Ozon : GMV Incl. Services Up 2.4x, Marketplace Sales Up 2.6x in Third Quarter

• Ozon achieved the fastest growth in GMV incl. services in eight quarters, increasing by 140% year-on-year to RUB 450.8 billion. Marketplace sales increased even faster, by 156%, accounting for 83.5% of GMV incl. services.
• The Company has raised its guidance for growth of GMV incl. services for the full year 2023 to 90%-100%, and expects a positive adjusted EBITDA for the year.
• Total revenue increased by 77% to RUB 109 billion; service revenue doubled to RUB 69 billion.
• Investments in the development of the platform convenience and accessibility boosted the number of orders, which increased by 130% to 261 million in Q3 2023.The number of active buyers reached 42.4 million, with a considerably higher engagement level: in Q3 2023 active buyers placed over 19 orders a year, up from 11.7 orders in Q3 2022 and 7.5 orders in Q3 2021.
• Total footprint of Ozon logistics infrastructure expanded to over 2 million square meters, while the number of pickup points more than doubled over the past year.
• Negative Adjusted EBITDA of RUB 3.9 billion in Q3 2023 was primarily caused by the planned investments in the platform growth and a significant increase in labor costs. For the 9 months 2023 Adjusted EBITDA remained positive and exceeded RUB 4.1 billion.

Ozon announced its unaudited financial results for Q3 2023. GMV incl. services increased by 140% year-on-year in 3Q 2023 to RUB 450.8 billion, boosted by the rapid growth in the number of orders, slight increase in average order value and expanded customer base of loyal customers. Marketplace sales grew faster, by nearly 160% year-on-year and accounted for 83.5% of GMV incl. services. Based on current trends, the Company raised its guidance for full year 2023, expecting GMV incl. services to increase by 90%-100% year-on-year.

Total revenue in Q3 showed accelerated growth of 77% year-on-year (compared with 61% in Q2 2023) and reached RUB 109 billion due to higher service revenue. Service revenue exceeded RUB 69 billion primarily due to an increase in the number of sellers and higher 3P sales. More than 70% of Marketplace sellers use the platform's advertising tools, resulting in the advertising revenue almost tripling year-on-year to RUB 19.5 billion. Revenue from financial services reached RUB 3.6 billion, as a result of Ozon Bank's customer base expansion in both B2B and B2C segments. Revenue from direct sales (1P) increased by 50% compared with Q3 2022 to over RUB 39.9 billion.

The Company continues its planned investments in the platform growth and expansion of its logistics infrastructure in Russia and the CIS countries. As a result, the number of orders on Ozon Marketplace increased by 134% year-on-year in Q3 2023 to 251.1 million. The number of active buyersincreased by almost a third to 42.4 million, up from 32.7 million a year before. Order frequency increased by 64% year-on-year, reaching an average of 19.2 orders per annum among active buyers. Total footprint of Ozon's logistics infrastructure expanded by 70% over the same period to more than 2 million square meters, while the number of pickup points more than doubled over the last year.

Gross profit decreased by 39% year-on-year to RUB 5.8 billion due to increased investments in growth, as well as higher fulfillment and delivery costs, including costs caused by the tight of labor market. As a result of the decrease in gross profit, adjusted EBITDA in Q3 was negative RUB 3.9 billion. Cumulative Adjusted EBITDA for the 9 months 2023 remained positive and exceeded RUB 4.1 billion.

"As the market continues its active growth, it is important for us to provide strong foundation for long-term expansion and enhance our resilience via economies of scale. That is why we continue investments in the convenience and value, increasing our loyal audience of both buyers and sellers. This strategy has already led us to the highest increase in GMV incl. services in the last eight quarters and enabled us to raise our guidance for annual growth of GMV incl. services to 90%-100%.

"At the same time, operational efficiency remains our priority: the investment volume is determined by macroeconomic pressure and our goals to maintain financial stability. We continue to optimize our operating expenses and improve the unit economics: operating expenses as a percentage of GMV incl. services shrinked by nearly 50% year-on-year, so did operating expenses per order. As of the end of 2023, we expect to maintain positive Adjusted EBITDA margin and positive operating cash flow," said Igor Gerasimov, Chief Financial Officer of Ozon.

The Company continues to improve its operational efficiency: in Q3 2023 operating expenses as a share of GMV incl. services decreased by about 50% year-on-year, from 8.2% in 3Q 2022 to 4.2% in the current period. Unit economics improved considerably, as a result of the economies of scale: operating expenses per order decreased from RUB 143 in Q3 2022 to RUB 76 in Q3 2023.

Net loss for the period was RUB 22.1 billion, compared with RUB 20.7 billion in Q3 2022, primarily due to lower operating profit and an increase in finance costs.

Net cash generated from operating activitiesamounted to RUB 24.9 billion, up by over 200% year-on-year, as a result of the positive working capital inflows.

Cash, cash equivalents and short-term bank deposits amounted to RUB 92.7 billion as of September 30, 2023, compared to RUB 74.6 billion as of June 30, 2023.

Other Business Developments

Ozon Fintech

Fintech revenue exceeded RUB 3.5 billion in Q3 2023. The "Flexible Payment Plan" remains Ozon's most popular financial B2B service, with more than 36,000 sellers who already use the service in Q3 2023. The Company's B2B segment is focused on providing cash and settlement services to individual entrepreneur and SMEs.

Ozon Bank card remains the most popular payment method on the platform, with over 29 million cardholders. At the same time, the Company is intensively developing its banking business beyond the Marketplace. The percentage of Ozon Bank customers' transactions completed outside the Ozon platform exceeded 35% of the turnover of their transactions on the marketplace

Ozon Global and CIS

The number of sellers from China working with Ozon increased fivefold year-on-year to 59,000. In September 2023, Ozon launched its first fulfillment center China, in Dongguan, based on the Fulfilment by Partner model. This new logistics model will reduce the delivery time from the moment an order is placed until its arrival at its pickup point in Russia to 8-12 days.

In 3Q 2023, the Company expanded its network of pickup points in Kazakhstan and Belarus and launched a pickup-point franchise program in Armenia. Ozon also opened its first sorting center in Yerevan in Q3 2023. In 2024, the Company plans to open fulfillment centers in every CIS country where it operates.

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Disclaimer

This press release contains forward-looking statements that reflect the current views of Ozon Holdings PLC ("we", "our" or "us", or the "Company") about future events and financial performance. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements.

These forward-looking statements are based on management's current expectations. However, it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. These statements are neither promises nor guarantees but involve known and unknown risks, uncertainties and other important factors and circumstances that may cause Ozon's actual results, performance or achievements to be materially different from its expectations expressed or implied by the forward-looking statements, including conditions in the relevant capital markets, negative global economic conditions, the geopolitical crisis surrounding Ukraine and sanctions and governmental measures imposed in response, other negative developments in Ozon's business or unfavorable legislative or regulatory developments. We caution you therefore against relying on these forward-looking statements, and we qualify all of our forward-looking statements by these cautionary statements. Please refer to our Annual Report on Form 20-F for the year ended December 31, 2022, and other filings with the SEC concerning factors that could cause actual results to differ materially from those described in our forward-looking statements.

These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While Ozon may elect to update such forward-looking statements at some point in the future, Ozon disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing Ozon's views as of any date subsequent to the date of this press release.

This press release includes "Adjusted EBITDA", a financial measure not presented in accordance with IFRS. This financial measure is not a measure of financial performance or liquidity in accordance with IFRS and may exclude items that are significant in understanding and assessing our financial results. Therefore, this measure should not be considered in isolation or as an alternative to loss for the period or other measures of profitability, liquidity or performance under IFRS. You should be aware that the Company's presentation of this measure may not be comparable to similarly named measures used by other companies, which may be defined and calculated differently. See "Presentation of Financial and Other Information - Use of Non-IFRS Financial Measures" in this press release for a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure.

This press release includes interim financial information for the three and nine months ended September 30, 2023, and September 30, 2022. The financial information for the three and nine months ended September 30, 2023, and September 30, 2022, was not audited by the Company's auditors.

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