Zalando Se Ord

Ladies and gentlemen, welcome to the Zalando SE publication on the Q2 Results 2025 conference call. I am Sandra, the call-as-call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference will not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Patrick Kofler, Head of Investor Relations. Please go ahead, sir.

Thank you and good morning and welcome to our Q2 2025 earnings call. Today, I'm joined by our Co-CEO Robert Gens and our Co-CEO and Interim CFO David Schroeder. Robert will kick us off with a business update before handing over to David to walk you through the financial developments of the quarter. Finally, Robert will discuss our outlook. Both will be available for questions afterwards. As usual, this call is being recorded and the live webcast as well as the replay of the call will be available on our Investor Relations web page later today. I will now hand it over to Robert. The floor is yours.

Thank you, Patrick. Hello, everyone, and thank you for joining today's call. So last year, we announced our new ecosystem strategy and started to execute against it and successfully delivered on our growth and profitability ambitions. This year, we continue on this great trajectory by further advancing our B2C and B2B growth factors and driving profitable growth. At the same time, we also keep investing in strategic growth opportunities, reflecting our ambition and conviction to serve an even larger share of the 450 billion euro total European fashion market in the long term. Our strong H1 performance confirms that we are well on track and marks another step towards our mid-term goals. Let me now move on to the overview of the five highlights of our presentation on page two. Number one, starting with our financial performance in the first half of 2025. We achieved strong GMB growth of 6.2% and even stronger revenue growth of 7.6% year-on-year. This represents a significant accomplishment amidst a fast-changing geopolitical and macroeconomic environment. Profitability wise, our business also performed well. Co-adjusted EBIT reached 232 million Euro representing a margin of 4.4% and improvement of 0.3 percentage points year on year. But not only financial, at the same time, we're advancing steadily on our ecosystem strategy, creating value across both the consumer and the partner side of our business. So number two, in B2C, starting this week actually, Zalando is launching a new AI-powered discovery feed, replacing the traditional home screen in our main app. And the feed brings together some of Zalando's most powerful experiences, the curated lifestyle boards, the personalized product recommendations, the live stream shopping, inspirational campaign stories, and high-quality editorial content from brands, creators, and Zalando, all in one place. And I come back to some of our most exciting B2C developments later in this call. Number three. Our B2B business maintained its double-digit growth, driven by Xeo's fulfillment. We are excited to announce the launch of our Xeo Shopify application. Alongside the collaboration with about US enterprise-grade e-commerce platform SCALE, this reflects the ongoing commitment to building our software ecosystem and strengthens our support for our merchants' most strategic digital channel, their own e-commerce operations. With the launch, we enabled ZEOS multi-channel fulfillment to Shopify's massive small and medium-sized merchant base in Europe. The integration connects Shopify stores directly to ZEOS fulfillment. Benefits for merchants include faster onboarding, reduced operational complexities, and cost. And this marks another step for ZEOS towards a broader portfolio of ecosystem partnerships with leading e-commerce platforms. Item number four. As already communicated on July 11th, the successful completion of the About You transaction represents another significant milestone in our journey to build a pan-European ecosystem for fashion and lifestyle e-commerce. We received merger control clearance from the European Commission and acquired a 91.5% stake in About You's share capital excluding the treasury shares. As a next step, we now intend to complete that squeezed out to acquire the remaining minority shares that were obtaining 100% of the share capital. We are thrilled to finally start executing our value creation plans and delivering our ecosystem strategy together. Highlight number five. Following the recent closing of the transaction, we provide the first outlook for the full year 2025 for the combined business. On a performer basis, capturing about you to allow for a like-for-like comparison, as of July 11th, we expect 47% GMV and revenue growth year-on-year. For the combined group, we expect an adjusted EBIT of €550 million to €600 million. This represents an increase of €15 million compared to Zalando's previous standalone guidance at the midpoint. And more details on this to follow later in this call. So a lot of exciting highlights we have to share. Let me now touch on the progress of our B2C strategy in more detail on slide three. In early 2024, during our strategy update, we introduced the three strategic pillars that underpin our B2C growth ambitions, differentiation through quality, lifestyle expansion, and inspiration and attainment. And since the update, we have relentlessly made progress on all of these three pillars. And we have, again, made some exciting progress that we want to share today. Let's start with the quality differentiation. One of the core initiatives, the rollout of the new loyalty program, has now surpassed 10 million members as of the end of the second quarter. Recently, we launched the program in four additional markets, bringing the total now to 17. Ultimately, we aim to serve the majority of our customers through this program, thereby increasing the average order frequency and our share of their spending. And already today, the members contribute more than a third of our GMV. Furthermore, we unschedule now to expand our platform into some additional European markets. Portugal is nearing launch preparations and is expected to go live in August and follows by Greece later this year. We're also making progress on our second pillar, becoming a more holistic lifestyle destination for our customers. In the first half of the year, we delivered strong growth in our sports, family and kids design and beauty propositions, all well above the B2C GMV growth rates. And we successfully rolled our beauty proposition to Finland, to Norway and to Spain. And additionally, our launch by the London proposition went live in Croatia and Slovenia and Hungary and Estonia. And Latvia will follow next week and Norway soon after. So we continuously and successfully extend our role that we play in our customers' lives to serve many more aspects of their lifestyle. Let's now move to our third strategic pillar in B2C Inspiration Entertainment. And we are happy with the performance of our advertising solution ZMS, which saw a revenue growth of 45% in H1, yet on a weak baseline in the prior year. Even more excited we are that brands increasingly now use DMS as a full-funnel solution leveraging as well our creative services. And this is a further great signal that Zalando is considered as a destination that helps to elevate brand equity. I now dive deeper into the consumer-facing progress of our inspiration and entertainment pillar. But first as a recap. Some of you may also recognize the slide as we shared it during our strategy update. We see the Inspiration Entertainment slide actually coming through on our user engagement timestamp on our platform and as our midterm on the advertising opportunities. So Zalando's ambition is to continuously redefine fashion and lifestyle shopping, and so we do. Starting this week, Zalando is launching a new AI driven discovery feed, replacing the traditional home screen in the app. This feed surfaces what is personally relevant and newsworthy to you from our most powerful experiences, curated boards, the personalized product recommendations, the livestream shopping, the inspiration campaigns and high quality content from brands, creators and so on. All in one easy to scroll personal feed. Our goal is to create the fashion and lifestyle gateway for European consumers. We want to offer them the most newsworthy and personally relevant access to fashion and lifestyle content, brands and products. From the moment customers open the app, shopping becomes more immersive and entertaining. Fresh, relevant content updates appear in the feed, keeping customers engaged and coming back. At the same time, the feed creates new, high-impact formats for partners to reach audiences through even more relevant organic and advertising placements. The concept blends the convenience of e-commerce, the entertainment of social media, the connection of idea-sharing platforms, and the inspiration of editorial content. presented in a personalized dynamic feed, powered by AI, and the depth to individual tastes increases usage frequency and engagement. The feeds will go live in six markets with a gradual rollout to follow, extending the customer journey well beyond the transactional. We're truly excited about the launch and the opportunities this new form of experience now creates for Zalando. Now over to David for the financial performance.