EQS-News: GLOBAL FASHION GROUP REPORTS Q2 2023 RESULTS

EQS-News: Global Fashion Group S.A. / Key word(s): Half Year Results/Quarter Results GLOBAL FASHION GROUP REPORTS Q2 2023 RESULTS 10.08.2023 / 08:00 CET/CEST The issuer is solely responsible for the content of this announcement. GLOBAL FASHION GROUP REPORTS Q2 2023 RESULTS Luxembourg, 10 August 2023 - Global Fashion Group S.A. (“GFG”), the leading online fashion and lifestyle destination in LATAM, SEA and ANZ, continues to execute cost action plans to adapt to challenging market conditions and improve performance going forward. Q2 2023 Highlights (growth rates at constant currency) Net Merchandise Value growth of (14.7)% (Q2/22: (1.9)%) Revenue growth of (18.6)% (Q2/22: 0.8%) Marketplace NMV achieved 39.1% share of total NMV (Q2/22: 34.7%) Gross Margin 42.0% (Q2/22: 43.4%) and Adj. EBITDA Margin (7.2)% (Q2/22: (1.5)%) Active Customers down (19.0)%, Order Frequency down (1.2)% Pro Forma Cash[1] of €466.7m and Pro Forma Net Cash1 of €173.2m Christoph Barchewitz, CEO of GFG, said: “Macro pressures continue to impact customer behaviour in GFG’s markets, which is reflected in our Q2 results. While our topline is challenged in the near-term, our commitment to improving each of our regions’ propositions for demand recovery, remains strong. These improvements will grow our platform and are adapted to our current focus on careful cost and inventory management. We are confident in our ability to navigate these challenges and in building long-term value for our customers, partners and shareholders.”  In Q2 2023, GFG delivered NMV of €346.5 million, down 14.7% yoy. Demand was weaker than expected as is reflected in Orders down 28.1% and Active Customers down 19.0%. The lower topline was partially offset by an 18.7% increase in Average Order Value, with inflation driving more than half of the increase. The remainder was split between country and category mix, including a shift to more premium products, along with an increase in items per order. Revenue was down 18.6% yoy. In LATAM, NMV declined 19.0% yoy. This was a result of our drive for marketing efficiency and lower purchasing power with elevated inflation and interest rates in the region. In SEA, NMV fell 16.9% yoy reflecting our prioritisation of profit over growth in a weaker demand environment. Positive profit contributions from SEA’s growing Marketplace and Platform Services were broadly offset by fixed cost deleverage from lower volumes. In ANZ, steadily increasing interest rates, elevated inflation and GDP growth declines have led to reduced discretionary spend and higher discounting to match a competitive market. As a result, ANZ’s NMV declined by 9.0% yoy. GFG delivered a Gross Margin of 42.0%, a 1.4ppt decline yoy. This was driven by higher levels of promotional activity particularly in LATAM and ANZ. Gross Margin pressure and fixed cost deleverage led to a lower Adj. EBITDA margin of (7.2)%. Going into 2023, we prepared the business for lower volumes and started the year with less inventory than the year before. As part of GFG’s cost action plans, we reduced inventory levels by 33% (€67.5m reduction in constant currency) and reduced intake by 30% yoy in H1. Managing inventory levels remains a top priority for GFG, along with customer acquisition discipline and restricting overhead and capital investments. GFG ended Q2 with a strong funding position of €466.7m Pro Forma cash and €173.2m Pro Forma net cash (net of the Convertible Bond and other third-party debt).2 Expectations for the full year 2023 are unchanged from the guidance issued in our announcement on 26 July 2023. GFG expects to deliver NMV growth of (15)-(10)%, c.€1.3-1.4 billion in NMV and c.€0.9 billion of Revenue, all on a constant currency basis. Adjusted EBITDA margin is expected to be (8)-(6)%. Capex investment will be c.€30 million. €m Q2 2022 Q2 2023 H1 2022 H1 2023 Key Financial Metrics         NMV 436.6 346.5 763.4 649.9      % Constant Currency Growth (1.9)% (14.7)% 2.2% (11.2)% Revenue 295.6 223.8 517.6 422.3      % Constant Currency Growth 0.8% (18.6)% 2.8% (14.9)% Gross Profit 128.3 94.0 223.3 175.6      % Margin of Revenue 43.4% 42.0% 43.1% 41.6% EBIT (63.5) (35.3) (92.5) (75.4) Adjusted EBITDA (4.5) (16.1) (20.9) (40.1)     % Margin of Revenue (1.5)% (7.2)% (4.0)% (9.5)% Financial Position         Net Working Capital 10.8 21.3 10.8 21.3 Capital Expenditure 10.6 6.8 21.9 14.2 Pro-forma Cash1 561.4 466.7 561.4 466.7 Pro-forma Net Cash1 264.5 173.2 264.5 173.2 Normalised Free Cash Flow[2] (8.7) (7.7) (85.9) (72.7)               Q2 2022 Q2 2023 H1 2022 H1 2023 Key Performance Indicators         Active Customers (m) 12.5 10.1 12.5 10.1      % Growth (7.2)% (19.0)% (7.2)% (19.0)% Number of Orders (m) 7.6 5.4 13.9 10.5      % Growth (16.7)% (28.1)% (11.8)% (24.0)% Order Frequency (x) 2.5 2.4 2.5 2.4      % Growth 0.6% (1.2)% 0.6% (1.2)% Average Order Value (€) 57.8 63.8 55.0 61.6      % Constant Currency Growth 17.8% 18.7% 15.9% 16.9% FURTHER INFORMATION KPI and financial definitions, including alternative performance measures are available in the 2022 Annual Financial Report.  For inquiries, please contact: Press / Communications Jovana Lakcevic, PR & Communications Director [e-mail]   Investor Relations Saori McKinnon, Investor Relations & Strategy Manager [e-mail] 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 destination in LATAM, SEA and ANZ. From our people to our customers and partners, we exist to empower everyone to express their true selves through fashion. Our three ecommerce platforms: Dafiti, ZALORA and THE ICONIC connect an assortment of international, local and own brands to over 800 million consumers from diverse cultures and lifestyles. GFG’s platforms provide seamless and inspiring customer experiences from discovery to delivery, powered by art & science that is infused with unparalleled local knowledge. Our vision is to be the #1 fashion & lifestyle destination in LATAM, SEA and ANZ, and we are committed to doing this responsibly by being people and planet positive across everything we do. (ISIN: LU2010095458) For more information visit: www.global-fashion-group.com   [1] Pro Forma cash is defined as cash & cash equivalents at the end of the period, short term duration bonds and securitised funds plus restricted cash and cash on deposits. Pro-forma net cash is pro-forma cash excluding third party borrowings and convertible bond debt. [2] Cash flow before FX retranslation, factoring cash flows, change in provisions, change in restricted cash, external funding, interest income, convertible bond coupon payments, exceptional items and fair value movement on investment funds. 10.08.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.eqs-news.com

Language:	English
Company:	Global Fashion Group S.A.
	5, Heienhaff
	L-1736 Senningerberg
	Luxemburg
E-mail:	[e-mail]
Internet:	https://global-fashion-group.com
ISIN:	LU2010095458
WKN:	A2PLUG
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Dusseldorf, Tradegate Exchange; Luxembourg Stock Exchange
EQS News ID:	1700127

End of News	EQS News Service

1700127  10.08.2023 CET/CEST