Annual Report 2022

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Letter from the CEO

Accelerating Global Growth

The market potential within order-fulfillment automation is huge. Despite global economic headwinds, AutoStore delivered 78.1% revenue growth and a robust adjusted EBITDA margin of 40.7%.

The world experienced several crises in 2022, not least as a result of Russia’s invasion of Ukraine in February, which marked the start of a conflict to which no end is yet in sight. My deepest sympathy and concern go out to the millions of people directly affected. In addition to colossal human costs, the war triggered price shocks, disrupted supply chains, and brought about food and labor shortages.

Despite global economic headwinds, AutoStore has experienced a year of major milestones. Globally, we reached +1,150 systems sold. Further, we achieved 100+ systems sold in the Asia-Pacific region in total, a solid proof of our accelerating growth in that part of the world.

Revenues for the full year ended at USD 583.5 million, representing growth of 78.1% from year-end 2021. Reported EBIT was USD 167.0 million. Adjusted EBITDA ended at USD 237.5 million with an adjusted EBITDA margin of 40.7%. As a result of supply chain challenges, our margins developed negatively compared to previous years. Throughout the year, we took several actions, including price increases, increasing capacity with existing suppliers, adding new suppliers and strengthening our organization. Due to this, and already reflected in our backlog, our margins will return to historical levels in 2023, and we already saw a sequential improvement of gross margins by 650 bps in the fourth quarter– so we are well under way.

Our order intake continues to be strong. At the end of the year, our backlog amounted to USD 476 million, which together with a record high project pipeline of USD 5.7 billion, up 35% compared to end of year 2021, gives us comfort regarding our 2023 full-year guidance of 20-30% revenue growth. Global megatrends such as the e-commerce and automation drive, changing consumer demand, the emergence of micro-fulfillment centers and a general need for more sustainable solutions constitute a strong platform for continued growth.

Going forward, our key strategic priorities are continued growth in core markets, product expansion and innovation, and boosting recurring revenue. These strategic priorities are clear and consistent with previous announcements, and give direction for the period from 2023 to 2025. In 2022, we also included sustainability as one of six strategic pillars, and will use 2023 to develop our climate and sustainability strategy.

Ever since 1996, we have been fully committed to innovation in our existing product portfolio and exploring related opportunities. This lies at the heart of what we do. Many people ask us how the idea we had in 1996 could grow into something on the scale we see in the 2022 numbers. I believe that our success is a result of our people, our entrepreneurial spirit and our strong partner network.

In 2022, we expanded our workforce by 49%, to 873 employees at year-end. This organizational growth is a clear sign of our determination to build a robust company with a highly skilled workforce capable of delivering on our growth ambitions.

AutoStore implemented an orderly and planned CEO transition in 2022, with Karl Johan Lier announcing his retirement in November, before I took up my new post on January 1, 2023. The transition has been positively received, and I could not be prouder to be leading the AutoStore team.

We have unwavering confidence in the future of AutoStore, and will continue to leverage our leading position in the automated storage and retrieval systems market by developing innovative order-fulfillment solutions that help companies achieve efficiency gains within the storage and retrieval of goods.

My sincere thanks go to our employees, partners, customers, and shareholders, for your work and support in the past year. We are here for the long run – as we have always been – with the aim of generating value through excellent performance and delivery, both in 2023 and beyond.

Mats Hovland Vikse,
Chief Executive Officer.

Report Highlights

In 2022, AutoStore demonstrated the resilience of its business model.  

Despite market uncertainty, AutoStore delivered 78.1% revenue growth and a robust adjusted EBITDA margin1 of 41%. In 2022, global supply chain challenges impacted margins in the form of cost inflation, primarily for key components. However, margins improved toward the end of the year as strategic pricing actions and more favorable aluminum prices started to take effect. We expect margins to trend higher and back toward historical levels in 2023, as projects with more favorable cost and pricing levels move from backlog to realized revenues.

In 2022, the AutoStore team remained focused on operational excellence, refining its production and sourcing strategies by reducing dependencies on individual suppliers, optimizing inventory levels, and increasing visibility among suppliers. Collectively, these efforts secured significantly shorter lead times and faster delivery to customers.

1 Please see the APM section in the Annual Report for further details, page. 208.

Strategic Direction

In 2022, AutoStore reformulated its strategic priorities for the period to 2025. The overall direction remains the same, but the priorities are clearer.

AutoStore is focused on maintaining positive momentum. In the medium term, the goal is to grow revenue by 2–3 times the growth rate of the broader warehouse automation market and bring margins back to historical levels. Assuming current market growth estimates, this implies a CAGR for AutoStore of approximately 40% over time.

The key strategic initiatives for the period to 2025 are:

  • Continue growth in core markets
    - Expanding our presence in North America and the Asia-Pacific region
    - Expanding in the large fulfillment center and micro-fulfillment center segments
  • Product expansion and innovation
    - Continued investment in research and development and product innovation
    - Product partnerships and disciplined approach to mergers and acquisitions
  • Increase proportion of recurring revenue
    - Pricing model innovation
    - Increase share of software sales

ESG (Environmental, Social and Governance)

At AutoStore, we see ESG measurement, management and reporting as a long-term value creation that will help us build resilience in all aspects of our business. ESG is important not only for AutoStore, but also for our employees, customers, partners, suppliers and investors.

The ESG report provides an overview of AutoStore material topics. The company’s aim is to be transparent and to drive continuous improvement within sustainability. AutoStore has established baseline measures for material topics and is actively addressing critical areas where work remains to be done. 2022 was a year of preparing for the future by putting in place key resources and plans for ESG activities and measurements going forward. In addition to forming the base for AutoStore’s sustainability reporting, the material topics will guide the development of the company’s new climate and sustainability strategy in 2023. AutoStore will define goals and performance indicators for these areas and aim to monitor and report progress regularly.

As a manufacturing business, AutoStore’s activities have both direct and indirect environmental impacts. AutoStore’s warehouse Robots use a variety of energy sources to stay operational and effective, and pick and deliver the right product at the right time. However, as the Robots require no ventilation, heating, cooling or lighting, they consume exceptionally low amounts of energy compared to traditional storage solutions. Moreover, optimized recharging schedules allow Robots to avoid excessive charging, and the regenerative energy function recovers battery charge during braking and bin lowering. Developing such energy-efficient solutions lies at the heart of AutoStore. The company’s mission has always been, and remains, to make a strong contribution to a more sustainable world and future for all.

Agnethe Brown Erland,
VP of Sustainability at AutoStore.

Annual Report 2022
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