Farfetch : Q1 2021 Earnings Release (opens in new window)

Farfetch Announces First Quarter 2021 Results

• Q1 2021 Gross Merchandise Value and Digital Platform GMV growth of 50% and 60% year- over-year, respectively, to $916 million and $790 million, respectively
• Q1 2021 Revenue increases 46% year-over-year to $485 million
• Q1 2021 Digital Platform Order Contribution Margin improves 100 bps year-over-year to 33%; Gross Profit Margin declines 80 bps year-over-year to 46%
• Q1 2021 Profit After Tax of $517 million includes $660 million non-cash benefit arising from lower share price impact on items held at fair value and remeasurements
• Q1 2021 Adjusted EBITDA improves to $(19) million, from $(22) million in Q1 2020
• Upgrades Digital Platform GMV outlook for full year 2021

LONDON, U.K. May 13, 2021 - Farfetch Limited (NYSE: FTCH), the leading global platform for the luxury fashion industry, today reported financial results for the first quarter ended March 31, 2021.

José Neves, Farfetch Founder, Chairman and CEO said: "Farfetch is off to a tremendous start in 2021 with stronger than expected acceleration in the business in the first quarter and higher full-year growth expectations than initially anticipated. Our brand partnerships have never been stronger, and our customer and brand building initiatives are resonating well to drive awareness of our value proposition and retention of our valuable consumers. I am also very enthused by the positive consumer reaction to our recent launch on Tmall's Luxury Pavilion, and the momentum building behind our Luxury New Retail vision as we see it being adopted by luxury partners around the world. I am more confident than ever in our position to go after the significant growth opportunities we see as a digital enabler of the global luxury industry - a nearly $300 billion opportunity which we remain laser-focused on and plan to continue investing behind to deliver significant value over the long- term."

Elliot Jordan, CFO of Farfetch, said: "I'm extremely pleased with Farfetch's strong first quarter where we exceeded our own expectations for GMV growth, while also achieving improved unit economics, operating leverage and adjusted EBITDA as compared to the prior year period. In light of the continuation of this strong momentum against a more favorable consumer backdrop, we are even more optimistic about our growth expectations for the year, and the value in continuing to invest behind our long-term growth opportunities as we continue to focus on delivering our first full year of adjusted EBITDA profitability 2021."

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Consolidated Financial Summary and Key Operating Metrics (in thousands, except per share data, Average Order Value, or otherwise stated):

		Three months ended March 31,
		2020		2021
Consolidated Group:
Gross Merchandise Value ("GMV")	$	610,874	$	915,604
Revenue		331,437		485,079
Adjusted Revenue		301,152		408,851
Gross profit		153,376		220,869
Gross profit margin		46.3%		45.5%
(Loss) / Profit after tax	$	(79,177)	$	516,667
Adjusted EBITDA		(22,319)		(19,196)
Adjusted EBITDA Margin		(7.4)%		(4.7)%
Basic (Loss) / Earnings per share ("EPS")	$	(0.24)	$	1.44
Diluted EPS		(0.24)		(0.28)
Adjusted EPS		(0.24)		(0.22)
Digital Platform:
Digital Platform GMV	$	494,899	$	790,014
Digital Platform Services Revenue		185,177		285,861
Digital Platform Gross Profit		97,207		156,335
Digital Platform Gross Profit Margin		52.5%		54.7%
Digital Platform Order Contribution	$	59,241	$	94,468
Digital Platform Order Contribution Margin		32.0%		33.0%
Active Consumers		2,149		3,272
Average Order Value ("AOV") - Marketplace	$	571	$	618
AOV - Stadium Goods		314		326
Brand Platform:
Brand Platform GMV	$	107,459	$	112,315
Brand Platform Revenue		107,459		112,315
Brand Platform Gross Profit		52,480		57,735
Brand Platform Gross Profit Margin		48.8%		51.4%

See "Notes and Disclosures" on page 18 for further explanations. See "Non-IFRS and Other Financial and Operating Metrics" on page 18 for reconciliations of non-IFRS measures to IFRS measures.

Recent Business Highlights

Group

• Farfetch was recognized as a TIME100 Most Influential Companies of 2021, for our relevance, impact, innovation, leadership and success
• COVID-19:

• Maintained continuity of operations throughout the business and continued to work closely with our global logistics partners to preserve continuity of fulfilment and delivery with no material disruptions during first quarter 2021
• Retail stores remained closed due to lockdown measures in affected locations across Europe

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Digital Platform

• Third-partytransactions generated 85% of Digital Platform GMV at a take rate of 29.7% in first quarter 2021
• Launched new brand campaign labeled "The Perfect Match" in April 2021, highlighting Farfetch's role as a platform connecting consumers with boutiques around the world
• The Farfetch Marketplace offered a record number of stock units across more than 3,550 brands from nearly 1,400 sellers as both multi-brand retailer and e-concession supply growth accelerated, including from our Top 10 brand e-concessions who more than doubled available stock units year-over-year
• Elevated the customer experience with introduction of interactive livestream events enabling Private Clients to engage with creators of brands such as AZ Factory and JAY AHR
• Continued to partner with brands to highlight their products and collections on the Marketplace, including the first of a four-partyear-long 'Imagined Futures' collaboration with Gucci focused on sustainability, as well as Burberry's genderless Spring-Summer 2021 collection and the Tag Heuer Connected watch
• Advanced Luxury New Retail (LNR) initiative:

• Full launch of Farfetch storefront on Tmall Luxury Pavilion - making over 3,000 brands available to Alibaba consumers
• Opened newly relocated Browns boutique in London, fully equipped with latest version of Connected Retail technology to offer visitors an integrated, personalized and interactive experience
• Expanded partnership with CHANEL with the implementation of Connected Retail technology in CHANEL boutique in Monaco
• Signed global department store, Printemps, to help design the in-store technology and connected retail experience for their new 300,000 square foot flagship planned for Doha, Qatar
• Expanded e-concession-as-a-service integrations for Harrods with additions of Zegna and Brunello Cucinelli
• Appointed by Cidade Matarazzo complex in development in Sao Paolo, to implement our Connected Retail solution to create a technologically advanced luxury experience across the complex's entire 300,000 square foot retail village

New Guards

• New Guards' portfolio continued to create culturally relevant collections

• Off-Whitelaunched 'I Support Black Women' initiative with Trinice McNally, which aims to amplify the voices of black women, as part of its quarterly PSA fundraising program and unveiled second activewear collection, named "OFF ACTIVE"
• Palm Angels introduced new staple sneaker, the "Palm One," and collaborated with famed art book publisher, Rizzoli, to launch a limited-edition zine in celebration of its Spring-Summer 2021 collection
• Ambush released a capsule collection with Nike and partnered with Moet & Chandon to design limited editions of their iconic champagne bottle

Environmental, Social and Governance (ESG)

• In partnership with African fashion, art and culture media brand, Nataal, worked to raise the profiles of Black-owned brands, boutiques and creatives via the Farfetch Marketplace

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• Collaborated with 30 Middle Eastern and international designers to release an exclusive capsule collection for Ramadan
• Launched Farfetch Fix, a luxury restoration service powered by The Restory, enabling customers to seamlessly book a repair or restoration service online and extend the life of their luxury purchases
• Highlighted ability for European customers to make a positive choice to reduce emissions by opting for standard delivery
• Released our 2020 Conscious Luxury Trends report on the behaviors of luxury consumers and the luxury industry with regards to sustainability issues, leveraging the power of our data to support our brand and boutique partners
• As part of Earth day celebrations in April, Farfetchers remotely planted over 5,500 trees to drive positive change and help reduce the impact of carbon emissions

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First Quarter 2021 Results Summary
Gross Merchandise Value (in thousands):
		Three months ended March 31,
		2020		2021
Digital Platform GMV	$	494,899	$	790,014
Brand Platform GMV		107,459		112,315
In-Store GMV		8,516		13,275
GMV	$	610,874	$	915,604

Gross Merchandise Value ("GMV") increased by $304.7 million from $610.9 million in first quarter 2020 to $915.6 million in first quarter 2021, representing year-over-year growth of 49.9%. Digital Platform GMV increased by $295.1 million from $494.9 million in first quarter 2020 to $790.0 million in first quarter 2021, representing year-over-year growth of 59.6%. Excluding the impact of changes in foreign exchange rates, Digital Platform GMV would have increased by approximately 54.3%.

The increase in GMV primarily reflects the growth in Digital Platform GMV driven by strong order growth, new consumer acquisition and an increase in Marketplace AOV from $571 to $618 resulting from a higher average selling price, foreign exchange rate movements, higher full price mix of items sold and increased number of items per order. During first quarter 2021, we also saw year-over-year growth in transactions through websites managed by Farfetch Platform Solutions, primarily driven by incremental activity from newly launched e-commerce sites over the past year, including Harrods.com and Off---White.com which were launched in first quarter 2020.

Revenue (in thousands):
			Three months ended March 31,
			2020			2021
		$	119,201		$	181,057
Digital Platform Services third-party revenue
			65,976
Digital Platform Services first-party revenue					104,804
Digital Platform Services Revenue			185,177			285,861
Digital Platform Fulfilment Revenue			30,285			76,228
Brand Platform Revenue			107,459			112,315
			8,516			10,675
In-Store Revenue
Revenue		$	331,437		$	485,079

Revenue increased by $153.6 million year-over-year from $331.4 million in first quarter 2020 to $485.1 million in first quarter 2021, representing growth of 46.4%. The increase was primarily driven by 68.1% growth in Digital Platform Revenue to $362.1 million partially offset by comparatively lower Brand Platform Revenue growth of 4.5% year-over-year.

The increase in Digital Platform Services Revenue of 54.4% was driven by 59.6% overall growth in Digital Platform GMV with Digital Platform Services first-party GMV, which is comprised of our sales of owned-inventory including First-Party Original, and included in Digital Platform Services Revenue at 100% of the GMV. Digital Platform Services first-party revenue increased 58.9% year-over-year to $104.8 million, primarily driven by our continued focus on growing New Guards direct-to-consumer sales on the Marketplace and the respective websites of the New Guards portfolio brands.

Digital Platform Fulfilment Revenue represents the pass-through of delivery and duties charges incurred by our global logistics solutions, net of any Farfetch-funded consumer promotions and

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