Zalando Posts Strong Start into 2018

• Strong revenue growth of 22 % to EUR 1,196 million
• Adjusted EBIT remains breakeven at EUR 0.4 million
• Full-year guidance confirmed
• Beauty category successfully launched

BERLIN, MAY 8, 2018 // Zalando SE continued to capture market share in the first quarter of 2018 and grew revenues strongly by 22 % to EUR 1,196 million. Europe’s leading online platform for fashion achieved an adjusted EBIT of EUR 0.4 million and remained breakeven. The company confirms its full-year guidance of revenue growth at 20-25 % and an adjusted EBIT between EUR 220 and 270 million.

Co-CEO Rubin Ritter said: “Growth is our top priority and that’s exactly what we have focused on in the first quarter, despite a challenging fashion market environment. A delayed start of the spring/summer season put pressure on the industry, however, we have our eyes firmly set on our growth targets.”

In the first quarter, Zalando successfully launched the beauty category in Germany. More than 4,000 products from 130 different brands were available at launch, initially focused on cosmetics and skin care for women.

“Beauty is the first category we launched in four years and we’re off to a promising start. We see a great opportunity to complement our assortment and strengthen our position as a one-stop destination for fashion and lifestyle,” said Rubin Ritter.

A strong increase of active customers and record order frequency drove growth in the first quarter. The number of active customers grew by 3.5 million, or 16.7 %, to 23.9 million. On average, each active customer placed four orders with Zalando in the last twelve months, marking an all-time high. Customers mainly accessed Zalando from mobile devices, as the mobile visit share reached 76.6 % in the first quarter.

The earnings presentation for analysts and investors is available on the Zalando Investor Relations website. Zalando will report results for the second quarter 2018 on August 7, 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 Other segment includes “Offprice” (Zalando Lounge, outlet stores and overstock management), the private label offering zLabels and various emerging businesses. However, to ensure continuity of capital market reporting, Zalando will continue to voluntarily 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 will be reported. Due to this change, the segment reporting has been supplemented by a reconciliation column to reconcile the segment figures (including internal and external transactions) to the consolidated group figures (showing only external transactions).

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. All other sales channels are grouped under the Other segment, which includes “Offprice” (Zalando Lounge, outlet stores and overstock management), 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

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.