February 26, 2019
Global Fashion Group FY 2018 Results
Luxembourg, 26th February 2019 – Global Fashion Group (GFG), the leading online fashion and lifestyle destination in growth markets, delivers accelerated top line growth, with full year Net Merchandise Value (NMV) increasing by 22.5% to EUR 1,453 million year on year (YoY) on a constant currency basis. Full year Revenue of EUR 1,156 million represented a 18.7% growth YoY and Adjusted EBITDA margin reached (4.3)% for the full year, increasing by 4.6 percentage points.
Christoph Barchewitz and Patrick Schmidt, Co-Chief Executive Officers, said: “It has been a year of significant progress for GFG. We continued to execute our growth strategy, building new and strengthening existing brand partnerships as well as enhancing our inspiring and seamless customer experience. Through our best-in-class fulfilment infrastructure and intuitive online shopping experience, we have delivered over 27m orders to 11.4m active customers. These efforts are clearly reflected in our results: We increased our number of Active Customers by 14.7% YoY, drove Net Merchandise Value growth of c.23% on a constant currency basis and delivered significantly improved profitability.”
Accelerated growth in our active customer base
With a growth of 14.7% compared to 2017, Active Customers for the Group reached 11.4 million at the end of this year. Our customers have increased their spending throughout the year with NMV per Active Customer growing by 6.8% on a constant currency basis. Orders also showed strong growth this year, rising by 22.2% to 27.5 million, with our customers ordering 6.5% more frequently than in the prior year. The average order value also increased by 0.3% compared to last year on a constant currency basis.
Continued NMV and Revenue growth
Net Merchandise Value, which represents customer checkout value, reached EUR 1,453 million for the full year and grew by 22.5% on a constant currency basis. Q4 2018 NMV was EUR 452 million, growing 22.4% on a constant currency basis. There has been significant growth in marketplace sales throughout 2018, with marketplace NMV growing nearly 90% YoY, bringing the marketplace contribution to NMV to approximately 15% for the year. Full year Revenue reached EUR 1,156 million, growing 18.7% on a constant currency basis and Revenue for Q4 was EUR 357 million, representing constant currency growth of 17.7%.
Improved profitability driven by continued scale benefits and operational improvements
Full year Gross Profit margin reduced by (0.5) percentage points to 38.9%. Gross Profit margin in Q4 2018, at 38.8%, was 0.8 percentage points higher than the Q4 2017 margin. A stronger Q4 YoY Gross Margin in ASIA PACIFIC and LATAM was partially offset by continued price investments in CIS.
Continued scale benefits along with improved marketing efficiencies have led to significantly reduced Adjusted EBITDA losses. Our marketing efficiencies enabled us to reduce marketing costs as a percentage of Revenue, whilst continuing to drive payback times of less than twelve months.
For the year 2018, the Adjusted EBITDA was EUR (49.8) million, on a proforma basis after adjusting for the impact of IFRS 16. Adjusted EBITDA margin on a proforma basis improved by 4.6 percentage points to (4.3)%. Developments in two of our segments confirm that profitability continued to improve. The LATAM segment and THE ICONIC, part of the ASIA PACIFIC segment, together representing over 50% of the Group’s NMV, achieved positive Adjusted EBITDA for the full year of 2018 for the first time.
Solid financial position
The closing cash position at the end of Q4 2018 was EUR 105 million. The sale of Namshi, which closed on February 25, 2019, generated additional proceeds of EUR 114 million. Our working capital stood at EUR (10) million, as of December 31, 2018, demonstrating capital efficient business growth over the course of the year. We have increased our investment in capex during the year, as we invest in fulfilment centre automation at THE ICONIC and increase our internally generated intangible assets, focusing further on our in house Technology developments.
About Global Fashion Group
Global Fashion Group (“GFG”) is the leading fashion and lifestyle destination in Asia Pacific, Latin America and CIS. We connect over 8,000 global, local and own brands to a market of more than one billion consumers through four established e-commerce platforms: THE ICONIC, ZALORA, Dafiti and lamoda. Through an inspiring and seamless customer experience enabled by our own technology ecosystem and operational infrastructure, we are dedicated to being the #1 fashion and lifestyle destination in our markets. With 19 offices and 10 fulfilment centres across four continents, GFG proudly employs a dynamic and diverse team with deep local knowledge and expertise. In 2018, GFG delivered over 27 million orders to over 11 million active customers, generating Net Merchandise Value of approximately EUR 1.5 billion. For more information, visit http://global-fashion-group.com