DGAP-News: Zalando SE / Key word(s): Half Year Results/Quarterly / Interim Statement Zalando reports record orders, active customers in Q2 07.08.2018 / 08:00 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- ZALANDO REPORTS RECORD ORDERS, ACTIVE CUSTOMERS IN SECOND QUARTER * Second quarter revenue up 20.9% to EUR 1,330.0 million, adjusted EBIT of EUR 94.0 million, 7.1% margin * Highest number of active customers (24.6 million) placed record number of orders (29 million) in a single quarter * Full-year revenue growth expected in the lower half of 20-25% growth target, adjusted EBIT at the low end of EUR 220-270 million range BERLIN, AUGUST 7, 2018 // Zalando SE continued to capture market share and grew revenues in the second quarter by 20.9% to EUR 1,330.0 million, in line with its 20-25% growth target. Europe's leading online fashion and lifestyle platform achieved an adjusted EBIT of EUR 94.0 million or a margin of 7.1% in the same period. For the financial year 2018, Zalando forecasts profitable revenue growth in the lower half of its target corridor of 20-25%, expecting adjusted EBIT at the low end of the EUR 220-270 million target range. The second quarter was characterized by a strong development of customer KPIs: Zalando recorded 29 million orders, the highest number of orders in a single quarter. Active customers increased by 15.9% to 24.6 million, and ordered more frequently; more than four times per year in an all-time high. Zalando Co-CEO Rubin Ritter: "The strong development in customer KPIs shows that our engine is running extremely well. We're excited to see that our customer-centric focus is paying off, despite a continued challenging fashion market environment. Our Partner Program is growing particularly strongly, accounting for about ten percent of merchandise volume sold in the second quarter." Zalando launched its online Fashion Store in Ireland and the Czech Republic in the second quarter and is now present in 17 European countries. Zalando also broadened access to its offering by launching an English language version of Zalando in Germany and an Italian version in Switzerland. In the first half of 2018, Zalando grew revenues by 21.4% to EUR 2,526.0 million and achieved an adjusted EBIT of EUR 94.4 million, or a 3.7% margin. Capital expenditure in the first half of 2018 amounted to EUR 108.8 million, reflecting investments primarily into logistics infrastructure. Due to continued strong logistics investments, the capital expenditure volume is expected to stay at an elevated level for the financial year of 2018 at around EUR 350 million. The earnings presentation for analysts and investors is available on the Zalando Investor Relations website. Zalando will report results for the third quarter 2018 on November 6, 2018. ZALANDO GROUP - KEY FIGURES (IN EUR MILLION) As of January 1, 2018, Zalando changed its internal management structure. The focus is now primarily on sales channels rather than on geographical regions. Thus, the segment reporting has been adjusted accordingly. This change increases the level of responsibility and decision making within the individual sales channels. Under the new structure, our main sales channel continues to be Fashion Store (online shops of Zalando). The Offprice segment includes Zalando Lounge, the outlet stores and overstock management. The Other segment includes the private label offering zLabels and various emerging businesses. However, to ensure continuity of capital market reporting, Zalando will continue to report a breakdown of results within the Fashion Store into DACH and Rest of Europe. While reporting was previously on a consolidated basis, from January 1, 2018 onwards, revenue and profitability generated with external business partners as well as the internal transactions between segments of Zalando are reported. Due to this change, the segment reporting has been supplemented by a reconciliation column to reconcile segment figures (including internal and external transactions) to the consolidated group figures (showing only external transactions). Q2 2018 Q2 20171 HY1 2018 HY1 20171 Group revenue 1,330.0 1,100.5 2,526.0 2,080.7 % growth 20.9% 20.1% 21.4% 21.5% Fashion Store 1,233.4 1,017.0 2,327.3 1,925.8 % growth 21.3% -- 20.8% -- Thereof DACH2 625.8 542.2 1,177.8 1,017.2 % growth 15.4% -- 15.8% -- Thereof Rest of Europe3 607.6 474.8 1,149.5 908.6 % growth 28.0% -- 26.5% -- Offprice 114.6 82.3 235.0 154.7 % growth 39.3% -- 51.9% -- Other4 100.8 81.9 200.6 166.1 % growth 23.0% -- 20.7% -- Reconciliation (118.7) (80.7) (236.8) (166.1) Adjusted group EBIT5 94.0 81.8 94.4 102.1 Adjusted group EBIT margin 7.1% 7.4% 3.7% 4.9% Fashion Store 92.2 74.7 92.0 91.0 % adj. margin 7.5% 7.3% 4.0% 4.7% Thereof DACH 60.0 57.6 76.7 94.1 % adj. margin 9.6% 10.6% 6.5% 9.3% Thereof Rest of Europe 32.2 17.0 15.4 (3.0) % adj. margin 5.3% 3.6% 1.3% (0.3%) Offprice 7.5 11.8 16.0 17.9 % adj. margin 6.5% 14.3% 6.8% 11.6% Other (7.5) (4.7) (15.8) (6.9) % adj. margin (7.4%) (5.7%) (7.8%) (4.2%) Reconciliation 1.7 0.0 2.1 0.0 Net working capital 16.1 (37.0) 16.1 (37.0) Capital expenditure (67.0) (52.1) (108.8) (130.0) Net income 51.8 47.4 36.7 52.6 1. New segment structure from January 1, 2018, onwards. Financial years 2014-2016 not restated. 2. Fashion Store DACH is comprised of Germany, Austria and Switzerland. 3. Fashion Store Rest of Europe includes all other countries in which Zalando presently operates its online shops. 4. Other segment includes the private label offering zLabels and various emerging businesses. 5. Before expenses for equity-settled share-based payments and effects from business transactions that do not recur regularly. ZALANDO GROUP - KEY PERFORMANCE INDICATORS Q2 Q2 HY1 HY1 2018 2017 2018 2017 Site visits (m)6 734.3 595.2 1,447.8 1,212.8 % growth 23.4% 24.0% 19.4% 26.4% Mobile visit share (% of site 78.4% 69.7% 77.5% 69.3% visits)7 Change vs. comparable prior period 8.6pp 5.0pp 8.2pp 5.8pp Active customers (m)8 24.6 21.2 24.6 21.2 % growth 15.9% 12.6% 15.9% 12.6% Number of orders (m)9 29.0 22.2 54.4 42.1 % growth 30.3% 26.8% 29.2% 27.0% Average orders per active customer 4.2 3.7 4.2 3.7 % growth 13.4% 11.2% 13.4% 11.2% Average basket size (EUR)10 60.4 64.5 60.3 63.8 % growth (6.4%) (2.6%) (5.4%) (3.8%) Headcount 15,612 13,218 15,612 13,218 % growth 18.1% 10.2% 18.1% 10.2% 6. Number of series of page views from the same device and the same source (via websites, mobile sites, tablet sites or apps). The series is considered ended when a page view is not recorded for longer than 30 minutes. 7. Tablets, mobile sites and apps. 8. Number of customers placing at least one order in the last twelve months irrespective of cancellations or returns. 9. Number of customer orders placed in the measurement period irrespective of cancellations or returns. An order is counted on the day the customer places the order. 10. Transactional revenue (incl. VAT and transactional volume of Partner Program) after cancellations or returns divided by the number of orders. NOTES TO EDITORS ABOUT ZALANDO Zalando (https://corporate.zalando.com) is Europe's leading online fashion and lifestyle platform for women, men and children. We offer our customers a one-stop, convenient shopping experience with an extensive selection of lifestyle articles including shoes, apparel, accessories and beauty products, with free delivery and returns. Our assortment of almost 2,000 international brands ranges from popular global brands, fast fashion and local brands, and is complemented by our private label products. Our localized offering addresses the distinct preferences of our customers in each of the 17 European markets we serve: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Poland, and the United Kingdom. Our logistics network with five centrally located fulfillment centers allows us to efficiently serve our customers throughout Europe, supported by warehouses in Northern Italy, France and Sweden with a focus on local customer needs. We believe that our integration of fashion, operations and online technology gives us the capability to deliver a compelling value proposition to both our customers and fashion brand partners. CONTACT ZALANDO Alexander Styles / Financial Communications [email protected] +49 30 20968 2022 --------------------------------------------------------------------------- 07.08.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: Zalando SE Tamara-Danz-Straße 1 10243 Berlin Germany E-mail: [email protected] Internet: https://corporate.zalando.de ISIN: DE000ZAL1111 WKN: ZAL111 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 711385 07.08.2018