DGAP-News

Zalando SE: Zalando on track for profitable 2014 after strong Q3 2014

DGAP-News: Zalando SE / Key word(s): 9-month figures
Zalando SE: Zalando on track for profitable 2014 after strong Q3 2014

26.11.2014 / 08:00

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Zalando on track for profitable 2014 after strong Q3 2014

- Q3 group revenue growth at 24 per cent, above market average

- First ever Q3 group EBIT breakeven driven by improved operating
efficiency

- Focus on capital efficiency led to strong free cash flow of EUR 80
million in Q3

- Zalando expects slight group EBIT profit for full-year 2014

Berlin, November 26, 2014 - Zalando SE, Europe's leading online platform
for fashion, is on track for a profitable full year after a third quarter
marked by continued above-market growth and strong gains in profitability
and capital efficiency. Group revenues grew by 24.2 per cent to EUR 501
million in the third quarter (Q3 2013: EUR 404 million). Growth in
Zalando's international markets was particularly strong with revenues in
the Rest of Europe segment growing by 39.9 per cent to EUR 198 million (Q3
2013: EUR 141 million). The DACH segment continued to lead the group's
profitability with an adjusted EBIT margin of 3.9 per cent (Q3 2013: -4.3
per cent), excluding stock based compensation. Overall, Zalando achieved an
adjusted EBIT margin of 0.8 per cent (Q3 2013: -12.4 per cent) in the third
quarter, marking the first ever group EBIT breakeven in a third quarter.
This development was driven by improvements along all cost lines, including
cost of sales, fulfillment, marketing and administration. In addition,
efficient working capital management led to a strong free cash flow of EUR
80 million.

"Zalando's revenue growth continued to outpace the overall online fashion
industry, which faced a difficult start to the fall/winter season due to
unseasonably mild weather," said Rubin Ritter, Member of the Zalando
Management Board. "Reviewing our successful development in the third
quarter we expect to reach slight group EBIT profitability for the full
year."

Zalando has put a strong focus on execution during the third quarter,
marked by the launch of the successful collaboration with Topshop and the
rollout of express delivery across all the company's markets, offering an
even more convenient delivery option for Zalando's customers. Zalando
continues to focus on execution in the fourth quarter and lately announced
the cooperation with GAP starting in spring/summer 2015, becoming the first
multibrand online shop to offer GAP fashion to continental Europe.