Ocado Group (OCDO.L): First Take: Large European CFC announced to go live in FY28; cash flow guidance reiterated

Research evidence excerpt

Ocado Group (OCDO.L): First Take: Large European CFC announced to go live in FY28; cash flow guidance reiterated

Equity Research

21 July 2026 | 4:13PM BST

Ocado Group (OCDO.L): First Take: Large European CFC announced to

go live in FY28; cash flow guidance reiterated

News: Ocado announced an agreement with a European national retailer to build a Richard Edwards

+44(20)7051-6016 |

large Customer Fulfilment Centre (CFC) due to go live in FY28. Key points are: 1) The richard.edwards@gs.com

Goldman Sachs International

CFC is expected to go live with utilisation of just over half of the design capacity due

Ben Williams

to the transfer of existing online order volumes; 2) The CFC is planned to be +44(20)7051-0661 |

equipped with Re:Imagined technologies including the 600 Series Bot, On-Grid ben.williams@gs.comGoldman Sachs International

Robotic Pick (OGRP), and a fully Automated Freezer. Hamish Bogdan

+44(20)7552-2214 |

Guidance reiterated: Ocado expects to turn FCF positive in 2H26, with full year cash hamish.bogdan@gs.comGoldman Sachs International

flow positivity expected in FY27.

Valuation: Our 12-month DCF-derived price target is 215p, equating to a c.11x

FY27E EV/EBITDA. We are Neutral rated.

Key upside/downside risks include: 1) If online grocery penetration grows

faster/slower than we expect, this would significantly improve/worsen Ocado’s TAM

and thus projected CFC rollout. 2) Solutions partners may choose to pause CFC

rollout given a weaker consumer demand environment given the large capex

required. However, the signing of new deals or extensions of existing partner

commitments would be an upside risk. 3) Ocado does not have a Re:Imagined CFC of

the specifications as guided to operating at full capacity — we therefore view

execution risk as tangible.