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In the first quarter of 2020, Zalando generated a negative cash flow from operating activities of EUR -260.8m (prior year: EUR -58.6m). The decrease compared to the prior-year period of EUR 202.2m was mainly impacted by net working capital as well as a lower net income. Predominantly, it related to a strong increase in inventories due to inbounds of the spring/ summer collection and lower business volume as well as a strong decrease in trade payables due to generally reduced spending and faster pay-out terms to support our partners.

Cash outflow from investing activities is mainly impacted by capex, being the sum of the payments for investments in property, plant and equipment and intangible assets excluding payments for acquisitions, amounting to EUR 47.8m (prior year: EUR 42.3m). Capex mainly included investments in the logistics infrastructure relating primarily to the fulfillment centers in Verona (Nogarole Rocca), Olsztynek, Lodz (Gluchow) and Erfurt as well as capital expenditures on internally developed software. In Q1 2019, cash flow from investing activities also contained payments received for the interest in the proceeds from the sale of developed land owned by third parties of EUR 21.8m.


This resulted from the participation in the increase in sales price of the Zalando Campus property. The amount had been recognized in the income statement over several years
beginning in 2015.

The performance in the first quarter of 2020 came in below our expectations due to effects of the coronavirus crisis. After strong growth in January and February this year, the company saw a significant decrease in consumer demand as a consequence of social distancing measures imposed by governments across Europe. GMV and revenue grew by 13.9% and 10.6% respectively compared to the corresponding prior-year period. As a result of the lower sales growth in the first quarter and an exceptional inventory write-down due to revised sales expectations for the current season, we generated an adjusted EBIT of EUR -98.6m and an adjusted EBIT margin of -6.5%.

In Q1 2020, Zalando increased GMV by EUR 242.3m compared to the prior-year period to EUR 1,991.2m. This corresponds to year-on-year GMV growth of 13.9%. While the first two months of 2020 showed strong GMV growth, this metric was severely impacted in March as COVID-19 continued to spread across Europe coupled with mitigation measures imposed by governments and their negative impact on consumer spending. Overall, the increase in GMV was mainly driven by a higher number of active customers as well as an increase in average orders per active customer compared to the corresponding prior-year period. Our customer KPIs continued to grow, albeit at a slower rate, despite the drop in demand caused by the coronavirus crisis. The group had 31.9 million active customers compared to 27.2 million active customers as of March 31, 2019, an increase of 17.2%. Supported also by an increasing use of mobile devices, the average number of orders per active customer rose by 5.1%. The continued strong growth of our Partner Program led to an increased Partner Program share in GMV and also contributed to the increase in GMV overall.

At the same time, the average basket size declined slightly by 1.5% compared to the prior-year period, driven by category mix and higher discounting levels in March as the Mid Season Sale (MSS) was moved forward to cushion the effect of the coronavirus crisis on inventory levels.

Revenue increased by EUR 146.0m compared to the prior-year period to EUR 1,524.2m. This corresponds to year-on-year revenue growth of 10.6%. The increase in GMV was higher than the increase in revenue. This is mainly the result of the strong growth of the Partner Program, which is fully reflected in the GMV metric, while revenue only includes the commission income and service fees from partners.


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