Zalando Se Ord

Welcome to the Zalando Q2 earnings call. The conference will be recorded. At this time all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation, so please dial in to state your question. So thank you very much and let me now turn the floor over to your host Patrick Kofler, Director Investor Relations.

Good morning and welcome to our Q2 2026 earnings call. Today I'm joined by our Co-CEO Robert Gentz and our CFO Anna Dimitrova. Robert will start with a strategic overview and our key business highlights before handing over to Anna, who will walk you through the financial developments of the quarter and the outlook. Both will be available for questions afterwards. As usual, this call is being recorded. The live webcast as well as the replay of the call will be available on our Investor Relations webpage later today. As usual, during the Q&A session, we kindly ask you to limit your questions to two each, allowing for an efficient discussion. Now, over to you, Robert. The floor is yours.

Thank you, Patrick. Hello, everyone, and thank you for joining today's call. We carried last year's momentum straight into 2026. By successfully executing our strategy and hitting major milestones, we achieved further progress throughout the first half of 2026. This progress is reflected across three core areas of our business. First, through our multi-app approach, where we're driving a platform distribution customer frequency and monetization depth. Second, through our advanced technology platform, which successfully powers both our B2C and B2B operations. and third, through scaling our AI capabilities, which continue to drive significant efficiency and growth across the business. European fashion represents a massive 500 billion euros addressable market. We are relentlessly focused on our strategic execution to expand our coverage and capture a larger share of this huge opportunity. Our solid Q2 performance confirms that we are on track to meet our full year targets, serving as another successful step towards our mid-term goals. On the next page, I will share five key highlights that illustrate our overall progress in H1. Number one, we've delivered solid profitability in H1, even as top line growth fell a little short of our ambition, driven by softer demand, mainly in the sneakers category. At group level, we delivered double digit growth. Reported GMV grew 21%, and group revenue is up more than 22% compared to H1 last year. and we increased adjusted EBIT by 16% year on year to 270 million euros, bringing our adjusted EBIT margin to 4.2%. On a performer basis, comparing like for like with about you in both periods, group GMV growth was mid single digits. And we continue to benefit from a structural shift of fashion spend online, which remains a steady tailwind for our business. Number two, in H1, we have also advanced our AI capabilities, bringing further traction to both our B2C and B2B business. AI is already delivering measurable benefits to both efficiency and growth. And I come back to some of our most exciting developments later in the call. Number three, in B2C, GMV grew across all three of our consumer apps, About You, Lounge, and Zalando. In our core apps, Zalando, we're doubling down on our lifestyle opportunity with upgraded customer journeys in sports, an exciting new pre-owned luxury fashion partnership, and the launch of a dedicated home and living category. Furthermore, the partner business remains a central engine to drive growth. In H1, we've seen strong double-digit GMV growth of 13.4%. Number four, in B2B, we see accelerated strong double-digit growth driven by the scaling of the partner business and large-scale merchant collaborations. B2B revenue grew almost 26% on a reported basis. Additionally, ZEOS achieved successful go-lives, such as Max & Spencer, while scale secured major enterprise client wins, including Wortmann Group, one of Europe's largest shoe retailers. Number five, we're refining our 2026 growth guidance to the lower half of the original 12 to 17% range for GMB and revenue following our H1 performance. Adjusted EBIT is narrowed to 680 to 720 million euros. We're narrowing our profit expectations despite a refined top line range which shows the strengths and quality of our earnings. We're excited with how our teams executed on the strategic priorities that will drive the business forward and remain confident in a strong H2O performance. Let me now elaborate on the progress of our business. In March, we shared that our B2C and B2B segments are powered by unified data and infrastructure engine that is increasingly enhanced by AI. This engine is constantly improving through growing consumer app engagement and brand integrations as we drive platform distribution and usage. The more customers and brands use our platform, the smarter our systems get. We've invested into data to run our business over 15 years, but putting AI to work right now is helping us operate much more efficiently and grow faster. Let me share with you some of the many new developments from the past few months now. AI generated content is transforming how fashion and lifestyle brands operate and connect with consumers. Building on our success using AI for product onboarding and discovery that we talked about, we have launched Scale Studios, a scalable B2B solution. Scale Studios is a new SaaS platform that replaces traditional photoshoots with AI generated content. This significantly reduces the time to market by 95% and reduces visual content costs by over 90%. We generate revenue through a flexible, token-based subscription model that grows alongside our customer needs. In just two and a half months after launch, over 100 brands, including S.Oliver and Betty Barclays, have joined the platform, resulting in an annual revenue run rate exceeding €1 million. and this early success proves that our position as a data and technology expert in the lifestyle industry combined with our access to over 7,000 potential brands allows us to scale innovative AI solutions very rapidly. Let's talk about an example of our customer-facing AI, the Zalando Assistant. We're making steady progress towards our goal of building a true lifestyle AI assistant. We had three major milestones last quarter. First, we integrate a web search. Now our assistant combines live data like current fashion trends, events, or weather with our product catalog, allowing us to connect real-time moments directly to these items that we sell. Second, we added customer care. Customers can now resolve order issues directly within the chat. In fact, 15% of conversations which contain simple inquiries like, where's my order, are already being handled on the spot. Third, we introduced visual discovery. Customers can now snap a photo of an item they like in real life, and our visual AI will instantly find that product or similar alternatives in our catalog. And these updates are gaining serious momentum. Between January and June, we saw a 63% increase in high value interactions. And even more importantly, our retention metrics are growing. Customers are consistently coming back to the use of the assistance for inspiration or for support. It's clear our innovation pipeline is working and I'm incredibly proud of the progress that we've made. Regarding our B2C strategy, I share how we're driving monetization by expanding our lifestyle universe within the Zalando app. Specifically through new experiences, partnerships and category launches. So here are three examples from last quarter. First unique category-specific experiences. In sports, we launched specialized hubs like fan homes and a boot room for football fans. We also enabled customized jerseys with favorite players' names, which nearly doubled our German football jersey sales compared to the Euro 2024. Second, new partnerships in pre-order. We joined forces with Le Ser Collective to bring pre-owned luxury to 14 markets, giving millions of customers access to over 50 designer brands. And third, a new lifestyle category. We're rolling out now our home and living category across all markets, debuting today with a high caliber portfolio of premium home and lifestyle brands. We have plans in place to expand this to over 50 partners and 25,000 products. Let us now transition to our second growth engine, our B2B operating system. We're speeding up our B2B growth. Our strategy is clear. We're making Zalando's proven logistics, software, and services available as a leading B2B operating system for fashion and lifestyle brands across Europe, whether they sell on or off our platform. You can see our growth momentum through our scaling partner business, major enterprise go-lives and key wins. On the logistics side, we announced a large-scale strategic partnership with British retailer Marks & Spencer last November. We successfully launched this collaboration today and it will be rolling out to 22 markets over the next few months. After a successful go-live with NEXT last September, we have now expanded the collaboration to the About You marketplace. We are also pleased that YouGoBoss has chosen ZEOS to handle fulfillment for the Zalando marketplace business. On the software side, it's great to see new go-lives for merchants like Ochsner Sports, Biogena and ICE. Additionally, scale has secured key wins across DACH and the UK. In DACH, we won the Wortmann Group, one of Europe's largest shoe retailers, along with Roastmarking and BiComponent. In the UK, music retailer HMV chose the scale e-commerce platform to power their online shop. These wins show that our B2B solutions are highly adaptable, easy to scale internationally and trusted by major enterprise clients. Now I hand it over to Anna for the financial performance.