EQS-News: GLOBAL FASHION GROUP REPORTS Q4 AND FY 2022 RESULTS

Christoph Barchewitz, CEO of GFG, said:

2022 played out very differently to what we expected and Im proud of how the team continued to adapt to a rapidly changing environment across all of our markets. We continued to focus on delivering our strategy, which helped us navigate a volatile market and ultimately deliver 1.6bn in NMV last year, while maintaining a strong Gross Margin. Looking ahead, we will prioritise profit and cash flow over the near term whilst continuing to selectively invest for the future, ensuring we are well-placed when growth returns.

Outlook 2023

The outlook reflects the demand environment and the near term de-prioritisation of growth in order to protect cash flow and improve profitability. In 2023, GFG expects to deliver NMV growth of (5)-0%, c.1.5-1.6 billion in NMV, and c.1.0 billion of Revenue, all on a constant currency basis. Adjusted EBITDA margin is expected to be (3)-(1)%, improving profitability year-on-year, while actively managing costs. Capex investment will be c.35 million. The Group expects to achieve Adj. EBITDA breakeven in 2024.

In the first two months of the year we have seen a continuation of Q4 trading trends.

Business Review

Reflecting the lower demand environment, GFG delivered NMV of 452.3 million in Q4, (6.9)% yoy, driven by order volumes, down 18.2% and Active Customers down 16.5%. This decline was offset by the 13.8% increase in Average Order Value which has four drivers: increased items per order, country mix, category mix and price Inflation net of discounts. Revenue was down 8.5% for the quarter.

In LATAM, NMV declined 13.2%. LATAM continues to rationalise marketing in a challenging market which is reducing the number of new customers. SEAs NMV declined 8.3% reflecting pent-up demand for physical retail and travel continuing after the regions comparatively late COVID re-opening. ANZ remained flat at 0.1% NMV growth reflecting the declining consumer sentiment.

GFGs Marketplace share in Q4 grew to 34.8% of NMV, up 2.1% year-on-year. While SEA grew Marketplace materially, ANZs focus on high-margin own brands resulted in a slight decrease in share. In LATAM, Marketplace sellers were deliberately rationalised to improve the customer experience. Overall, Marketplace continued to grow in absolute terms. The Group increased focus on its Platform Services and generated higher revenue from its Marketing by GFG, Operations by GFG and Data by GFG offerings.

Despite pricing activity from lower demand, GFG delivered a broadly stable Gross Margin performance at 42.8%. Profit was impacted by cost deleverage and additional costs at the ANZ fulfilment centre net of savings from lower marketing investments. Together this led to an Adj. EBITDA margin of (1.3)%. GFG successfully reduced its inventory levels down 12 million from 2021, putting us in a stronger position going into 2023.

Capital Markets Day