Luxembourg: Global Fashion Group (GFG), the leading online fashion and lifestyle destination in growth markets, expects Q2 to be its second Adjusted EBITDA-profitable and first cash flow-positive quarter, as a result of strong customer demand recovery since the end of April, and the company’s strategic response to the COVID-19 pandemic.
Preliminary results indicate the following expected outcomes for GFG’s performance in Q2:
- Net Merchandise Value (NMV) growth on a constant currency basis of above 20% for the quarter despite the negative COVID-19 impact in April, driven by more than two million new customers.
- Adjusted EBITDA profitability, enabled by strong gross margin and significantly better marketing efficiency.
- Improved Marketplace share of more than 30% (Q2 19: 19%) and around 90% Marketplace NMV growth as a result of category mix shift and increased Marketplace SKU share.
- Profitability, alongside disciplined working capital management and capital expenditure, resulted in strong cash generation and a pro-forma cash balance* at 30 June of around €260m, up €50m from 31 March.
Christoph Barchewitz and Patrick Schmidt, Co-CEOs of GFG said: “We continue to put the safety of our people first and are humbled by this strong financial performance, which is a direct result of the agility and adaptability of the GFG teams around the world. Over the last few months customer acquisition, Marketplace share growth and brand relationships have been accelerated. We have continued to execute against our strategic priorities with a focus on capturing the significant fashion and lifestyle ecommerce opportunity in our markets.”
GFG experienced a strong recovery in sales from late April, with Order Intake** up over 30% since the start of May compared to the same period last year. This was driven by strong performances in CIS and LATAM, while APAC saw more moderate growth as a result of soft trading in Australia.
GFG will publish its second quarter and first half results on 20 August.
All numbers presented in this release are unaudited and based on first preliminary indications (including a number of estimates). The final numbers may deviate from the numbers presented in this release.
* Includes restricted cash of €20m related to the current RCF facility and approximately €10.5m drawn on local working capital facilities (Q1 20: €20m and €7.9m respectively).
** Order Intake is the measure used by GFG to define sales within quarterly periods and measures customer order value including VAT and sales taxes and net of provisioned returns and rejections at the date of customer order.
KPI and financial definitions including of the alternative performance measure EBITDA are available in the FY 2019 annual report, available on the Company website here.
Regarding the definition of the alternative performance measure EBITDA, the Company refers to the corresponding definition in its Annual Report 2019, which is published on the Company’s website.
Forward looking information
This announcement contains forward-looking statements. Forward-looking statements should not be construed as a promise of future results and developments and involve known and unknown risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in this announcement, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this announcement or the underlying assumptions.
About Global Fashion Group
Global Fashion Group is the leading fashion and lifestyle retail destination in Asia Pacific, Latin America and CIS. We connect over 10,000 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 17 offices and 10 fulfilment centres across four continents, GFG proudly employs a dynamic and diverse team with deep local knowledge and expertise. In 2019, GFG delivered over 34.6 million orders to 13.1 million Active Customers. (ISIN: LU2010095458.)
For more information visit: www.global-fashion-group.com