Zalando revenues accelerate 33.6 percent in FY15

Zalando grew revenue by 33.6 percent year-on-year –above the medium-term 20-25 percent target corridor. Zalando said, continued focus on the customer proposition, reinforced by additional market opportunities, drove the revenue growth. It now expects continued strong revenue growth in the financial year 2016 at the upper end of its medium-term target growth corridor of 20-25 percent, following an outstanding financial year 2015.

“Our market position has never been stronger, and we have never faced so many great opportunities,” said Rubin Ritter, Member of the Management Board. “We want to excite even more customers and gain further market share. We deliberately pursue growth while maintaining solid profitability - we think this is the best way to create long-term value.”

Witnesses positive revenue growth

Zalando achieved total revenues of 2,958 million euros (3,216.6 million dollars) in 2015. Revenue grew 28 percent in the DACH region, and the Rest of Europe region grew 40.5 percent over the same period. Despite investment in customer proposition and platform initiatives, Zalando demonstrated solid profitability with an adjusted EBIT of margin of 3.6 percent. The adjusted EBIT margin in the DACH region was 6.4 percent. Rest of Europe came close to break-even with an adjusted EBIT margin of -0.3 percent.

During the year, the company said, with a strong focus on mobile and app development, mobile traffic increased from 48 percent to 60 percent year-on-year, while app downloads more than doubled to 19 million in 2015, from around 7 million in 2014. Zalando’s brand value was enhanced through successful joint campaigns with brand partners. As a result, the number of active customers increased 22 percent to 18 million at year-end.

The company also launched additional platform products, such as Zalon, a curated shopping service, and Zalando Media Solutions, a digital advertising service. To strengthen its technology capabilities, the company opened tech hubs in Dublin and Helsinki. The fulfillment footprint too is expanding with a third large fulfillment center planned in Lahr, Germany, and a first satellite warehouse in Stradella, Italy.

Expects buoyant growth ahead

The company will continue to invest in its customer proposition to support growth in the near term. Meanwhile, it also plans to invest in its multi-year platform strategy to sustain growth within the target corridor in the medium-term. The company aims for roughly neutral working capital at year-end and about 200 million euros (217 million dollars) of capital expenditures in 2016, excluding M&A. Despite these continued investments, Zalando expects a solid adjusted EBIT margin of 3.0-4.5 percent for 2016.