ZALANDO SE - Zalando further upgrades long-term growth ambition to more than 10% of European fashion market
- Strong financial year 2020 with 30.4% GMV growth, 5.3% adjusted EBIT margin
- Guidance 2021: GMV growth of 27-32% at EUR 350-425 million adjusted EBIT
- Astrid Arndt appointed to the Management Board as Chief People Officer as of April 1
BERLIN, MARCH 16, 2021 // Following a strong financial year 2020, Zalando significantly upgrades its growth ambitions and aims to grow Gross Merchandise Volume (GMV) to more than EUR 30 billion by 2025. The company further aspires to serve more than 10% of the total EUR 450 billion European fashion market in the long-term.
In 2020, Zalando achieved EUR 10.7 billion GMV, accelerating its growth to 30.4% year-on-year driven by an outstanding intake of new customers and strong Partner Program performance. Revenues in the same period grew 23.1% to EUR 8.0 billion. Zalando recorded an adjusted EBIT of EUR 420.8 million, corresponding to a margin of 5.3%, driven by increasing operating leverage and a significant decrease in return rates year-on-year, which Zalando regards as temporary.
Following an extraordinarily strong start to the year 2021 with expected GMV growth of around 50% in the first quarter, Zalando expects to grow GMV by 27-32% to EUR 13.6-14.1 billion in the financial year 2021. Revenues will trail GMV growth as a result of the ongoing platform transition at 24-29% growth or EUR 9.9-10.3 billion. Zalando expects to continue to grow profitably with an adjusted EBIT of EUR 350-425 million. Zalando will continue to invest into its logistics infrastructure and technology platform and plans capital expenditure of EUR 350-400 million in 2021.
Zalando co-CEO Robert Gentz says, '2020 has been a year like no other. We have kept our eyes on our long-term vision to be the Starting Point for Fashion. For the coming years, our focus remains on growth and investments for the long-term.'
STRATEGIC PRIORITIES TO DRIVE LONG-TERM GROWTH
Zalando aims to be the destination that consumers gravitate to for all their fashion needs. In 2020, Zalando grew its active customer base by 25% to 38.7 million. Building on this strong development, Zalando continues to invest into innovative ways to engage with customers to build deeper relationships in existing markets. In addition, Zalando will expand its footprint in Europe to eight further European markets: Croatia, Estonia, Latvia, Lithuania, Slovakia and Slovenia in 2021; Hungary and Romania in 2022.
Zalando is an integral part of the digital strategy for fashion brands, retailers and stores. In the fourth quarter of 2020, Zalando's Partner Program accounted for 24% of Zalando's Fashion Store GMV. More than 2,400 stores were connected to the Zalando platform by end of 2020 through the Connected Retail program. The program continues to grow fast in 2021, with more than 3,400 stores connected by the end of February 2021.
'The growth of Connected Retail underlines the value that the combination of offline and online can unlock for retailers,' says Zalando co-CEO David Schneider. 'The industry has faced a lot of challenges in the past year, and we have seen partners engaging with Zalando more deeply than ever. We remain committed to be part of the solution and support our partners that are looking for ways to shift their business online.'
SUSTAINABILITY IS A KEY PILLAR TO BECOME STARTING POINT FOR FASHION
One year after announcing its do.MORE sustainability strategy, Zalando has made strong progress towards becoming a sustainable fashion platform with a net-positive impact for people and the planet. The company has reduced its own greenhouse gas emissions by 64% since 2017 and runs all its own operations on 100% renewable energy. In 2020, the sale of more sustainable products accounted for around 16% of GMV, up from about 7% in 2019. As a result, Zalando upgrades its goal to 25% (previously 20%) of GMV with more sustainable products by 2023, while at the same time making the sustainable product criteria more stringent. Full details on Zalandos progress can be found in the first stand-alone Annual Sustainability Progress Report.
Rubin Ritter, Zalando co-CEO, comments, 'We have an opportunity and responsibility to leverage our scale and platform position to drive positive change in the fashion industry. If we want to build the Starting Point for Fashion and win the hearts and minds of consumers, we need to be part of the solution to the sustainability challenge we jointly face.'
MANAGEMENT TEAM IDEALLY POSITIONED TO EXECUTE GROWTH AMBITIONS
To execute its growth ambitions and following Rubin Ritter's announcement to leave his position as co-CEO after the upcoming AGM, Zalando introduces a new Management Board setup as of April 1, 2021. Zalando founders Robert Gentz and David Schneider continue to lead the company as co-CEOs. Robert Gentz will be responsible for leading on long-term strategy as well as oversee corporate affairs and corporate development. David Schneider will continue to define and drive the strategy towards brand partners and lead Zalando's efforts in sustainability as well as diversity and inclusion.
The Supervisory Board appointed Astrid Arndt to the newly created position of Chief People Officer at its Board meeting on Monday, March 15, 2021. Astrid Arndt has been leading and building the People & Organization teams at Zalando since 2019, having joined the company in 2018. Current Chief Technology Officer Jim Freeman will develop, market and grow Zalando's consumer offerings in a newly created Chief Business and Product Officer role. David Schröder continues to oversee the financial development of the group as Chief Financial Officer and build best-in-class capabilities to support Zalando's growth ambitions. Current co-CEO Rubin Ritter will be actively involved in an orderly transition and support the team until his departure after the AGM.
Cristina Stenbeck, Chairperson of the Supervisory Board, says, 'The role of work in society is changing, and the past year has highlighted that Zalando's unique culture and entrepreneurial approach are key assets for the company. Ensuring the entire Zalando organisation continues to reveal its full potential will be an important area of focus for the Management Board. The Supervisory Board is therefore delighted to welcome Astrid Arndt as Chief People Officer to the Management Board with the relevant capabilities she brings to Zalando's strategic priorities. We are convinced that the Management Board team is ideally positioned to execute its growth ambitions and reach its vision to be the Starting Point for Fashion.'
Zalando today hosts its virtual Annual Press Conference and Capital Markets Day, details of which are available on our corporate website.
Zalando today published its Annual Report and - for the first time - a dedicated Sustainability Progress Report, which are also available on the company's website.
Zalando Group - Key Figures (in EUR million)
FY 2020 | FY 2019 | |
Group GMV | 10,699.8 | 8,202.9 |
percent growth | 30.4 | 23.6 |
Group revenue | 7,982.0 | 6,482.5 |
percent growth | 23.1 | 20.3 |
Fashion Store | 7,257.7 | 5,964.9 |
Thereof DACH | 3,319.0 | 2,897.2 |
Thereof Rest of Europe | 3,938.7 | 3,067.7 |
Offprice | 978.1 | 659.4 |
Other | 196.0 | 252.3 |
Reconciliation | (449.8) | (394.1) |
Adjusted group EBIT | 420.8 | 224.9 |
Adjusted group EBIT margin | 5.3 | 3.5 |
Fashion Store | 341.7 | 219.9 |
Thereof DACH | 288.4 | 219.5 |
Thereof Rest of Europe | 53.3 | 0.4 |
Offprice | 88.0 | 27.7 |
Other | (9.1) | (23.3) |
Reconciliation | 0.2 | 0.6 |
Net working capital | (87.4) | (147.7) |
Capital expenditure | 250.0 | 306.5 |
Net income | 226.1 | 99.7 |
Zalando Group - Key Performance Indicators
FY 2020 | FY 2019 | Change | |
Site visits (million) | 5,393.6 | 4,178.1 | 29.1% |
Mobile visit share (% of site visits) | 86.3 | 83.7 | 2.6pp |
Active customers (million) | 38.7 | 31.0 | 25.0% |
Number of orders (million) | 185.5 | 144.9 | 28.0% |
Average orders per active customer | 4.8 | 4.7 | 2.4% |
Average basket size (LTM, EUR) | 57.7 | 56.6 | 1.9% |
Definitions are available in the annual report
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Zalando SE published this content on 16 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2021 07:02:03 UTC.
