Zalando progresses on strategic agenda and delivers strong third quarter

• Significant strategic progress in 2021 towards Starting Point for Fashion vision, platform transition and sustainability ambitions
• Strong financial performance in first full quarter of reopened economies: GMV grows 25.3% to 3.1 billion euros; 9.8 million euros adjusted EBIT
• Upgraded 2021 guidance confirmed: GMV growth of 31-36%, revenue growth of 26-31% and adjusted EBIT in the upper half of guided 400-475 million euros range

On its path to be the Starting Point for Fashion, the company successfully launched six markets in the second and third quarter of 2021 with locally tailored assortment, digital experience and convenience - including local payment, delivery and return options. Zalando continues the international roll-out of its subscription-based loyalty program Zalando Plus, enhancing the program for French customers and expanding to the Netherlands and Italy.

A key factor to Zalando's platform transition is building strong partnerships with brands. The company continuously aims to elevate the ways brands can engage with customers on its platform, most recently through more brand collaborations, for example with Adidas, Levi's, Dr. Martens or The North Face.

In the third quarter, Zalando introduced new business practices for circularity along the full product lifecycle, from developing design standards to investing in new recycling technologies. Paying into its sustainability goal of applying the principle of circularity and extending the life of at least 50 million fashion products by 2023, Zalando has for example grown its pre-owned offer tenfold from 20,000 to now over 200,000 articles in one year.

To make further progress towards being the Starting Point for Fashion in 2022, Zalando will focus on engaging customers across multiple propositions. Significantly accelerating the partner business beyond Germany will be a key driver of the company's further platform transition. Ingraining sustainability and Diversity & Inclusion (D&I) even stronger across all parts of the organization will advance Zalando's ambition to build a sustainable fashion platform with a net-positive impact on people and the planet.

Robert Gentz, Zalando Co-CEO, says: "Throughout the year we progressed strongly across all areas of our strategy, always keeping our focus on our long-term vision to be the Starting Point for Fashion and build a truly sustainable platform business with more than 30 billion euros in GMV by 2025. We are looking confidently ahead into 2022, with several strategic initiatives in the pipeline that will excite customers and partners alike and push our sustainability agenda further forward."

STRONG FINANCIAL PERFORMANCE IN FIRST FULL QUARTER OF REOPENED ECONOMIES

With most lockdown measures eased across Europe, physical stores reopening and consumer mobility steadily increasing, growth rates started to normalize during the third quarter, as expected compared to the elevated levels achieved during the first half of the year.

Zalando grew its third quarter GMV by 25.3% year-on-year to 3.1 billion euros, slightly above the company's mid-term target growth corridor of 20-25%. Revenues grew in the same period by 23.4% to 2.3 billion euros. Strong customer acquisition and the continued positive development of existing customers have been key growth drivers. Zalando grew its active customer base by 30.1% year-on-year to 46.3 million by the end of the third quarter 2021. Customers also ordered more frequently, with average orders per active customer reaching a new all time high at 5.1 orders over the past twelve months. Throughout the quarter, Zalando's platform business developed strongly and grew faster than overall GMV growth.

Zalando achieved an adjusted EBIT of 9.8 million euros in the third quarter, corresponding to a margin of 0.4%, and thus a more normalized level of profitability compared to the exceptional result recorded in the third quarter of 2020. Profitability levels in the third quarter 2021 are very much in line with the third quarter of 2019, which was the last third quarter recorded before the pandemic.

David Schröder, Chief Financial Officer, says: "We are pleased to see our strong performance continue in the third quarter, the first quarter with economies fully reopened. Despite growing inflation and supply chain uncertainties, we remain confident to achieve our upgraded full-year outlook and are now looking forward to exciting our customers and supporting our partners over cyber week and the upcoming festive season."

ZALANDO REITERATES GROWTH AND PROFIT OUTLOOK FOR THE FINANCIAL YEAR 2021

Zalando reiterates its upgraded outlook for the financial year 2021. GMV is expected to grow by 31-36% to 14.0-14.6 billion euros, and revenues are expected to grow by 26-31% to 10.1-10.5 billion euros. Based on an outstanding topline performance and continued return rate benefits in the first half of this year, the company expects adjusted EBIT in the upper half of the guided range of 400-475 million euros. Capital expenditure is expected to come in at around 350 million euros. Furthermore, the group continues to expect negative net working capital for the fiscal year 2021.

The Q3 2021 financial report, as well as the earnings presentation for analysts and investors, is available on the Zalando Investor Relations website. Zalando will report the results for the full year and fourth quarter 2021 on March 1, 2022.

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Zalando Group - Key Figures (in EUR million)

Zalando Group - Key Performance Indicators

Definitions are available in the Q3 and annual report.

ABOUT ZALANDO
Zalando (https://corporate.zalando.com) is Europe's leading online platform for fashion and lifestyle. Founded in Berlin in 2008, we bring head-to-toe fashion to more than 46 million active customers in 23 markets, offering clothing, footwear, accessories, and beauty. The assortment of international brands ranges from world famous names to local labels. Our platform is a one-stop fashion destination for inspiration, innovation, and interaction. As Europe's most fashionable tech company, we work hard to find digital solutions for every aspect of the fashion journey: for our customers, partners and every valuable player in the Zalando story. Our vision is to be the Starting Point for Fashion and a sustainable platform with a net-positive impact for people and the planet.

MEDIA INQUIRIES
Alexander Styles
Business & Financial Communications
alexander.styles@zalando.de
+49 (0)152 22715810

INVESTOR/ANALYST INQUIRIES
Patrick Kofler
Investor Relations
patrick.kofler@zalando.de
+49 (0)30 20968 1584