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Zalando SE Investor Presentation 2021
499_ip_2021-11-03_412373c3-19d4-448a-a6ef-aaf3bc299ebe.pdf
Investor Presentation
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Zalando Q3/2021
We successfully navigated through the first full quarter of a reopened economy, continued to make significant progress on our strategic agenda and delivered a strong set of financial results
Successfully launched in six new markets with locally tailored assortment, digital experience and convenience services, paving the way to be the Starting Point for Fashion across Europe
Increased frequency of brand collaborations showcasing our progress in bringing brand relationships to the next level and exciting our customers with exclusive offers
Introduced new business practices for circularity along the full product lifecycle to ultimately extend the life of 50 million fashion products by 2023
Delivered strong financial performance: GMV growth of +25.3%, Revenue growth of +23.4% and adj. EBIT of 9.8m EUR in Q3
Reiterating upgraded FY/2021 guidance: GMV and revenue growth unchanged at +31-36% and +26-31% YoY, respectively, adj. EBIT in the upper half of the guided 400-475m EUR range
Business Update Q3 2021
Robert Gentz (co-CEO & Founder)
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To achieve our vision to be the Starting Point for Fashion we focus on three strategic dimensions and have set ourselves ambitious targets for 2025
We successfully launched 6 markets in 2021 to be the Starting Point for Fashion across Europe
Entering new markets with locally tailored offer ... … reflected in early success indicators
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options
1) Source: AppAnnie. According to AppAnnie 1.6x more downloads than next best competitor. 2) Average population penetration across Croatia, Estonia, Lithuania, Latvia, Slovakia, Slovenia.
Establishing the next level of collaboration with our partners to engage our customers by providing the best assortment from their most desired brands
On our path towards a truly sustainable fashion platform, we continue to shape new business models and expand into circular systems
In 2022, we will double-down on our strategic initiatives to make strong headway towards our long-term vision
Financial Update Q3 2021
David Schröder (CFO)
9
Continued strong topline momentum in Q3 in light of reopening of European economies and later than usual fall winter season start
1) YTD/21 (YTD/20) [YTD/19] contains -€541.7m (-€335.6m) [-€290.8m] reconciliation of internal revenues; Q3/21 (Q3/20) [Q3/19] contains -€208.8m (-€118.2m) [-€79.4m] reconciliation of internal revenues 2) Other segments including various emerging businesses, private label offering zLabels no longer presented as separate unit since Q2/19
Key customer KPIs reflect exceptionally strong customer acquisition and development over the past 12 months
1) Defined as GMV divided by the number of orders
2) Defined as GMV divided by the number of active customers
Normalized level of profitability reflecting usual seasonal pattern as well as continued significant long term growth investments including recent market launches in Rest of Europe
1) YTD/21 (YTD/20) contains €2.7m (€4.1m) reconciliation of internal EBIT; Q3/21 (Q3/20) contains -€0.5m (€4.8m) reconciliation of internal EBIT
2) Excluding equity-settled share-based compensation (SBC) in YTD/21 (YTD/20) of -€40.4m (-€41.1 m); Q3/21 of -14.3 €m, Q3/20 of -13.2€m; and non-operating one-off effects in Q3/21 of 0.0€m
3) All other segments including various emerging businesses; private label offering zLabels no longer presented as separate unit since Q2/19
Delayed season start, increased price and marketing investments drove Q3 profitability below prior year, which had seen significant one-off benefit from reversal of inventory write-down
| Costs and margins (in % of revenue) |
YTD | Q3 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | YoY Delta | 2019 | 2020 | 2021 | YoY Delta | ||
| Cost of sales | (57.6%) | (58.2%) | (58.5%) | (0.4pp) | (58.9%) | (55.6%) | (61.2%) | (5.6pp) | Delayed season start, price Investments & |
| Gross profit | 42.4% | 41.8% | 41.5% | (0.4pp) | 41.1% | 44.4% | 38.8% | (5.6pp) | lapping of reversal inventory write-down |
| Fulfillment costs | (28.2%) | (27.1%) | (25.3%) | 1.8pp | (28.7%) | (26.7%) | (26.5%) | 0.2pp | |
| Marketing costs | (7.8%) | (6.9%) | (8.8%) | (1.9pp) | (8.1%) | (7.9%) | (8.6%) | (0.8pp) | |
| Administrative expenses & Other | (4.8%) | (4.3%) | (3.7%) | 0.5pp | (4.7%) | (4.1%) | (3.9%) | 0.3pp | |
| EBIT | 1.5% | 3.5% | 3.6% | 0.1pp | (0.5%) | 5.7% | (0.2%) | (5.9pp) | |
| Adj. EBIT1 | 2.6% | 4.3% | 4.0% | (0.3pp) | 0.4% | 6.4% | 0.4% | (6.0pp) |
1) Excluding equity-settled share-based payment expense ("SBC"), restructuring costs and non-operating one-time effects
Net working capital increased YoY reflecting deliberately preponed inventory intake to mitigate potential supply chain disruptions in preparation for peak season
1) Excluding payments for acquisitions of €0.0m in YTD/21, €0.0m in Q3/21 (Q3/20: €0.0m)
Outlook
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GMV growth of 31 – 36%, and Revenue growth of 26 – 31%
Adj. EBIT1in the upper half of the €400 – 475m range
Negative net working capital and Capex around €350m2
1) Excluding equity-settled share-based payment expense ("SBC") of ~€60m, restructuring costs and non-operating one-time effects for FY/21
2) Excludes M&A transactions
Cash Position
(1) Includes sales and investments in fixed and intangible assets (-€57.7m), payments for acquisitions (+€0.0m), change in restricted cash (+€0.2m) and change in term deposits (-€3.0m).
(2) Includes financing cash flow (-€111.5m) and effect of exchange rate on cash and cash equivalents (€9.7m).
Issued share capital
| SHARE INFORMATION (AS OF SEP 30, 2021) |
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 | 261,991,533 | |||
| Issued Share Capital | €261,991,533 |
STOCK OPTION PROGRAMS MGMT BOARD (AS OF SEP 30, 2021) STOCK OPTION PROGRAMS SENIOR MGMT (AS OF SEP 30, 2021)
| Program | # Options outstanding | Weighted average exercise price (EUR) |
|---|---|---|
| SOP 20131 | 407,475 | 1.00 |
| LTI 2018² | 4,296,949 | 47.44 |
| VSOP 2018 | 140,000 | 29.84 |
| LTI 2019 | 412,450 | 17.31 |
| Total | 5,256,874 | 41.01 |
| Program | # Options outstanding | Weighted average exercise price (EUR) |
|---|---|---|
| SOP 20141 | 677,248 | 23.63 |
| EIP1 | 2,798,403 | 37.26 |
| VSOP 2017 | 30,000 | 50.00 |
| ZOP | 1,246,126 | 37.42 |
| Total | 4,751,777 | 35.44 |
1) Settled with new shares
2) Only to 43% dilutive / to be settled with new shares, remaining backed by treasury shares
Zalando Investor Relations Team
Patrick Kofler Head of IR
Dorothee Schultz Manager IR - ESG
Nils Pöppinghaus Senior Manager IR
Jan Edelmann Manager IR
Team Contact
T: +49 3020 9681 584 Zalando Tamara-Danz-Straße 1 10243 Berlin
[email protected] https://corporate.zalando.com/en
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.
