BERLIN — Europe’s largest fashion and footwear online platform Zalando continues to be profitable in 2015 and aims for further growth and logistic expansion in 2016.
The Berlin-based e-tailer’s annual report for 2015 released today lists a net profit of 121.5 million euros, or $134.7 million, significantly more compared with 47.1 million euros, or $62.6 million, in 2014.
Dollar figures are converted at average exchange for the period to which they refer.
Zalando reported growing earnings before interest and taxes of 89.9 million euros, or $99.4 million, a gain of 44.3 percent compared with 62.1 million euros, or $82.4 million in 2014, while the adjusted EBIT margin dropped from 3.7 to 3.6 percent points from 2014 to 2015.
With revenues of 2.96 billion euros, or $3.28 billion, compared to sales of 2.21 billion euros, or $2.94 billion in 2014, an increase of 33.6 percent, the group exceeded the growth target of 20 to 25 percent for the year.
Rubin Ritter, member of the management board, aims further: “We’ve been growing extremely fast for the last eight years and going forward, we think this is still very much about growth. When we look at the European market, we have a market share of around 1 percent which is already significant, but we clearly think there’s the opportunity to continue to grow for a market share of 5 percent plus — in the German shoe market we already have a market share of 5 percent so this is clearly achievable.”
Zalando closed 2015 with 17.9 million active customers, 3.2 million more than the previous year, with an increasing percentage of 57 percent accessing from mobile devices compared to 42 percent in 2014.
Active in 15 countries, the DACH region of Germany, Austria and Switzerland remains the core market with a revenue of 1.58 billion euros and an EBIT of 101.9 million euros while the rest of Europe still operates in the red with a loss of 3.3 million euros in 2015 — 8.3 million euros less than in 2014.
“Where we’re heading in 2016 is, of course, the most interesting part and we think we still have a huge opportunity ahead of us,” Ritter said. “We continue to follow our long-term target, the growth corridor of 20 to 25 percent and we think we can achieve the upper hand of that corridor this year. On the margin side, we continue to invest but at the same time will be able to keep margins at the level that we have seen in 2015 around 3 to 4.5 percent points, net working capital will remain neutral and capital expenditures will be around 200 million driven by investments, our operations footprint but also the software projects that we are working on.”
Zalando is working on establishing a network linking inventories of brands and retailers with their software company Anatwine and developing an infrastructure for same-day-deliveries, potentially cooperating with Uber and similar transportation companies. Furthermore, a logistics center is scheduled to open in 2017, but further details will be revealed later this year.
Along with the annual report, Zalando announced changes at the supervisory level: Current chair of the supervisory board Cristina Stenbeck will leave the group to concentrate on operations at the investment firm Kinnevik. Lothar Lanz, supervisory board member since February 2014, is nominated to take over as chairperson; Kai-Uwe Ricke was nominated as audit committee deputy chairman, and Jørgen Madsen Lindemann, chief executive officer of Modern Times Group, a media corporation founded by Kinnevik, was nominated to take over Stenbeck’s vacant seat in the supervisory board as of the next annual general meeting on May 31.
“I have had the great pleasure of supporting Zalando on its journey from early stage to successful high growth public company. The Supervisory Board’s decision to promote Mr. Lanz to chairman and the nomination committee’s decision to add Mr. Madsen Lindemann further strengthens the composition of the supervisory board and helps to drive Zalando’s platform strategy in relevant ways. Kinnevik remains committed and excited about its lead shareholder role in Zalando’s promising future,” Stenbeck said.