Zalando

Europes leading
online fashion
destination
May 22, 2014
Zalando AG
1
Why are we here?
Customer value: We believe online technology offers superior ways to the custoers
to shop fashion in ters of convenience, selection, personali!ation and inspiration"
Proven model: When we started, our friends as#ed us$ %Who would buy shoes
online&' (oday they as# us$ %)an * get another friendship+voucher&'
Mega trend: Alost everyone growing up in ,urope today is a %digital native'" *n the
future, the a-ority of fashion purchases will be inspired and ade online"
Disruptive ompany: .ver the last five years we have changed the way ,uropeans
shop fashion" /ut when we loo# at Zalando today we thin# it still is sall copared to
what it could be" We are still at the beginning of our -ourney0
!reat team: We are a group of young, entrepreneurial and abitious people" We want
to continue to disrupt and shape the fashion industry, and to offer our custoers the
world1s best online fashion e2perience"
2
"#$%&n
run+rate revenue
314
at reord
&rea'ing speed
((#m
visits in 51114
)(*+ from
mo&ile devies
at end of ,--.
-($/m
active custoers
324
)*0+ &rand
awareness
1(2
-/%3%%%4
styles
-3/%%4
brands
Zalando at a glane
314 Annualised 51 2014 revenue"
324 Active custoers have shopped at Zalando at least once during the past 12 onths"
364 )ountries with Zalando shop launched before 2012" Zalando survey March 2014"
Zalandos 'ey milestones
6
#%%*5%0
6uilding !ermanys online
leader in shoes
7 /road product selection
3no discount odel4,
convenient shopping
7 8ast brand building
#%-%
Category e7pansion
7 ,2pansion into other
fashion categories
3clothing, sports,
accessories4
7 ,2pansion into private
label
#%--5-#
!eographi e7pansion
7 9resence in 1: ar#ets
reaching ore than 400
people
314
7 Mar#et leader in online
fashion retail in a-ority of
served countries
#%-(5-.
8perational e7ellene
and innovation
7 Growth investents in
technology and logistics to
support future growth
7 8ront+end innovation to
drive custoer activity
314 ;u2ebourg followed as 1:th countryy in 2016"
4
9nwrapping Zalando whats inside
8nline fashion is a massive and highly attrative mar'et opportunity
1
Zalando is in the pole position to win the online fashion ar#et in ,urope 2
<ignificant top+line growth at scale with history of profitability in core =A)> region
6
?isionary founder+led tea with proven trac# record of scaling at speed 4
:
e:Commere
fashion
Europe
7 ;argest online consuer
product category with highly
attractive argin profile
7 ,arly on the curve of online
adaption
7 ,uropeans have high fashion
spending per capita and high
density of fashion spending
7 ,arly on the curve of online
penetration
7 *ntersection of attractive
category and geographic
ar#et
7 (argeting very si!able ar#et
opportunity for long+ter
growth
Zalandos
sweet spot
8nline fashion is a massive and highly attrative
mar'et opportunity
-
@
9nwrapping Zalando whats inside
.nline fashion is a assive and highly attractive ar#et opportunity
1
Zalando is in the pole position to win the online fashion mar'et in Europe 2
<ignificant top+line growth at scale with history of profitability in core =A)> region
6
?isionary founder+led tea with proven trac# record of scaling at speed 4
Zalando is the online fashion leader in ,urope by brand awareness and website visitors
<cale enables us to deliver the best value to custoers and brands
>ighly localised operations in 1: regional businesses
*ntegration of fashion, technology and operations creates disruptive business odel




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Zalando is the online fashion leader in Europe
&y &rand awareness and we&site visitors
1;elative position &y un:aided &rand awareness
1-2
2
<trong &rand driving top:of:mind awareness Most visited fashion we&site outside China
#
<ource$ Zalando survey March 2016 3right4, )o<core 3left4"
314 Celative position relative to following copetitor" <iple average of relative positions across ar#ets assued"
324 9oland and Betherlands 3survey not conducted for FG and /elgiu on an ongoing basis4"
-$.7
1!lo&al 8nline ;etail We&sites Worldwide 9ni=ue >isitors3 #%-(2
#$.7
#$(7
-$?7
-$#7
<outhern
,urope
=A)> Bordics ,urope H
.ther
324
I
7 /road selection of brands
and styles
7 *nspiration and eotional
engageent
7 8ast delivery and custoer
support
7 Mobile e2perience
7 <ignificant econoies of scale
7 More data leading to better
insight
7 ;everage in #ey areas$
J Mar#eting bidding
J 9urchasing
J ;ogistics
7 Access to 400 illion
,uropeans
7 Zalando as strategic partner
to lead brands in online age
7 (rusted brand e2perience
7 Bot a discount odel
Customers
(>13.5m active customers)
6rands
(>1,500 brands)
<ale ena&les us to deliver the &est value to
ustomers and &rands
Creating a compelling
customer experience
Helping brands
to win online
#
enerating scale driven
networ! e""ects
314 Annualised 51 2014 revenue"
Zalando <ale
(#$bn run%rate revenue
(1)
)
@oal
payment
methods:
Anvoie Prepayment
Bighly loalised operations in -/ regional
&usinesses
Multi:lingual:
Multi:urreny:
@oal
logistis
partners:
-# @anguages
C Currenies
#
@oal
&rands:




Bundreds of
loal &rands
8ver #% methods
8ver -# partners

Multi:ountry: -/ Countries

erman& 'rance (tal& )ustria *elgium +enmar! 'inland ,uxembourg
-et.erlands /0 1wit2erland 1weden 1pain 3oland -orwa&
K
10
Zalando dimensions
Customer e7periene
<uessful integration of fashion3 tehnology and
operations reates disruptive &usiness model
#
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
11
*0+
Zalando brand awareness in
countries with Zalando shop
launched before 2012
C.+
Zalando brand awareness in
countries with Zalando shop
launched in 2012
Bigh &rand awareness aross mar'ets
1-2
314 Zalando March 2014 survey"
324 ,2cluding F"G 3survey not conducted on an ongoing basis4"
364 ,2cluding /elgiu 3survey not conducted on an ongoing basis4"
344 Active custoers have shopped at Zalando at least once during the past 12 onths"
;apid growth in visitors
Zalando is the go:to online fashion destination in Europe
;apid growth in ative ustomers
1.2
E6
662
51L11 51L14
2":
16":
51L11 51L14
.$/7
/$.7
1#2
1(2
An millions
An millions
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
12 <ource$ Webtre##"
314 Mobile is defined as tablets, obile site and apps"
324 (e2tilwirtschaft 3:"K"20144$ MMobile+<tudie$ Zalando bei (ablets vorn%
Mo&ile is ritial for driving:
Anywhere, anytie access
*ncreental engageent A
transactions
*n store coparison
G# lifestyle app
on i8< store in !ermany
H6est ta&let site amongst
fashion sitesI
Fe7tilWirtshaft
1#2
.:<tar user rating
on i8< store in !ermany
Zalando is suessfully riding the mo&ile wave
Mo&ile share of Zalando traffi
1-2
App 1"0
Zalando"de
first "site
App 6"0
2016 2012 2011 2014
End of
,--.
(*+
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
16
-/%3%%%4
styles
@oal relevant &rands
@arge glo&al &rands
Zalando has reated a go:to fashion destination with a
&road and ompelling offer
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
Private la&els
East fashion &rands
-3/%%4
&rands
Partner program
7 >igher availability
7 /etter selection
6
M!
EE
,rfurt
120,000 sN""
14
Bote$ /rieselang, ,rfurt and MOnchengladbach represent Zalando1s in+house operations, another warehouse in GroPbeeren is operated by a service provider and not displayed" GroPbeeren is
e2pected to rap+down Q close by year+end"
)entralised distribution fro the center of ,urope
(otal R2:0,000 sN"" cobined capacity
)usto+tailored and sei+autoated warehouses
)apital+light investents through leasing of building
;eent investments in logisti infrastruture are
starting to pay off
R:0S of population and RI0S of custoers within radius of E:0# 3T K hour drive4 fro ,rfurt
/rieselang
60,000 sN""
MOnchengladbach
E:,000 sN""
3U4:,000 sN""
e2pansion ongoing4
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
1:
Demand model
Mar'eting vs$
disount
Cross:sell
reommen:
dation
Payment option
steering
;eturn foreast
8rder foreast
Jll &usiness proesses supported &y &est in lass
in:house tehnology and &ig data solutions
<trategi ownership of tehnology platform Consistent use of &ig data
6rand D
Customer
6ase
8nline D
Mo&ile
8perations Eashion
Fehnology
D 6ig Data
4xamples
.%%4 AF professionals Plus ?%4 data sientists
1@
9nwrapping Zalando whats inside
.nline fashion is a assive and highly attractive ar#et opportunity
1
Zalando is in the pole position to win the online fashion ar#et in ,urope 2
6
?isionary founder+led tea with proven trac# record of scaling at speed 4
<ignifiant top:line growth at sale with history of profita&ility in ore DJCB region
1E
Zalando has shown strong growth3 reahing "#&n
run:rate
1-2
after / years
142
6EE
EE6
1,0:@
@
200K
1 country
2010
3 countries
2011
7 countries
324 =A)> T Gerany, Austria, <wit!erland"
200K$ .nly Gerany"
2010$ Added Betherlands and 8rance"
226
2I4
51114
15 countries
2012
14 countries
2016
15 countries
51116
14 countries
2011 Added *taly, F"G", Austria and <wit!erland"
2012 Added 8inland, Borway, <weden, /elgiu, <pain, 9oland and =enar#"
2016 ;aunch of Zalando ;u2ebourg in Boveber 2016 operated through Zalando /elgiu"
(
1,1:K
:10
1:4
@
6E2
U6:S
UV12K
:01
U2IS
UV@1
U4:S
UV@I
314 Annualised 51 2014 revenue"
=A)>
324
" in millions
;evenue development
1,E@2
1I
2012 2011
314 =A)> T Gerany, Austria, <wit!erland"
2010
+1:"0S
+11"ES
+E"2S
+@":S
2016
51 2014A
and 2014,
Fra' reord of profita&ility in ore DJCB region
with signifiant margin upside
(
perent
E6AF margin development
!roup E6AF margin
improved signifiantly
year:on:year in ,--.
>igher fulfillent
productivity
*ncreased ar#eting
efficiency
Good start into
springQsuer
season
,- -. trends underline
our plan to ta'e a
signifiant step toward3
&ut not =uite reah3 E6AF
&rea' even at !roup
level in EK#%-.
Begative argins in =A)>
314
due
to fast brand building A scaling
=A)> brea#even as
business odel atures
1K
9nwrapping Zalando whats inside
.nline fashion is a assive and highly attractive ar#et opportunity
1
Zalando is in the pole position to win the online fashion ar#et in ,urope 2
<ignificant top+line growth at scale with history of profitability in core =A)> region
6
>isionary founder:led team with proven tra' reord of saling at speed 4
20
Management 6oard
David <hneider
Zalando as a
fashion company
;o&ert !entL
Zalando as
an online
company
;u&in ;itter
Zalando as a
process machine
Manageent /oard
supported by strong
second and third
level anageent
tea
>isionary founder:led team with proven tra'
reord and well apitalised &usiness
Jnders Bolh
Povlsen
E=uity shareholder &ase
1-2
314 <hareholder structure includes$ *nvestent A/ Ginnevi#$ 6@":S, ,uropean 8ounders 8ound$ 1ES, Anders >olch 9ovlsen$ 10S"
.
Zalando is well
capitali!ed$
Bet cash position
RV6:0 at the end
of 2016
21
We want to provide the &est online fashion e7periene
Customer want more
Annovate the ustomer e7periene
Win in all onte7ts
Fhin'ing in usage situations
<trategi &rand partnerships
<torytelling3 <mart Data3 et$
=es#top
during the day
(ablet
in the evening
<artphone
in the orning
Jdvie and inspiration
Proess innovations
<oial shopping e7periene
;elevant reommendations
22
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