Global Fashion Group

Good morning, everyone, and welcome to Global Fashion Group's Q4 and full year 2025 results presentation. I'm Krzysztof Wasiewicz, CEO of GFG, and I'm joined today by our CFO, Helen Higman. I'll start today with an update on the strategic actions we have executed over the past three years, followed by an overview of our 2025 regional performance. Helen will cover results for the group and the outlook. Then we'll open it up for Q&A. To start, I want to briefly remind you of what underpins GFG's long-term potential. We hold leading positions across large fashion and lifestyle markets where online penetration continues to increase over time. We serve these markets with a tailored, customer-centric approach that reflects local needs, and we maintain strong relationships with both global and grow in complex markets. We also have a unique operational footprint, supported by proprietary technology and scalable infrastructure, which enables us to deliver fashion-specific customer experience efficiently at scale. With these foundations in place, we are on track to deliver profitable growth and positive cash flow across our markets. And we do so from a position of financial strength with a healthy balance sheet and a substantial net cash position. This long-term potential is underpinned by the work we have done to reset and strengthen the business. Looking back to 2022, two main events have shaped the challenges our business has had to navigate over the past three years. One, a difficult post-COVID macroeconomic and fashion e-commerce environment that significantly depressed consumer demand and led to a decline in our active customer base and order volumes. And two, the sale of our CIS business due to the Russian invasion of Ukraine, which significantly reduced the scale and profit of the group. This initiated a reset period for our business. We have successfully actioned this since 2023 by evolving our business model, strengthening our customer flywheel and driving cost efficiency. On business model evolution, we strengthened our brand partnerships and rationalized our offering. We took a prudent approach to inventory and since the end of 2022, we reduced inventory levels by 43% on a constant currency basis. We curated our assortment by reducing the brand count by 26% as a result of removing long-tail brands from our platforms. On customer flywheel, we dedicated our attention to our high-value customers and increased gross profit per active customer by 14% on a constant currency basis. We delivered this step up all while applying discipline with marketing costs remaining stable at 7% of NMV each year. Finally, on cost efficiency, we reduced and simplified everywhere across the group. From 2023 to 2025, we reduced our total cost base by 106 million euros, a 16% reduction in constant currency, and released 88 million euros from working capital. So now let's look at how this reset period has translated into our financial results. As mentioned, we've been operating in a period of demand downturn, which resulted in 168 million Euro reduction in NMB from 2023 to 2025. FX devaluation against the Euro accounted for about half of this reduction. Despite facing a lower top line, we substantially improved profitability and cash flow. Adjusted EBITDA improved by 62 million Euros since 2023. Normalized free cash flow improved by 31 million euros since 2023. Let's now turn to our regional segment results. By executing with discipline across all aspects of our business, we have significantly strengthened our financial operating model. As a result, we delivered a positive adjusted EBITDA for all three year in our two largest regions, ANZ and LATAM. While our reset actions have built stronger foundations group-wide, each region is currently at a different phase in their journey to profitable growth. Starting with ANZ, which now represents half of the group's NMV, ANZ has completed its transition and is now operating as our profitable growth engine. In 2025, ANZ's NMV grew 6% year-over-year in constant currency. Profitability was strong at €26 million in adjusted EBITDA, marking a €28 million improvement compared to 2023. ANZ has strong cash conversion and delivered a positive normalized free cash flow. Latam represents 30% of group NMV and also delivered 6% NMV growth in 2025. Latam has achieved a significant turnaround, moving from a declining business with negative 22 million adjusted EBITDA in 2023 to a positive 3 million euros in 2025. Cash flow has improved materially as well, with Latam now near normalized free cash flow break-even. As the initiatives we put in place continue to flow through, we expect LATAM to move toward the end of its reset phase and into a more profitable growth position. SEA is our smallest region at 21% of group NMV and continues to face a decline with NMV down 15% in 2025. Despite this backdrop and thanks to its strong cost discipline, SEA has remained resilient on profitability, delivering a positive €3 million adjusted EBITDA in 2025 and was also near break-even on normalized free cash flow. SEA's financial resilience is also partly attributable to its high marketplace share and sizable platform services business. Let's look at that next. Evolving toward a platform-led model by scaling our marketplace and platform services is a core part of our strategy. In 2025, marketplace represented 39% of group NMV and platform services represented 4% of group revenue. Through our reset phase, all regions contributed to our progression toward our group goals of 45% marketplace share and more than 5% platform services share. SEA is the most advanced in this evolution and is also the only region so far to offer a solution where we use a single stock pool to fulfill orders across multiple brand partner channels. This service is the main driver behind SEA's step up in platform services revenue from 2023 to 2025. In ANZ and LATAM, and 2024, respectively. Additionally, our growing marketing platform service is expanding across these regions, serving as another key driver of profitability. Let's now take a closer look at ANZ's results. 2025 marked a clear step forward for ANZ as the region returned to growth and delivered stronger profitability. NMV and revenue steadily grew each quarter 3% on a constant currency basis. Active customers also closed the year up 4% year-on-year. ANZ achieved a record full-year gross margin of 49% up 2 percentage points from 2024 and we held that same level in Q4. This flowed through to adjusted EBITDA margin which expanded 3 percentage points to 7%. ANZ's strong performance has a scaling platform mix, more efficient infrastructure, and stronger customer engagement. Looking at platform mix, we are strengthening our fashion proposition while shifting to a more inventory-like model. In 2025, more than 20% of NMB came from our own brands and exclusive partnerships, helping us differentiate ourselves. At the same time, our brand partners are participating in our partner offerings. Marketplace now makes up 36% of NMB and 115 brands are live on Fulfilled By since we launched it in 2023. This gives customers more choice and gives brands an efficient and reliable way to grow with us. Additionally, our marketing services revenue is up 36% since 2023, indicative of another great value add for our brand partners. The second major driver is our more efficient infrastructure. With our new order and warehouse management system and expanded partnership with Australia Post, we've had a delivery upgrade. About half of all orders are now delivered in under 48 hours across Australia and New Zealand. In Q4 alone, delivery speed in major cities improved by 10% year over year. In Australia, we are the only fashion player to have rolled out Saturday standard delivery at scale for East Coast metro areas. And in New Zealand, we have achieved a meaningful improvement by reducing delivery times by 15% and introducing express next day service for key metro areas. These operational wins support our profitable growth momentum and our third driver, customer engagement. Our gut-you-looking master brand campaign continues to demonstrate strong results. Amongst the campaign's target audience, unprompted awareness is up 70%, customer trust has increased 62%, and 57% of viewers take action after seeing our ads, meaning more visits to the iconic app and site. To further strengthen the iconic's customer flywheel, we launched the Front Row loyalty program in October last year. the loyalty currency members earn when they shop to unlock rewards, special offers and exclusive experiences. Members progress through four status levels with higher levels unlocking greater benefits and faster earning. The front row is helping us recognize and retain our highest value customers, which deepens loyalty and drives higher order frequency. demographic penetration and increased cross-category shopping. In parallel, we continue to drive profitability through scale, ongoing fulfillment optimization, and leveraging technology and AI. Turning now to LATAM. 2025 was a year of continued recovery. NMV returned to growth for the full year and LATAM became, just to give a doubt, profitable. We did see LATAM's momentum moderate in the second half. This was partly due to cycling stronger year-over-year competitors and partly due to a more challenging market and competitive environment. Though active customers ended 2025 down 2% year-on-year, LATAM saw higher order frequency and average order value, which reflected our focus on higher value customers. LATAM's margin profile strengthened Next, we'll cover the strategic drivers for LATAMP that have laid the foundation for profitable growth. First, we are changing how we engage with our customers. We have started to refresh our cashback program to increase customer loyalty. We're promoting Club DaVici, which is where shoppers can access personalized rewards and exclusive promotions. It is highly effective in keeping our high-value customers engaged and coming back to DaVici. second we are scaling our brand partner proposition a major piece of this is our fulfilled by offering which launched in 2024 and now has over 60 brand partners live we saw four times more revenue from fulfilled by in 2025 it is a true win-win where brands leverage our fulfillment network to grow while we monetize our automated fulfillment center capacity our partner We have been growing our marketing services with revenue up 42% in 2025 and our revenue per session doubling in Q4. 2025, we also rolled out financing to support our partners' working capital needs while simultaneously optimizing our cash flows. Finally, we are deploying AI-generated product imagery at scale. This reduces our reliance This new workflow is about 30% faster, and as we scale it, we expect it to cut production costs by around two-thirds. All of these initiatives are building a more resilient and profitable foundation for us in Latam. Let's now turn to SEA. In 2025, we continue to see the rate of decline steadily ease even as the top line remains challenging. By Q4, NMV to 15% in Q3. SEA's revenue declined less than NMB for both Q4 and the full year. This was a result of improved marketplace commissions and stronger contribution from platform services. Our SEA business is now operating with a more favorable margin mix and leaner cost base. As we work through our initiatives to stabilize demand, SEA is well positioned to translate any return to growth into stronger profitability. To drive stabilization, we are focusing on sharpening our customer proposition, while driving simplification and efficiency to progress toward profitable growth. This includes focusing on our top-performing brand partners. In 2025, more than 60% of SEA's NMV came from our top 30 brands. To support this, we have refined our assortment. In retail, we have reduced our intake by 28% from 20% fewer brands since 2023. On our marketplace, we have reduced long-tail complexity, resulting in a 20% increase in NMV per brand compared to 2023. Alongside our assortment strategy, platform services continue to scale and be an important growth lever for SEA. generated 48% higher revenue in 2025 versus 2023 on a constant currency basis. And it enables sales for brand.com and other channels in 2025. An exciting recent development in Q1 is the launch of our Gutly Looking in SEA. We took our learnings from ANZ and adapted the master brand for Zalora. Gutly Looking is now live across all of our drive higher quality traffic and ultimately rebuild a healthier, more profitable customer base over time. Finally, we are continuously driving simplification and efficiency across the business. We successfully reduced SEA's total cost base by 19% on a constant currency basis and released 29 million euros in working capital since 2023. Altogether, these actions give us a solid foundation I will now hand it over to Helen to take you through the group results and outlook.

Thank you, Christoph, and good morning, everyone. I'll start with customers. At the end of 2025, our active customer base was down 4% year on year, as we continue to prioritize profitable customer acquisition, engagement, and reactivation. This strategy includes engagement initiatives that encourage cross-category shopping, app usage, and loyalty program participation. These initiatives in ANZ and LATAM have successfully offset headwinds in SEA to result in a 2.3% increase in group order frequency. In 2025, we generated over €1 billion in NMV. with Q4, our key trading season, contributing about a third of the full year. Whilst our full year and Q4 NMV were broadly stable on a constant currency basis, our reported figures were significantly impacted by FX headwinds. Specifically, the Australian dollar and Brazilian RAI were weak against the euro in 2025, both down about 7% year on year. With Australia and Brazil being our two largest markets, this translated to a lower Euro reported value for our NMV and revenue. Our average order value increased in constant currency terms for both the full year 2025 and Q4, offsetting lower volumes in SEA, which drove the group year on year decline. The order value increase was driven by inflation along with a combination of a higher price point assortment and a regional mix. Now turning to revenue and margins. We increased our adjusted EBITDA by 27 million euro against a backdrop of broadly flat constant currency revenue to turn the group four year positive for the first time within our current footprint. Now let's take a closer look at the two contributors to this milestone, gross margin improvement and ongoing cost and efficiency actions. Starting first with gross margin improvements. Over our reset period, we have successfully reduced our overall inventory position by 43% on a constant currency basis from the end of 2022 to the end of 2025. we've achieved a healthier inventory profile by reducing discount through a more relevant assortment, increasing inventory turnover, and decreasing our share of aged inventory by 10 percentage points. This, combined with a steady increase in marketplace and platform services share, has resulted in a four percentage point increase in gross margin, rising from 42% in 2023 to 46% in 2025. The second key contributor to the significantly improved adjusted EBITDA position is ongoing cost discipline. Our cost efficiency programmes have been a crucial part of our business reset and remain a core part of our strategy going forward. From 2023 to 2025, we've reduced our total cost base by €106 million, representing a 16% reduction on a constant currency basis. This cost reduction has more than doubled the pace of our 7% NMV decline over the same time period. The largest saving came from fulfilment. Two thirds of the reduction was as a result of our own initiatives, where we captured efficiencies, including from automation and the order warehouse management system, OWMS, that we implemented in ANZ last year. Another 20% was due to reduced volumes, and the remainder relates to external factors such as FX. We also delivered significant savings across tech and admin. We continue to streamline our organisational structure along with ongoing reviews and negotiations of all our non-pupil costs. Across all cost lines, we've reduced our headcount by over 40% over the past three years. Together, our 4 percentage point gross margin expansion and 106 million euro cost reduction have enabled us to reach our milestone of becoming adjusted EBITDA profitable. Turning to our cash, our normalised fee cash flow improvement in 2025 was primarily driven by the 27 million euro increase in adjusted EBITDA. Lease costs remained broadly stable year on year. Working capital moved towards neutral as we cycled the one-off timing benefits seen in 2024. We delivered a capex reduction of 16 million euro following the completion of the OWS investment and ongoing rationalisation of our broader technology spend. After adjusting for operational tax and interest, we had a normalised free cash outflow of 32 million euro. representing a €10 million improvement compared to 2024. In Q4, we generated €46 million of normalised free cash inflow. As a reminder, our cash flow cycle is highly seasonal, generating significant cash flows in Q4, our key trading season, and experiencing significant outflows in Q1. We closed 2025 with a strong liquidity position of €185 million in pro forma cash and €143 million in pro forma net cash. Pro forma net cash deducts our outstanding €41 million convertible bond liability and other small levels of third party borrowing. Throughout 2025, we strengthened our balance sheet by repurchasing 13.8 million euro in aggregate principal amount of our convertible bond, bringing our total repurchased volume at a discount to 89% of the original issue. We have two significant funding events taking effect in quarter one, which I'd like to overlay against our closing December 2025 cash position. Firstly, Following bondholders exercising their right to redeem at par on the 16th of March, we will redeem 31.8 million Euro, which is about three quarters of our outstanding convertible bond. This will leave 9.1 million of the bond outstanding at attractive terms of a 1.25% interest rate maturing in March, 2028. After this redemption, Based on the December 2025 balance, this will leave us with €153 million in pro forma cash. Secondly, we've increased our funding flexibility through a new credit line. In December, our ANZ business signed a €17 million revolving credit facility to efficiently manage our seasonal working capital needs. When combined with our undrawn funds from our facility with HSBC, we have €23 million in additional available funding. This brings our total adjusted available liquidity position per year end 2025 to €176 million. This represents the strong financial foundation and significant headroom we have to support our next phase. We're also pleased to announce this morning the launch of a €3 million share buyback programme The repurchased shares are expected to be used to partially meet our ongoing share-based employee remuneration scheme. Now let's look forward to our outlook, starting with guidance for 2026. For LNV, we expect a range of negative 4 to positive 4% on a constant currency basis. As of December 2025 closing effect rates, this translates to 0.99 to 1.07 billion euro. The global macroeconomic environment remains highly volatile, compounded by ongoing geopolitical tensions with distinct macroeconomic factors impacting demand across the nine countries where we operate. Specifically, our two largest markets, face near-term headwinds. In Australia, weak consumer sentiment is driven by recent interest rate increases and persistent inflation. Whilst in Brazil, higher interest rates remain and the upcoming general election and World Cup has additional volatility considerations. Our MMV guidance reflects softer current trading and half-won expectations as well as different half-due trajectories to account for these dynamics. For adjusted EBITDA, we expect 15 to 25 million Euro, again at closing December FX rates, building on the 9 million we delivered in 2025. CapEx and leases are expected to be broadly in line with 2025 levels. The working capital we expect a slightly higher inflow than we delivered in 2025. Our strategy to deliver profitable growth remains unchanged and is built on three key pillars. Firstly, business model evolution. We continue to create our assortment across retail and marketplace while scaling our brand partner offerings through our platforms. including expanding operations by, fulfilled by, and marketing by GFG. This platform mixed shift continues to support our evolving business profile towards a gross margin in excess of 47%, 45% marketplace share, and 5% platform services share, whilst maintaining broadly neutral working capital. Secondly, the customer flywheel. We are continuously refining our customer strategy with a clear focus on quality and profitability. This means disciplined engagement initiatives, stronger adoption of our loyalty programs, and using AI across the entire customer journey. These actions will drive order frequency growth and improve customer economics, whilst keeping marketing investment broadly stable at 7% of MMV. Thirdly, cost efficiency. We will remain focused on cost and capital discipline. As we grow, we create operating leverage from our existing assets, particularly our fulfillment network, without requiring significant incremental investment, which keeps capex and lease costs broadly stable. Technology and AI are embedded in our operations, helping us execute faster, improve customer experience, and remain resilient through market volatility. In summary, applying these three pillars through our research phase has established a stronger financial foundation. We will continue to execute this strategy to deliver MMV growth, adjusted EBITDA margin expansion, and normalize free cash flow break even. We will now open the call to your questions. If you'd like to submit a written question, please click on the speech bubble at the bottom of the screen. Thank you.

Thank you. And if you wish to ask a question over the phone, please signal by pressing star one on your telephone keypad. And please make sure the function on your phone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. So, my first question is from Anne from . Please go ahead.