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Zalando SE Earnings Release 2024
499_ip_2024-05-07_79fbf8ec-fea9-413a-b8bf-1acf3f7f5b01.pdf
Earnings Release
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May 7, 2024 Dr. Sandra Dembeck (CFO)
Executive summary
01 Returned to growth in the first year of our ecosystem strategy GMV growth of +1.3% after thee quarters of muted growth in a challenging environment. Growth accelerated by +4pp compared to Q4/23
Continued adjusted EBIT margin expansion 02
Adjusted EBIT margin up +1.3pp to 1.3% (EUR 28.3m) driven by improved gross margin and a reduction in OPEX
03 Accelerated B2C growth by elevating and expanding our multi-brand platform Partner Business continues to outgrow retail business
B2B growth driven by increased adoption of ZEOS fulfillment Strong revenue growth of +13.4%, increased the number of merchants using multichannel fulfillment by five bringing the total number of merchants to 27 04
Reiterating full year 2024 guidance 05
Both GMV and revenue growth of 0% - 5%, adjusted EBIT in the range of EUR 380 - 450m, CAPEX of EUR 250 - 350m and negative net working capital
In Q1, we returned to GMV growth and continued our margin expansion
3 1Gross Merchandise Volume after Returns (GMV): dynamically reported
2 Excluding equity-settled share-based payment expense ("SBC"), restructuring costs, non-operating one-time effects and acquisition-related expenses 1
B2C segment driving GMV growth and adjusted EBIT margin expansion
4 1Gross Merchandise Volume after Returns (GMV): dynamically reported.
2 Excluding equity-settled share-based payment expense ("SBC"), restructuring costs, non-operating one-time effects and acquisition-related expenses L3M 1
+4.1%
L3M +2.0%
L3M (2.0)%
GMV per active customer continued to increase driven by higher average basket size
5 1L12M = last twelve months. 2 Defined as GMV divided by the number of orders 3 Defined as GMV divided by the number of active customers
B2B segment outperformed the group revenue growth rate driven by ZEOS fulfillment
6 1Q1/24 contains EUR 1.7m | Q1/23 EUR 2.1m reconciliations of intersegment revenue 2 Excluding equity-settled share-based payment expense ("SBC"), restructuring costs, non-operating one-time effects and acquisition-related expenses
Increased group profitability through improved gross margin and reduced fulfillment costs
| Costs and margin (in % of revenue) |
Q1/23 | Q1/24 | YoY ∆ |
|---|---|---|---|
| Gross profit | 37.9% | 38.2% | 0.3pp |
| Fulfillment costs | (26.4)% | (24.6)% | 1.8pp |
| Marketing costs | (7.3)% | (8.2)% | (0.9)pp |
| Administrative expenses & Other | (5.4)% | (5.5)% | (0.1)pp |
| EBIT | (1.2)% | 0.0% | 1.2pp |
| Adjusted EBIT1 | (0.0)% | 1.3% | 1.3pp |
Improved inventory management in our retail business and higher partner business share in B2C
Favorable order economics and scaling of our ZEOS fulfillment business
Investments to leverage the timely start to the spring/ summer season for demand generation and brand building
7 1 Excluding equity-settled share-based payment expense ("SBC"), restructuring costs, non-operating one-time effects and acquisition-related expenses
Continued inventory reduction resulted in improvement of net working capital
Cash and cash equivalents increased year-over-year to EUR ~2.3 billion
9 1 Includes investments in fixed assets of EUR (37.6)m and intangible assets of EUR (21.9)m, investments in term deposits of EUR (28.0)m and restricted cash of EUR 4.9m 2 Includes financing cash flow of EUR (40.7)m and effect of exchange rate on cash and cash equivalents of EUR (6.4)m 3 Includes operating cash flow of EUR (102.0)m, payments for investments in fixed assets of EUR (37.6)m and payments for investments in intangible assets EUR of (21.9)m Outlook
Reiterating our full year 2024 guidance
In 2024 we return to growth, continue to increase profitability and invest in future growth
| Guidance 2024 | ||
|---|---|---|
| Growth | GMV | 0% - 5% |
| Revenue | 0% - 5% | |
| Profitability | Adjusted1 EBIT (in EUR m) |
380 - 450 |
| Cash | Capex (in EUR m) |
250 - 350 |
| Net working capital (in EUR m) |
negative |
10 ¹ Excludes equity-settled share-based payment expense ("SBC"), restructuring costs, non-operating one-time effects and acquisition-related expenses
Key takeaways
01 Returned to growth in the first year of our ecosystem strategy GMV growth of +1.3% after thee quarters of muted growth in a challenging environment. Growth accelerated by +4pp compared to Q4/23
Continued adjusted EBIT margin expansion 02
Adjusted EBIT margin up +1.3pp to 1.3% (EUR 28.3m) driven by improved gross margin and a reduction in OPEX
03 Accelerated B2C growth by elevating and expanding our multi-brand platform Partner Business continues to outgrow retail business
B2B growth driven by increased adoption of ZEOS fulfillment Strong revenue growth of +13.4%, increased the number of merchants using multichannel fulfillment by five bringing the total number of merchants to 27 04
Reiterating full year 2024 guidance 05
Both GMV and revenue growth of 0% - 5%, adjusted EBIT in the range of EUR 380 - 450m, CAPEX of EUR 250 - 350m and negative net working capital
Zalando Q1/24
Q&A
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Zalando Q1/24
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Appendix
Issued share capital
Share information
(as of Mar 31, 2024)
| Type of shares | Ordinary bearer shares with no-par value (Stückaktien) |
|---|---|
| Stock exchange | Frankfurt Stock Exchange |
| Market segment | Regulated Market (Prime Standard) |
| Index listings | DAX |
| Total number of shares outstanding | 263,785,700 |
| Issued capital | EUR 263,785,700 |
Stock options programs Management Board (as of Mar 31, 2024) Stock options programs Senior Management (as of Mar 31, 2024)
| Program | # Options outstanding | Weighted average exercise price (EUR) |
|---|---|---|
| LTI 2018 2 | 4,296,949 | 47.44 |
| LTI 2019 | 296,442 | 24.38 |
| LTI 2021 | 2,596,413 | 24.80 |
| ZOP 2021 | 132,388 | 12.95 |
| Total | 7,322,192 | 37.85 |
| Program | # Options outstanding | Weighted average exercise price (EUR) |
|---|---|---|
| SOP 20141 | 319,385 | 28.24 |
| EIP 1 | 2,625,482 | 38.65 |
| ZOP 2019 | 6,638,104 | 25.27 |
| Total | 9,582,971 | 29.03 |
Zalando Investor Relations Team
Patrick Kofler Director of IR
Dorothee Schultz Manager ESG IR
Nils Pöppinghaus Senior Manager IR
Ignacio Azpitarte Garay Junior Manager IR
T: +49 3020 9681 584 Zalando SE Valeska-Gert-Straße 5 10243 Berlin
Team contact
[email protected] https://corporate.zalando.com/en
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Disclaimer
Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties.
You should not rely on these forward-looking statements as predictions of future events and we undertake no obligation to update or revise these statements.
Our actual results may differ materially and adversely from any forward-looking statements discussed on this call due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfillment centers, inaccurate personnel and capacity forecasts for fulfillment centers, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels.