Key Financials 2012: Zalando More Than Doubles Net Sales to 1.15 Billion EUR and Reaches Break-Even in Core Region

Berlin, February 15, 2013 // Europe’s leading online shop for shoes and fashion successfully concluded the business year 2012 and continues to deliver unprecedented growth. With net sales of 1.15 billion EUR Zalando was able to more than double sales compared to the previous year (2011: 510 million EUR), according to the company’s preliminary figures. At the same time, Zalando reached break-even (EBIT) in its core region Germany, Austria and Switzerland (“DACH”) and continued to invest into new markets as well as assortment, proprietary logistics and IT.

Zalando is Europe´s fastest growing company

Zalando is the fastest European company ever to reach more than one billion EUR in net sales only four years after being founded. Robert Gentz, Founder and Managing Director of Zalando, commented: “We are very proud of the remarkable achievements we made as a team. This development reaffirms our business model and our investors’ trust. Zalando is a true European success story.”

Zalando‘s sales grew at a rate of 125 per cent compared to 2011. This increase can be attributed to rising demand in all existing markets including Germany, as well as the addition of seven new countries in 2012, extending the company’s reach to 14 active markets overall. “By launching shops in several new countries we have now established a broad footprint. This will be the basis for Zalando’s growth for the years to come,” added Robert Gentz.

Zalando reaches break-even in its core region DACH (Germany, Austria and Switzerland) and continues to invest into international expansion

In 2012, Zalando proved its capability to combine very strong sales growth with a continued path to profitability. In the most established region DACH, which generates the majority of net sales, Zalando reached break-even (EBIT) while continuing to grow at high rates.

At the same time, Zalando invested into the international markets to further strengthen its leading position in Europe. As a result of this strategy, the Berlin-based company closed 2012 with an improved overall EBIT margin of minus eight per cent of sales (2011: minus twelve per cent). “Set-up costs are taken into account and part of our strategy for all market entries. The important part is that we see a positive margin trend in all regions as customers are loyal and efficiency is improved,” explained Rubin Ritter, Managing Director at Zalando. “The fact that we reached break-even in our core region already in our fourth year proves the success of our business model and has encouraged us to invest even faster into building leadership in the international markets,” continued Ritter.

To drive future expansion, Zalando remains financially well-equipped. “In 2012, we further increased Zalando’s equity ratio to more than 50 per cent from 39 per cent back in 2011. We follow a fast growth path, and always have countered this with a very conservative balance sheet,” emphasized Rubin Ritter. Zalando was able to win three new high profile shareholders in 2012: DST Global, J.P. Morgan Asset Management and Quadrant Capital. Swedish investor AB Kinnevik increased its share, becoming the largest shareholder. Additionally, Zalando has agreed on debt financing of 40.7 million EUR with the Commerzbank and the Sparkasse Mittelthüringen.

Zalando successfully enters seven new markets and continues to invest in assortment, proprietary logistics and IT

In 2012, Zalando not only invested into seven new countries, but also built new capabilities to assure sustainable structures and further enhance customer satisfaction. As a result, more than ten million customers have ordered fashion at Zalando until today. The e-commerce company continued to extend its assortment, which now offers customers to choose of more than 150,000 styles from current collections offered by more than 1,500 brands.

“It’s our goal to be the preferred online shop for fashion and shoes in each of our European markets. To keep growing at this speed, we continued to improve our offer to the customer by extending our brand portfolio to an incomparably international selection along all categories in fashion, shoes and sports. We broadened our in-house designed labels, and engaged more shops in the partner program adding to a better availability and broader selection,” said David Schneider, Founder and Managing Director at Zalando. “Our goal is to keep focus on the best fashion offer, the most advanced technology with great functionality of our web shop and proprietary logistic infrastructure enabling fast delivery and excellent service. We do not only want to grow fast, but also to become better in what we deliver to our customers.”

In order to further improve convenience, investments were made into building in-house logistics competence, launching one of the largest European fulfillment centers in Erfurt/Germany. The same applied in the field of IT, where Zalando built one of Europe’s largest technology teams with about 300 IT specialists.

ABOUT ZALANDO
Zalando is Europe’s leading online retailer for shoes and fashion. Working with over 1,500 international brands, Zalando offers an extensive selection of products for women, men and children, ranging from popular high street brands to much sought-after designer labels. Exclusive accessories and sportswear add to Zalando’s wide range of products. A combination of unique services – free delivery and returns, a free service helpline and an extended day returns policy – make online shopping at Zalando a convenient and secure online experience. The company was founded by Robert Gentz and David Schneider in 2008 and its headquarters are located in Berlin. Following its success in Germany, Zalando launched in Austria in 2009 and the Netherlands and France followed in 2010. In 2011 Zalando expanded into Italy, the UK and Switzerland. Since 2012 Zalando has also been available in Sweden, Belgium, Spain, Denmark, Finland, Poland, and Norway. Deliveries were extended to Luxembourg in 2013.