Global Fashion Group S.A.
GLOBAL FASHION GROUP REPORTS Q4 & FY 2023 RESULTS

GLOBAL FASHION GROUP REPORTS Q4 & FY 2023 RESULTS

Luxembourg, 6 March 2024 – Global Fashion Group S.A. (“GFG”), the leading online fashion and lifestyle destination in LATAM, SEA and ANZ, demonstrated resilience in executing its strategic initiatives amidst market headwinds to achieve breakeven Adjusted EBITDA and a Gross Margin improvement in Q4.

Q4 2023 Highlights (growth rates at constant currency)

• Net Merchandise Value decrease of 14.0% (Q4/22: (6.4)%)
• Revenue decrease of 16.8% (Q4/22: (8.3)%)
• Marketplace NMV achieved 38% share of total NMV (Q4/22: 34%)
• Gross Margin 43.6% (Q4/22: 42.7%) and Adj. EBITDA Margin 0.2% (Q4/22: (1.9)%)
• Active Customers decrease of 18.6%, Order Frequency decrease of 5.5%
• Pro-Forma Cash of €396.5m and Pro-Forma Net Cash of €206.3m¹

Christoph Barchewitz, CEO of GFG, said:

“2023 was a year of significant change and adaptation for GFG, and I am proud of the team’s resilience and focus. We anticipated a challenging market and took action to navigate it by prioritising growing our Marketplace and Platform Services, reducing costs and advancing our strategic initiatives. As a result, we achieved Adjusted EBITDA breakeven in Q4, and maintained a healthy Gross Margin. We entered 2024 with a stronger foundation and a clear path forward to capitalise on our long-term potential.”

In Q4 2023, GFG delivered a Net Merchandise Value (“NMV”) of €369 million, representing a 14.0% yoy decrease due to the continued subdued consumer demand environment. Lower conversion rates led to a 19.5% yoy drop in Orders. However, GFG partially offset this volume impact by maintaining growth in Average Order Value, increasing 6.9% in Q4. Whilst moderating from prior quarters in 2023, this growth in order value was primarily driven by inflation, followed by category mix shifts.

In LATAM, NMV declined 12.4% yoy where the focus remained on strengthening the customer proposition in an inflationary and competitive market. SEA focused on its controllable levers and exceeded the Group’s longer term platform goals with Marketplace participation at 50% and Platform Services revenue share of 12% in FY 2023. This drove SEA’s Gross Margin increase of 1.1ppt to 43.3%, even with an NMV decline of 18.0% in Q4. ANZ also improved Gross Margin by 1.5ppt to reach 46.4% in Q4. This was achieved despite a challenging market still recovering from higher cost-of-living, which led to a 12.6% decline in NMV.

Note: All Group figures are presented excluding Argentina except for Pro-Forma cash for which Argentina balances remained within the Group following the close of operations.

(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.

GFG’s focus on the expansion of its platform business and implementation of cost-saving actions culminated in year-on-year improvements for both Gross Margin and Adjusted EBITDA in Q4. Each region also delivered Gross Margin improvements which contributed to the Group’s Gross Margin increasing 0.9ppt yoy to 43.6%. Despite fixed cost deleverage from lower volumes, GFG achieved an Adjusted EBITDA margin of 0.2%, improving 2.1ppt yoy.

GFG successfully delivered on its cost-saving initiatives resulting in significant reductions to the Group’s total cost base encompassing fulfilment, marketing, technology and administrative costs and office and fulfilment centre leases. GFG also maintained its inventory and working capital discipline resulting in a 32% yoy inventory reduction on a constant currency basis and a €33m Normalised Free Cash Flow in Q4. GFG closed 2023 with a strong cash position of €396.5m Pro-Forma Cash and €206.3m Pro-Forma Net Cash.¹

By taking decisive action throughout 2023, GFG has built a stronger foundation for 2024 with a leaner cost structure, healthy inventory and robust balance sheet. GFG is committed to its ongoing efficiency programme to ensure it is well positioned to navigate various scenarios and capitalise on future growth opportunities.

In 2024, GFG expects to deliver a 5-15% decrease in NMV on a constant currency basis, implying €1.1-1.2 billion in NMV. Adjusted EBITDA is expected to be €(25)-(45) million. This guidance reflects ongoing market challenges which have been observed in similar topline trends in the first two months of 2024 compared to Q4 2023.

Note: All Group figures are presented excluding Argentina except for Pro-Forma cash for which Argentina balances remained within the Group following the close of operations.

(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) Normalised Free Cash Flow (“NFCF”) represents operating cash flows excluding discontinued operations, exceptional items, changes in factoring principal, interest and tax on investment income and convertible bond interest.

FURTHER INFORMATION

KPI and financial definitions, including alternative performance measures are available in the

2023 Annual Financial Report. 

For inquiries, please contact:

Saori McKinnon

Head of Investor Relations & Communications

investors@global-fashion-group.com

press@global-fashion-group.com

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 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