Inditex : net sales rise 15.4% to €20.9 billion in FY2015

Inditex Group's net sales increased by 15.4% in FY15 (1 February 2015 - 31 January 2016) to €20.90 billion, underpinned by growth in all of the Group's geographic regions. Sales growth in local currencies reached 15%. Net profit was €2.88 billion, up 15% from FY14. Meanwhile EBITDA registered growth of 15% to €4.70 billion. Like-for-like sales growth was 8.5%, on top of 5% growth in FY14, with positive growth in all geographies and across all the formats.

Commenting on Inditex's earnings performance over FY2015, Group Chairman, Pablo Isla, said 'these figures demonstrate the Group's potential, boosted by the quality and the commitment of all of its employees'.

Key financial indicators, FY15
(€ billion)	2015	2014
Net sales	20,900	18,117
Gross profit Gross margin	12,089 57.8%	10,569 58.3%
EBITDA	4,699	4,103
EBIT	3,677	3,198
Net profit	2,875	2,501

Other bussiness indicators
No. of stores Net openings	7,013 330
No. of markets	88
Employees	152,854

In FY15, Inditex generated 15,800 new jobs, boosting its worldwide headcount from 137,054 a year earlier to 152,854. The pace of job creation in Spain - where 4,120 new jobs were created across stores, head offices and logistic platforms - was a particular highlight. These new opportunities emphasise the benefits of Inditex's global growth.

Pablo Isla sought to highlight the Group's ability to create jobs, particularly in Spain, noting: 'The investments carried out in head offices and logistics platforms, and in upgrading the company's technology have continued to translate into significant job creation and enabled Inditex to attract talent all over the world'.

The Group's global growth has also had an indirect impact on the entire industry in Spain, where the Group has over 7,500 suppliers, which in turn employ some 50,000 people. These suppliers have invoiced Inditex €4.1 billion in 2015.

Capital expenditure. The Group invested €1.52 billion in FY15, earmarking this capital expenditure to the Group's growth and international expansion. This investment included the expansion and modernisation of its logistics facilities and design centres in Spain.

Over the past five years, Inditex has invested more than €700 million in operating platforms and process modernisation. Meanwhile, the Group has committed more than €1 billion in acquiring cutting-edge technology to support its store and logistics services. Over FY2015, investments include the creation of a new logistics platform in Cabanillas (Guadalajara, Spain), which services Pull&Bear and Zara Home, and the addition of two next-generation hanging garment storage and retrieval systems at the Zara platform in Zaragoza (Spain) and the Massimo Dutti platform in Tordera. In parallel, there is an ongoing effort to continually fine-tune and upgrade the Group's 10 existing logistics platforms in Spain.

Other highlights from 2015 include the installation of a new and fully-automated garment retrieval system at the Bershka platform in Tordera, which will be fully up and running in 2016 and will deliver more time-effective dispatches. The new Zara Home distribution systems in Cabanillas (Guadalajara, Spain) also stand out.

This Zara Home project included the addition of a fully-automated 40-metre high facility with capacity to hold 900,000 boxes or the equivalent processing capacity of 15 million articles. This has lifted storage capacity to 1,200,000 boxes of Zara Home articles of varying shapes and sizes, thus increasing process automation of a once complex logistics procedure, and made work at the facility more ergonomic. In parallel, Pull&Bear completed the expansion and renovation of its headquarters in Narón (A Coruña) in 2015 with a building certified under the most stringent green building standards.

Meanwhile, the Group continued to steadily rollout radio frequency identification technology (RFID) to improve stock management across its store base. At year-end FY2015, this technology was up and running in 1,542 stores in 64 markets and had been fully implemented in 48 of these countries. By the end of 2016, the Group plans to have installed this technology throughout Zara's more than 2,000 stores.

Employee bonuses and the extraordinary profit-sharing plan. Under the umbrella of its ordinary remuneration policy, Inditex will distribute over €500 million to its employees this year in the form of store sales commission, bonuses and incentive payments, all of which relate to meeting specific targets.

In addition, financial year-end 2015 marked the end of phase one of the extraordinary profit-sharing plan announced by the Group last year for FY2015 and FY2016. According to the plan, the Group will pay out €37.4 million to the 78,000 employees of stores, factories, logistics, brands and subsidiaries who qualify for the plan having worked at the company for 2 years at 31 March 2016. This first phase of the payout is equivalent to 10% of the year-on-year growth in consolidated profit attributable to the controlling company for FY2015 as agreed in the plan announced last year. Beneficiaries will be paid in April. Phase two of the plan will be distributed in 2017, following the same criteria.

Global growth In FY2015, Inditex opened a net 330 stores in 56 markets, ending the year with 7,013 stores in 88 countries across all continents. The Zara store opened in Honolulu (Hawaii, US) during the last quarter marked the Group's 7,000th store.

The Group increased its store presence in all its geographies. Europe was home to 148 net new stores, Asia and rest of world to a net 114 and the Americas to a net 68.

By brand, Zara added a net 77 new stores to its network, bringing the total worldwide to 2,162. In 2015, it opened flagship stores on some of the world's most renowned shopping streets. In the US, the brand opened new establishments in cities such as New Jersey, Las Vegas, Los Angeles, San Diego, Boston, Dallas, Chicago, Seattle and Puerto Rico. It also added further stores in Manhattan (NY) with a flagship store in the heart of the Financial District (222 Broadway) as well as unveiling the enlargement and renovation of its store on Fifth Avenue and 42nd street. It continues to add to its retail base in New York in FY2016 with the opening of a global flagship store in Soho (at 503-511 Broadway) on March 3.

Also in FY2015, Zara opened or refurbished and enlarged stores in locations as emblematic as London's Oxford Street (UK) - its fifth in this international shopping hub, Avenue de la Toison d'Or in Brussels (Belgium), Paseo del Born in Palma de Malloca (Spain) and in other cities including Hamburg (Germany), Vienna (Austria), Copenhagen (Denmark) and Vladivostok (Russia).

Other brands of the Group also added to their footprint by opening new stores and undertaking refurbishments all over the world. Zara Home opened its debut stores in Switzerland, Australia and Chile; Pull&Bear opened flagship stores on Shanghai's East Nanjing Road (China), in Lausanne (Suiza) and on calle Hermosilla in Madrid (Spain). Massimo Dutti opened its doors in Salzburg (Austria) and Los Angeles (US), as well as refurbishing its Parisian flagship store on Rue Royale in the La Madeleine district. Bershka opened a store in Seoul (South Korea) as well as its first establishment in Taipei (Taiwan). Stradivarius' openings spanned from Mexico City to China, where it extended its presence in the cities of Harbin and Chengdu. Oysho opened flagship stores on Paseo de Gracia (Barcelona, Spain) and Rua Garrett (Lisbon, Portugal). Meanwhile, Uterqüe inaugurated new stores in Russia and Mexico as well as revamping its store on Madrid's calle Serrano.

This physical store presence is complemented in each market by the development of fully-integrated online sales platforms. Against this backdrop, Inditex expanded its online sales to Hong Kong, Taiwan, Macao and Australia. At year-end, the Group was selling online in 29 markets (see Annex I).

The Group will continue to expand all of its brands' online reach in 2016. All of the Group's brands have today launched online sales in Croatia, Slovakia and the Czech Republic and next week they will launch in Bulgaria, Finland and Hungary. The Group will complete its online presence in all the European Union markets in April when its online sales platform goes live in Slovenia, Malta and the Baltic States. Meanwhile, the Group is planning to launch in five new markets with physical stores in 2016 (New Zealand, Vietnam, Nicaragua, Paraguay and Aruba).

Social investment. During the year 2015, the Group maintained its investment in the community, promoting employment, education, social welfare and humanitarian aid programmes that have benefited around 3 million people in 40 countries. It also continued to develop its cooperation and support programmes with various institutions and organizations (see Annex II).

In the sphere of employment and education, the programme Salta Mundo, which encourages labour market integration of people at risk of social exclusion, has been established in 10 cities (Madrid, Athens, Berlin, London, Lisbon, Milan, Paris, Warsaw, Mexico City and New York). This has already facilitated the integration into employment of 800 people. Furthermore, it is also worth highlighting the agreement signed with the China Youth Development Foundation to improve the conditions of education centres in the country's rural areas, as well as the renewal of Inditex's support for the Fundación Entreculturas, which provides professional technical training to more than 60,000 people in 13 countries in Latin America and Africa.

For&from, the project to encourage the integration of people with disabilities into the labour market promoted by Inditex since 2002, reached a landmark in 2015 with the opening of the ninth store forming part of the programme in Culleredo (A Coruña, Spain). In 2016, there are plans to expand the Massimo Dutti store in Palafolls (Barcelona, Spain), the first in the project, as well as open a new store in Igualada (Barcelona).

Regarding programmes linked to social welfare, in 2015 Inditex signed collaboration agreements with Every Mother Counts to provide medical care to pregnant women in a vulnerable situation, as well as with the organisation Water.org to facilitate access to drinking water and sanitation in developing areas. This builds on Inditex's existing support for Cáritas programmes in Spain, Bangladesh, Cambodia and Brazil, In 2015, Inditex strengthened its support for organisations that provide assistance to refugees fleeing the Syrian conflict, such as the Red Cross, UNHCR, Cáritas and Médecins Sans Frontières, the last of which Inditex began collaborating with in 2014. Working through Cáritas, the Red Cross and Oxfam, the Group has also channelled emergency aid to the victims of the earthquake that devastated Nepal in April last year.

Environment. In relation to environmental policies, in 2015 the Group continued to develop its eco-efficient store programme adding more than 387 new eco-efficient stores through opening new stores and upgrading existing ones. This marks an important step towards the objective of ensuring all of the Group's establishments are included in this model by 2020.

Also in the sphere of environment, Inditex continues to work toward the ambition for a circular economy, incorporating new actions in all phases of its production cycle from the analysis of raw materials to the final recycling of garments. To this end, the Group is implementing a project called Recycle2, which is already up and running in five countries (Spain, Denmark, the Netherlands, the United Kingdom and Sweden). The programme facilitates the collection of used garments at work centres and specific stores in collaboration with organisations such as Cáritas and the Red Cross. To date, this recycling project, which will continue to expand in 2016, has collected an average of 350 kg of used garments per store per month.

Dividend. Inditex's Board of Directors will ask the company's shareholders to approve a €0.60 per share dividend, marking year-on-year growth of 15.4%, at the Annual General Meeting scheduled for July. A dividend of €0.30 per share will be paid out in the interim on 2 May 2016, while the remaining €0.30 per share would be paid out on 2 November 2016 as the final ordinary and bonus dividend.

2016 update. Store sales in constant currency - adjusted for seasonality on account of the leap year - rose by 15% between 1 February and 7 March 2016.

Annex I

Global online sales platform (in bold the online stores that went live in FY2015)
Australia	Zara Home
Austria	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Belgium	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Canada	Zara, Massimo Dutti, Zara Home
China	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho
Denmark	Zara, Pull&Bear, Massimo Dutti, Zara Home, Uterqüe
Finland	Zara Home
France	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Germany	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Greece	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Ireland	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Zara Home, Uterqüe
Italy	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home
Japan	Zara, Zara Home
Luxembourg	Zara, Pull&Bear, Massimo Dutti, Stradivarius, Oysho, Zara Home, Uterqüe
Mexico	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home
Monaco	Zara, Pull&Bear, Masimo Dutti, Zara Home, Uterqüe
Netherlands	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Norway	Zara, Massimo Dutti, Zara Home
Poland	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home
Portugal	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Romania	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius
Russia	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
South Korea	Zara
Spain	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Sweden	Zara, Pull&Bear, Massimo Dutti, Oysho, Zara Home, Uterqüe
Switzerland	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
Taiwan	Zara
United Kingdom	Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, Uterqüe
United States	Zara, Massimo Dutti, Zara Home

Anex II

Códigos y compromisos asumidos por Inditex

UNI GLOBAL UNION (www.uniglobalunion.org). It encourages respect for and promotion of fundamental rights and decent work within the retail and distribution network. Date of adherence: 2 October 2009.

The United Nations Global Compact (www.globalcompact.org).A United Nations initiative to encourage social dialogue between companies and the civil society. Date of adherence: 31 October 2001.

Ethical Trading Initiative (ETI) (www.ethicaltrade.org).This is a dialogue Platform to improve working conditions of workers in developing countries. It is an alliance between companies, international trade unions, and non-governmental organizations. Date of adherence: 17 October 2005.

Framework Agreement with IndustriALL Global Union (formerly, ITGLWF) (www.industriall-union.org).To promote essential human and social rights within Inditex's supply chain, including the definition of mechanisms of joint action within the supply chain to implement the Code of Conduct for Manufacturers and Suppliers. Date of adherence: 4 October 2007. Inditex and IndustriALL executed on 4 May 2012 the 'Protocol to define the involvement of trade unions in the reinforcement of the International Framework Agreement within Inditex's supply chain.' On 8 July 2014, the Framework Agreement was renewed by both parties at the ILO headquarters in Geneva (Switzerland).

Zero Discharge of Hazardous Chemicals in 2020. Commitment towards restriction and elimination of certain chemicals in the process to manufacture goods. Date of execution: 27 November 2012.

ILO's Better Work Programme (www.betterwork.org).Platform to improve compliance with labour regulations and competitiveness of global supply chains Date of adherence: October 2007. In the course of this partnership, Inditex and Better Work executed on 9 October 2013 a specific collaboration agreement whereby Inditex becomes a direct buyer partner of the Better Work programme.

The CEO Water Mandate (www.ceowatermandate.org).A United Nations initiative to support companies in the development, implementation and disclosure of their water-related strategies and policies. Date of adherence: 30 June 2011.

Sustainable Apparel Coalition (www.apparelcoalition.org). An initiative of the textile sector to set in train a joint sustainable index to assess the environmental performance of their suppliers during the production process. Date of adherence: 20 October 2011.

Textile Exchange (www.textileexchange.org).Platform to promote the growing of organic cotton, and sustainability within the global textile sector. Date of adherence: 8 September 2010.

Better Cotton Initiative (www.bettercotton.org).Initiative to develop and promote best practices in the traditional growing of cotton to benefit the farmers and the environment, and to ensure the future of the sector. Date of adherence: 1 July 2011.

Code of Tax best practices. It encourages a mutually cooperative relationship between the Tax Agency and the companies. Date of adherence: 21 September 2010.

Accord on Fire and Building Safety in Bangladesh dated 13 May 2013. This agreement was signed by international brands and retailers, local and international trade unions and NGOs, for the purpose of ensuring lasting safety improvements to working conditions in Bangladesh's garment sector.

The Cotton Campaignis a global coalition of human rights, labour, investor and business organisations dedicated to improve labour rights in Uzbekistan and Turkmenistan's cotton sectors. Date of adherence: 26 October 2012.

Fur Free Alliance (www.infurmation.com).Inditex has adhered to the Fur Free Retailer Programme of the Fur Free Alliance. The Fur Free Alliance is an international coalition of animal welfare organisations working to bring an end to the exploitation and killing of animals for their fur. Date of adherence: 1 January 2014.

Bangladesh Water PaCT (Partnership for Cleaner Textile).This is a 4-year initiative which seeks to foster changes within the textile sector in Bangladesh by improving wet processing (dying, washing, printing and other finishes) from an environmental perspective, thus contributing to the sustainability of the sector. Date of adherence: 20 June 2013.

ACT (Action Collaboration Transformation).This is an initiative between international brands & retailers, manufacturers, and trade unions to address the issue of living wages in the textile and garment supply chain. In development thereof, a Memorandum of Understanding was signed by ACT's brands and IndustriALL Global Union to establish the following principles within the supply chain: freedom of association, collective bargaining and living wages. Date of execution: 13 March 2015.