 and will vest
on the normal vesting date, subject to the satisfaction of applicable performance conditions. He was not entitled to a FY23 ALTIS award.
• He was also eligible to have expenses paid on his behalf in relation to legal fees, up to £10,000, and outplacement support, up to £25,000.
There were no other payments made for loss of office during the financial period to 3 September 2023.
Payments to past Directors (audited)
There were no payments made to any past Directors during the financial period to 3 September 2023.
Annual Report on Remuneration continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202388
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Directors’ interests in share plans (audited)
Director
Share option
scheme Date of grant
31 August
2022
(no. of shares)
Granted during
the period to
3 September
2023
(no. of shares)
Lapsed during
the period to
3 September
2023
(no. of shares)
Vested during
theperiod to
3 September
2023
(no. of shares)
As at
3 September
2023
(no. of shares)
Vest date/
period
José Antonio
Ramos
Calamonte
ALTIS
1
16.02.21 12,511 – – – 12,511 31.10.23
ALTIS
1
23.11.21 21,433 – – – 21,433 31.10.24
RSU
2
14.01.22 20,319 – 20,319 – 50% on
31.10.22
and 50% on
30.04.23
ALTIS
1
23.06.22 20,612 – – 20,612 31.10.24
ALTIS
1
28.11.22 – 271,739 – – 271,739 31.10.25
Mat Dunn
3
ALTIS
1
20.11.19 27,173 – 24,184 2,989 – 31.10.22
ALTIS
1
20.11.20 25,633 – 5,694 – 19,939 31.10.23
ALTIS
1
23.11.21 48,791 – 27,136 – 21,655 31.10.24
1 Conditional award over shares under the rules of the ASOS Long Term Incentive Scheme. Performance conditions for those awards are set out in the relevant
remuneration report for the year of grant.
2 Conditional award over shares under the rules of the ASOS Long Term Incentive Scheme, with no performance conditions applying to the award, but vesting
of each award was subject to continued employment. These awards were granted before José Antonio Ramos Calamonte was appointed to the main Board.
3 Mat Dunn stepped down as CO&FO on 31 October 2022. As set out on page 88, he was treated as a good leaver in respect of inflight FY21 and FY22 ALTIS awards,
which have been retained and will vest in line with their original schedule, subject to performance testing and time pro-rating to 31 December 2022, the date of
his departure.
Directors’ shareholdings (audited)
The Directors who held office at 3 September 2023 had the following interests, including family interests, in the shares of ASOS Plc. A shareholding
guideline is in place for the Executive Directors; this is 200% of salary. A post-employment shareholding guideline was introduced in the current
Policy, whereby normally the full in-employment guideline must be held for one year following stepping down from the Board, and half the in-employment
guideline for the second year following stepping down from the Board.
Director
Beneficially owned as at
31 August 2022
(no. of shares)
Beneficially owned as at
3 September 2023
(no. of shares)
Outstanding share options
(ALTIS)
(no. of shares) Shareholding guideline met
José Antonio Ramos Calamonte 3,705 24,322 326,295 No
Jørgen Lindemann 62,052 130,052 N/A N/A
Mai Fyfield 2,000 2,000 N/A N/A
Wei Gao – – N/A N/A
Marie Gulin-Merle – – N/A N/A
Natasja Laheij – – N/A N/A
Jose Manuel Martínez Gutiérrez – – N/A N/A
Nick Robertson 2,886,414 2,636,025 N/A N/A
Anna Maria Rugarli – – N/A N/A
Former Directors
Beneficially owned as at
31 August 2022 (no. of shares)
Beneficially owned as at
date of resignation from Board
(no. of shares)
Mat Dunn¹ 20,644 22,187
Karen Geary² 641 641
Luke Jensen³ 15,733 15,733
Patrick Kennedy
4
53,000 53,000
Eugenia Ulasewicz
5
500 500
1 As at 31 October 2022.
2 As at 1 December 2022.
3 As at 31 October 2022.
4 As at 5 April 2023.
5 As at 11 January 2023.
Post-period end, William Barker was appointed as Non-executive Director on 20 September 2023. William is the founder and CEO of Camelot
Capital Partners LLC (“Camelot Partners”) which, as at the date of his appointment and as at the date of this report, held 16,722,381 shares
in the Company, representing 14.02% of the Company’s issued share capital.
There were no other changes to the Directors’ share interests between 3 September 2023 and 31 October 2023.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 89
Pay gap reporting
Diversity continues to be a key area of focus for ASOS, and we published our most recent Gender and Ethnicity Pay Gap report in March 2023.
Our UK gender pay gap is not a symptom of unequal pay for equal work among men and women, but reflects the fact that there are more men
than women in senior roles. We acknowledge that we are still on our journey to achieve at least 50% female representation and over 15% ethnic
minority representation across our leadership teams.
In addition, ASOS carries out an annual equal pay audit, checking the pay of men and women doing the same or similar roles. Our audits continue
to show that our pay policies and practices pay men and women equally for equivalent roles. Our pay range system ensures ASOSers are paid
fairly based on their skills, qualifications, experience and performance.
All our FWI reports and policies, including our Gender and Ethnicity Pay Gap report, can be found at asosplc.com/fashion-with-integrity/
reports-and-policies/.
Performance and CEO remuneration comparison
This graph shows the value, by 3 September 2023, of £100 invested in ASOS Plc on 31 August 2013 compared with that of £100 invested in the
FTSE 250 and the FTSE All-Share General Retail Indices. These indices are relevant to the Company in terms of size and sector respectively, and
between them they show the Company’s performance against both the broader market and the retail sector. The other points plotted are the
values at the intervening financial period ends.
400
350
300
250
200
(Rebased £)
150
100
50
0
ASOS Plc FTSE All-Share General Retail IndexFTSE 250
Year to
31 August
2013
Year to
31 August
2014
Year to
31 August
2015
Year to
31 August
2016
Year to
31 August
2017
Year to
31 August
2018
Year to
31 August
2019
Year to
31 August
2020
Year to
31 August
2021
Period to
3 September
2023
Year to
31 August
2022
CEO remuneration history
The table below sets out the remuneration data for Directors undertaking the role of CEO during each of the past ten financial years.
Year to
31 August
2014
Year to
31 August
2015⁴
Year to
31 August
2016⁵
Year to
31 August
2017
Year to
31 August
2018
Year to
31 August
2019
Year to
31 August
2020
Year to
31 August
2021
Year to
31 August
2022
6
Period to
3 September
2023
Total remuneration (£)¹ 337,193 81,280 1,199,520 3,072,259 2,904,614 848,487 1,730,323 1,726,859 252,782
814,775
Annual bonus %² – – 70.0% 65.0% – – 93.7% 89.9% 0% 0%
Long-term incentive %³ – – – 99.1% 100% 27.0 % 31.2% 38.1% 11% 0%
1 Gains made under the long-term incentive plans are recognised above in the financial year of the performance period to which they relate.
2 Annual bonus percentage figure shows the percentage of the individual’s maximum bonus percentage received in that financial year.
3 Long-term incentive percentages show the percentage of the award that vested in the financial year.
4 During the year to 31 August 2015, Nick Robertson opted to waive receipt of £442,580 of his base salary, and any entitlement to bonus.
5 Nick Robertson stepped down as CEO and was succeeded by Nick Beighton on 1 September 2015.
6 During the year to 31 August 2022, Nick Beighton stepped down as CEO on 11 October 2021 and José Antonio Ramos Calamonte was appointed CEO on 16 June
2022, therefore this column shows the remuneration Nick received between 1 September 2021 and 11 October 2021 (£97,080) and the remuneration José received
between 16 June 2022 and 31 August 2022 (£155,702). José had not joined the Company when the FY20 ALTIS was awarded. No bonus was paid in FY22.
Annual Report on Remuneration continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202390
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Percentage change in Directors’ remuneration
The table below shows the percentage change in the Directors’ salary/fees, benefits and annual bonus over the last three years, compared with
all employees of ASOS. This is a voluntary disclosure as no employees are directly employed by ASOS Plc.
FY23 FY22 FY21 FY20
% change
Salary/
Fees
Benefits
11
Bonus
Salary/
Fees
10
Benefits
11
Bonus
Salary/
Fees Benefits
11
Bonus
Salary/
Fees Benefits
12
Bonus
All employees 9% 8% 0%¹ 13% -5% -100% 16% 38% 8% 7% 13% 100%
Executive Directors
José Antonio Ramos
Calamonte
2
457% 217% – – – – – – – – – –
Non-executive
Directors
3
Jørgen Lindemann
4
370% 81% – – – – – – – – – –
Mai Fyfield
3 5
21% 0% – 11% -100% – – 300% – – – –
Wei Gao
6
0% – – – – – – – – – – –
Marie Gulin-Merle
6
0% – – – – – – – – – – –
Natasja Laheij
6
0% – – – – – – – – – – –
Jose Manuel Martínez
Gutiérrez
6
0% – – – – – – – – – – –
Nick Robertson
3
3% 0% – 4% -100% – – – – – -97% –
Anna Maria Rugarli
6
0% – – – – – – – – – – –
Former Directors – –
Mat Dunn
7
-85% -88% – 25% 29% -100% 5% 2% 49% 1% 9% 100%
Karen Geary
3 8
-74% -91% – 7% 383% – – 6900% – – – –
Luke Jensen
3 8
-83% -96% – 8% 608% – – 400% – – – –
Patrick Kennedy
9
-6% -87% – – – – – – – – – –
Eugenia Ulasewicz
3 8
-60% -77% – 19% 7240% – – – – – – –
1 No payments were made under the Group annual bonus in FY22 and FY23. Some employees received payments under other bonus schemes, however as this was
only a small population of the wider Group, this payment has been excluded from this calculation to allow for meaningful comparison year on year. No bonus was
paid inFY19.
2 José Antonio Ramos Calamonte was appointed CEO part way through FY22, therefore his 2022 single figure showed part year data for the period 16 June 2022
to 31 August 2022. His 2023 single figure reflects a full year in role.
3 The base fee for Non-executive Directors was increased to £56,230 effective 1 December 2021. No increase was applied the following year.
4 Jørgen Lindemann joined the Board on 1 November 2021 and was appointed Chair on 1 August 2022, therefore his 2022 single figure showed part year data.
His 2023 single figure reflects a full year in role.
5 Mai Fyfield joined the Board part way through FY20. She was appointed Chair of the Remuneration Committee on 1 January 2023.
6 Wei Gao, Marie Gulin-Merle, Natasja Laheij, Jose Manuel Martínez Gutiérrez and Anna Maria Rugarli joined part way through FY23.
7 Mat Dunn stepped down from the Board on 31 October 2022. During FY22, he received an additional temporary salary allowance of £5,000 per month to reflect
his additional responsibilities leading the day-to-day operation of the business on a temporary basis until the CEO was appointed. During FY21, his target and
maximum bonus opportunity was increased to align with the CEO. He was appointed to the Board part way through FY19 on 23 April 2019.
8 Karen Geary, Luke Jensen and Eugenia Ulasewicz were appointed part way through FY20 and all stepped down during FY23.
9 Patrick Kennedy joined the Board part way through FY22 and stepped down part way through FY23.
10 Change in fees for the Non-executive Directors have been restated this year to align with the single figure methodology.
11 Once COVID-19 social and travel restrictions started to lift, Board and Committee meetings were held in person leading to an increase in Director travel and
other expenses in FY21, FY22 and FY23.
12 Reduction in benefits in FY20 was due to a reduction in expenses claimed during that year.
CEO pay ratio
The table below shows the ratio of the total remuneration paid to the CEO for 2022/23 against the upper quartile, median and lower quartile
full-time equivalent remuneration of ASOS’ UK employees. This is the fourth year of reporting a pay ratio and data from the last two financial
years is shown for comparison.
Method P25 P50 P75
2022/23 Option C 26:1 16:1 11:1
2021/22
1
Option C 9:1 5:1 4:1
Full-year equivalent 2021/22
1
Option C 29:1 17:1 11:1
2020/21 Option C 68:1 35:1 25:1
2019/20 Option C 73:1 38:1 24:1
1 The first calculation for 2021/22 uses the total remuneration paid to Nick Beighton between 1 September 2021 and 11 October 2021 and the total remuneration
paid to José Antonio Ramos Calamonte between 16 June 2022 and 31 August 2022. The ratio has been recalculated this year to reflect the actual value of
Nick’s FY20 ALTIS on the vesting date and the restatement of José’s 2022 benefits figure (as described on page 86). This has reduced the ratio from 6:1 to 5:1.
There was a period during the financial year, between 12 October 2021 and 15 June 2022, that the Company did not have a CEO, therefore the second calculation
(full-year equivalent 2021/22) provides the ratios if José had been CEO for the full financial year.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 91
The Company has chosen Option C as it enabled the use of readily available data that was current to ASOS’ year end. The employees at P25,
P50 and P75 were identified based on salaries at 3 September 2023, and their total remuneration was calculated, including salary, benefits,
flex allowance and pension as at that date plus 2022/23 bonus outturns (all three employees are outside the ALTIS population). No omissions,
estimates or adjustments were included in the calculation.
The total remuneration of these individuals and a small number of others positioned around each quartile were compared to determine whether
the employees at P25, P50 and P75 were most representative of pay levels at these quartiles. Based on that review of similarly ranked roles, the
remuneration of all three individuals was deemed to be representative of the relevant quartile.
The base salary and total remuneration for the employees used in the above calculations are as follows:
P25 P50 P75
Base salary £28,822 £47,071 £68,683
Total remuneration £31,025 £49,832 £77,452
The Committee is satisfied that the median pay ratio for FY23 is consistent with the Group’s wider policies on employee pay, reward and
progression. Executive Directors receive a greater proportion of their remuneration in elements tied to performance, including participation
in the ALTIS which operates at the most senior levels. This means that the pay ratio will vary in large part due to incentive outcomes each year.
The pay ratio for the past two years (based on the full-time equivalent figure for 2021/22) has been lower than in the two years prior due in part
to a nil payout on the annual bonus, compared to a payout near maximum in 2019/20 and 2020/21.
Relative importance of spend on pay
The following table shows ASOS’ actual spend on pay (for all employees) relative to loss before tax. This has been used as a comparison as this
is a key metric that the Board considers when assessing the Company and Group’s performance. To date, no dividend has been paid by ASOS Plc
and there is no intention to pay a dividend at this stage as all monies are being retained in the business for future investment.
12%
2023
2022
Staff costs
(£million)¹
1 The above includes capitalised staff costs and excludes share-based payments charge.
221.9
198.9
2023
2022
2 See consolidated income statement for more information.
(296.7)
(31.9)
-830%
Loss before tax
(£million)²
Non-executive Directors’ dates of appointment
All Non-executive Directors have letters of appointment in place with remaining terms as follows, subject to re-appointment at the Company’s
Annual General Meeting:
Non-executive Director Date of appointment Notice period
Appointment end date
inaccordance with letter
ofappointment
1
Total length of service
as at 3 September
2023
Jørgen Lindemann
2
1 November 2021 3 months 31 July 2025 1 year 10 months
Mai Fyfield
3
1 November 2019 3 months 31 October 2025 3 years 10 months
Wei Gao 1 February 2023 3 months 31 January 2026 7 months
Marie Gulin-Merle 1 February 2023 3 months 31 January 2026 7 months
Natasja Laheij 11 April 2023 3 months 10 April 2026 5 months
Jose Manuel Martínez Gutiérrez 11 April 2023 3 months 10 April 2026 5 months
Nick Robertson
4
6 June 2000 3 months 31 August 2024 23 years 3 months
Anna Maria Rugarli 26 June 2023 3 months 25 June 2026 2 months
William Barker
5
20 September 2023 3 months 19 September 2026 –
1 All Non-executive Directors’ appointments are subject to their re-election at the AGM each year.
2 Jørgen Lindemann was appointed as Chair of the Board on 1 August 2022 following initial appointment to the Board as Non-executive Director on 1 November 2021.
3 Mai Fyfield was initially appointed for a three-year term commencing 1 November 2019 which was extended for a subsequent three years in October 2022.
4 Nick Robertson is the Founder and former CEO of ASOS. He stepped down from the role of CEO and assumed the role of Non-executive Director on 1 September 2015.
5 William Barker was appointed post-period end.
Annual Report on Remuneration continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202392
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Overview of Remuneration Committee
Composition of the Remuneration Committee
The Remuneration Committee currently comprises three independent Non-executive Directors: Mai Fyfield (Chair), Marie Gulin-Merle and
Natasja Laheij. Karen Geary, Patrick Kennedy and Eugenia Ulasewicz also served on the Committee for part of the year (Karen Geary as Chair).
Appropriate members of the management team, as well as the Committee’s advisors, are invited to attend meetings as appropriate, unless there
is a potential conflict of interest. The remuneration of Non-executive Directors, other than the Chair, is determined by the Chair of the Board and
the Executive Directors.
Committee composition and effectiveness
Details of the Committee’s experience can be found on pages 55 and 56. As explained on page 67, the annual evaluation of the Board and its
Committees was delayed for FY23 and has not yet completed.
Advisors to the Remuneration Committee
The Committee has engaged the external advisors listed below to help it meet its responsibilities.
Committee advisor
• Deloitte has been the independent advisor to the Committee since 2019 and were appointed by the Committee following a competitive tender
process. Deloitte are signatories to the Remuneration Consultants’ Code of Conduct, and the Committee is satisfied that the advice that it
receives is objective and independent. Total fees for advice provided to the Committee were £59,450 in the period to 3 September 2023 on
a time and materials basis. The Deloitte engagement partner and advisory team that provide remuneration advice to the Committee do not
have any connections with the Group or individual Directors that may impair their independence. Separately, during the year other parts of
Deloitte also advised the Group in relation to financial advisory, consulting, taxation, accounting services and financial modelling support
aspart of business planning and analysis.
• When required, ASOS also received advice relating to remuneration matters from Slaughter and May on reward and legal matters
respectively. As a matter of course, the Committee also received advice and assistance as needed from our Interim Chief People Officer,
Reward Director, General Counsel & Company Secretary and Executive Directors.
Key areas of focus for the year ahead
• Engaging with shareholders in relation to our approach to remuneration for FY25.
• Approve package for new CFO (at time of appointment).
• Review and approve any salary increases for the Executive Committee.
• Determine FY24 annual bonus outcome and FY22 ALTIS awards vesting.
• Approve any bonus, ALTIS or other awards intended to operate during FY25.
• Continue to monitor regulatory and legislative developments.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 93
Directors’ Report
The Directors present their report, together with the audited financial
statements for the period ended 3 September 2023.
Results and dividends
The Group’s results for the period ended 3 September 2023 are set out
on pages 100 to 159.
As last year, the Directors do not recommend the payment of a dividend
(2022: £nil).
Strategic Report
This is set out on pages 2 to 53 of the Annual Report and includes an
indication of likely future developments.
Corporate Governance
Our Corporate Governance Statement setting out how the Company
has complied with the UK Corporate Governance Code 2018 (the
“Code”) can be found on page 61. A description of the composition and
activities of the Board and its Committees, including our approach to
diversity, is set out on pages 61 and 65. A full version of the Code is
available from the Financial Reporting Council website at frc.org.uk.
Risk management and principal risks
A description of the main features of our internal control and risk
management arrangements in relation to the financial reporting
process can be found on pages 73 to 74. A description of the principal
risks facing the business, and the Group’s approach to managing those
risks, is on pages 44 to 51. Information on the Group’s foreign currency
risks is set out in Note 22 of the financial statements.
Significant events since the end of the financial period
Information on post balance sheet events can be found in Note 29 on
page 159.
Share capital
The issued share capital of the Company as at 31 October 2023, being
the last practicable date prior to this report, was 119,236,850 ordinary
shares of 3.5 pence each. Details of the authorised and issued share
capital, together with the details of shares issued during the period to
3 September 2023, are shown in Note 21 to the financial statements.
As far as the Company is aware, there are no restrictions on the voting
rights attaching to the Company’s ordinary shares and the Company is
not aware of any agreements which may result in restrictions in the
transfer of securities or voting rights.
No securities carry any special rights.
Powers for the acquisition of the Company’s own shares
The Company was also authorised by shareholders the AGM in January
2023 to replace the existing authority (as granted by shareholders at
the AGM held on 7 December 2021) to purchase its own shares in the
market up to a maximum of 5% of the issued share capital of the
Company (excluding treasury shares). No shares were bought back
under this authority during the financial period to 3 September 2023.
This is a standard authority which is renewable annually and the
Directors will be seeking to renew this authority at the next AGM.
Directors and their interests
The following Directors have held office since 1 September 2022 and up
to the date of this report:
Name Date of appointment/resignation
Jørgen Lindemann 1 November 2021
José Antonio Ramos Calamonte 16 June 2022
Mai Fyfield 1 November 2019
William Barker 20 September 2023
Wei Gao 1 February 2023
Marie Gulin-Merle 1 February 2023
Natasja Laheij 11 April 2023
Jose Manuel Martínez Gutiérrez 11 April 2023
Nick Robertson 6 June 2000
Anna Maria Rugarli 26 June 2023
Mat Dunn Stepped down on 31 October 2022
Patrick Kennedy Stepped down on 5 April 2023
Karen Geary Stepped down on 1 December 2022
Luke Jensen Stepped down on 31 October 2022
Eugenia Ulasewicz Stepped down on 11 January 2023
Biographies of the Directors as at the date of this report are set out
on pages 55 to 56.
The general powers of the Directors are contained within UK legislation
and the Company’s Articles of Association (the “Articles”). The
Directors are entitled to exercise all powers of the Company, subject
to any limitations imposed by the Articles or applicable legislation.
The appointment and retirement of Directors is governed by the
Company’s Articles of Association, the UK Corporate Governance
Code 2018, the Companies Act 2006 and other related legislation.
The interests of the Directors, and their persons closely associated, in
the share capital of the Company as at 3 September 2023, along with
details of Directors’ share options and awards, are contained in the
Directors’ Remuneration Report on pages 80 to 93. At no time during
the period did any of the Directors have a material interest in any
significant contract with ASOS or any of its subsidiaries.
We maintain Directors’ and Officers’ liability insurance which gives
appropriate cover for any legal action brought against its Directors.
This was in place throughout the period and up to the date of approval
of the financial statements. The Group has also provided an indemnity
for its Directors, which is a qualifying third-party indemnity provision,
for the purposes of section 234 of the Companies Act 2006 and was
and remains in force as at the date of approval of the financial
statements.
Articles of Association
Our Articles of Association can only be amended by special resolution
of the shareholders and are available for inspection on our website at
asosplc.com.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202394
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Branches
The Group has a branch of ASOS.com Limited registered in the
Netherlands. Further details are provided on page 166, together
with a full list of Group subsidiaries.
Employee Benefit Trust
We use an Employee Benefit Trust to facilitate the acquisition of
ordinary shares in the Company for the purpose of satisfying awards
and options granted under ASOS share schemes. During the financial
period, we used both the Employee Benefit Trust (EBT) and the Link
Trust (LT) to satisfy awards granted under our Save As You Earn, ASOS
Long Term Incentive Scheme (ALTIS) and Share Incentive Plan (SIP)
share schemes:
• The EBT is a discretionary trust, the sole beneficiaries being
employees (including Executive Directors) and former employees
of the Group who have received awards under the Save As You Earn
and ALTIS schemes (or their close relations in the event of their
death). The trustee of the EBT is Apex Financial Services (Trust
Company) Limited, an independent professional trustee company
based in Jersey. Under the terms of the Trust Deed, we fund the
EBT to purchase on the EBT’s own account ordinary shares in the
Company on the open market in return for the EBT agreeing to
use the ordinary shares in the Company that it holds to satisfy
certain outstanding awards and options made under the
Company’s share schemes.
• The LT holds shares awarded under the SIP solely for the benefit of
current employees (including Executive Directors) who participate
in it. The trustee of the SIP is Link Market Services Limited, an
independent professional trustee company based in the United
Kingdom. Under the terms of the Trust Deed, we fund the LT to buy
the shares on the open market and retain those shares on behalf
of the underlying beneficiaries.
Substantial shareholders
As at 29 September 2023, the Company was aware of the following
interests in 3% or more of its ordinary share capital:
Major shareholder Holding
As a % of
issued
shares
Aktieselskabet af 5.5.2010 32,309,749 27.10 %
Camelot Capital Partners LLC 16,722,381 14.02%
Frasers Group Plc
1
12,666,816 10.62%
Hargreaves Lansdown Asset
Management
4,341,636 3.64%
Schroders Plc 3,971,755 3.33%
1 Frasers Group Plc holds further sold put options over 8.49% of ASOS’ existing
share capital which have been disclosed to the market in line with DTR5.3.1.
As at 29 September 2023, the EBT and LT (combined) held 228,814
shares in the Company (2022: 229,182 shares). The EBT and LT are both
recognised within the EBT reserve for accounting purposes.
The Group’s accounting policies are detailed within Note 2 to the
financial statements and movements are detailed in the Consolidated
Statement of Changes in Equity on page 111.
Employees with disabilities
We are an inclusive employer and continue to belong to the Disability
Confident scheme. We are committed to taking the right steps in
ensuring our recruitment, training and development processes and
culture remain accessible for people with disabilities.
We operate with a diverse sourcing approach, fully embedded into our
talent acquisition team’s recruitment process, offering guaranteed
interviews to any candidates with disabilities or neurodiverse conditions,
who meet the minimum eligibility criteria for the role. Along with
creating more inclusive job advertisement templates, we’ve launched
hiring manager training to support those making recruitment decisions
in understanding inclusive best practice, including around biases, within
a candidate’s interview process.
See pages 14 to 15 for more information.
Research and development
The Group undertakes research and development activities in relation
to software development. The deferred tax impact on Research and
Development tax relief claimed on qualifying spend is disclosed in Note 9.
Political donations
No political donations have been made during this financial period
(2022: £nil).
Annual General Meeting
A separate circular providing the Notice of Annual General Meeting
and details of the resolutions to be put to the meeting will be sent to
shareholders in due course and will be available to view on asosplc.com.
Statement on disclosure of information to auditors
The Directors confirm that, so far as each is aware, there is no relevant
audit information of which the Group’s auditors are unaware. Each
of the Directors has taken all the steps he or she should have taken
as a Director, to make himself or herself aware of any relevant audit
information and to establish that the Group’s auditors are aware of
that information.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 95
Independent auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their
willingness to continue in office and a resolution that they be re-
appointed will be proposed at the next AGM.
Environmental, Social and Governance (ESG) disclosures
Details of our ESG commitments are on pages 16 to 30.
Additional disclosures
Information that is relevant to this report, and which is also incorporated
by reference, including information required in accordance with the UK
Companies Act 2006 and Listing Rule 9.8.4R, can be found as follows:
Annual Report
pagereference
Post balance sheet events (if applicable) 159
Likely future developments in the business 42
Financial instruments and financial risk
management
144 to 152
Risk management and principal risks 44 to 45, 73 to 74
Corporate Governance Report 54 to 98
Employee engagement 14 to 15, 35, 68
Stakeholder engagement and s.172 statement 34 to 37
Viability Statement & Going Concern 52 to 53, 113
Details of long-term incentive schemes 154 to 156
Statement of capitalised interest 130
Related party transactions 156
Greenhouse gas emissions, energy
consumption and energy efficiency action
19 to 31
Climate-related disclosures consistent with TCFD 19 to 31
The Company has chosen, in accordance with section 414C(11) of the
Companies Act 2006, and as noted in this Directors’ Report, to include
certain matters in its Strategic Report that would otherwise be
required to be disclosed in this Directors’ Report. The Strategic Report
can be found on pages 2 to 53. Other information requirements set out
in LR 9.8.4R are not applicable to the Company.
Disclaimer
The purpose of this Annual Report is to provide information to the
members of the Company and it has been prepared for, and only for,
the members of the Company as a body, and no other persons.
The Company, its Directors and employees, agents and advisors do
notaccept or assume responsibility to any other person to whom this
document is shown or into whose hands it may come and any such
responsibility or liability is expressly disclaimed.
A cautionary statement in respect of forward-looking statements
contained in this Annual Report appears on the inside back cover of
thisdocument.
By order of the Board
Emma Whyte
Company Secretary
31 October 2023
Directors’ Report continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202396
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Non-financial and sustainability
information statement
The table below constitutes the Company’s non-financial and sustainability information statement as required by sections 414CA and 414CB
of the Companies Act 2006 (as amended by The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022) with
the table disclosed below and other disclosures throughout the Strategic Report. The climate-related financial disclosures of the Company are
contained within the Task Force on Climate-related Financial Disclosures (TCFD) section, on pages 19 to 30 of this Annual Report. Our policies
can be viewed on our website asosplc.com which also contains a wide range of non-financial and sustainability information.
Reporting requirement
Relevant policies and documents
whichgovern our approach Annual Report section Page
Climate change and
sustainability
• Environmental Policy
• Fashion with Integrity (FWI) programme
– Be Net Zero goal
• Task Force on Climate-related Financial
Disclosures (TCFD)
• Streamlined Energy & Carbon Reporting
(SECR)
19 to 30
31
Environmental and social
matters
• Environmental Policy
• FWI programme
• Responsible sourcing policies including
Chemical Policy & Restricted Substances
List, Cotton Sourcing Policy, Animal Derived
Materials Policy
• Policy on Gender Equality in the Supply Chain
• Group Tax Strategy
• Stakeholder engagement
• TCFD
• SECR
• ESG Committee Report
• FWI Report
• Principal risks and opportunities
• Section 172 statement
19 to 30
31
75 to 76
16 to 18
46 to 51
34
ASOSers • Code of Conduct
• Health & Safety Policy
• Whistleblowing Policy
• FWI programme – Be Diverse
• Our people
• Stakeholder engagement
• Governance Report –Engagement
with ASOSers
• FWI Report
• Directors’ Report – Employees
with disabilities
12 to 15
34 to 37
68
16 to 18
95
Human rights • Modern Slavery Statement
• Anti-Slavery & Human Trafficking Policy
• Child Labour Remediation & Young
Worker Policy
• Freedom of Association and Collective
Bargaining Policy
• Migrant Workers Policy
• Global framework agreement with
IndustriALL
• Whistleblowing Policy
• FWI Report
• Stakeholder engagement
• Principal risks and opportunities
16 to 18
34 to 37
46 to 51
Anti-bribery & corruption • Code of Conduct
• Anti-Bribery & Corruption Policy
• Gifts & Entertainment Policy
• Audit Committee Report
• Directors’ Report
69 to 74
94 to 96
Risk management • Risk Management Standard
• ASOS Risk Taxonomy
• Risk management
• Principal risks and opportunities
• TCFD – climate-related risks
44 to 45
46 to 51
27
Business model • Business model 6 to 7
Non-financial KPIs • KPIs
• FWI Strategy
32 to 33
16 to 18
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 97
Statement of
Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have prepared
the Group financial statements in accordance with UK-adopted
international accounting standards. The Directors have also chosen
to prepare the Parent Company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including Financial
Reporting Standard (FRS) 101 Reduced Disclosure Framework.
Under Company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting
standards have been followed for the Group financial statements,
and United Kingdom Accounting Standards, comprising FRS 101
have been followed for the Company financial statements,
subject to any material departures disclosed and explained in
the financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation and regulation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation and regulation in other
jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s and
Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the
Governance Report confirm that, to the best of their knowledge:
• the Group and Company financial statements, which have been
prepared in accordance with the relevant financial reporting
framework, give a true and fair view of the assets, liabilities and
financial position of the Group and Company, and of the loss of
the Group; and
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group
and Company, together with a description of the principal risks
and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report
is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors are
unaware; and
• they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
auditors are aware of that information.
Emma Whyte
Company Secretary
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 202398
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
100 Independent Auditors’ Report to the Members of ASOS plc
Consolidated financial statements
108 Consolidated Income Statement
109 Consolidated Statement of Comprehensive Income
110 Consolidated Balance Sheet
111 Consolidated Statement of Changes in Equity
112 Consolidated Cash Flow Statement
113 Notes to the Consolidated Financial Statements
Company financial statements
160 Company Balance Sheet
161 Company Statement of Changes in Equity
162 Notes to the Company Financial Statements
166 Related Undertakings of the ASOS Group
167 Alternative Performance Measures (APMs)
171 Company Information
172 Shareholder Information
Financial Statements
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 99
Report on the audit of the financial statements
Opinion
In our opinion:
• ASOS Plc’s group financial statements and company financial statements (the “financial statements”) give a true and fair view of the state
of the group’s and of the company’s affairs as at 3 September 2023 and of the group’s loss and the group’s cash flows for the period from
1 September 2022 to 3 September 2023;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied
in accordance with the provisions of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2023 (the “Annual Report”), which comprise: the
Consolidated and Company Balance Sheets as at 3 September 2023; the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated Cash Flow Statement, and the Consolidated and Company Statements of Changes in Equity for the
period then ended; and thenotes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under
ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements
inthe UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 6 to the financial statements, we have provided no non-audit services to the company or its controlled
undertakings in the period under audit.
Our audit approach
Overview
Audit scope • We performed full scope audit procedures over the following two components: ASOS Plc, the parent entity that
holds investments throughout the Group, and ASOS.com Limited, the trading entity that generates more than
96% of the Group’s revenue.
• Additionally, we performed a financial statement line item audit over the convertible debt and related interest
balances in Cornwall (Jersey) Limited, and over the acquired brand and customer relationship intangible assets
and related amortisation balances in ASOS Holdings Limited.
• Taken together, the entities over which full scope audit work was performed accounted for 96% of the Group’s
revenue and 95% of the Group’s loss before tax.
Key audit matters • Capitalisation of internal staff costs (group)
• Valuation of inventory (group)
• Going concern assessment in response to economic uncertainties (group)
• Classification of adjusting items (group)
• Carrying value of assets (group and parent)
Materiality • Overall group materiality: £10,600,000 (2022: £11,500,000) based on 0.3% of revenue.
• Overall company materiality: £9,000,000 (2022: 9,100,000) based on 1% of total assets.
• Performance materiality: £7,950,000 (2022: £8,625,000) (group) and £6,750,000 (2022: £6,825,000) (company).
Independent auditors’ report to the members
of ASOS Plc
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ANNUAL REPORT AND ACCOUNTS 2023100
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Carrying value of assets and Classification of adjusting items are new key audit matters this year. Otherwise, the key audit matters below are
consistent with last year.
Key audit matter How our audit addressed the key audit matter
Capitalisation of internal staff costs (group)
Refer to Notes 7 and 11 in the financial statements.
The Group continued to invest in its operational infrastructure
having spent £126.5m (2022: £120.5m) on intangible assets. Within
capital additions are £58.3m (2022: £51.0m) of internal staff costs,
which primarily relate to intangible assets.
This was an area of focus due to the magnitude of the costs
capitalised and the judgement involved in assessing whether the
criteria set out in IAS 38 for the capitalisation of elements of these
costs had been met. In particular, we focussed on the capitalisation
of internal staff costs to confirm that costs capitalised were an
accurate reflection of actual costs incurred and the associated
time was spent on projects which met the criteria to be capitalised.
We further assessed whether the costs were appropriately moved
out of assets under construction and appropriately amortised/
depreciated from the point at which they came into operational use.
We gained an understanding through walkthroughs and enquiries
performed with management of the process in place for evaluating
approval for staff time capitalised to capital projects. We performed
substantive testing over new projects in the year to assess whether
they met capitalisation criteria, including inquiring with management,
and inspecting evidence of criteria assessments, such as in capex
funding forms. We also obtained an understanding of the various
selected capitalised projects, inspected timesheet data to corroborate
time charged on projects, and reviewed management’s assessment to
determine whether sufficient economic benefits were likely to flow from
the projects to support the values capitalised.
For a number of projects, we assessed whether they had been
appropriately included within assets under construction at year-end.
We further confirmed that amortisation/depreciation commenced on
these projects at rates consistent with the Group’s accounting policies
once the respective projects became operational.
Based on the procedures performed, we noted no material issues
arising from our work.
Valuation of inventory (group)
Refer to Note 15 in the financial statements.
As at 3 September 2023, the Group held gross inventories of
£892.4m (2022: £1,109.7m), against which a provision of £124.4m
(2022: £31.3m) had been recorded.
The nature of the Group’s business model is to service demand in a
dynamic and fast moving fashion market which means there is a risk
of inventory falling out of fashion and proving difficult to sell above
cost. The Group’s provisioning policy is based on the estimated
future net realisable value of inventories. The Group’s methodology
to calculate inventory provisions has been updated this year to
include provisions for inventory which is expected to be sold via
offsite channels as well as through the website. Provisions are
calculated using estimates of loss rates and website sell through
rates, both of which are calculated based on historical data from
the prior 12 month’s sales when categorizing the stock by price
status and age banding. A subsequent review is performed by
management based on the year end price status and forecast
mark down rates, as linked to the approved FY24 budget, to assess
the sufficiency of the provision.
The provisions held at 3 September 2023 also include a provision
for the specific write down of inventory, identified to be sold via
off-site channels to facilitate the Group’s transition to its new
commercial model which commenced in the current period.
The quantum of the total inventory balance and the level of
judgement involved to ensure that inventories are stated at the
lower of cost and net realisable value made this an area of focus.
We reviewed management’s provisioning policy and the resulting
provisions applied, which include significant elements relating to:
• Forecast loss rates for inventory expected to be sold via the website;
• Forecast loss rates for inventory expected to be sold via offsite
channels; and
• A specific write down of inventory, identified to be sold via off-site
channels to facilitate the Group’s transition to its new commercial
model.
We tested the mathematical integrity of management’s provision
calculations. We validated the inputs into the models including verifying
the inventory quantity and values for various elements making up the
overall inventory provision, and confirmed the accuracy of the data
used. We recalculated the net losses incurred, used to determine the
historical loss experience, for a sample of transactions in the year and
obtained corroborating evidence to validate their selling price and cost.
We have reviewed management’s assessment of the year end price
status and forecast mark down rates, as linked to the approved FY24
budget. We recalculated the forecast net losses and for a sample of
inventory items obtained corroborating evidence to validate their selling
price and cost. We have also reviewed the post year end losses as part
of this assessment.
Based on the procedures performed, we noted no material issues
arising from our work.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 101
Key audit matter How our audit addressed the key audit matter
Going concern assessment in response to economic
uncertainties (group)
In order to conclude whether it is appropriate for the financial
statements to be prepared on a going concern basis, management
prepared a base case forecast for a period of 18months from the
balance sheet date. In addition they modelled asevere but
plausible downside case which included cost reductions that could
be achieved from mitigating actions within the group’s control.
We focused on this area given the importance of the going concern
judgement in the context of the basis of preparation of the financial
statements and recognising the degree of estimation inherent in
management’s forecasts. We evaluated management’s going concern
assessment and we performed testing procedures as detailed in the
“Conclusions relating to Going Concern” section below.
Classification of adjusting items (group)
Refer to note 3 in the financial statements
The Group discloses an adjusted measure of profit in order to
provide shareholders with additional insight into the year-on-year
performance of the business. Adjusted loss before tax of £70.3m
(2022: profit before tax of £22.0m) is presented against an IFRS
measure of loss before tax of £296.7m (2022: £31.9m).
The £226.4m (2022: £53.9m) of adjusted items before tax are
those which are significant either by virtue of their size and/or
nature, the inclusion of which could, in management’s view, distort
comparability between periods to either reported performance or
individual financial statement line items.
The quantum of adjusting items and the level of judgement involved
to ensure that performance of the business is not distorted made
this an area of focus.
We have performed audit procedures to test the magnitude of the
charge on a sample basis across all elements of the adjusting items. As
part of this sample testing we also understood the nature of the items
and management’s rationale for classification as an adjusting item.
We have considered whether the disclosure as adjusting items is
appropriate taking account of the size and nature of the items and
management’s disclosed accounting policy.
Based on the procedures performed, we noted no material issues
arising from our work.
Carrying value of assets (group and parent)
Refer to Note 14 in the Group financial statements and Note 3 in
the Company financial statements.
As at 3 September, the Group had balances relating to Goodwill,
Intangibles, Property, Plant and Equipment and Right of use assets
totalling £1,358.3m (2022: 1,415.9m). Due to the Group’s trading
performance in the period and fall in share price, there is an
indicator that these balances might be impaired.
At 3 September 2023, the Company had amounts due from
subsidiary undertakings of £837.9m (2022: £853.5m), of which
£1.4m (2022: £111.0m) was classed as current and £836.5m
(2022: £742.5m) non-current.
There is a risk that the financial condition and performance of the
subsidiary undertakings are not sufficient to support the
recoverability of the amounts due and the assets may be impaired.
Management has assessed the carrying value of these assets using
a value in use model and concluded that no impairment is required.
Due to the fact that the VIU model includes assumptions about
future performance which are judgemental in nature, we determined
this to be a key area of focus.
We have obtained management’s impairment assessment which uses
a value in use model to support the recoverability of the goodwill and
other intangibles, property plant and equipment and right of use assets
in the Group accounts and the intercompany receivable in the Company
accounts and undertook the following procedures:
• We ensured the calculations included within the model were
mathematically accurate and obtained supporting evidence
for the assumptions used ensuring consistency with IAS 36.
• We compared the forecasts used with the latest Board-approved
plans and challenged the key assumptions used within the model
to which the value was most sensitive, including the discount rate,
future revenue growth and improvement in gross profit margin.
In assessing management’s plans, we considered the Group’s
historical forecasting accuracy.
• We used our valuation specialists to assist us in our audit of the
discount rate and long term growth rate used.
• We considered other sources of information to assess whether
management’s conclusion that there was no impairment was
reasonable. This included a consideration of third party industry
reports and other market based valuations.
• We considered the adequacy of management’s disclosure in
respect of the impairment assessment and the key sensitivities
in their estimates.
In relation to the company assessment, in addition to the above
procedures we evaluated management’s expected credit loss
assessment under IFRS 9 in respect of the intercompany receivables.
Based on the procedures performed, we noted no material issues
arising from our work.
Independent Auditors’ Report to the members of ASOS Plc – continued
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ANNUAL REPORT AND ACCOUNTS 2023102
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole,
taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate.
Based on our risk and materiality assessments, we determined which components required an audit of their complete financial information having
consideration to the relative significance of each component to the Group, and the overall coverage obtained over each material line item in the
consolidated financial statements.
Due to its relative contribution to the Group’s revenues and loss before tax, we identified one financially significant component which, in our view,
required an audit of its complete financial information. This was ASOS.com Limited which generated more than 96% of the Group revenue
through sales via the worldwide ASOS websites and wholesale network. In addition, a full scope audit was performed over ASOS Plc being the
parent entity which holds investments throughout the Group. We performed audit procedures over the convertible debt and related interest
balances in the Cornwall (Jersey) Limited entity, and over the acquired brand intangible assets and related amortisation balances in ASOS
Holdings Limited, in order to achieve appropriate audit coverage over these material financial statement line items. All work over these
components was performed by the Group engagement team. Further central procedures were performed over tax, treasury, legal claims, lease
liability and associated right-of-use asset balances, property, plant and equipment and other intangible assets, goodwill, going concern, the
Group’s consolidation and the financial statement disclosures. This provided the evidence we needed for our opinion on the consolidated financial
statements taken as a whole.
Taken together, the components where we performed our audit work accounted for 96% of the Group’s revenue and 95% of the Group’s loss
before tax. This was before considering the contribution to our audit evidence from performing audit work at the Group level, including
disaggregated analytical review procedures, which covered certain of the Group’s smaller and lower risk components that were not directly
included in our Group audit scope.
Our audit of the Company financial statements included substantive procedures over all material balances and transactions.
The impact of climate risk on our audit
As part of our audit procedures, we have considered the potential impact of climate change on the Group’s business and its financial statements.
The Group continues to develop its assessment of the potential impacts of climate change as explained throughout the Strategic Report and in
more detail on pages 19 to 30.
As part of our audit, we have obtained management’s climate-related risk assessment and held discussions with management, together with
our own climate change experts, to understand the process of identifying climate related risks, the determination of mitigating actions and the
impact on the Group’s financial statements.
Management has assessed that the most likely impacted financial statement line items and estimates are those associated with future cash
flows since the impact of climate change is expected to become more notable in the medium to long term.
While auditing these forecast cash flows, we have considered the impact of climate change and any climate change related commitments on
the potentially impacted financial statement line items.
We have not identified any matters as part of this work which are inconsistent with the disclosures in the Annual Report or would lead to any
material adjustments to the financial statements.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 103
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality £10,600,000 (2022: £11,500,000). £9,000,000 (2022: 9,100,000).
How we determined it 0.3% of revenue 1% of total assets
Rationale for
benchmark applied
In determining materiality, we considered both loss before tax
and revenue as the acceptable benchmarks. We considered loss
before tax to be an appropriate benchmark due to the Group’s
focus on delivering an acceptable short-term return. We
considered total revenue to be appropriate given the focus of
investors on revenues and top line growth. This provided a wide
range of acceptable materiality levels. In our judgement, the
Group is currently experiencing volatile profits or losses but less
volatile revenues and their operations remain largely consistent
year on year. We therefore consider revenue to remain an
appropriate benchmark to use, The materiality selected
therefore is consistent at approximately 0.3% of revenue based
on which we determined a materiality of £10,600,000.
ASOS Plc is the ultimate parent entity which
holds the Group’s investments. Therefore, the
entity is not in itself profit-oriented. We consider
total assets to be an appropriate benchmark as
it reflects the nature of the Company, which
primarily acts as a holding company for the
Group’s investments.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of
materiality allocated across components was between £4,020,000 and £10,070,000. Certain components were audited to a local statutory
audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and
extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance
materiality was 75% (2022: 75%) of overall materiality, amounting to £7,950,000 (2022: £8,625,000) for the group financial statements and
£6,750,000 (2022: £6,825,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors –the history of misstatements, risk assessment and aggregation
risk and the effectiveness of controls –and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £530,000 (group audit)
(2022: £575,000) and £450,000 (company audit) (2022: £575,000) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Independent Auditors’ Report to the members of ASOS Plc – continued
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Conclusions relating to going concern
The going concern assessment was identified as a key audit matter as set out in the ‘Key audit matters’ section above.
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of
accounting included:
• Assessing management’s going concern model, including the base case and the severe but plausible downside case;
• Testing the reasonableness of key assumptions including sales growth and estimated gross margins based on historical performance and
external market data;
• Understanding the impact of foreign exchange sensitivities on the cash flows;
• Considering the magnitude and feasibility of the mitigations available in the downside case and whether these are in the control of
management;
• Considering various aspects of the business model that could impact the Group’s liquidity;
• Considering the severity of the downside scenario based on historic experience;
• Reperforming a number of reverse stress tests to determine the magnitude of changes needed to key assumptions to result in there being
no liquidity headroom;
• Assessing the historical reliability of management’s forecasting by comparing budgeted results to actual performance;
• Validating that the cash flow forecasts used to support management’s impairment, going concern and viability assessments were consistent;
• Reviewing the terms of the facility agreement with the lenders and ensuring that management’s calculations of headroom against the
minimum liquidity covenant were accurate; and
• Reviewing the related disclosures in the Annual Report and Accounts.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the company’s
ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon.
The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act 2006
have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ Report for
the period ended 3 September 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic report and Directors’ Report.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 105
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code specified for our review.
Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to
add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s ability to continue to do so
over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and why the
period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet
its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope than an audit
and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in
alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the
financial statements and our knowledge and understanding of the group and company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the
information necessary for the members to assess the group’s and company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the
Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related
to UK and overseas tax legislation and the Companies Act 2006, and we considered the extent to which non-compliance might have a material
effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
Independent Auditors’ Report to the members of ASOS Plc – continued
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ANNUAL REPORT AND ACCOUNTS 2023106
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statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal
entries to manipulate the financial performance of the Group and management bias in accounting estimates and judgements. Audit procedures
performed by the engagement team included:
• Enquiry of management, Internal Audit and the Group’s legal counsel around known and suspected fraud and non-compliance with laws and
regulations;
• Assessment of matters reported on the Group’s whistleblowing helpline and results of management’s investigation of such matters;
• Enquiry of the Group’s tax function to identify any instances of non-compliance with laws and regulations;
• Identifying and testing higher risk journal entries, in particular certain journal entries posted with unusual account combinations and journals
posted by senior management (of which none were identified);
• Incorporating elements of unpredictability to the nature or extent of audit procedures performed by us;
• Challenging assumptions made by management in its significant and other key accounting estimates in particular in relation to inventory
provisions; and
• Reviewing financial statement disclosures and testing to supporting documentation.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with
laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting
a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment
by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16
of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches
not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting
records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were appointed by the members to audit the financial statements for the year ended 31 March 2008 and subsequent financial periods.
The period of total uninterrupted engagement is 16 years, covering the years ended 31 March 2008 to 3 September 2023.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements form part of
the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report has
been prepared using the single electronic format specified in the ESEF RTS.
Neil Grimes (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
31 October 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 107
1 September 2022 to 3 September 2023 | Year ended 31 August 2022 | ||||||
| Adjusting items | Adjusting items | ||||||
| Adjusted | (Note 3) | Total | Adjusted | (Note 3) | Total | ||
| Note | £m | £m | £m | £m | £m | £m | |
Revenue | 4 | ||||||
| Cost of sales | ( | ( | ( | ( | ( | ||
| Gross profit | ( | ||||||
Distribution expenses | ( | ( | ( | ( | |||
| Administrative expenses | ( | ( | ( | ( | ( | ( | |
| Other income | |||||||
Operating (loss)/profit | 6 | ( | ( | ( | ( | ( | |
Finance income | 8 | ||||||
Finance expense | 8 | ( | ( | ( | ( | ( | |
| (Loss)/profit before tax | ( | ( | ( | ( | ( | ||
Income tax credit/(expense) | 9 | ( | |||||
(Loss)/profit for the financial period | ( | ( | ( | ( | ( | ||
(Loss) per share | pence per share | pence per share | |||||
Basic per share | 10 | ( | ( | ||||
Diluted per share | 10 | ( | ( |
All activities in the current and prior period are continuing.
The notes on pages 113 to 159 form an integral part of these financial statements.
Consolidated Income Statement
For the financial period 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023108
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Note
| 1 September | |||
| 2022 to | Year ended | ||
| 3 September | 31 August | ||
| 2023 | 2022 | ||
| £m | £m | ||
Loss for the financial period | ( | ( | |
| Items that will not be reclassified to Group income statement | |||
Net fair value (losses)/gains on cash flow hedges | 24 | ( | |
Tax on items that will not be reclassified | 9 | ( | |
( | |||
| Items that may be subsequently reclassified to Group income statement | |||
Net translation movements offset in reserves | ( | ||
Net fair value gains/(losses) on cash flow hedges | 24 | ( | |
Fair value movements reclassified from cash flow hedge reserve to Group income statement | 24 | ( | |
Tax on items that may be reclassified | 9 | ( | |
( | |||
Other comprehensive (loss)/income for the period | ( | ||
Total comprehensive loss for the period attributable to owners of the parent company | ( | ( | |
The notes on pages 113 to 159 form an integral part of these financial statements.
Consolidated Statement of
Comprehensive Income
For the financial period 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 109
Note
| 3 September | 31 August | ||
| 2023 | 2022 | ||
| £m | £m | ||
| Non-current assets | |||
Goodwill and other intangible assets | 11 | ||
Property, plant and equipment | 12 | ||
Right-of-use assets | 13 | ||
Investment Properties | 13 | ||
Derivative financial assets | 24 | ||
Deferred tax assets | 9 | ||
| Current assets | |||
Inventories | 15 | ||
Trade and other receivables | 16 | ||
Derivative financial assets | 24 | ||
Cash and cash equivalents | 17 | ||
Current tax assets | |||
| Current liabilities | |||
Trade and other payables | 18 | ( | ( |
Borrowings | 19 | ( | ( |
Lease liabilities | 13 | ( | ( |
Derivative financial liabilities | 24 | ( | ( |
Provisions | 20 | ( | |
( | ( | ||
Net current assets | |||
| Non-current liabilities | |||
Borrowings | 19 | ( | ( |
Lease liabilities | 13 | ( | ( |
Deferred tax liabilities | 9 | ( | |
Derivative financial liabilities | 24 | ( | ( |
Provisions | 20 | ( | ( |
( | ( | ||
Net assets | |||
| Equity attributable to owners of the parent | |||
Called up share capital | 21 | ||
Share premium | 21 | ||
Other reserves | 21 | ||
Retained earnings | |||
Total equity |
The notes on pages 113 to 159 form an integral part of these financial statements.
The consolidated financial statements of ASOS Plc, registered number 4006623, on pages 99 to 159, were approved by the Board of Directors
and authorised for issue on 31 October 2023 and were signed on its behalf by:
José Antonio Ramos Calamonte
Chief Executive Officer
Consolidated Balance Sheet
As at 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023110
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Note
| Called up | Share | Other | Retained | Total | ||
| share capital | premium | reserves | earnings | equity | ||
| £m | £m | £m | £m | £m | ||
As at 1 September 2022 | ||||||
Loss for the period | ( | ( | ||||
Other comprehensive loss for the period | ( | ( | ||||
Total comprehensive loss for the period | ( | ( | ( | |||
Cash flow hedges gains and losses transferred to non-financial assets | 24 | |||||
Share issue | 21 | |||||
Share-based payments charge | 25 | |||||
Tax relating to share option scheme | 9 | |||||
Balance as at 3 September 2023 | ||||||
As at 1 September 2021 | ||||||
Loss for the year | ( | ( | ||||
Other comprehensive income for the year | ||||||
Total comprehensive income/(loss) for the year | ( | ( | ||||
Cash flow hedges gains and losses transferred to non-financial assets | 24 | |||||
Share-based payments charge | 25 | |||||
Tax relating to share option scheme | 9 | ( | ( | |||
Balance as at 31 August 2022 |
Retained earnings includes the share-based payments reserve, and employee benefit trust reserve.
Consolidated Statement of Changes in Equity
For the financial period 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 111
Note
| 1 September | |||
| 2022 to | Year to | ||
| 3 September | 31 August | ||
| 2023 | 2022 | ||
| £m | £m | ||
Operating loss | ( | ( | |
| Adjusted for: | |||
Depreciation of property, plant and equipment, right-of-use assets and investment property | 6 | ||
Amortisation of other intangible assets | 6 | ||
Impairment charges on non-financial assets | 6 | ||
Share-based payments charge | 25 | ||
Other non-cash items | ( | ||
Settlement of contingent consideration in relation to employee benefits | ( | ||
Decrease/(increase) in inventories | ( | ||
Decrease/(increase) in trade and other receivables | ( | ||
(Decrease)/increase in trade and other payables | ( | ||
Increase/(decrease) in provisions | ( | ||
Cash used in operating activities | ( | ( | |
Net income tax received | |||
Net cash generated from/(used in) operating activities | ( | ||
| Investing activities | |||
Purchase of other intangible assets | ( | ( | |
Purchase of property, plant and equipment | ( | ( | |
Interest received | |||
Net cash used in investing activities | ( | ( | |
| Financing activities | |||
Proceeds from issue of ordinary shares | 21 | ||
Proceeds from borrowings | 19 | ||
Drawdown of revolving credit facility | 19 | ||
Repayment of borrowings | 19 | ( | |
Refinancing fees | 19 | ( | |
Repayment of principal portion of lease liabilities | 13 | ( | ( |
Interest paid | ( | ( | |
Net cash generated from/(used in) financing activities | ( | ||
Net increase/(decrease) in cash and cash equivalents | ( | ||
Opening cash and cash equivalents | |||
Effect of exchange rates on cash and cash equivalents | ( | ||
Closing cash and cash equivalents | |||
Consolidated Cash Flow Statement
For the financial period 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023112
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
2 SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES
Notes to the Consolidated Financial Statements
For the financial period 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 113
Notes to the Consolidated Financial Statements – continued
2 SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023114
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
2 SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 115
Notes to the Consolidated Financial Statements – continued
2 SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023116
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
3 ADJUSTED PROFIT BEFORE TAX
In order to provide shareholders with additional insight into the year-on-year performance of the business, an adjusted measure of profit is
provided to supplement the reported IFRS numbers, and reflects how the business measures performance internally. Adjusted items are those
which are significant either by virtue of their size and/or nature, the inclusion of which could distort comparability between periods. The
assessment is made both on an individual basis and, if of a similar type, in aggregate.
Critical accounting judgement – identification of adjusted items
The assessment of whether to adjust certain items requires judgement, and covers the nature of the item, the cause of its occurrence and the
scale of impact of that item on reported performance and individual financial statement line items, as well as consistency with prior periods.
The same assessment is applied consistently to any reversals of prior adjusting items. Adjusted profit before tax (and similarly adjusted EBIT)
is not an IFRS measure and therefore not directly comparable to other companies.
The consolidated income statement is presented in a columnar format to enable users of the financial statements to see the Group’s
performance before adjusting items, the adjusting items, and the statutory total on a line-by-line basis. An analysis of the adjusting items
included in the consolidated income statement, together with the impact of these items on the consolidated cash flow statement, is disclosed
below.
1 September 2022 to
3 September 2023
Revenue
£m
Cost of sales
£m
Administrative
expenses
£m
Finance
expenses
£m
Total
adjustments
before tax
£m
Tax
£m
Total
£m
Driving change agenda
Commercial operating
model change
11.5 (130.0) (14.7) – (133.2) 33.2 (100.0)
Property-related costs – – (60.2) (0.5) (60.7) 15.2 (45.5)
Other strategic
initiatives
– – (24.6) (6.4) (31.0) 7.4 (23.6)
Amortisation of
acquisition intangibles
– – (10.7) – (10.7) 2.7 (8.0)
Other items – 14.1 (4.9) – 9.2 (2.3) 6.9
11.5 (115.9) (115.1) (6.9) (226.4) 56.2 (170.2)
Year to 31 August 2022
ASOS Reimagined – – (25.4) – (25.4) 4.8 (20.6)
Main Market transition
costs
– – (5.7) – (5.7) (1.1) (6.8)
Impairment of Leavesden
assets
– – (18.5) – (18.5) 2.3 (16.2)
Employee and other
liabilities relating to
acquisition of Arcadia
brands
– – 6.4 – 6.4 (1.2) 5.2
Amortisation of acquired
intangible assets
– – (10.7) – (10.7) 1.6 (9.1)
– – (53.9) – (53.9) 6.4 (47.5)
Driving change agenda
In October 2022, ASOS’ new CEO delivered an assessment of the business’s strengths and weaknesses and launched the Driving Change agenda
to return ASOS to profitability and cash generation. This strategy centred around four pillars:
a) A renewed commercial model: A new approach to buying, merchandising, managing and clearing stock designed to increase flexibility and
improve stock turn, increasing full price sales and generating cash.
b) Stronger order economics and a lighter cost profile: Actions to improve order profitability in all markets while reducing costs in all parts
of the business.
c) Robust, flexible balance sheet: Ensuring sufficient flexibility in the Group’s balance sheet to successfully execute its strategy while aligning
investment with capacity requirements to ensure a more efficient allocation of capital.
d) Enabled by a reinforced leadership team and refreshed culture: Reinforcing the Senior Leadership team with strategic hires while
embedding a more innovative culture at all levels.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 117
Notes to the Consolidated Financial Statements – continued
3 ADJUSTED PROFIT BEFORE TAX – CONTINUED
Various items of income and expenditure have been incurred during the period in relation to this, as outlined below.
Commercial operating model
A key focus for ASOS in FY23 has been the introduction of the new commercial operating model which was approved by the Board during the
current financial period. The new model involves a more disciplined approach to intake, increased speed to market and clearing product more
quickly to reduce the Group’s inventory requirement, increase full price sales and hence gross margin, and improve customer engagement.
To unlock these benefits, the Group must also clear old stock acquired under its previous ways of working. As such and in addition to clearance
via its own platform, ASOS is utilising offsite clearance routes to support its transition to the new model.
To transition to the new model, a reshaping of the inventory portfolio has been required, and as a result additional costs have been recognised
totalling £133.2m. This comprises losses on stock cleared during the period, net of income received of £11.5m, as well as provisions for stock
(either held as at FY22 or committed to purchase as at FY22) that will be sold through alternative clearance channels (i.e. not via the ASOS website).
Extraction and relevant holding costs totalling £14.7m have also been incurred.
Property related costs
During the period it was agreed to vacate a number of Group-occupied sites, including office and warehouse space. As a result, costs of £60.7m
have been incurred, comprising the following:
1 September 2022 to 3 September 2023 £m
Impairment of property, plant and equipment (a) (5.6)
Impairment of intangible assets (a) (1.7)
Impairment of right of use assets (a) (20.0)
Impairment of investment property (a) (1.3)
Accelerated depreciation (b) (7.6)
Exit provisions (c) (18.3)
Other closure costs (d) (6.2)
(60.7)
a) Impairment of assets for sites vacated during the financial period. The related assets have been written off in full.
b) The remaining useful economic lives of corresponding sites have been reassessed to align with closure dates, resulting in an acceleration in
depreciation of these assets. The existing depreciation of these assets (depreciation that would have been recognised absent of a closure
decision) is recognised within adjusted profit, whereas accelerated depreciation above this is recognised outside of adjusted profit.
c) Exit provisions relate to onerous contract costs on leased sites that have been identified for closure. Upon initial recognition of exit provisions,
management uses its best estimates of the relevant costs to be incurred as well as expected closure dates. This excludes business rates on
leased property which are recognised in the period they are incurred. Whilst the properties remain vacant, ongoing expenses relating to lease
interest, onerous provision unwinds and business rates will be reported outside adjusted profit given they do not relate to operational sites of
the Group.
d) Relates to negotiated exit costs to vacate certain leased sites ahead of the lease end date.
Other strategic initiatives
Other priorities for FY23 communicated at the FY22 results included: (i) stronger order economics and a lighter cost profile, (ii) a robust, flexible
balance sheet, and, (iii) a reinforced leadership team and refreshed culture. ASOS has progressed with each of these priorities during the period,
with costs of £31.0m incurred and excluded from adjusted profit. These predominantly relate to external consultancy costs to support the launch
of the programme and the identification of initiatives (£8.9m), severance costs (£7.7m), costs incurred associated with the revolving credit facility
covenant waiver and subsequent refinancing during the year (£8.1m – refer to Note 19 for more detail) and other business restructuring costs
(£6.3m). The Driving Change agenda has replaced the Group’s ASOS Reimagined programme that commenced in the prior year.
Costs incurred last year in relation to ASOS Reimagined totalled £25.4m, bringing cumulative change agenda costs incurred to date to £250.3m
(including the commercial model change and property initiatives), of which £63.0m is cash.
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets is adjusted for as acquisitions are outside business-as-usual operations for ASOS. These assets would
not normally be recognised outside of a business combination, therefore the associated amortisation is adjusted.
Other items
During the period, the Group corrected in-aggregate and individually immaterial items relating to prior years totalling £9.2m.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023118
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Prior year adjusting items
Items recognised outside adjusted profit in the prior year relate to:
• ASOS Reimagined – A multi-year programme to enable the business to accelerate delivery of the strategy and medium-term plan set out at
the Capital Markets Day held on 10 November 2021. This has subsequently been replaced by the Group’s Driving Change agenda.
• Main Market transition costs – ASOS’ transition to the Main Market of the London Stock Exchange, which was completed on 22 February 2022.
• Impairment of Leavesden assets – A non-cash impairment charge relating to the right-of-use assets and associated fixtures and fittings at
part of ASOS’ Leavesden office.
• Employee and other liabilities relating to Arcadia acquisition – The release of a contingent liability relating to employee and other costs,
which was originally recognised as part of the Arcadia acquisition in February 2021.
Classification as adjusting items
Given a number of the costs incurred as part of the above programmes facilitate future ongoing cost savings, it was considered whether it was
appropriate to report these costs within adjusted profit/(loss). Whilst they arise from changes in the Group’s underlying operations, they can
be separately identified, are significant in size/nature and their inclusion within adjusted profit/(loss) does not facilitate meaningful comparison
between financial periods. Furthermore, the costs incurred arise as a result of implementing changes for the future to evolve and reshape the
business and are therefore not reflective of ordinary, in-year trading activity, and for areas being closed or restructured, these operations no
longer relate to the Group’s trading operations. Exclusion from adjusted profit/(loss) is therefore considered appropriate.
Cash flow impact of adjusting items
The total cash flow impact of adjusting items is as follows:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Commercial operating model change 3.5 –
Other strategic initiatives (including ASOS Reimagined) (56.9) (12.5)
Main Market transition costs – (5.7)
Total adjusting items within cash flow (53.4) (18.2)
Other strategic initiatives includes £30.8m fees paid in relation to refinancing included within cash flows from financing activities, as detailed
in Note 19.
An additional property initiative was approved after the balance sheet date for which costs are expected next year that will be excluded from
adjusted profit. Refer to Note 29 for additional information.
4 REVENUE
Accounting policy
Retail sales
Retail sales represent the majority of the Group’s revenue, and consist of internet sales. Revenues are recorded net of an appropriate deduction
for actual and expected returns, relevant vouchers and sales taxes. Revenues for goods are recognised on dispatch to the customer instead of
delivery to the customer for practical reasons. The impact of this is assessed at each reporting period and is immaterial to group revenue and
profits.
It is the Group’s policy to sell its products to the retail customer with a right to return. The value of goods to be returned is estimated based on
historical returns, and is recorded as a deduction to revenue, with a corresponding refund liability recognised within trade and other payables.
A separate right of return asset is recognised and included within inventory which represents the right to recover product from the customer.
The Group does not operate any loyalty programmes. Deferred revenue in relation to gift card redemptions is estimated on the basis of historical
redemption rates, and recognised within revenue in line with redemptions.
3 ADJUSTED PROFIT BEFORE TAX – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 119
Notes to the Consolidated Financial Statements – continued
Revenue from other services
Revenue from other services relates to premier subscription income, marketing income earned from the website, commission income, delivery
receipt payments and revenue recognised in relation to wholesale sales.
Income relating to the Group’s ASOS Premier subscription (which span a year) is recognised on a straight-line basis throughout the year’s
subscription. Income from marketing services is recognised as performance obligations are completed in line with the terms and conditions of
each contract.
For commission income, the Group, as agent, only recognises the commission receivable within revenue, being the net amount of consideration
retained after paying the brand partner the consideration received in exchange for the goods provided by the relevant partner. The assessment
of whether to recognise revenue as principal or agent considers whether the Group controls the relevant goods prior to sale to the end customer.
The level of judgement involved is not considered material to the Group.
In line with retail sales, delivery receipts and wholesale revenue are recognised on dispatch to the customer instead of at delivery. The impact is
not material to the Group’s results.
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Retail sales 3,388.2 3,772.6
Premier subscription income 24.7 24.6
Marketing and other services
1
20.7 17.3
Delivery receipts 72.7 74.5
Wholesale revenue 43.2 47.5
3,549.5 3,936.5
1 Marketing and other services includes commission income
5 SEGMENTAL ANALYSIS
IFRS 8 ‘Operating Segments’ requires operating segments to be identified on the basis of internal reporting on components of the Group that are
regularly reviewed by the chief operating decision-maker to allocate resources to the segments and to assess their performance.
The Chief Operating Decision Maker has been determined to be the Management Committee (renamed from the Executive Committee as part of
the Group’s Driving Change agenda). It is the Management Committee that reviews the Group’s internal reporting in order to assess performance
and allocate resources across the business. In doing so, the Management Committee reviews performance across the Group via a number of
sources, comprising regular monthly management accounts, and ad hoc analysis that provides deep dives into different areas, including
territory, brands and revenue streams.
In determining the Group’s operating segments, management has considered the level of information which is regularly reviewed by the
Management Committee. Information regularly reviewed by the Management Committee is at a consolidated Group level only, with some
disaggregated revenue information and associated metrics provided for the geographical territories of the UK, the US, Europe and the Rest
of the World. However, decisions on resource allocation are not made based on this information. Such decisions are made on ad hoc analysis,
separately provided to the Management Committee, and does not constitute information that is either regularly provided to, nor reviewed by,
the Management Committee. As a result, it has been concluded that the Group has only one operating segment (the Group level).
4 REVENUE – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023120
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Information by Geographical territory is included below in line with the entity-wide disclosure requirements of IFRS 8 ‘Operating Segments’.
1 September 2022 to 3 September 2023
UK
£m
EU
£m
US
£m
Rest of World
£m
Total
£m
Retail sales 1,494.6 1,127.3 443.6 322.7 3,388.2
Income from other services (Note 4) 59.8 29.4 57.5 14.6 161.3
Total revenue 1,554.4 1,156.7 501.1 337.3 3,549.5
Cost of sales (2,090.5)
Gross profit 1,459.0
Distribution expenses (429.7)
Administrative expenses (1,279.8)
Other income 2.0
Operating loss (248.5)
Finance income 5.0
Finance expense (53.2)
Loss before tax (296.7)
Non-current assets
1
994.1 177.9 162.0 – 1,334.0
Year to 31 August 2022
UK
£m
EU
£m
US
£m
Rest of World
£m
Total
£m
Retail sales 1,703.3 1,142 .6 472.7 454.0 3,772.6
Income from other services (Note 4) 59.5 27.4 58.7 18.3 163.9
Total revenue 1,762.8 1,170.0 531.4 472.3 3,936.5
Cost of sales (2,219.0)
Gross profit 1,717.5
Distribution expenses (523.7)
Administrative expenses (1,224.2)
Other Income 20.6
Operating loss (9.8)
Finance income 0.9
Finance expense (23.0)
Loss before tax (31.9)
Non-current assets
1
1,006.7 188.8 185.2 – 1,380.7
1 Non-current assets above exclude goodwill, derivative financial assets and deferred tax assets.
The above presentation is consistent with the analysis provided to the chief operating decision maker within the monthly management accounts.
Due to the nature of its activities, the Group is not reliant on any individual major customers.
5 SEGMENTAL ANALYSIS – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 121
Notes to the Consolidated Financial Statements – continued
6 OPERATING (LOSS)/PROFIT
Operating (loss)/profit is stated after charging/(crediting):
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Depreciation and amortisation:
Property, plant and equipment 31.4 30.7
Right-of-use assets 35.9 30.3
Investment properties 0.5 –
Other intangible assets 104.7 88.8
Impairment of non-financial assets:
Property, plant and equipment 5.6 9.9
Right-of-use assets 20.0 9.3
Investment properties 1.3 –
Other intangible assets 5.2 –
Onerous contract charges 18.3 –
Net foreign exchange gains – (6.3)
7 STAFF COSTS INCLUDING DIRECTORS’ REMUNERATION
The Group’s costs for employees, including Directors, during the period were as follows:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Wages and salaries 192.1 168.9
Social security costs 21.5 22.2
Pension costs 8.3 7.8
Share-based payments charge (Note 25) 6.4 0.8
Gross total 228.3 199.7
Less: staff costs capitalised in relation to capital projects (58.3) (51.0)
170.0 148.7
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023122
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
7 STAFF COSTS INCLUDING DIRECTORS’ REMUNERATION – CONTINUED
The Group’s monthly average number of employees during the period was as follows:
1 September
2022
to 3 September
2023
Year to
31 August
2022
By activity:
Fashion 1,120 1,215
Operations 1,249 1,219
Technology 983 825
3,352 3,259
Despite the increase in average employees since the 2022 financial year, there has been a reduction in employees during the period with 3,405
employees as at 31 August 2022 and 3,042 employees as at 3 September 2023 due to headcount reductions during the period.
The Group contributes to the personal pension plans for enrolled employees under a defined contribution scheme. The costs of these
contributions are charged to the consolidated income statement on an accruals basis as they become payable under the scheme rules.
The aggregate compensation to key management personnel, being the Directors of ASOS Plc (executive and non-executive) and the members
of the Management Committee was as follows:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Short-term employee benefits 5.1 4.8
Post-employment benefits 0.3 0.2
Share-based payments charge/(credit) 0.9 (0.8)
Joining costs and loss of office costs 0.5 –
6.8 4.2
Components of the highest-paid Director’s remuneration are detailed in the Directors’ remuneration table on page 86.
Directors’ aggregate emoluments and pension payments are detailed in the Directors’ Remuneration Report on pages 84 to 93, along with
Directors’ interests in issued shares and share options on page 89.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 123
Notes to the Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023124
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
9 TAXATION – CONTINUED
Reconciliation of tax charge
The effective tax rate of 24.8% (2022: 3.4%) is higher than (2022: lower than) the blended rate of corporation tax in the UK of 21.5% (2022:
19.0%). The blended UK corporation tax rate of 21.5% for the period reflects the increase in rate from 19% to 25% from 1 April 2023. The
differences are explained below:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Loss before tax (296.7) (31.9)
Tax on loss at standard rate of UK corporation tax of 21.5% (2022: 19%) (63.8) (6.0)
Effects of:
Expenses not deductible for taxation purposes 3.9 2.8
Tax incentives (1.1) (1.7)
Rate differences: overseas tax 0.5 0.3
UK tax rate differential (10.0) 2.4
Tax adjustments on share-based payments 0.6 2.7
Adjustment in respect of prior years (3.7) (1.6)
Total tax credit in the income statement (73.6) (1.1)
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The
legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or after 31 December
2023. The Group is currently assessing the impact, and has applied the exception under the IAS 12 amendment for recognising and disclosing
information about deferred tax assets and liabilities related to top-up income taxes.
Tax recognised in other comprehensive income
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Deferred tax charge on net translation movements offset in reserves – 0.6
Deferred tax (credit)/charge on movement of derivative financial instruments (2.0) 3.3
(2.0) 3.9
Tax recognised in the statement of changes in equity
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Deferred tax (credit)/charge on movement in tax base of share options
(0.2) 0.7
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 125
Notes to the Consolidated Financial Statements – continued
9 TAXATION – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023126
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
10 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent company ASOS Plc by the weighted average
number of ordinary shares in issue during the period. Own shares held by the Employee Benefit Trust and Link Trust are excluded from the
weighted average number of ordinary shares.
Diluted earnings per share is calculated by dividing the profit attributable to the owners of the parent company by the weighted average number
of ordinary shares in issue during the period, excluding own shares held, adjusted for the effects of potentially dilutive ordinary shares. The
dilutive impact is calculated as the weighted average of all potentially dilutive ordinary shares. These represent share options granted by the
Group, including performance-based options, where the scheme to date performance is deemed to have been earned. It also includes the number
of shares that would be issued if all convertible bonds are assumed to be converted unless the convertible instrument is out-of-the-money and not
expected to convert. All operations are continuing for the periods presented.
1 September
2022
to 3 September
2023
Year to
31 August
2022
Weighted average share capital
Weighted average shares in issue for basic earnings per share (no. of shares) 104,729,376 99,696,028
Weighted average effect of dilutive options (no. of shares)
1
– –
Weighted average effect of convertible bond (no. of shares)
2
– –
Weighted average shares in issue for diluted earnings per share (no. of shares) 104,729,376 99,696,028
Loss after tax for the financial period (£m)
Loss attributable to owners of the parent company for basic earnings per share (223.1) (30.8)
Interest expense on convertible bonds
1
– –
Diluted loss attributable to owners of the parent company for diluted loss per share (223.1) (30.8)
Basic loss per share (pence per share) (213.0) (30.9)
Diluted loss per share (pence per share) (213.0) (30.9)
1 Dilutive shares and interest not included where their effect is anti-dilutive
2 The impact of convertible bonds on the weighted average share capital has been excluded as it is not assumed they will be exercised
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 127
Notes to the Consolidated Financial Statements – continued
11 GOODWILL AND OTHER INTANGIBLE ASSETS – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023128
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 129
Notes to the Consolidated Financial Statements – continued
Interest capitalised
As at
3 September
2023
£m
As at
31 August 2022
£m
Included within additions 4.8 2.2
Accumulated capitalised interest (net of disposals) included within cost 7.0 2.2
Accumulated capitalised interest (net of disposals) held within net book value 7.0 2.2
Capitalisation rate 5.3% 3.4%
Climate change
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. This includes
consideration over climate change-related risks which may impact the useful lives of the Group’s assets, such as the impact of flood risks on
fulfilment centres. During the year, no changes were made to the remaining useful lives of the Group’s assets as a result of climate change risks.
12 PROPERTY, PLANT AND EQUIPMENT – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023130
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
13 LEASES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 131
Notes to the Consolidated Financial Statements – continued
13 LEASES – CONTINUED
Maturity analysis for lease liabilities
As at
3 September
2023
£m
As at
31 August
2022
£m
Contractual undiscounted cash flows
Within one year 30.5 32.0
Within two to five years 126.2 130.3
Within five to ten years 133.5 152.5
Within ten to fifteen years 52.0 88.2
In more than fifteen years 18.5 26.3
360.7 429.3
Future finance charge on lease liabilities (31.7) (49.2)
Present value of future leases 329.0 38 0.1
Critical accounting judgement – lease terms
The inclusion of a lease extension period or lease break period in the lease term is a key judgement for the Group and considers all relevant
factors that create an economic incentive for it to exercise them. For leased properties, this includes the current and expected profitability of
the respective site, as well as the length of time until the option can be exercised. Any changes to the Group’s judgement over lease terms will
impact both the right-of-use asset and lease liability.
Set out below are the undiscounted future rental payments not currently included within the reported lease liability for where lease extensions
have not been included. The value for where lease breaks have been assumed is nil.
As at
3 September
2023
£m
As at
31 August
2022
£m
Extension options expected not to be exercised 129.2 98.4
Following the commercial model update announced in October 2022, a review of the Group’s leased warehousing estate was conducted, and it
was concluded that it could no longer be seen as reasonably certain that the extension options on one of the Group’s leased sites would be exercised.
The lease term has been reassessed from 15 to 5 years with a commensurate decrease in the right-of-use asset and lease liability of £22.5 million.
Amounts recognised in the consolidated income statement
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Depreciation charge for right-of-use assets and investment property (excluding impairment) (36.4) (30.3)
Interest expense on lease liabilities (5.6) (5.4)
Expense relating to short-term leases (2.3) (0.5)
Expense relating to leases of low value assets that are not shown above as short-term leases (0.4) (0.4)
Impairment charge for right-of-use assets (20.0) (9.3)
Sub-let income relating to leases under IFRS 16 1.4 0.9
Total amounts recognised in income statement (63.3) (45.0)
Total cash outflow for leases comprising interest and capital payments (28.0) (31.7)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023132
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
13 LEASES – CONTINUED
Group as lessor
Lessor accounting
The Group sublets leased properties relating to unused office capacity. Where the Group subleases assets, the sublease classification (as a
finance lease or operating lease) is assessed with reference to the head lease right-of-use asset. This assessment considers, among other
factors, whether the sublease represents the majority of the remaining life of the head lease. All subleases have been assessed to be operating
leases, and the related assets reclassified to investment properties. Investment property assets are carried at cost less accumulated
depreciation and any recognised impairment in value. The depreciation policies for investment property are consistent with those described for
right-of-use assets. Operating lease income is recognised as earned on a straight-line basis over the lease term.
An analysis of investment properties is included below:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Net book value
Opening balance – –
Transfers to investment property 12.8 –
Modifications (0.1) –
Impairment charge (1.3) –
Depreciation charge (0.5) –
Closing balance 10.9 –
The direct operating expenses arising from investment property in the period was immaterial. There are additionally no restrictions or relevant
contractual obligations involved in the sublet of these properties.
The estimated fair value of the Group’s investment property is £12.5m. This fair value has been determined by applying an appropriate rental
yield to the rentals earned by the investment property. A valuation has not been performed by an independent valuer.
Rental income is receivable as follows:
As at
3 September
2023
£m
As at
31 August 2022
£m
Minimum lease payments receivable on leases of investment properties are as follows:
Within one year 1.2 0.1
Within two to five years 4.5 5.3
Within five to ten years 6.1 6.6
In more than ten years – –
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 133
Notes to the Consolidated Financial Statements – continued
14 IMPAIRMENT OF NON-FINANCIAL ASSETS
Goodwill
Goodwill is not amortised but is reviewed for impairment at least annually (or more frequently where there is an indication that the asset may
be impaired) by assessing the recoverable amount of each cash-generating unit (CGU), or group of cash generating units, to which the
goodwill relates.
Impairment is assessed by measuring the recoverable amount of the CGU, calculated as the higher of fair value less cost to dispose and
value-in-use. Where the carrying value of the CGU exceeds the recoverable amount an impairment loss is recognised in the income statement.
The impairment charge is allocated first against goodwill and then pro rata over other assets within the CGU by reference to the carrying
amount of each remaining asset in the unit. Impairment losses recognised for goodwill are not subsequently reversed.
Goodwill at ASOS predominantly relates to that recognised as part of the acquisition of Topshop, and is monitored on an entity wide basis at the
reporting segment level as a singular CGU, the ASOS Group CGU.
Other non-financial assets
Property, plant and equipment (PPE), right-of-use assets, and finite-lived intangible assets are assessed on an ongoing basis to determine whether
there is an indication that the net book value is no longer supportable. If any such indication exists, the recoverable amount of the asset, being the
higher of its fair value less costs to dispose and its value-in-use, is estimated in order to determine the extent of the impairment loss. Where the
asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the CGU to which
the asset belongs.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is
reduced to its recoverable amount and an impairment loss is recognised immediately in the income statement.
Where an impairment loss on other non-financial assets subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of the recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined if no impairment loss had been recognised for the asset (or cash-generating unit) in prior years. A reversal of
an impairment loss is recognised immediately as a credit to the consolidated income statement.
Cash generating units
Cash generating units are deemed the smallest group of assets that independently generate cash inflows and are independent of the cash flows
generated by other assets. It was determined that the Group only has one CGU (the Group level), on the basis that the majority of assets within
the Group are shared (i.e. software assets that support the entire Group), therefore unable to be allocated on a reasonable or consistent basis in
any other way.
Composition of CGU
For impairment testing purposes, the CGU comprises the following:
As at
3 September
2023
£m
Goodwill and other intangible assets 700.5
Property, plant and equipment 362.6
Right-of-use assets 295.2
1,358.3
Identification of impairment indicator
Given the reported loss recognised during the period, combined with the volatility within the macro-economic environment and the market
capitalisation of the Group being below the Group’s net assets, an indicator of impairment was deemed to exist during the financial period.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023134
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
14 IMPAIRMENT OF NON-FINANCIAL ASSETS – CONTINUED
Approach and assumptions
The recoverable amount for the CGU has been determined using a value-in-use calculation which is based upon the cash flows expected to be
generated, derived from the latest budget and forecast data which are reviewed by the Board, and consistent with those used for the Group’s
going concern and viability assessments. Budget and forecast data reflects both past experience and future expectations of market conditions.
The key assumptions in measuring the value-in-use are as follows:
Assumption Details
Cash flow years/assumptions
• Derived from medium term forecasts reviewed by the Board which cover a period of five years,
then extrapolated to perpetuity with an assumed growth rate of 2% (2022: 1.5%)
• Whilst the value-in-use excludes lease rentals (a financing cash flow under IFRS 16 ‘Leases’)
an estimated cash outflow for future lease renewals is assumed from the current lease end dates
Discount rate
• A post tax discount rate representing the Group’s weighted average cost of capital (WACC),
subsequently grossed up to a pre-tax rate using an iterative calculation that yields the same value
in use when tax cash flows are excluded.
• The post-tax WACC has been calculated using the capital asset pricing model, the inputs of which include
a long-term risk-free rate based on government bond rates, an equity risk premium and levered debt
premium benchmarked to externally available data, and an average beta derived from a comparator group.
• The resulting discount rates are:
2023 2022
Post-tax rate Pre-tax rate Post-tax rate Pre-tax rate
13.0% 15.6% 10.4% 12.7%
Outputs
Outside of specific impairments recognised during the period in relation to sites identified for exit, or other strategic initiatives as part of the
Group’s Driving Change agenda (refer to Note 3), no further impairments were identified as a result of the impairment review described above.
Key source of estimation uncertainty – assumptions in relation to impairment assessment
Of the above assumptions, the value-in-use calculations are most sensitive to changes in the discount rate, the long-term growth rate and
forecast cash flows (comprising revenue, gross margin and fixed overheads). As noted above, cash flows are derived from forecasts reviewed by
the Board, and in line with those used for the going concern and viability assessments. Sales growth rates utilised for the first year of the plan
reflect year-on-year declines of (5)% to (15)%, with subsequent periods thereafter returning to double digit year-on-year growth. The plan also
assumes modest year-on-year improvements in adjusted gross margin during FY24, with up to c300bps growth vs FY23 over the remaining years.
The following table shows the amount by which the assumptions would have to change to make the recoverable amount equal to the carrying
value to show the headroom sensitivity. It is not considered that a reasonable possible change in fixed overheads would cause an impairment,
therefore it is not included below.
Sensitivity
Discount rate (post-tax) increase of: 2.6%
Long term growth rate decrease of: (3.6)%
A reduction in forecast annual growth rates of: (1.8)%
A reduction in forecast gross margin in each year of: (1.2)%
The reduction in forecast annual growth rates above equates to a reduction in forecast revenue in each year of (6.9)%.
Climate change
As detailed within the Group’s TCFD report on page 19, updated quantified scenario analysis in relation to climate still needs to be performed
due to the Group being in the final stages of developing and embedding its new commercial model, which will impact the Group’s supply chain and
the inputs needed when calculating appropriate metrics. In addition the Group is also updating its FWI Strategy and completing a review of its
associated metrics and targets, including plans for the Group’s Be Net Zero pillar. As a result, the cash flows used for impairment testing have
not been adjusted for climate risks. Sensitivities, however, are provided showing the impacts of changes in revenue and gross margin.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 135
Notes to the Consolidated Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023136
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 137
Notes to the Consolidated Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023138
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
18 TRADE AND OTHER PAYABLES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 139
Notes to the Consolidated Financial Statements – continued
19 BORROWINGS – CONTINUED
Convertible bonds
On 16 April 2021 the Group issued £500m of convertible bonds. The unsecured instruments pay a coupon of 0.75% until April 2026, or the
conversion date, if earlier. The initial conversion price was set at £79.65 per share. The fair value of the debt component was determined using the
market interest rate for an equivalent non-convertible bond, deemed to be 3.4%. As a result, £440.1m was recognised as a liability in the balance
sheet on issue and the remainder of the proceeds, £59.9m, which represents the equity component, was credited to reserves. Issue costs of
£9.0m were allocated between equity (£1.0m) and debt (£8.0m).
Term loan
In May 2023, the Group entered into a £200m senior term loan and a £75m super senior revolving facility (the “New RCF”) (together the “New
Facilities”) with specialist lender Bantry Bay Capital Limited through to April 2026, with the optionality to further extend to May 2028 subject to
meeting lender requirements. The New Facilities have replaced the previous £350m revolving credit facility (the “Old RCF”) which was due to
expire in November 2024 following the amendment and extension announced alongside the Company’s interim results on 10 May 2023. Fees
totalling £21.7m were incurred, of which £15.8m was applied to the term loan, with the remainder relating to the New RCF and capitalised within
prepayments.
Both the senior term loan and New RCF (when drawn) bear interest at a margin above SONIA. The New RCF incurs commitment fees at a
market rate.
The New Facilities are subject only to a minimum liquidity covenant defined as cash and cash equivalents plus amounts undrawn under the New
RCF. The New Facilities carry a fixed and floating charge over all assets of the following chargors in the Group – ASOS Plc, ASOS.com Limited,
ASOS Intermediate Holdings Limited, Mornington & Co (No. 1) Limited and Mornington & Co (No. 2) Limited.
Nordstrom Loan
On 12 July 2021 the Group announced a strategic partnership with Nordstrom, a US-based multi-channel retailer, to drive growth in North
America. As part of this venture, Nordstrom purchased a minority interest in ASOS Holdings Limited which holds the Topshop, Topman, Miss
Selfridge and HIIT brands in exchange for £10 as well as providing a £21.9m loan. The loan attracts interest at a market rate of 6.5% per annum.
The resulting liability is £20.4m as at 3 September 2023 (2022: £22.0m), this is following a partial repayment of the loan totalling £1.7m (2022: £nil)
being made in the period. As part of this agreement a written put option was provided to Nordstrom over their shares in ASOS Holdings Limited,
valued at £3.2m as at 3 September 2023.
Refinancing fees included in cash flow
Refinancing fees included in the cash flow statement total £30.8m, and are reconciled to their location in the financial statements as follows:
Income statement Balance sheet
Administrative
expenses Finance costs Borrowings Prepayments
Fee description
Cash
£m
Outside
adjusted profit
£m
Outside
adjusted profit
£m
Within
adjusted profit
£m £m £m
Fees incurred in relation to covenant
waiver exercise in October 2022
7.1 1.7 4.0 1.4 – –
Extension fees incurred in May 2023
for old RCF
2.0 – 2.0 – – –
Refinancing fees for New Facilities 21.7 – – – 15.8 5.9
Total
30.8 1.7 6.0 1.4 15.8 5.9
Other non-cash (write-off of previously
capitalised fees)
– – 0.4 – – –
Total
30.8 1.7 6.4 1.4 15.8 5.9
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023140
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 141
Notes to the Consolidated Financial Statements – continued
Onerous occupancy provisions
Where the Group no longer operates from a leased property, onerous property contract provisions are recognised for the least net cost of
exiting from the contract. The amounts provided are based on the Group’s best estimates of the likely committed outflows and site closure dates.
These provisions do not include rent in accordance with IFRS 16, however do include unavoidable costs related to the lease such as service charges
and insurance.
Cash flows are discounted to present value using a nominal pre-tax annual discount rate, based on government bond yields of an appropriate
tenure within the country that the lease is held. No adjustments are made to the discount rate for inflation as inflationary increases are already
included in the undiscounted cash flows. As the cash flows are known due to being contractual, the discount rate is not adjusted for risk. The
discount rates for onerous occupancy provisions are 4.3% to 4.4%.
Where the Group is able to exit lease contracts before the expiry date or agree sublets, this results in the release of any associated property
provisions. Such events are subject to the agreement of landlords, therefore the Group makes no assumptions on the ability to either exit or
sublet a property until a position is agreed. Utilisation of the above amounts is expected to be incurred in conjunction with the profile of the leases
to which they relate. Refer to Note 3 for more detail on the amount recognised in the period.
Whilst all provisions are sensitive to the discount rate used, given they are derived from government bond yields, it is not considered that there is
a significant risk of a reasonable possible change in management’s estimate resulting in a material movement in the provisions.
20 PROVISIONS – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023142
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
21 SHARE CAPITAL, SHARE PREMIUM AND OTHER RESERVES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 143
Notes to the Consolidated Financial Statements – continued
22 FINANCIAL RISK MANAGEMENT
The Group’s Treasury function seeks to reduce exposures to capital risk, liquidity risk, credit risk, interest rate risk and foreign currency risk, to
ensure liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group does not engage in speculative
trading in financial instruments and transacts only in relation to underlying business requirements. The Group’s treasury policies and procedures
are reviewed annually and approved by the Audit Committee.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023144
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
22 FINANCIAL RISK MANAGEMENT – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 145
Notes to the Consolidated Financial Statements – continued
22 FINANCIAL RISK MANAGEMENT – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023146
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
22 FINANCIAL RISK MANAGEMENT – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 147
Notes to the Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023148
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
23 FINANCIAL INSTRUMENTS – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 149
Notes to the Consolidated Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023150
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
24 DERIVATIVE FINANCIAL INSTRUMENTS – CONTINUED
The table below analyses the Group’s derivative financial instruments into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
As at 3 September 2023 1 to 6 months
Maturity
6 to 12 months
More than
one year
US dollars (highly probable forecast purchases)
Notional amount (in £m) 66.6 109.3 39.8
Average GBP:USD contract rate 1.31 1.28 1.30
Euro (highly probable forecast sales)
Notional amount (in £m) (86.6) (97.0) (25.6)
Average GBP:EUR contract rate 1.14 1.15 1.14
Australian dollars (highly probable forecast sales)
Notional amount (in £m) (23.7) (28.9) (15.7)
Average GBP:AUD contract rate 1.74 1.78 1.74
Other (highly probable forecast sales)
Notional amount (in £m) (50.6) (44.9) (22.8)
Average GBP: Other contract rate Various currencies
As at 31 August 2022 1 to 6 months
Maturity
6 to 12 months
More than
one year
US dollars (highly probable forecast purchases)
Notional amount (in £m)
114.8 115.8 273.4
Average GBP:USD contract rate
1.31 1.29 1.30
Euro (highly probable forecast sales)
Notional amount (in £m)
(60.3) (47.4) (156.3)
Average GBP:EUR contract rate
1.12 1.14 1.13
Australian dollars (highly probable forecast sales)
Notional amount (in £m)
(53.2) (46.5) (67.0)
Average GBP:AUD contract rate
1.82 1.83 1.87
Other (highly probable forecast sales)
Notional amount (in £m)
(68.3) (57.4) (107.6)
Average GBP: Other contract rate Various currencies
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 151
Notes to the Consolidated Financial Statements – continued
24 DERIVATIVE FINANCIAL INSTRUMENTS – CONTINUED
The impact of the hedged items on the Group’s financial statements is as follows:
1 September 2022 to 3 September 2023
Change in value
of hedged item
for calculating
hedge
ineffectiveness
£m
Change in value
of hedging
instrument for
calculating
hedge
ineffectiveness
£m
Cumulative
impact on cash
flow hedge
reserve
£m
Hedges of foreign currency sales (30.5) 30.5 14.8
Hedges of foreign currency inventory purchases 53.8 (53.8) 4.5
Hedges of foreign currency purchases of property, plant and equipment 6.3 (6.3) 2.1
Year ended 31 August 2022
Change in value
of hedged item
for calculating
hedge
ineffectiveness
£m
Change in value
of hedging
instrument for
calculating hedge
ineffectiveness
£m
Cumulative
impact on cash
flow hedge
reserve
£m
Hedges of foreign currency sales 25.9 (25.9) (17.4)
Hedges of foreign currency inventory purchases (44.9) 44.9 43.6
Hedges of foreign currency purchases of property, plant and equipment (6.3) 6.3 6.2
The following table presents a reconciliation by risk category of the cash flow hedge reserve and analysis of other comprehensive income in
relation to hedge accounting:
1 September 2022 to 3 September 2023
Opening
£m
Fair value
movements
recognised in
other
comprehensive
income
£m
Amounts
reclassified
£m
Closing
£m Reclassification recognised in
Hedges of foreign currency sales (17.4) 30.5 1.7 14.8 Revenue
Hedges of foreign currency
inventory purchases
43.6 (53.8) 14.7 4.5 Inventory
Hedges of foreign currency
purchases of property, plant
and equipment
6.2 (6.3) 2.2 2.1 Property, plant and
equipment
Tax (6.2) 2.0 – (4.2)
26.2 (27.6) 18.6 17.2
Year ended 31 August 2022
Opening
£m
Fair value
movements
recognised in
other
comprehensive
income
£m
Amounts
reclassified
£m
Closing
£m Reclassification recognised in
Hedges of foreign currency sales 24.0 (25.9) (15.5) (17.4) Revenue
Hedges of foreign currency
inventory purchases
(6.8) 44.9 5.5 43.6 Inventory
Hedges of foreign currency purchases
of property, plant and equipment
– 6.3 (0.1) 6.2 Property, plant and
equipment
Tax (2.9) (3.3) – (6.2)
14.3 22.0 (10.1) 26.2
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023152
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 153
Notes to the Consolidated Financial Statements – continued
25 SHARE-BASED PAYMENTS – CONTINUED
The fair value of SAYE options granted during the current and prior periods was calculated using the Black-Scholes model, assuming the following
inputs:
1 September
2022 to
3 September
2023
1 September
2021 to
31 August
2022
Share price (pence) 665 2,546
Exercise price (pence) 532 2,057
Expected volatility (%) 63 72
Expected life (years) 2 .1 3.1
Risk-free rate (%) 3.3 0.6
Dividend yield – –
Weighted average fair value of options (pence) 298 1,355
Volatility has been estimated by taking the historical volatility in the Company’s share price over a three-year period.
Share Incentive Plan (SIP)
Under the terms of the SIP, the Board granted free shares to every employee under an HMRC-approved SIP. Awards must be held in trust for
a period of at least three years after grant date and become exercisable at this date. These option grants are settled on exercise through a
transfer of shares from the Link Trust. Only 2,901 options remain outstanding at the period end (2022: 3,317).
ASOS Long-Term Incentive Scheme (ALTIS)
Under the terms of the ALTIS, certain Executive Directors and members of management may be granted conditional awards, the base value of
which is calculated as a fixed multiple of salary, and will only vest to the extent the related performance targets, as detailed in the Directors’
Remuneration Report on page 84, are met. These options grants are settled on exercise through issue of new ordinary shares by the Company.
Options granted under the ALTIS are shown below.
1 September
2022 to
3 September
2023
(no. of shares)
1 September
2021 to
31 August
2022
(no. of shares)
Outstanding at beginning of period 790,724 790,562
Granted 1,564,478 441,46 0
Lapsed (510,069) (339,110)
Exercised (24,413) (102,188)
Outstanding end of period 1,820,720 790,724
The weighted average remaining contractual life of share options outstanding at 3 September 2023 was 1.8 years (2022: 1.3 years). Details of
shares conditionally allocated at 3 September 2023 are set out below:
Date of grant
As at
3 September
2023
(no. of shares)
As at
31 August
2022
(no. of shares)
ALTIS ‘19 – 223,627
ALTIS ‘20 160,375 188,644
ALTIS ‘21 290,158 378,453
ALTIS ‘22 1,370,185 –
Total 1,820,718 790,724
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023154
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
25 SHARE-BASED PAYMENTS – CONTINUED
The fair value of options granted during the current and prior periods under the ALTIS EPS performance conditions were calculated using the
Black-Scholes model and the fair value of options granted under the ALTIS TSR (Total Shareholder Return) performance conditions were
calculated using the Monte Carlo model. Both sets of inputs are shown below:
1 September 2022 to
3 September 2023 1 September 2021 to 31 August 2022
Grant 1 Grant 2 Grant 1 Grant 2 Grant 3 Grant 4 Grant 5
Share price (pence) 642 406 2,601 2,056 1,373 860 697
Exercise price (pence) – – – – – – –
Expected volatility (%) 72.4 69.8 72.8 67.9 66.3 74.0 60.2
Expected life (years) 2.9 2.4 2.9 2.7 2.5 2.4 2.2
Risk-free rate (%) 3.2 4.6 0.5 1.3 1.6 2.2 2.8
Dividend yield – – – – – – –
Weighted average fair value of options for
EPS performance condition (pence)
642 406 2,601 2,056 1,373 860 697
Weighted average fair value of options for
TSR performance condition (pence)
1, 2
270 171 1,480 1,170 781 489 397
1 Inputs to the Monte Carlo model for all grants from 2023 were as follows: share price of 642 pence, exercise price of nil, expected volatility of 57.0%, expected life
of 2.8 years, risk-free rate of 3.2% and dividend yield of nil.
2 Inputs to the Monte Carlo model for all grants from 2022 were as follows: share price of 2,601 pence, exercise price of nil, expected volatility of 52.0%, expected
life of 3.0 years, risk-free rate of 0.6% and dividend yield of nil.
Volatility has been estimated by taking the historical volatility in the Company’s share price over a three-year period.
Restricted Stock Unit (RSU)
Similar to the ALTIS schemes, certain Executive Directors and members of management may be granted conditional awards, the base value of
which is calculated as a fixed multiple of salary, and will only vest to the extent the members remain in employment to the end of the vesting
period. These options granted are settled on exercise through issue of new ordinary shares by the Company.
Options granted under the RSU are shown below.
1 September
2022 to
3 September
2023
(no. of shares)
1 September
2021 to
31 August
2022
(no. of shares)
Outstanding at beginning of period 114,294 11,920
Granted 323,208 127,422
Lapsed (29,235) (17,883)
Exercised (178,401) (7,16 5)
Outstanding end of period 229,866 114,29 4
The weighted average remaining contractual life of share options outstanding at 3 September 2023 was 0.4 years (2022: 0.7 years).
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 155
Notes to the Consolidated Financial Statements – continued
25 SHARE-BASED PAYMENTS – CONTINUED
No performance conditions were included in the fair value calculations. The fair value per option granted during the period and the assumptions
used in the calculation as well as details of shares conditionally allocated are as follows:
Date of grant
Fair value of
options
(pence)
As at
3 September
2023
(no. of shares)
As at
31 August
2022
(no. of shares)
26.04.21 5,222 – 3,830
14.01.22 2,270 – 100,836
30.08.22 727 4,814 9,628
19.01.23 761 104,996 –
31.05.23 354 120,056 –
229,866 114,294
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023156
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
27 NET DEBT RECONCILIATION
Group net debt comprises cash and cash equivalents less any borrowings drawn down at period-end (including accrued interest), but excluding
outstanding lease liabilities.
Lease liabilities
£m
Borrowings
£m
Cash and cash
equivalents
£m
Total
£m
As at 1 September 2022 (380.1) (475.9) 323.0 (533.0)
Cash flow movements 28.0 (154.5) 27.6 (98.9)
Cash flow excluding interest 22.4 (198.3) 32.1 (143.8)
Net interest paid/(received) 5.6 28.0 (4.5) 29.1
Financing fees paid – 15.8 – 15.8
Non-cash movements 23.1 (42.4) 2.7 (16.6)
Movement in lease liabilities 21.1 – – 21.1
Foreign exchange impacts 7.6 – (1.8) 5.8
Accrued interest (5.6) (42.4) 4.5 (43.5)
As at 3 September 2023 (329.0) (672.8) 353.3 (648.5)
Net debt (excluding leases) (319.5)
As at 1 September 2021 (328.9) (463.2) 662.7 (129.4)
Cash flow movements 31.7 5.7 (340.7) (303.3)
Cash flow excluding interest 26.3 – (339.8) (313.5)
Net interest paid/(received) 5.4 5.7 (0.9) 10.2
Non-cash movements (82.9) (18.4) 1.0 (100.3)
Movement in lease liabilities (71.3) – – (71.3)
Foreign exchange impacts (6.2) – 0.1 (6.1)
Accrued interest (5.4) (18.4) 0.9 (22.9)
As at 31 August 2022 (38 0.1) (475.9) 323.0 (533.0)
Net debt (excluding leases) (152.9)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 157
Notes to the Consolidated Financial Statements – continued
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023158
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
29 POST BALANCE SHEET EVENTS
After the balance sheet date, on 6 October 2023, the Board approved the commencement of a process to either sell or mothball the Lichfield
fulfilment centre, following completion of the automation project in late FY24. At the year-end, the site was in use and will remain as such until
the automation work completes.
At the year-end, assets held in relation to Lichfield totalled circa £110m, as well as lease liabilities of circa £30m. Costs to complete the automation
are estimated at £45m. As a result of the decision, an impairment of the existing assets is likely to be required, which together with committed
future automation spend, will be recognised directly within administrative expenses, and outside adjusted profit. Any impairments are ultimately
dependent on future decisions regarding the site, which include recommissioning the site, leaving vacant, or securing the sale of the related
equipment and assigning the lease.
28 COMMITMENTS AND CONTINGENCIES – CONTINUED
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 159
Note
3 September
2023
£m
31 August
2022
£m
Non-current assets
Investments in subsidiaries 2 65.9 59.5
Amounts due from subsidiary undertakings 3 836.5 742.5
902.4 802.0
Current assets
Amounts due from subsidiary undertakings 3 1.4 111.0
Current liabilities
Current payable to subsidiary undertaking 4 (1.4) (111.0)
Non-current liabilities
Non-current payable to subsidiary undertaking 4 (467.3) (450.9)
Net assets 4 35.1 3 51.1
Equity
Called up share capital 5 4.2 3.5
Share premium 5 322.6 245.7
Convertible bond reserve 58.9 58.8
Retained earnings 6 49.4 43.1
Total equity 435.1 351.1
The loss after tax for the financial period was £0.1m (2022: loss of £3.5m). Notes 1 to 7 are an integral part of the financial statements.
The financial statements of ASOS Plc, company number 4006623, on pages 160 to 165, were approved by the Board of Directors and authorised
for issue on 31 October 2023 and were signed on its behalf by:
José Antonio Ramos Calamonte
Chief Executive Officer
Company balance sheet
As at 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023160
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Called up share
capital
£m
Share premium
£m
Convertible
bond reserve
£m
Retained
earnings
£m
Total
£m
As at 1 September 2022 3.5 245.7 58.8 43.1 351.1
Loss for the period and total comprehensive loss – – – (0.1) (0.1)
Share issue 0.7 76.9 – – 77.6
Share-based payments contribution – – – 6.4 6.4
Adjustment – – 0.1 – 0.1
As at 3 September 2023 4.2 322.6 58.9 49.4 435.1
As at 1 September 2021 3.5 245.7 58.8 45.8 353.8
Loss for the year and total comprehensive loss – – – (3.5) (3.5)
Share-based payments contribution – – – 0.8 0.8
As at 31 August 2022 3.5 245.7 58.8 43.1 351.1
Retained earnings includes the share-based payments reserve.
Company Statement ofChanges in Equity
For the financial period from 1 September 2022 to 3 September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 161
1 BASIS OF PREPARATION
The parent company’s financial statements are prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and the
Companies Act 2006 as applicable to companies using FRS 101. FRS 101 sets out a reduced disclosure framework for a ‘qualifying entity’ as defined
in the Standard, which addresses the financial reporting requirements and disclosure exemptions in the individual financial statements of qualifying
entities that otherwise apply the recognition measurement and disclosure requirements of UK-adopted international accounting standards.
The Company transitioned to FRS 101 during the financial period to 3 September 2023. FRS 101 sets out amendments to IFRS as adopted by the UK
that are necessary to achieve compliance with the Companies Act and related regulations. These amendments had no impact on the statement
of comprehensive income, balance sheet or statement of changes in equity for the Company for the period of transition.
The financial period represents the financial period 1 September 2022 to 3 September 2023 (prior financial period 1 September 2021 to 31 August2022).
The disclosure exemptions adopted by the Company in accordance with FRS 101 are as follows:
• The requirements of IAS 7 to present a cash flow statement
• The requirements of paragraph 17 of IAS 24 ‘Related Party Transactions’, to disclose information related to key management personnel, and
the requirements of IAS 24 to disclose related party transactions between two or more members of a group for wholly owned subsidiaries
• The requirements of paragraphs 30 and 31 of IAS 8 to disclose information assessing the possible impact of new standards issued but which
are not yet effective
• The requirements of IFRS 7 and IFRS 13 for disclosure of financial instruments and fair values
• The requirements of IFRS 2, to disclose information related to share-based payment arrangements
• The requirements of IAS 1 to present comparative information in respect of certain assets and the disclosure information related to capital
management.
The financial statements are presented in pound sterling, rounded to the nearest million unless otherwise stated. They have been prepared on the
going concern basis under the historical cost convention.
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and not presented an income
statement nor a statement of comprehensive income for the Company alone.
Amendments to published standards
The Company has considered the following amendments to published standards that are effective for the Company for the financial period
beginning 1 September 2022 and concluded that they are either not relevant to the Company or that they do not have a significant impact on the
Company’s financial statements other than disclosures.
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
• Annual Improvements to IFRS Standards 2018-2020
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
• Reference to the Conceptual Framework (Amendments to IFRS 3)
The following standards and revisions will be effective for future periods:
• IFRS 17 ‘Insurance Contracts’
• Amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Making Materiality Judgements’ on the disclosure
of accounting policies
• Amendments to IAS 1 ‘Presentation of Financial Statements’ on the classification of liabilities as current or non-current
• Amendments to IAS 1 ‘Presentation of Financial Statements’ on non-current liabilities with covenants
• Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ on the definition of accounting estimates
• Amendments to IAS 12 ‘Income Taxes’ on Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction
• Amendments to IFRS 16 ‘Leases’ on Lease Liability in a Sale and Leaseback
• Amendments to IFRS 10 ‘Consolidated Financial Statements’ and IAS 28 ‘Investments in Associates and Joint Ventures’ on the sale or
contribution of assets between an investor and its associate or joint venture
The Company has considered the impact of the remaining above standards and revisions and have concluded that they will not have a significant
impact on the Company’s financial statements.
Significant accounting judgements and estimates
The preparation of the Company’s financial statements requires the use of judgements, estimates and assumptions in applying the Company’s
accounting policies to determine the reported amounts of assets, liabilities, income and expenses.
Estimates and judgements are continually reviewed and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the current circumstances. Actual results may differ from these estimates. Any revisions to
accounting estimates are applied prospectively. None of the estimates and judgements used in preparation of the Company accounts are
considered significant.
Notes to the Company Financial Statements
For the financial period from 1 September 2022 to3September 2023
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023162
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
2 INVESTMENTS IN SUBSIDIARIES
Accounting policy
Investments in subsidiaries are carried at cost less any impairment loss in the financial statements of the Company. At each reporting period, the
Company assesses the carrying amounts of its investments to determine whether there is any indication of impairment. Where such an indication
exists, the Company makes an estimate of the recoverable amount. If the recoverable amount of the investment is less than its carrying amount,
the investment is written down to its recoverable amount. Any impairment loss is immediately recognised in the income statement.
In accordance with IFRS 2, ASOS.com Limited (a subsidiary of the Company) is required to recognise share-based payment arrangements
involving equity instruments where ASOS.com Limited has remunerated those providing services to the entity in this way. ASOS Plc makes
contributions to ASOS.com Limited equal to the charge for the share-based payment arrangement which is reflected as an increase in ASOS Plc’s
capital contribution to ASOS.com Limited. For the period from 1 September 2022 to 3 September 2023, ASOS.com Limited recognised a charge
of £6.4m (2022: £0.8m) in respect of share-based payment arrangements. Accordingly, this is included within investment additions within the
table below.
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
At the beginning of the period 59.5 58.7
Additions 6.4 0.8
At the end of the period 65.9 59.5
An impairment test over the investment in subsidiaries was performed at the period-end, with no impairments identified. Where value-in-use
calculations have been used to estimate the recoverable amounts of the investments, sensitivity analysis has been performed. The analysis
indicates that there is sufficient headroom such that a reasonably possible change to key assumptions would not result in any impairment in any
of the Company’s investments in subsidiaries.
3 AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS
Accounting policy
Amounts due from subsidiary undertakings are initially recognised at fair value and are subsequently measured at amortised cost using the
effective interest rate method less any provision for impairment.
As at
3 September
2023
£m
As at
31 August
2022
£m
Current 1.4 111.0
Non-current 836.5 742.5
837.9 853.5
Included within non-current receivables are interest-bearing amounts of £493.8m (2022: £493.8m). The remainder is non-interest bearing. All
amounts are repayable on demand. Current receivables has reduced in the period as a result of amounts due to and due from subsidiary
undertakings being net-settled.
Receivable balances with Group companies are reviewed for potential impairment based on the ability of the counterparty to meet its
obligations. This is assessed by considering the net asset position of the entity and whether amounts owed to the Company are covered. No
impairment losses were recognised in the financial period.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 163
Notes to the Company Financial Statements – continued
4 AMOUNTS DUE TO SUBSIDIARY UNDERTAKINGS
Accounting policy
Amounts due to subsidiary undertakings are recognised initially at fair value, and subsequently at amortised cost using the effective interest
rate method.
As at
3 September
2023
£m
As at
31 August
2022
£m
Current 1.4 111.0
Non-current 467.3 450.9
468.7 561.9
Current amounts due to subsidiary undertakings have reduced in the period as a result of amounts due to and due from subsidiary
undertakings being net-settled. Non-current amounts due to subsidiary undertakings relate to a term loan with Cornwall (Jersey) Limited
relating to the convertible bond due in 2026. The terms of the loan mirror those of the convertible bond which are described in Note 19
of the Group financial statements.
5 CALLED UP SHARE CAPITAL AND SHARE PREMIUM
Accounting policy
Ordinary shares are classified as equity instruments. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
As at
3 September
2023
Number of
ordinary shares
As at
31 August
2022
Number of
ordinary shares
As at
3 September
2023
£m
As at
31 August
2022
£m
Called up share capital
Allotted, issued and fully paid ordinary shares of 3.5p 119,236,850 99,940,235 4.2 3.5
Share premium account
Share premium 322.6 245.7
The movements in the called up share capital and share premium are as follows:
Number of
ordinary shares
Share capital
£m
Share premium
£m
As at 1 September 2022 99,940,235 3.5 245.7
Allotted in respect of share option schemes 202,814 – –
New shares issued 19,093,801 0.7 76.9
As at 3 September 2023 119,236,850 4.2 322.6
As at 1 September 2021 99,837,096 3.5 245.7
Allotted in respect of share option schemes 103,139 – –
As at 31 August 2022 99,940,235 3.5 245.7
In May 2023, the Company completed a placing of new ordinary shares, raising gross proceeds of £75.0m in support of the Group’s Driving
Change agenda. A total of 17,938,292 new ordinary shares were placed at an issue price of 418.1 pence per share. At the same time, the Company
completed a retail offer of 1,155,509 new ordinary shares at an issue price of 418.1 pence per share, raising gross proceeds of £4.8m. Share issue
fees totalling £2.2m were incurred.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023164
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
6 RETAINED EARNINGS
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
As at 1 September 2022 and 1 September 2021 43.1 45.8
Loss for the financial period and total comprehensive loss (0.1) (3.5)
Share-based payments contribution 6.4 0.8
As at 3 September 2023 and 31 August 2022 49.4 43.1
7 CONTINGENT LIABILITIES AND GUARANTEES
Contingent liabilities
Refer to Note 28 of the Group financial statements.
Guarantees
Via the statutory audit exemptions as disclosed on page 158, ASOS Plc will guarantee all outstanding liabilities that the relevant subsidiaries
are subject to as at the financial year ended 3 September 2023 in accordance with section 479C of the Act, as amended by the Companies
and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012.
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 165
In accordance with section 409 of the Companies Act 2006 and Schedule 4 of The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, a full list of related undertakings, registered office address and the percentage of share class
owned as at 3 September 2023 are disclosed below. All shares held are ordinary shares unless otherwise stated.
Name of company
Country of
incorporation
Proportion of
ordinary shares
held Holding Nature of business
ASOS Intermediate Holdings Limited UK 100% Direct Holding company
Mornington & Co (No. 1) Limited UK 100% Direct Vehicle for implementation of ALTIP
Mornington & Co (No. 2) Limited UK 100% Direct Vehicle for implementation of ALTIP
ASOS.com Limited
1,2
UK 100% Indirect Internet retailer
Crooked Tongues Limited UK 95% Indirect Internet retailer
Covetique Limited UK 100% Indirect Discontinued internet marketplace
ASOS Marketplace Limited UK 100% Indirect Internet marketplace
ASOS Global Limited UK 100% Indirect Holding company
Eight Paw Projects Limited UK 100% Indirect Brand management company
ASOS US, Inc US 100% Indirect Employer of marketing staff based
in the US
ASOS Germany GmbH Germany 100% Indirect Employer of supply chain staff
based in Germany
ASOS France SAS France 100% Indirect Non-trading company
ASOS Transaction Services France SAS France 100% Indirect Payment processing company
ASOS Australia Pty Limited Australia 100% Indirect Non-trading company
ASOS Canada Services Limited Canada 100% Indirect Non-trading company
ASOS Transaction Services Limited UK 100% Indirect Holding company
ASOS Transaction Services Australia Pty Limited Australia 100% Indirect Payment processing company
ASOS US Sales, LLC US 100% Indirect Payment processing company
ASOS Projects Limited
3
UK 100% Indirect Holding company
ASOS Ventures Limited UK 100% Indirect Non-trading company
ASOS (Shanghai) Commerce Co. Limited China 100% Indirect Discontinued internet retailer
ASOS Payments UK Limited UK 100% Indirect Payment processing company
ASOS Payments Europe B.V. Netherlands 100% Indirect Payment processing company
ASOS Payments Holdings Limited UK 100% Indirect Holding company
Cornwall (Jersey) Limited Jersey 100% Indirect Vehicle for issue of convertible bond
ASOS Holdings Limited UK 90% Indirect Brand management company
1 ASOS.com Limited has a 7.2% interest in Needle and Thread Design Holdings Limited.
2 ASOS.com Limited additionally has a branch registered in the Netherlands
3 ASOS Projects Limited has a 2.9% interest in Action Artificial Intelligence Limited.
All UK incorporated entities share the same registered office as ASOS Plc and non-UK entities’ registered offices are detailed below:
Entity Registered office
ASOS US Inc 12 Timber Creek Lane, Newark, DE 19711, US
ASOS Germany GmbH An der Anhalter Bahn 6, 14979 Grossbeeren, Germany
ASOS France SAS TMF France SAS, 3-5 Rue Saint Georges, 75009 Paris, France
ASOS Transaction Services France SAS TMF France SAS, 3-5 Rue Saint Georges, 75009 Paris, France
ASOS Australia Pty Limited Company Matters Pty Limited, Level 12, 680 George Street, Sydney NSW 2000,
Australia
ASOS Canada Services Limited 777 Dunsmuir Street, Suite 1700, Vancouver, BC V7Y 1K4, Canada
ASOS Transaction Services Australia Pty Limited c/o Company Matters Pty Limited, Tower 4, 727 Collins Street, Docklands, VIC
3008, Australia
ASOS US Sales LLC 12 Timber Creek Lane, Newark, DE 19711, US
ASOS (Shanghai) Commerce Co. Limited Unit 506A Level 5, No. 2911 North Zhongshan Road, Putuo District, Shanghai, PRC.
ASOS Payments Europe B.V. Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam.
Related Undertakings of the ASOS Group
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023166
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
The Group uses the below non-IFRS performance measures to allow shareholders to better understand underlying financial performance and
position. These should not be seen as substitutes for IFRS measures of performance and may not allow a direct comparison to other companies.
Performance
measure
Closest IFRS
measure Definition How ASOS uses this measure
Revenue
growth at
constant
currency
None ASOS calculates constant currency
(CCY) growth by adjusting the
current year reported revenue
number for the impact of year-on-
year changes in the hedge rate on
hedged sales and year-on-year spot
rate movements on unhedged sales.
The current period also adjusts for
the impact of the three additional
trading days in FY23. This provides
revenue growth on alike-for-like
basis vs. last year, giving users of
the accounts a better view of
underlying sales performance that
is not impacted by exchange rate
fluctuations.
This measure is presented as a means of eliminating the effects of
exchange rate fluctuations on the period-on-period reported results.
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
Growth
%
Adjusted revenue
1
3,448.0 3,859.7 (11) %
Impact of foreign
exchange translation,
Jobber income
excluded from
adjusted profit, and
LFL financial periods
101.5 – –
Excluding Russia – 76.8 –
Group revenue 3,549.5 3,936.5 (10)%
1 Adjusted revenue, stated on a constant currency basis, excluding Russia from
H1 FY22, and removing the impact of the 3 extra trading days in FY23.
Year to
31 August 2022
£m
Year to
31 August 2021
£m
Growth
%
Revenue at constant
currency
3,972.7 3,910.5 2%
Impact of foreign
exchange translation
(36.2) – –
Group revenue 3,936.5 3,910.5 1%
Retail sales Revenue
Internet sales recorded net of an
appropriate deduction for actual
and expected returns, relevant
vouchers, discounts and sales taxes.
Retail sales exclude income from
delivery receipt payments,
marketing services, commission on
partner-fulfilled sales and revenue
from wholesale sales.
A measure of the Group’s trading performance focusing on the sale of
products to end customers. Used by management to monitor overall
performance across markets, and the basis of key internal KPIs such
as ABV.
A reconciliation of this measure is included in Note 4.
Adjusted
revenue
Revenue Revenue excluding the impact
of adjusting items.
A measure of the Group’s revenue and gross profitability, excluding
the impact of any adjusting items.
Reconciliation is shown below:
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
Revenue 3,549.5 3,936.5
Adjusting items (11.5) –
Adjusted revenue 3,538.0 3,936.5
Gross profit 1,459.0 1,717.5
Adjusting items 104.4 –
Adjusted gross profit 1,563.4 1,717.5
Gross margin % 41.1% 43.6%
Adjusted gross margin % 44.2% 43.6%
Adjusted
gross margin
None Gross profit divided by revenue
andexcluding the impact of
adjusting items.
Alternative Performance Measures (APMs)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 167
Alternative Performance Measures (APMs) – continued
Performance
measure
Closest IFRS
measure Definition How ASOS uses this measure
Adjusted
EBIT
Operating
(loss)/profit
Profit before tax, interest, and any
adjusting items excluded from
adjusted profit before tax (see below).
A measure of the Group’s underlying profitability for the period, excluding
the impact of any transactions outside of the ordinary course of business
and not considered to be part of ASOS’ usual cost base. Used by
management to monitor the performance of the business each month.
Adjusted
(loss)/profit
before tax
(Loss)/profit
before tax
Adjusted (loss)/profit before tax
excludes items recognised in
reported profit or loss before tax
which, if included, could distort
comparability between periods.
In determining which items to
exclude, the Group considers items
which are significant either by virtue
of their size and/or nature, or that
are non-recurring.
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
Operating loss (248.5) (9.8)
Adjusting items excluding finance
costs (Note 3)
219.5 53.9
Adjusted EBIT (29.0) 4 4.1
Net finance costs (Note 8) (48.2) (22 .1)
Add back adjusting finance costs
(Note 3)
6.9 –
Adjusted (loss)/profit before tax (70.3) 22.0
Group revenue 3,549.5 3,936.5
Adjusting items (11.5) –
Adjusted Group revenue 3,538.0 3,936.5
Adjusted EBIT margin (0.8)% 1.1%
Details of adjusting items are included within Note 3.
Adjusted
EBITDA
No direct
equivalent
Adjusted EBIT above, adjusted for
depreciation, amortisation and
impairments
EBITDA is used to review the Group’s profit generation and the
sustainability of ongoing capital reinvestment and finance costs.
1 September
2022
to3 September
2023
£m
Year to
31 August
2022
£m
Adjusted EBIT (above) (29.0) 44.1
Add back depreciation and
amortisation (per cash flow)
172.5 149.8
Add back impairment (per cash flow) 32.1 19.2
Less depreciation and amortisation
excluded from adjusted profit
1
(19.6) (10.7)
Less impairment excluded from
adjusted profit
2
(31.5) (18.5)
Adjusted EBITDA 124.5 183.9
1 Comprises £18.3m within property initiatives, and £1.3m within the commercial
operating model change
2 Comprises £28.6m within property initiatives, and £2.9m within strategic
initiatives
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023168
Performance
measure
Closest IFRS
measure Definition How ASOS uses this measure
Net cash/
(debt)
No direct
equivalent
Cash and cash equivalents less the
carrying value of borrowings
(including accrued interest) drawn
down at period-end, but excluding
outstanding lease liabilities.
A measure of the Group’s liquidity.
Information is included in Note 27. A reconciliation is included below:
As at
3 September
2023
£m
As at
31 August
2022
£m
Cash and cash equivalents 353.3 323.0
Borrowings (672.8) (475.9)
Lease liabilities (329.0) (380.1)
Net borrowings (648.5) (533.0)
Add back lease liabilities 329.0 38 0.1
Group net debt (319.5) (152.9)
Free cash
flow
Adjusted
free cash
flow
No direct
equivalent
No direct
equivalent
Free cash flow is net cash generated
from operating activities, less
payments to acquire intangible
and tangible assets, payment
of the principal portion of lease
liabilities and net finance expenses.
Free cash flow, excluding the cash
flow impact of adjusting items within
operating cash flows. This metric
would also exclude the impact
from any M&A or financing
transactions carried out by the
Group. A performance measure
for the FY23 annual bonus.
A measure of the cash generated by the Group outside cash flows
relating to M&A and financing transactions, which allows management
to better assess the cash being generated by the business.
A reconciliation to the Group cash flow is shown below:
1 September
2022 to
3 September
2023
£m
Year to
31 August
2022
£m
Cash generated from/(used in)
operations (per cash flow)
16.4 (120.4)
Purchase of tangible and intangible
assets
(177.9) (182.9)
Repayment of principal portion of
lease liabilities
(22.4) (26.3)
Net interest paid (29.1) (10.2)
Free cash flow (213.0) (339.8)
Cash flow impact of adjusting items 53.4 18.2
Refinancing fees (in financing
cash flows)
(30.8) –
Adjusted free cash flow (190.4) (321.6)
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 169
Performance
measure
Closest IFRS
measure Definition How ASOS uses this measure
Adjusted
diluted EPS
Diluted EPS Diluted EPS measure used for ATLIS
awards, assessed using adjusted
(loss)/profit after tax, and with the
convertible bond treated as dilutive.
A measure of the Group’s diluted EPS and is used as the basis for
assessing the outturn of the Group’s ALTIS scheme targets.
A reconciliation of the Group diluted EPS is shown below:
1 September
2022
to 3 September
2023
£m
Year to
31 August
2022
£m
Adjusted profit after tax (52.9) 16.7
Add back P&L impact of convertible
bond (net of tax)
10.4 7.6
Adjusted profit after tax for diluted
EPS calculation
(42.5) 24.3
Shares (k) 104,729 99,940
Convertible bond shares (k) 6,277 6,277
Shares for diluted EPS calculation 111,006 106,217
Adjusted diluted EPS (38.3)p 22.9p
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023170
Registered office
Greater London House
Hampstead Road
London
NW1 7FB
Registered in England
Company Number 4006623
Company Secretary
Emma Whyte
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London
WC2N 6RH
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Lawyers
Slaughter and May
1 Bunhill Row
London
EC1Y 8YY
Joint brokers
J.P. Morgan Cazenove
25 Bank Street
London
E14 5JP
Deutsche Numis Securities Limited
45 Gresham Street
London
EC2V 7BF
Berenberg
60 Threadneedle Street
London
EC2R 8HP
Financial PR
Teneo
The Carter Building
11 Pilgrim Street
London
EC4V 6RN
Company Information
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023 171
Share dealing enquiries
Link Group – Share Dealing
Central Square
29 Wellington Street
Leeds
LS1 4DL
0371 664 0445 (Calls are charged at the standard geographic rate
and will vary by provider)
Outside UK +44 (0) 371 664 0445 (Calls outside the United Kingdom
are charged at the applicable international rate)
Lines are open Monday –Friday 8am –4:30pm
Email: info@linksharedeal.com
Donate your shares to charity
If you have only a small number of shares which are uneconomical
to sell you may wish to donate them to charity free of charge
through ShareGift (Registered Charity 10528686).
Find out more at www.sharegift.org.uk or by telephoning
020 7930 3737.
Share fraud warning
Share fraud includes scams where investors are called out of the blue
and offered shares that often turn out to be worthless or non-existent,
or an inflated price for shares they own. These calls come from
fraudsters operating in ‘boiler rooms’ that are mostly based abroad.
While high profits are promised, those who buy or sell shares in this
way usually lose their money.
The Financial Conduct Authority (FCA) has found most share fraud
victims are experienced investors who lose an average of £20,000,
with around £200m lost in the UK each year.
Protect yourself
If you are offered unsolicited investment advice, discounted shares,
a premium price for shares you own, or free company or research
reports, you should take these steps before handing over any money:
• Get the name of the person and organisation contacting you.
• Check the Financial Services Register at http://www.fca.org.uk
to ensure they are authorised.
• Use the details on the FCA Register to contact the firm.
• Call the FCA Consumer Helpline on 0800 111 6768 if there are no
contact details on the Register or you are told they are out of date.
• Search our list of unauthorised firms and individuals to avoid doing
business with.
Remember: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other investments,
you will not have access to the Financial Ombudsman Service or
Financial Services Compensation Scheme (FSCS) if things go wrong.
Report a scam
If you are approached about a share scam you should tell the FCA
using the share fraud reporting form at http://www.fca.org.uk/scams,
where you can find out about the latest investment scams. You can
also call the Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should contact
Action Fraud on 0300 123 2040.
Shareholder Information
ASOS PLC
ANNUAL REPORT AND ACCOUNTS 2023172
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ASOS Plc Annual Report and Accounts 2023
ASOS Plc
Greater London House
Hampstead Road
London
NW1 7FB
United Kingdom
Tel: +44 (0)20 7756 1000
Company information
Registered in England 4006623
VAT number: 788 6225 77