Global Fashion Group Stock

Good morning, everyone, and welcome to Global Fashion Group due to an H1 2026 results presentation. I'm Christoph Barchewitz, CEO of GFG, and I'm joined today by our CFO, Helen Hickman. I will start with highlights for today and then share an update on progress we are making across the business. Helen will then take you through the regional and group final results and our guidance for the full year. After that, we will open the call for questions.

Overall, we are executing on our strategy and delivering financial results in line with our expectations and guidance. We've continued to improve our unit economics. -- with sales and profit per customer in per order growing strongly, creating the foundation for profitable growth. We've made significant progress in enhancing our delivery proposition, strengthening our marketplace and scaling our platform services offering. While today's focus will be on fulfilled by our platform services also continue to grow driven by retail media across all 3 regions in our single stock solution in Southeast Asia.

Combined with the integration of AI across our business, initiatives across these areas continue to strengthen our customer value proposition and profitable growth strategy. I'll be sharing more detail on these topics in a moment. On financial results, we delivered our first profitable H1 with our current footprint. For the LTM period to June, adjusted EBITDA improved by a strong EUR 23 million year-over-year and normalized free cash flow by EUR 28 million.

Lastly, we have narrowed our 2026 guidance to take account of H1 results and our current expectations for H2. For NMV, we now expect a year-over-year change of negative 4% to 0%. For adjusted EBITDA, we now expect a range of EUR 18 million to EUR 25 million. Helen will explain these changes in more detail. Turning to our Q2 financial highlights. NMV was broadly stable with a 0.6% constant currency decline, while adjusted EBITDA margin increased by 1.8 percentage points. Our focus on unit economics is delivering results. Increased order frequency and cost discipline are offsetting the impact of fewer active customers and orders.

Next, we have our business update. Over the last several years, we have focused on increasing the value and contribution generated from each customer and order while also reducing our fixed cost structure to drive substantial profitability and cash flow improvements. While this transition has resulted in about a quarter reduction in active customers and orders, it has also fundamentally strengthened our unit economics. This progress is visible across the entire group as shown with consistent trends on profit contribution in all 3 regions. NMV and gross profit per unit have increased reflecting our more targeted approach to customer acquisition and deepened repeat engagement. These improvements become materially more pronounced further down the P&L.

After fulfillment costs, profit contribution per active customer has increased by 47% over the last 3-year period, while profit contribution per order has increased by 53%. After both fulfillment and marketing costs, the improvement is even more significant, with profit contribution increasing by 91% per active customer and 99% per order. These results were unable through a broad range of initiatives, including greater automation, improved terms with our delivery partners and marketing allocation towards the channels and customers that generate the strongest returns. We will continue to optimize unit economics while reinvesting efficiency gains into customer experience and marketing.

Turning to our delivery proposition, which is a critical driver of both customer experience and unit economics. We continue to deliver a high-quality service with on-time delivery exceeding 90% across all regions and delivery speeds improving by more than 20% in ANZ and SCA compared with 2023, while remains stable in LatAm. We are also elevating the customer experience through greater choice and transparency. Real-time tracking provides end-to-end order visibility while our expanded fulfilled by GFG and drop ship partnerships are strengthening the marketplace delivery experience. We continue to invest in more delivery options. We have rolled out next-day delivery in additional key metro areas, introduced flexible express tiers and increased the number of automated parcel lockers.

Importantly, we delivered these service improvements while continuing to build a more efficient model, having reduced fulfillment costs by 3 percentage points of NMV over the last 3 years. This has been achieved through vendor negotiations, route optimization and an expanded asset-light partner network that allows us to scale capacity without increasing fixed costs. All of these initiatives create a superior delivery experience that drives conversion and growth. Our fulfilled by service leverages our delivery and fulfillment infrastructure to manage logistics for marketplace brand partners, enabling them to bypass internal operations while providing a more consistent shopping experience for our customers. Filled by his life in all 3 regions, though they are in different stages of maturity.

ANZ launched in early 2023, and adoption has been accelerating, so that it now represents 15% of Marketplace NMV with 88 brands live. In LATAM, the offering has continued to gain traction since its launch in June 4, fulfilled by now accounts for 6% of Marketplace NMV across 70 brand partners. SCA is our most established market, having launched the offering in 2019. Fulfilled by contributes 29% of marketplace NMV with [ A1 ] brand partners Live, our focus has been on optimizing the assortment and brand mix to support stronger unit economics. Overall, fulfilled by is a key contributor to the group's growing marketplace business. Together, fulfilled by and platform services deepen our relationships with brand partners improve their ability to reach and serve customers to support a more scalable, higher-margin revenue mix for GFG.

Now looking at our integration of AI into our workflows across the business. In LatAm, we have transitioned to an AI-enabled workflow for image and video generation across our product catalog and marketing campaigns. The impact in Brazil has been significant, where e-production costs have reduced by over 50%. Beyond cost savings, this greater ability allows us to bring products to market faster and refresh content more frequently at scale. As AI opportunities extend beyond how we create content, we are also focused on how we improve our customers discover our products. In [ ANZ ] iconic is the only Australian fashion retailer participating in Google's Universal Commerce Protocol, or UCP pile. The UCP enables customers to discover select iconic products through Google's AI services, including Google Search and GEMINI and moved through to an integrated checkout term. The iconic remains a merchant of record and manages the entire fulfillment and post-purchase customer experience.

This pilot allows us to learn from and help shape this emerging channel as shopping journeys evolve, as Discovery shifts towards AI-driven search, we are also prioritizing answer engine optimization or AEO to ensure our platforms and assortment remain discoverable in these new environments. We are also applying AI to the commercial decisions we make every day. In ANZ, our automated pricing tool now covers 100% of our retail assortment. This enables faster data-led pricing that helps our team better balance competition, margin and sell-through.

Beyond pricing, we are applying AI across broader commercial workflows, including product descriptions, campaign SKU election and buying optimization, all to improve the speed and quality of our decisions. In summary, we are successfully driving a more efficient and profitable business through each of these strategic initiatives. I'll now hand it over to Helen, who will take you through our financial results.

Thanks, Christoph. First, let's look at our regional segment results. Starting with ANZ, our largest region, generating about half of our NMV. ANZ delivered 3% year-on-year NMV growth in both half 1 and Q2 on a constant currency basis. This was supported by 2% active customer growth and strong engagement across targeted campaigns. NMV more challenging discretionary spending environment, and invest performance reflects our highly relevant brand and assortment proposition that continue to resonate with customers.

Higher living costs and interest rate increases have weighed on consumer confidence so far this year. Gross margin remained broadly stable at 48%. We saw growth driven by a greater mix of higher-margin categories, including own-branded women's apparel, alongside increased marketplace participation offset our continued investment in the loyalty program launched last year. As a result of further cost efficiencies, mainly in fulfillment, ANZ's half 1 adjusted EBITDA margin increased by 2 percentage points to a strong 5%.

Moving on to LatAm. Our performance in half 1 reflects clear resilience on profitability while facing external headwinds. Lat Am delivered a solid 3 percentage points step up in adjusted EBITDA margin and was profitable in half 1 despite NMV go down 2% and revenue down 7%. In the second quarter, NMV was down 1% and revenue down 5%, reflecting external headwinds, including record household debt and the World Cup, which we directed consumer retention and spending. It was also a highly competitive environment, driven by a tax change favoring cross-border players.

Now turning to SEA. Similar to LatAm, SEA delivered profitability improvements despite facing top line declines. In half 1, adjusted EBITDA margin reached 3%, improving 3 percentage points year-on-year. NMV declined 11% on a constant currency basis. SCA has made strong steps in reducing the fixed cost base to ensure we are well positioned as growth returns. Across all regions, we've demonstrated this half that we can deliver profitability in competitive markets through business model shifts towards more marketplace and platform services and operating cost improvements.

Now turning to the group results. Order frequency increased by 1.8% year-on-year to 2.4x. We're seeing the customers who shop with us becoming more engaged whilst active customers declined 5.5% year-on-year. We're continuing to rebalance our customer base towards profitable growth. Turning to NMV. Q2 moderated to a 0.6% decline on a constant currency basis, following a 3% decline in quarter 1. For half 1, NMV declined by 1.7% year-on-year. 5.3% higher average order values substantially mitigated the effect of 6.6% less orders resulting from lower traffic in the first half. Average order value was supported by 3 main drivers in order of impact, this included a more favorable regional mix, price inflation and less discounting.

Turning to revenue and profitability. Half 1 revenue declined by 3.5% year-on-year on a constant currency basis, reflecting the lower NMV and increased marketplace mix. We improved gross margin by 0.2 percentage points year-on-year to 47.2%, increased marketplace and platform service share offset a decline in retail margin. We improved adjusted EBITDA margin by EUR 9 million year-on-year to positive EUR 1 million. delivering our first positive adjusted EBITDA result for our first half within our current footprint. This represents a 2.8 percentage point margin improvement year-over-year.

We delivered this through the benefits of evolving revenue mix and structural improvements to our cost base. We also continue to benefit from FX tailwinds this quarter. Now let me take you through our cost actions in more detail. Our total cost base continued to reduce significantly, significantly more than our NMV decline for half 1. Fulfillment costs reduced by 1.3 percentage points as a share of NMV, reflecting continued automation and efficiency improvements across our logistics network, specifically reducing delivery and personnel costs.

Technology and administrative costs also reduced by 1.3 percentage points, then fitting from head count reductions and further simplification of the business. Marketing remained broadly stable at 6.9% of NMV allowing us to maintain investment in the customer and growth initiatives that generate the strongest returns. We expect to deliver further efficiencies and volume returns. Turning to cash flow. In Q2, our EUR 3 million improvement in adjusted EBITDA drove a corresponding improvement in normalized free cash flow and other key components, including leases, working capital and CapEx remained stable year-on-year.

On a last 12-month basis, we're making strong progress towards a breakeven position with normalized free cash flow improving by EUR 28 million year-on-year-on-year to negative EUR 19 million. Our cash position remains robust. We closed Q2 with EUR 105 million in pro forma cash and EUR 89 million in pro forma net cash after accounting for third-party borrowings. Turning now to our full year 2026 guidance. On NMV, we have lowered the top end of our range to reflect half 1 performance and our revised expectations for a more challenging second half. This range continues to consider factors specific to our markets including the upcoming general election in Brazil and sustained cost of living pressures in ANZ.

We now expect year-on-year constant currency NMV of negative 4% to 0%. On a reported basis, incorporating half 1 actuals and using 30th of June '26 closing exchange rates for the remainder of the year, this translates to EUR 1.05 billion to EUR 1.09 billion. Whilst our original guidance provided in March is December '25 exchange rates, ongoing strength in the Australian dollar and the Brazilian real offers a potential currency tailwind to our reported a values, if sustained here.

On adjusted EBITDA, we've raised the bottom end of our range, and it now stands at EUR 18 million to EUR 25 million, representing a year-on-year improvement of EUR 9 million to EUR 16 million. This revised range reflects our half 1 performance and the importance of Q4 trading. Our full year expectations for leases, working capital and CapEx remain unchanged. In summary, our focus on unit economics, scaling our platform and AI integration is supporting our profitable growth goals as proven from our first half results. We've demonstrated that we have the foundation required to navigate varying levels of demand.

We'll now open the call to your questions. If you'd like to submit a written question, please click on the speech button at the bottom of the page. Thank you.

[Operator Instructions] We'll now take our first question from Anne Critchlow of Berenberg.

I have a few questions, and perhaps I'll just ask them 1 by one. First of all, please, could you comment on how you're performing versus your competitors in the different regions?

Sure, Anne. So I would say it's a mixed picture, as you would expect, in ANZ, the reporting cycle isn't yet fully done. So don't have a complete picture on the public companies. But I think generally, we feel like we're performing at golf average. A couple of them have reported weaker sales and especially recent trends being fairly weak. And so with the growth that we've shown, we think we're a little bit ahead of for the mantos in that region. However, big pressure in the whole industry have intensified in June and in July in the region, and that's what a couple of people have commented on and it's also consistent with our foreign experience.

LatAM some of the competitors and peers have reported softer top line where we continue to see strength in the general merchandisers and in the cross-border players, in particular, since there's been a temporary favorable tax decision, which again improves the relative competitive position for the cross-border. And in SDA, I would say, again, the large platforms doing reasonably well. Beyond that, a bit hard to tell given the fragmented nature of the market. But clearly, with our trends, we don't think we're gaining share. We think we're losing share in that market, and that's obviously a key focus area to turn around.

That's very helpful. Have you stepped up price investment? I'm just wondering how you're balancing price increments versus, say, use of loyalty programs in the various regions?

Yes. So we -- what we do is we really drive it off number competitive pricing -- so as it becomes more aggressive we will match, and we've seen a bit of an increase in that. Secondly, we obviously look at our inventory position and want to continue to keep that as healthy as it has been over the last couple of quarters. And as you've seen from the numbers, our Q2 ending position has been clean and healthy, but we do take a little bit of pressure on the retail margin as a result. We obviously also always go back to our brand partners and try to kind of share a little bit the dynamics in the market and share the burden of that. So there is a bit of that. There isn't an active down pricing or changing in the price positioning. I would say it's more business as usual with these parameters supplying. But clearly, the tougher the competitive environment and the weaker the consumer sentiment, no more pressure on retail margin we see.

That makes sense. Then I just wondered also, is it possible, do you think, to use the automated pricing tool that you've used in ANZ, would you transfer that into LatAm? And could that improve the gross margin in time?

It's definitely something we're looking at. We have a pretty sophisticated pricing operation in LatAm already, and it's also bit slightly different set up end market when it comes to that. But it is something we're definitely considering. In Southeast Asia, actually, we're using a fairly automated but internally developed pricing tool already. So the pricing mechanism is a really important driver of efficiency and also of margin. But in the end, the basics of buying right, merchandising right and getting the right consumer still the bigger driver than just the tooling.

Great. Could we move on to free cash flow. Just wondering how confident you are that Global Fashion Group can start to generate free cash flow in the medium term and whether anything has changed on the cash flow front.

Anne, Helen here. So yes, we're still very prudent and that's very much our goal. So you'll have seen we take the last 12 months, on our normalized free cash flow, we're now -- we set forward EUR 28 million at that time to minus EUR 19 million. And as you know, we generate all of our cash in the second half, mainly in the latter quarter of the year. So given that based in line with our profit guidance and our guidance with regards to sort of CapEx and leases, which will remain in agree at about EUR 30 million broadly, we think of it that we need at least EUR 30 million adjusted EBITDA to offset that fixed cost. Then we'll then get some small benefits around working capital. But we have sort of a run rate of about EUR 10 million of interest tax and others. So you have those compounded parts. And if you think where we are on the guidance that should give a good indication to us really being able to step much closer to that breakeven target.

Great. I do have a few more questions, but just wondered if I should take a break and allow anyone else to ask a question on the call.

Why don't you just run through it and then we'll go to others.

Okay. Great. So looking at the active customer decline. I'm just wondering how long you might be taking action on the unprofitable customers and how long that might continue to impact the active customer numbers.

Yes, that's a very good question, Anne. I think it's a distinct on a regional basis. in ANZ, we're obviously more in the kind of growth or at least very stable customer base depending on which quarter you exactly look at. But I think there, we feel like the economics are healthy. There's always more to be done, and we definitely would love to free up more room to invest in growth. We're seeing strong growth, for example, in New Zealand. So we think there's more opportunity in that market to acquire incremental customers, but also in Australia, certainly as a core market in the region.

In LATAM and SCA, I think we have more work to do and further to go on really driving the customer profitability and order profitability to the right level. So we've made a huge amount of progress in both regions over the last few years already, but there's still more room to go and solve. I think it is likely in those markets that we will see first probably stronger NMV trends and then secondly, stronger order trends and then third, the active customer trends. And that really follows the logo. We're driving frequency. We're driving aperture value grow -- and so then naturally, as the metrics are the focus to drive the overall profitability the active customer number will be the most lagging in turning into positive territory, if that makes sense.

It does. On climate, we are beginning to see a bit of climate-related disruption in the supply chain in the industry. And also on the climate piece, are you seeing any disruption trading due to extreme weather patterns sort of recognizant that you're in a different hemisphere than the European businesses that we usually cover?

Yes, we've probably, over the years, seen quite a lot of extreme weather patterns, patterns in our markets. We have some wild fire seasons in Australia that have been quite extremely. We have typhoons and have regulatory typhoons and other events, we had an earthquake in Colombia this week. So there are things that are not always climbing overseeing the case of worth rate, but there are kind of, let's say, completely natural environment driven. I think the -- there's always a short-term disruption, operational demand and so when something dramatic like that happens. So that's a very consistent theme, but we also, I think, are very resilient in responding to it and have just kind of the experience of quite regularly, maybe a bit different from the European retailers.

What we have seen also in the more longer-term trends is that the warmer winters in Brazil and Australia have really rung the share of the winter assortment in those categories. and making it even more critical to really get that product in those categories sold in the right timing because of the winter just becoming a much shorter period. And for example, most recently, April in Brazil was very, very warm. And as a result, the beginning of our winter sales were quite soft and then that obviously spills into the land later part and we have a bit more work down to do there and have done already in June, July. So yes, the answer is it has an impact, but we're experiencing managing those impacts because it's not new.

That's very interesting. Looking ahead to the next season, are you expecting price inflation to come through from, say, higher polyester costs and the disruption from the Iran conflict?

Yes. It's not something that we're seeing dramatically come through. Obviously, we need to be mindful of it. But where we are, we're trying as much as possible through supply negotiations to secured strong prices. And also we generally tend to pass cost price inflation ultimately on for our sales price. So it's not a significant issue as we're phasing into the second half.

We will now take our next question from Russell Pointon of Edison Group.

Few questions on Southeast Asia, if that's okay. you're still getting relatively high rates of decline there in the active customers. And I appreciate it as a lagging indicator as you often say. But could you just give us some idea of what you're seeing below the headline number in terms of client losses versus potentially new customers coming in? And perhaps give some detail on the individual countries? That would be my first question.

The second question is the gross margin. Obviously, the revenue trends are challenging. The gross margin improved a little bit. Just interested in your thoughts on how satisfied you are with that in the context of the changes to the product offer and the relationships of brands you've made over the last year? And my third question is essentially in half 1 this year and half 2 last year, you've had around a 20% decline in operating costs. Perhaps just talk about what you've done there. And given those numbers have been consistent across the 2 halves, are you starting to annualize the easy gains and perhaps where there are opportunities coming forward.

Great. Maybe I'll start, Russell. On the Southeast Asian trends, and then I'll let Helen answer the question on the gross margin and then on the operating cost. So within -- when it comes to Southeast Asia, yes, active customer decline is still pretty strong -- it is across the markets. So obviously, Philippines, Indonesia and Singapore and Malaysia are the 4 larger markets and then Hong Kong is a smaller market for us. But we're seeing this across all markets. It is in the context of the natural and relatively high churn that's inherent in our business model, but it is elevated.

And clearly, we are not able to acquire and reactivate customers at the level of marketing spending that we're willing to commit at this point. And so our constraining of the marketing spend and the payback periods around that is what ultimately leads to the erosion of base where basically churn is just higher than reactivation and a new acquisition of customers because of the marketing spend. We're obviously intensely working on improving retention, improving second water conversion, improving loyalty and we have many actions and programs underway, including a couple of changes planned for the rest of the year in terms of how we think about loyalty program, the Arsalora VIT program in Garica et cetera.

So generally, it's a continuation of the trends. We do believe that we are able to retain rear-value customers. So I would say the quality of customer base is improving, but it's obviously very concerning to see the level of decline, and we want to stop that as quickly as we can, but we need to do it within the disciplined financial framework we are applying, and that's nonnegotiable around it. I hope that helps I hand it over to Helen.

So first question being gross margin in Southeast so in line with our expectations. So yes, it is in line with our expectations. I mean it's -- for the first half, it stepped 0.7 percentage points -- the highest of our 3 regions in the first half. I think if you unpack it, we know that the retail margin in Southeast Asia is slightly lower in that in some of our other regions. And I think that's definitely an area to focus for us Southeast Asia with a slightly higher aged inventory position than the rest of our regions. So we see clearance on some provisioning through that. So that's improving, and that's an area of focus for us to continue to improve that retail margin and -- but on the counter it runs the highest platform service and marketplace participation, which actually is highly accretive to margins. So land all those together -- and it is -- it has that board and it is in line with where we want it to go. But obviously, we're pushing for further improvements.

Your second point then was with regards the cost improvement, which has led to the 3 percentage point adjusted EBITDA margin improvement in the first half and also seeing similar cost improvements in the second half. So we've done a lot of work with regards fixed costs and around head count. So we've done organizational change. So we did a large structural change at the start of this year, which, whilst we've got the benefits in the first half. Obviously, we'll then see benefits into the second half, which I think addresses part of your question, we've done a lot of work around renegotiating things like with our delivery partners, et cetera. So there are definitely some annualization from last year, which obviously will tail off into this year, but we do have a program of work that, that then just went [indiscernible]. So it will be in around -- we'll continue to look at administrative functions and how we simplify, how we automate and obviously, some of the AI initiatives that Christophe spoke about how we can continue to roll this out across all of our regions, including Southeast Asia.

Okay. Just can I have a follow-up question on Latin America, please, in terms of the gross margin. It went down there for the first time in quite a long time, actually, in you've done quite a good job of increasing the gross model margin over time getting with all the competitive challenges you have. What is the greatest effect on the gross margin in Latin America? Was it just this? Was it the competitor activity? Or was it that you talked about a slight weakness from a top-down perspective?

Yes. So for the half, it was -- during the quarter, you're right, it did at marginally up for the half. So it's definitely in the first half, it's a is a Q2 issue. So it was highly competitive. So we did need -- we took some margin investment a little bit to drive trade. So the World Cup is disproportionately huge in Brazil and Columbia to some extent where actually spending tends to move away for closing on to other areas. A little bit around driving trade and also then the sort of the byproduct of that because trade, especially from our retail side of our business wasn't as strong as we'd anticipated. We also took some relatively aggressive markdown just to maintain, to stop sort of age inventory creeping up. So I'd say the Q2 position very much is around sort of the competitive environment and driving trade.

[Operator Instructions] We'll take a follow-up question from Anne Critchlow of Berenberg.

One more question from me, please. On marketing activity. So -- is there anything that's working for you in particular in the type of media sort of thinking right across the outdoor and then the split between SEO and AEO, as I think you call it now, social media, whether it's retargeting, anything that really stands out?

Yes. Thanks, Anne. I mean, I would kind of call out 2 or 3 points here. Number one, we have moved a bit more top and mid of the funnel. So basically, going back into more brands and in some ways, maybe more traditional channels, in particular, in Australia. I think as you know, we have the country looking master brand and underlying campaigns they're running for quite some time and launched that in a first trial in Southeast Asia in the first half as well. And as part of that, in particular, in Australia, we are also doing things like even radio podcast, outdoor collectively to reach also sometimes different audiences and really elevate the brand and depress the more media touch points.

The core overall remains obviously performance marketing in terms of the spend. And within that, we continue to optimize the tooling and the approach. And it's a never-ending journey. Obviously, there's always new capabilities that are coming through, where we think are getting much better at to but dimensions of that. One is to really go after profit versus just sales; and number two, to really target customers and potential customers who we want to have and i.e., who have the potential to be profitable, high-value, long-term customers. And secondly, avoiding spending on winning over transactions that we would have gotten anyway because we would have reached those customers through CRM or just any other organic channel as well. So I think the granularity and the targeting around it around the profit dimension and the selection of the right customers is ever improving.

AEO is still a very small part -- and that's currently more of an organic effort to really make sure that all of our products and presence online on our platform, but also off-platform review sites, all that is as supportive as possible to make it very, very clear that we are the leading fashion and lifestyle destination in each of our markets.

Thank you. We have no further questions from the line. I'll now hand over to Saori for webcast questions.

The first question we have from Christian, NuWays what are the drivers behind the increased order frequency?

Okay. I'll take that -- so I think, Christian, the #1 focus is here on the customer quality and retention. So it's kind of part of the overall drive of targeting higher-value customers who naturally have a higher frequency. We have fewer, let's say, new customers that are just coming for 1 order and turning through it, they obviously dragged down the average. So this number going up is positive in many ways. And I'm not sure it will go up every single quarter, but definitely the objective for us is to drive it up. And if you compare us to some of the more developed market gears. I think we have quite some room to go in improving this metric.

Next question also from NuWays. How do you expect ANZ and Latin to built develop going forward? Do you have NMV share targets?

We definitely are pursuing opportunity very, very ambitiously. We are -- have recently hosted and will be hosting big events in both Brazil and Australia, 4 brand partners, both the existing ones that may not be using this particular model yet and for potential new partners. It is more of an enterprise sales cycle, if you want, in terms of people obviously need to sign up to the service. They need to bring the stock physically into our fulfillment centers, et cetera. It is just such a better experience for the customer. And so our goal is to maximize the share of orders where we control the fulfillment and delivery experience and to minimize effectively uncontrolled drop shipping where we don't really have the ability to track where the orders are.

So just to be clear in drop shipping. In some cases, we can track the orders and some we can't. And that's really the weakest customer experience. And as always, there will be a mix effect. We don't have a particular target, but we do think that marketplace as a whole will continue to grow in share towards about 45%. And within that, the share of fulfilled guide going up relative to where we are, and you've seen the regional numbers in the presentation today.

So the next question we have from [ Mars from ICS] how is current trading?

So comp trading still remains relatively soft and is quite challenging, reflecting the sort of the macro environment that we've spoken about today. And that's now built into the revised guidance. that we've given this morning. I think it's clear to say though, as we've been articulating for the past few quarters, our focus very much is to be able to novate that top line softness and ensure that our focus very much remains around improved profitability and strong focus on cash.

So a few questions on cash. a free cash flow turned positive for the first time. Could you break down how much of that improvement was operational versus working capital timing -- and given the working capital, Talend has largely run its course. How do you think about reaching structure relates to simple free cash flow breakeven?

Okay. So let me take both parts. So for the quarter, yes, we do generate EUR 2 million normalized free cash flow. And that's really broken down by the adjusted EBITDA in the quarter of EUR 6 million that we saw and about EUR 6 million inferred from working capital and that more than then offset our fixed costs around cash costs around leases and CapEx -- with regards to the ongoing piece, it mines really to Anne's earlier question, whereby we see the sort of the main driver of becoming cash flow breakeven is for our increased adjusted EBITDA and our increased profitability flows to cash. We've done a lot of work to maintain and limit our investments around CapEx and leases, which broadly with forecasting to be broadly in line with last year to about EUR 30 million.

On the working capital, obviously, we're -- it's highly seasonal for our business. We do still anticipate this year a small working capital input, slightly higher than we saw last year were at EUR 3 million. And we will continue to West -- we've done a lot of work over the last couple of years to really bring our inventory levels down, which has released significant amounts of working capital, we will always look to optimize our working capital through ongoing supplier negotiations, ongoing optimization of inventory and the way in which we manage our business between the retail and the marketplace platform.

Next question, also along the length of cash flow. Your cash flow is still negative. Do you expect GFG to be cash flow positive this year? If not, when?

Okay. So we've -- historically, and we don't specifically guide on our normalized free cash flow. But if you take the component parts that I've just described, obviously, it depends the ends of the adjusted EBITDA that within our guidance between 18 and 25, but even within that range, we're going to make significant headway to the minus EUR 30 million that we saw last year. And you can see that on our last 12 months rolling measure where we step forward significantly.

Next question a few about overall share buyback program. So how are we prioritizing the share buybacks against reinvestment? Is the buyback of ration being actively used and our repurchase shares being canceled or retained to satisfy employee incentive plans related to that, what's the position and future role of major stakeholders of GFG?

I'll take that. So yes, the buyback program that we launched in Q1 is continuing. You can also find the weekly updates on the volumes and the prices on our Investor Relations website. To date, we have purchased 1.7 million shares. And these are retained in treasury for us, including for employee incentive or anything else for now. And there is clearly a limitation around the daily trading volumes or the volumes that we're actually able to buy back are not that high, but the volumes that we can buy back are being bought back. And the major stakeholders, I really can't speak to them you need to speak to that. And I think, as you know, our 2 largest shareholders have been very long-term shareholders since well before the IPO in 2019, and we don't expect any change in that position or situation from what we know.

Next question, how will you make use of the past tax losses and potential future tax credits on the GFG Group level in Luxembourg, but not in the regions you are operating in.

Yes. We have these in Luxembourg. I think we've explained this at various points over the last couple of years and continued disclosure on that. we think it's very difficult to make use of these tax credits under Luxembourg, it is also not possible to get any finding a clear guidance from the tax authorities about whether they could be used for certain purposes. So I wouldn't attribute too much value to these tax losses. It's different in the regions where we also have tax losses and those are by much usable and also have quite long life. So as the business is shifting into profitability and starting to generate taxable income in the next couple of years. Some markets, obviously, that's already pace. These will be relevant in minimizing our income tax.

Next question, how do you view the risks posed to GFG's figures by the ongoing [ Warner red ] and the recent week consumer confidence in Australia -- also the trend in cash flow shows that GFG report a little to no cash burn in 2027. How does GFG plan to use is still a very high cash position.

So obviously, with regards the Iraq situation where we continue to monitor and assess the position -- there's no material impact that we're seeing with regards to supply at the time being. The key refigures the secondary impact on consumer confidence. And some of those we've described today, I'd say, high oil prices across our regions, but especially in places like Australia are impacting consumer confidence, and that's a very big area of focus for us. With regards cash and cash burn, so we're very cautious around managing our cash position and at the moment, we're focused on strategic initiatives such as the share buyback that Christoph's just spoken about and prior to that, the buyback of a significant portion of our convertible bond.

Next question from what your -- do you expect to see a similar trajectory of profitable growth in LATAM and SCA? Overall, can you give some perspective on the longer-term outlook for these regions and have you considered strategic alternatives for any of the regions like a sale of SCA or fully focusing on enzyme.

Yes. So in terms of the longer-term opportunity in both of those regions, it is a very significant opportunity very clearly as an industry, fashion e-commerce penetration still lacks many of the more advanced markets like China, but also Australia, Europe and the U.S. And so we think there's a long-term continued growth opportunity for factory e-commerce in these geographies. We also think there's a very significant opportunity to enable a broader ecosystem and our brand partners through our platform services, including the marketing service as the fulfillment services, et cetera. And we'll continue to pursue that in those geographies clearly, they're also challenging to operate in. They are very competitive. And in both of those regions, we have more competitors who are willing to take significant losses in the short term for presumed longer-term profitability, while we are obviously more focused on the short-term profitability.

So they are challenging, but we're confident in delivering profitable and eventually also growing business in both of those regions to the question on sales of strategic alternatives, like, I think, any public company, we're always open to consider strategic opportunities as they present themselves and our businesses are very well known in their respective markets and in the broader ecosystem. So like any management team of a public company, if there are specific opportunities, we'll always evaluate and consider.

There are no further questions for the call. Thank you all for joining today. If you have any further questions, please reach out to the Investor Relations team directly.

Good morning, everyone, and welcome to Global Fashion Group's Q1 2026 Results Presentation.

I'm Helen Hickman, CFO of GFG. Today, I'll provide an overview of our first quarter's performance. Our CEO, Christoph Barchewitz, will then join us for the Q&A session.

In quarter 1, we delivered another strong step forward in our profitability journey. Our adjusted EBITDA margin increased by 3.5 percentage points year-over-year, driven by a combination of gross margin expansion and cost discipline, proving that our focus on healthy order and customer economics is delivering tangible bottom line impact.

On a regional basis, ANZ remained resilient, with growth across all top line metrics, which helped mitigate the group's overall small NMV decline. Our focus on customer quality is delivering clear results, with order frequency over the last 12 months rising to 2.4x, up 1.9% year-over-year. This marks our third consecutive quarter of growth and a turnaround from the past 2 years.

By prioritizing frequent shoppers who drive long-term value, we're building a higher-quality active customer base currently at 7.2 million customers. Our more loyal customer provides a resilient foundation to navigate current pressures on new customer acquisition and volume. Our average order value grew by 5.2% to EUR 61. This growth was mainly driven by inflation and a favorable regional mix, with increased contribution from ANZ's higher average order value. This increase helped mitigate the impact of lower volumes on our NMV, which declined by 3% on a constant currency basis to EUR 215 million.

Moving on to revenue and margins. We generated EUR 138 million in revenue, representing a 4.3% year-over-year decline. The gap between revenue and our 3% NMV decline was driven by the continued shift in our business model mix as marketplace share increased to 42% NMV. Gross margin improved by 0.5 percentage point year-over-year to 46.5%, with higher margin contribution from Platform Services balancing our retail performance. This demonstrated our ability to maintain margin gains even as business model mix and inventory benefit from '24 and '25 normalize.

On adjusted EBITDA, we delivered a strong EUR 5.4 million increase year-over-year as we realized savings from our 2025 and early 2026 cost initiatives and continued fulfillment efficiencies across the group.

Now, let's turn to our regional performance. ANZ proved resilient this quarter for a softer consumer spending environment. ANZ achieved a 3.5% increase in NMV, and a 4.0% revenue growth on a constant currency basis. This was supported by a 3.7% rise in Active Customers, driven by successful new customer acquisition and reactivation initiatives. ANZ's gross margin compressed slightly by 0.4 percentage points due to investment in our new loyalty program.

In LatAm and SEA, we prioritized margin health as we faced lower demand. In LatAm, a greater contribution from Marketplace drove a 1.4 percentage point gross margin expansion. In SEA, Platform Service drove a 1 percentage point increase.

Now, let's move on to our cash flow for the quarter. Q1 normalized free cash flow improved by EUR 10 million year-over-year to negative EUR 51 million. Whilst Q1 is a seasonally high outflow period, our trajectory towards breakeven is strong. On a last 12-month basis, normalized free cash flow has improved by EUR 24 million year-over-year to negative EUR 22 million. The year-over-year progress in Q1 was primarily driven by the EUR 5 million improvement in adjusted EBITDA, supported by further discipline in working capital and CapEx.

Looking at our liquidity position, we had a EUR 19 million net reduction in borrowings this quarter, which was driven by the EUR 32 million redemption of our convertible bond completed in March. This redemption was partly offset by a EUR 13 million drawdown from our working capital facilities, which primarily consists of our new Australian RCF with NAB. Following the redemption, we now have EUR 9 million of our convertible bonds outstanding. We closed quarter 1 in a strong position with EUR 109 million in pro forma cash and EUR 86 million in pro forma net cash.

Now looking to the rest of the year. Our Q1 results were in line with expectations. The softer top line described at our Q4 results was successfully offset by improving margin trends. Therefore, we are reconfirming our full-year 2026 guidance as set out in March. We expect NMV growth to range from negative 4% to positive 4% year-over-year on a constant currency basis. This implies an NMV range of EUR 990 million to EUR 1.07 billion.

On adjusted EBITDA, we expect to deliver EUR 15 million to EUR 25 million. Whilst our guidance is based on December 2025 closing rates, we've observed currency tailwinds with the Australian dollar and the Brazilian real strengthening against the euro as of the end of Q1. If this persists throughout the year, we may see a benefit to our euro ranges. Our guidance range continues to reflect softer first half expectation whilst factoring in different trajectories for the second half.

GFG has no direct exposure to the Middle East, and is closely monitoring the secondary impacts on global supply chains and consumer sentiment. Our guidance reflects factors specific to our markets such as interest rate increases in Australia and upcoming election cycles in LatAm. Our guidance does not assume prolonged geopolitical volatility as this cannot be reliably predicted.

We remain highly confident in our overall strategic direction. By prioritizing customer quality and maintaining rigorous cost discipline, we've built a solid foundation that allows us to navigate external variables whilst continuing to drive forward our profitable growth goals.

We'll now open the call to your questions. If you'd like to submit a written question, please kick on the speech bubble at the bottom of the screen. Thank you.

[Operator Instructions] Our very first question this morning is coming from Russell Pointon of Edison.

A couple of questions. First of all, there's a very clear message that you're focusing on quality customers, which is showing up in a slight increase in the rate of decline quarter-on-quarter. So, I suspect this is quite a difficult question to answer. But can you help say anything that helps understand what percentage of your customers are kind of where you want them to be? And what percentage are probably not where you want them to be from a quality perspective? And I suspect within that, there's quite a lot of drivers in terms of product, marketing, promotions, that type of thing. So, where is the focus?

Great. Thanks, Russell. I'll take a stab at that. It is not an easy question to answer. But I think fundamentally, the way we look at it is we look at it from -- in driving profitable growth from 2 angles. We look at order profitability, and we look at customer profitability. On the order profitability side, we are constantly looking to drive efficiency into fulfillment, delivery proposition, all of those things because obviously, as we can kind of better economics to each individual order that helps the overall picture.

And then through the customer profitability lens, we look very much at the entire life cycle of the customer. As you know, we're now 15 years into this business and in these markets. And so we have a huge amount of historical data around which types of customers through which channels, in which locations, which devices, et cetera, and also with which initial browsing, search, purchase behavior end up being the ones that really become long-term loyal customers. And there's a lot of effort in terms of driving our new customer acquisition and also our reactivation towards those higher-value customers such that we are not investing marketing spending on customers that have a high probability of turning out to be lower value customers.

To your percentage question, it's obviously a distribution. That's why things like the loyalty program we announced in Australia are so important to us to really make sure that the very high-value customers, so let's say, the top 5% or 10% of customers who are accounting for a large -- much larger percentage, obviously, of spend are feeling particularly special and looked after from every aspect of the experience. And then at the other end of the distribution, we do have customers that through also behaviors around returns and other things end up being very, very unprofitable. And that's an area where we are tightening some of our policies and behaviors as well.

So, I would say it's a very multi-dimensional effort to try to drive this. Ultimately, where we think this will be most visible is through the purchase frequency of the average customer base and moving that upwards. And I think that's what we want to be measured against as the ultimate outcome from this effort.

Great. And secondly, on Southeast Asia, it's interesting that you saw a lower revenue decline than you did in Active Customers. So, could you just talk about what's happened in Southeast Asia, please?

Sorry. Yes, Russell, I mean, what we're seeing really in Southeast Asia again sort of goes back a little bit to Christoph with regards to the customers that we're retaining and attracting actually are increasing their overall purchasing. So, we're seeing that buildup is actually the decline in revenue as a result then ends up being lower than the declining customer.

Okay. And Helen, there was a broad improvement in profitability, EBITDA and EBIT year-on-year. So, was that across all 3 divisions? Or did it effectively follow the trends in gross margin because the gross margin in Australia was a little weaker?

Yes. The gross margin was a little weaker, but we've seen sort of consistent improvement in profitability across all of our regions. So yes, we've got the improvement in gross margin at a total level, but also you'll see a 3.5 percentage point improvement on adjusted EBITDA. There's been significant efficiency and further cost out, which we've seen across all regions. So, all regions stepping forward.

And my final question is, I know it's not long since the last set of results. I'd just be interested in how your thoughts have evolved over the last month or so to how you get to the improvement in profitability this year, given the conflict is going on a bit longer? So, do you think you're having to work a bit harder on OpEx this year than perhaps you previously thought?

I mean, we set the year out, as you say, it's about 6 weeks since we last spoke. So, I mean, a lot has happened over that time. But we set the year with a broad top line range from minus 4% to plus 4% and are confident that within those bookends, we have plans to be able to deliver the profitability improvements that we've set out in the guidance.

Obviously, the longer that the wider macro impacts last, et cetera, we need to be mindful overall around OpEx, CapEx. But as you can imagine, we're making very conscious decisions on a day-to-day basis with regards to intake, with regards to CapEx, with regards to headcount, et cetera. So as we stand at the moment within the range that we feel -- still feel comfortable with, we're committed to that improvement in profitability.

Our next question is coming from Anne Critchlow of Berenberg.

I've got 3 questions, if I may. So the first one is on current trading because last time you spoke to us, I think, at the beginning of March, you did mention a weaker consumer in January and February compared to Q4 in Australia and Brazil. So, I just wondered if that had actually weakened further since you last spoke to us due to any impacts on consumer sentiment given the Iran conflict.

And then the second question is on average order value, that 5% growth year-on-year. Just wondered what the drivers were behind that, whether it's like-for-like inflation or not?

And then the third question is on the gross margin. So, just wondered what the drivers were behind the gross margin increase in LatAm and Southeast Asia? So was it mix or whatever was going on there?

So, let me take all of those in order. So current trading, I mean, Q1 has played out in line with our expectations and in line with the trade that we described when we did our full-year results at the start of March. And we're really seeing similar trends at the group level as in April. So, we're not seeing anything particularly worse at a group level than the Q1. So, we're broadly in those similar trends. That remains in line with the way in which we've described guidance that overall, we expect a softer half 1 overall for the year.

Your second point was on average order value. I think with regards to what's driving that increase, so we are seeing the 5% improve or increase we're seeing, about half of it coming from wider inflation and then the rest really around country mix. So as the average order value, which is higher in Australia grows as well, proportionately, that's driving the overall group average order up as well. So, I broadly look at it in 2 buckets, overall inflation and then country mix driven by Australia.

And then lastly, Anne, your question on gross margin. I think specifically, it was what was driving some of the increases in LatAm and then in Southeast Asia. So overall, retail margins remained broadly stable across the board, a little bit of movement within each region. Within LatAm, we've seen a larger participation in marketplace. So, that's really driven the overall increase within LatAm. And the main driver in Southeast Asia is Platform Services. So, we've seen a higher participation in Platform Services revenue in the quarter, which has driven the increase there.

As we have no further audio questions at this time, I'd like to turn the call over to Saori for any questions submitted through webcast.

So, a question from Christian at NuWays. Are you seeing any first impact from the loyalty program in ANZ?

Yes. Thanks, Christian. I'm happy to take that. So as you, I think know, we launched the iconic Front Row in October last year. So, we're still probably 6 months into it. So far, customers are earning ICONS and rewards, and the program is meeting our expectations around the level of engagement, the level of people using those ICONS and rewards and also the cost to us as a business. We are also seeing the improvement in purchase frequency and loyalty that we expected.

I think overall, we're also very conscious that it does take time to really embed this in and make sure that all of our customers understand it. Clearly, the high-frequency, high-value customers understand it more quickly given the very frequent engagement they have with the platform, but then we obviously have a large number of customers that show only a few times a year. And so for those, they will take a bit longer to really understand the dynamics.

And so we are working on continued communication and engagement with customers to really make sure they all understand the mechanics of the program, the benefits of the program and then expect that to continue to drive further improvements in the customer behavior. And we will also continue to look at ways of how we increase the value of the program to the customer. But overall, very much on track and very pleased with the launch and the rollout of that program last year.

Just going back to the live questions. I think Anne has another one. Maybe disconnected. If that's the case, we have no further questions.

I'm sorry to interrupt, ma'am. We just have Anne Critchlow, has just signaled again for an audio question. If it's okay, we'll take that question now. Is that okay? Here we go.

Yes, please.

So, I've got 2 questions, sort of thematic ones. The first one on AI because last time you said that about a low single-digit percentage of traffic was coming from AI. So, just wondered if that's building fast or not.

And then the second one is on the idea of software-as-a-service because you've got proprietary tech and you've got fulfilled by. So, I'm just wondering if you've ever considered doing a Zalando or NEXT basically and putting them together to offer other brands and retailers help with website tech perhaps or software generally in addition to logistics?

Yes. Thanks, Anne. I'll take those 2. So on AI and specifically the traffic, I think what you're referring to is the traffic volume we're getting from the Geminis, ChatGPTs, Claudes, et cetera, of the world. That remains very, very small. But we do obviously see it growing, and it is growing at a good percentage, but not in a way that we think that there is a fast path to that becoming a very important traffic source. That's the current status. Obviously, there's a lot of things around commerce protocols and other things on the technology side evolving there.

Please keep in mind also that very often a lot of these, let's say, more headline grabbing rollouts, they start in the U.S. They eventually come to Europe, and it takes a lot longer until they land in all of our markets. And so we can often see quite a lot of these kind of innovations that are driven by, let's say, the Western technology companies in the real world in markets like the U.S., U.K. or other European markets before they come to us. What we are very focused on is making sure that we are showing up as an important retail platform on all of the AI tools. So, when people look for fashion advice, look for products, et cetera, that we have the same strong visibility that we enjoy on the traditional search engines., So that's on the AI traffic side.

On the SaaS question, very good question. Thank you. We are very focused on enabling our Marketplace and Platform Services for brand partners. There's a lot of opportunity to grow this, in particular, Fulfilled by GFG and the marketing, and we're focusing most of the tech investments on those platforms. We are enabling brands to sell on other marketplaces in Southeast Asia through our single-stop solution. And so in that case, we do provide technology that lets the brands sell on their brand.com, not the front end, but basically the back end of that in terms of the fulfillment, but also integrates them into our ZALORA platform as well as into other marketplaces if they want to sell on those.

We have made a quite conscious decision not to go into the business of e-commerce stores or front ends or those types of things because we don't think we have a particular competence to do that well for brand.coms. And also, please remember that most of the global brands make those technology choices in their largest markets. And for most of the global brands, obviously, our markets are not the largest. And so they are often more follower markets when it comes to technology choices. And therefore, we've looked at this opportunity in the past, but never concluded that, that would be a worthwhile investment to make for us.

We have no further audio questions at this time.

Okay. Thank you all for joining today. If you have any further questions, please reach out to the Investor Relations team directly.

Good morning, everyone and welcome to Global Fashion Group's Q4 and Full Year 2025 Results Presentation. I'm Christoph Barchewitz, CEO of GFG and I'm joined today by our CFO, Helen Hickman.

I'll start today with an update on the strategic actions we have executed over the past 3 years, followed by an overview of our 2025 regional performance. Helen will cover results for the group and the outlook. Then we'll open it up for Q&A. To start, I want to briefly remind you of what underpins GFG's long-term potential. We hold leading positions across large fashion and lifestyle markets where online penetration continues to increase over time. We serve these markets with a tailored customer-centric approach that it reflects local needs and we maintain strong relationships with both global and local brands. These partnerships are supported by flexible business models that help brands grow in complex markets. We also have a unique operational footprint, supported by proprietary technology and scalable infrastructure, which enables us to deliver a fashion-specific customer experience efficiently at scale.

With these foundations in place, we are on track to deliver profitable growth and positive cash flow across our markets. And we do so from a position of financial strength with a healthy balance sheet and a substantial net cash position. This long-term potential is underpinned by the work we have done to reset and strengthen the business. Looking back to 2022, 2 main events have shaped the challenges our business has had to navigate over the past 3 years. One, a difficult post-COVID macroeconomic and fashion e-commerce environment that significantly depressed consumer demand and led to a decline in our active customer base and order volumes; and two, the sale of our CIS business due to the Russian invasion of Ukraine, which significantly reduced the scale and profit of the group. This initiated a reset period for our business.

We have successfully actioned this since 2023 by evolving our business model, strengthening our customer flywheel and driving cost efficiency. On business model evolution, we strengthened our brand partnerships and rationalized our offering. We took a prudent approach to inventory. And since the end of 2022, we reduced inventory levels by 43% on a constant currency basis. We curated our assortment by reducing the brand count by 26% as a result of removing long-tail brands from our platforms. On customer flywheel, we dedicated our attention to our high-value customers and increased gross profit per active customer by 14% on a constant currency basis. We delivered this step-up all while applying discipline with marketing costs remaining stable at 7% of NMV each year. Finally, on cost efficiency, we reduced and simplified everywhere across the group. From 2023 to 2025, we reduced our total cost base by EUR 106 million, a 16% reduction in constant currency and released EUR 88 million from working capital.

So now let's look at how this reset period has translated into our financial results. As mentioned, we've been operating in a period of demand downturn, which resulted in EUR 168 million reduction in NMV from 2023 to 2025. FX devaluation against the euro accounted for about half of this reduction. Despite facing a lower top line, we substantially improved profitability and cash flow. Adjusted EBITDA improved by EUR 62 million since 2023. Normalized free cash flow improved by EUR 31 million since 2023. Let's now turn to our regional segment results. By executing with discipline across all aspects of our business, we have significantly strengthened our financial operating model. As a result, we delivered a positive adjusted EBITDA for all 3 regions and the group in 2025. This milestone was driven by a return to NMV growth for the full year in our 2 largest regions, ANZ and LATAM. While our reset actions have built stronger foundations group-wide, each region is currently at a different phase in their journey to profitable growth.

Starting with ANZ, which now represents half of the group's NMV. ANZ has completed its transition and is now operating as our profitable growth engine. In 2025, ANZ's NMV grew 6% year-over-year in constant currency. Profitability was strong at EUR 26 million in adjusted EBITDA, marking a EUR 28 million improvement compared to 2023. ANZ has strong cash conversion and delivered a positive normalized free cash flow. LATAM represents 30% of group NMV and also delivered 6% NMV growth in 2025. LATAM has achieved a significant turnaround moving from a declining business with negative EUR 22 million adjusted EBITDA in 2023 to a positive EUR 3 million in 2025. Cash flow has improved materially as well with LATAM now near normalized free cash flow breakeven. As the initiatives we put in place continue to flow through, we expect LATAM to move toward the end of its reset phase and into a more profitable growth position.

SEA is our smallest region at 21% of group NMV and continues to face a decline with NMV down 15% in 2025. Despite this backdrop and thanks to its strong cost discipline, SEA has remained resilient on profitability, delivering a positive EUR 3 million adjusted EBITDA in 2025 and was also near breakeven on normalized free cash flow. SEA's financial resilience is also partly attributable to its high Marketplace share and sizable Platform Services business. Let's look at that next. Evolving toward a platform-led model by scaling our Marketplace and Platform Services is a core part of our strategy. In 2025, Marketplace represented 39% of group NMV and Platform Services represented 4% of group revenue. Through our reset phase, all regions contributed to our progression toward our group goals of 45% Marketplace share and more than 5% Platform Services share.

SEA is the most advanced in this evolution and is also the only region so far to offer a solution where we use a single stock pool to fulfill orders across multiple brand partner channels. This service is the main driver behind SEA's step-up in Platform Services revenue from 2023 to 2025. In ANZ and LATAM, we expect Marketplace to continue expanding, particularly following the rollout of Fulfilled by in 2023 and 2024, respectively. Additionally, our growing marketing platform service is expanding across these regions, serving as another key driver of profitability. Let's now take a closer look at ANZ's results. 2025 marked a clear step up forward -- step forward for ANZ as the region returned to growth and delivered stronger profitability. NMV and revenue steadily grew each quarter, including Q4 with NMV up 6% and revenue up 3% on a constant currency basis. Active customers also closed the year up 4% year-on-year. ANZ achieved a record full year gross margin of 49%, up 2 percentage points from 2024 and we held at the same level in Q4.

This flowed through to adjusted EBITDA margin, which expanded 3 percentage points to 7%. ANZ's strong performance has been driven by 3 key areas: a scaling platform mix, more efficient infrastructure and stronger customer engagement. Looking at platform mix. We are strengthening our fashion proposition while shifting to a more inventory-light model. In 2025, more than 20% of NMV came from our own brands and exclusive partnerships, helping us differentiate ourselves. At the same time, our brand partners are participating in our partner offerings. Marketplace now makes up 36% of NMV and 115 brands are live on Fulfilled by since we launched it in 2023. This gives customers more choice and gives brands an efficient and reliable way to grow with us.

Additionally, our marketing services revenue is up 36% since 2023, indicative of another great value add for our brand partners. The second major driver is our more efficient infrastructure. With our new order and warehouse management system and expanded partnership with Australia Post, we've had a delivery upgrade. About half of all orders are now delivered in under 48 hours across Australia and New Zealand. In Q4 alone, delivery speed in major cities improved by 10% year-over-year. In Australia, we are the only fashion player to have rolled out Saturday standard delivery at scale for East Coast metro areas. And in New Zealand, we have achieved a meaningful improvement by reducing delivery times by 15% and introducing express next day service for key metro areas.

These operational wins support our profitable growth momentum and our third driver, customer engagement. Our Got You Looking masterbrand campaign continues to demonstrate strong results. Amongst the campaign's target audience, unprompted awareness is up 70%, customer trust has increased 62% and 57% of viewers take action after seeing our ads, meaning more visits to the ICONIC app and site. To further strengthen the ICONIC's customer flywheel, we launched the Front Row loyalty program in October last year. This program was co-designed with input from 50,000 customers and is built around ICONS, the loyalty currency members earn when they shop to unlock rewards, special offers and exclusive experiences.

Members progress through 4 status levels with higher levels unlocking greater benefits and faster earning. The Front Row is helping us recognize and retain our highest value customers, which deepens loyalty and drives higher order frequency. This supports ANZ's growth agenda, which also includes greater geographic penetration and increased cross-category shopping. In parallel, we continue to drive profitability through scale, ongoing fulfillment optimization and leveraging technology and AI. Turning now to LATAM. 2025 was a year of continued recovery. NMV returned to growth for the full year and LATAM became adjusted EBITDA profitable. We did see LATAM's momentum moderate in the second half. This was partly due to slightly stronger year-over-year comparators and partly due to a more challenging market and competitive environment.

Though active customers ended 2025 down 2% year-on-year, LATAM saw higher order frequency and average order value, which reflected our focus on higher-value customers. LATAM's margin profile strengthened with gross margin improving to 44%, up 1 percentage point year-on-year and adjusted EBITDA reaching 1%, up 5 percentage points. Next, we'll cover the strategic drivers for LATAM that have laid the foundation for profitable growth. First, we are changing how we engage with our customers. We have started to refresh our cash back program to increase customer loyalty. We're promoting Club Dafiti, which is where shoppers can access personalized rewards and exclusive promotions. It's highly effective in keeping our high-value customers engaged and coming back to Dafiti. Second, we are scaling our brand partner proposition. A major piece of this is our Fulfilled by offering, which launched in 2024 and now has over 60 brand partners live.

We saw 4x more revenue from Fulfilled by in 2025. It is a true win-win where brands leverage our fulfillment network to grow while we monetize our automated fulfillment center capacity. Our partner services go beyond logistics. We have been growing our marketing services with revenue up 42% in 2025 and our revenue per session doubling in Q4. 2025, we also rolled out financing to support our partners' working capital needs while simultaneously optimizing our cash flows. Finally, we are deploying AI-generated product imagery at scale. This reduces our reliance on traditional studio photos and gets products online much faster. This new workflow is about 30% faster. And as we scale it, we expect it to cut production costs by around 2/3. All of these initiatives are building a more resilient and profitable foundation for us in LATAM.

Let's now turn to SEA. In 2025, we continue to see the rate of decline steadily ease even as the top line remain challenging. By Q4, NMV was down 10% year-on-year compared to 15% in Q3. SEA's revenue declined less than NMV for both Q4 and the full year. This was a result of improved marketplace commissions and stronger contribution from platform services. Our SEA business is now operating with a more favorable margin mix and leaner cost base. As we work through our initiatives to stabilize demand, SEA is well positioned to translate any return to growth into stronger profitability. To drive stabilization, we are focusing on sharpening our customer proposition while driving simplification and efficiency to progress toward profitable growth. This includes focusing on our top-performing brand partners. In 2025, more than 60% of SEA's NMV came from our top 30 brands.

To support this, we have refined our assortment. In retail, we have reduced our intake by 28% from 20% fewer brands since 2023. On our Marketplace, we have reduced long-tail complexity, resulting in a 20% increase in NMV per brand compared to 2023. Alongside our assortment strategy, platform services continue to scale and be an important growth lever for SEA. Our single-stop solution, which is part of our operations services has generated 48% higher revenue in 2025 versus 2023 on a constant currency basis as it enables sales for brand.com and other channels in 2025. An exciting recent development in Q1 is the launch of our Got You Looking in SEA.

We took our learnings from ANZ and adapted the masterbrand for ZALORA. Got You Looking is now live across all of our channels. It is designed to demand attention and improve brand preference, drive higher quality traffic and ultimately rebuild a healthier, more profitable customer base over time. Finally, we are continuously driving simplification and efficiency across the business. We successfully reduced SEA's total cost base by 19% on a constant currency basis and released EUR 29 million in working capital since 2023. Altogether, these actions give us a solid foundation in SEA as we progress towards sustainable, profitable growth.

I will now hand it over to Helen to take you through the group results and outlook.

Thank you, Christoph and good morning, everyone. I'll start with customers. At the end of 2025, our active customer base was down 4% year-on-year as we continue to prioritize profitable customer acquisition, engagement and reactivation. This strategy includes engagement initiatives that encourage cross-category shopping, app usage and loyalty program participation. These initiatives in ANZ and LATAM have successfully offset headwinds in SEA to result in a 2.3% increase in group order frequency. In 2025, we generated over EUR 1 billion in NMV, with Q4, our key trading season contributing about 1/3 of the full year. Whilst our full year and Q4 NMV were broadly stable on a constant currency basis, our reported figures were significantly impacted by FX headwinds. Specifically, the Australian dollar and Brazilian real were weak against the euro in '25, both down about 7% year-on-year.

With Australia and Brazil being our 2 largest markets, this translated to a lower euro reported value for our NMV and revenue. Our average order value increased in constant currency terms for both the full year 2025 and Q4, offsetting lower volumes in SEA, which drove the group year-on-year decline. The order value increase was driven by inflation, along with a combination of a higher price point assortment and regional mix. Now turning to revenue and margins. We increased our adjusted EBITDA by EUR 27 million against the backdrop of broadly flat constant currency revenue to turn the group full year positive for the first time within our current footprint. Now let's take a closer look at the 2 contributors to this milestone, gross margin improvement and ongoing cost and efficiency actions. Starting first with gross margin improvements. Over our reset period, we have successfully reduced our overall inventory position by 43% on a constant currency basis from the end of 2022 to the end of 2025.

We've achieved a healthier inventory profile by reducing discount through a more relevant assortment, increasing inventory turnover and decreasing our share of aged inventory by 10 percentage points. This, combined with a steady increase in Marketplace and Platform Services share has resulted in a 4 percentage point increase in gross margin, rising from 42% in 2023 to 46% in 2025. The second key contributor to the significantly improved adjusted EBITDA position is ongoing cost discipline. Our cost efficiency programs have been a crucial part of our business reset and remain a core part of our strategy going forward. From 2023 to 2025, we've reduced our total cost base by EUR 106 million, representing a 16% reduction on a constant currency basis. This cost reduction has more than doubled the pace of our 7% NMV decline over the same time period. The largest saving came from fulfillment. 2/3 of the reduction was as a result of our own initiatives where we captured efficiencies, including from automation and the order warehouse management system, OWMS, that we implemented in ANZ last year.

Another 20% was due to reduced volumes and the remainder related to external factors such as FX. We also delivered significant savings across tech and admin. We continue to streamline our organizational structure along with ongoing reviews and negotiations of all our non-people costs. Across all cost lines, we've reduced our headcount by over 40% over the past 3 years. Together, our 4 percentage point gross margin expansion and EUR 106 million cost reduction have enabled us to reach our milestone of becoming adjusted EBITDA profitable. Turning to our cash. Our normalized free cash flow improvement in 2025 was primarily driven by the EUR 27 million increase in adjusted EBITDA. Lease costs remained broadly stable year-on-year. Working capital moved towards neutral as we cycle the one-off timing benefits seen in 2024. We delivered a CapEx reduction of EUR 16 million following the completion of the OWS (sic) [ OWMS ] investment and ongoing rationalization of our broader technology spend.

After adjusting for operational tax and interest, we had a normalized free cash outflow of EUR 32 million, representing a EUR 10 million improvement compared to 2024. In Q4, we generated EUR 46 million of normalized free cash inflow. As a reminder, our cash flow cycle is highly seasonal, generating significant cash flows in Q4, our key trading season and experiencing significant outflows in quarter 1. We closed 2025 with a strong liquidity position of EUR 185 million in pro forma cash and EUR 143 million in pro forma net cash. Pro forma net cash deducts our outstanding EUR 41 million convertible bond liability and other small levels of third-party borrowing. Throughout 2025, we strengthened our balance sheet by repurchasing EUR 13.8 million in aggregate principal amount of our convertible bond, bringing our total repurchase volume at a discount to 89% of the original issue.

We have 2 significant funding events taking effect in quarter 1, which I'd like to overlay against our closing December 2025 cash position. Firstly, following bondholders exercising their right to redeem at par on the 16th of March, we will redeem EUR 31.8 million, which is about 3/4 of our outstanding convertible bond. This will leave EUR 9.1 million of the bond outstanding at an attractive terms of a 1.25% interest rate maturing in March 2028. After this redemption, based on the December 2025 balance, this will leave us with EUR 153 million in pro forma cash. Secondly, we increased our funding flexibility through a new credit line. In December, our ANZ business signed a EUR 17 million revolving credit facility to efficiently manage our seasonal working capital needs. When combined with our undrawn funds from our facility with HSBC, we have EUR 23 million in additional available funding.

This brings our total adjusted available liquidity position for year-end 2025 to EUR 176 million. This represents a strong financial foundation and significant headroom we have to support our next phase. We're also pleased to announce this morning the launch of a EUR 3 million share buyback program. The repurchased shares are expected to be used to partially meet our ongoing share-based employee remuneration scheme. Now let's look forward to our outlook, starting with guidance for 2026. For NMV, we expect a range of negative 4% to positive 4% on a constant currency basis. As at December 2025 closing effect rates, this translates to EUR 0.99 billion to EUR 1.07 billion. The global macroeconomic environment remains highly volatile, compounded by ongoing geopolitical tensions with distinct macroeconomic factors impacting demand across the 9 countries where we operate.

Specifically, our 2 largest markets face near-term headwinds. In Australia, weak consumer sentiment is driven by recent interest rate increases and persistent inflation. Whilst in Brazil, higher interest rates remain and the upcoming general election and World Cup add additional volatility considerations. Our NMV guidance reflects softer current trading and half 1 expectations as well as different half 2 trajectories to account for these dynamics. For adjusted EBITDA, we expect EUR 15 million to EUR 25 million, again at closing December FX rates, building on the EUR 9 million we delivered in 2025. CapEx and leases are expected to be broadly in line with 2025 levels. For working capital, we expect a slightly higher inflow than we delivered in 2025. Our strategy to deliver profitable growth remains unchanged and is built on 3 key pillars. Firstly, business model evolution. We continue to create our assortment across retail and marketplace while scaling our brand partner offerings through our platform, including expanding Operations by, Fulfilled by and Marketing by GFG.

This platform mix shift continues to support our evolving business profile towards a gross margin in excess of 47%, 45% Marketplace share and 5% Platform Services share, whilst maintaining broadly neutral working capital. Secondly, the customer flywheel. We are continuously refining our customer strategy with a clear focus on quality and profitability. This means disciplined engagement initiatives, stronger adoption of our loyalty programs and using AI across the entire customer journey. These actions will drive order frequency growth and improve customer economics, whilst keeping marketing investment broadly stable at 7% of NMV. Thirdly, cost efficiency. We will remain focused on cost and capital discipline.

As we grow, we create operating leverage from our existing assets, particularly our fulfillment network without requiring significant incremental investment, which keeps CapEx and lease costs broadly stable. Technology and AI are embedded in our operations, helping us execute faster, improve customer experience and remain resilient through market volatility. In summary, applying these 3 pillars through our research phase has established a stronger financial foundation. We will continue to execute this strategy to deliver NMV growth, adjusted EBITDA margin expansion and normalized free cash flow breakeven.

We will now open the call to your questions. [Operator Instructions]

[Operator Instructions] Our first question is from Anne Critchlow from Berenberg.

I've got 3 to start us off, if that's okay. First of all, please, could you comment on how much weaker trading was in January and February compared to Q4? And then secondly, if you could just comment on the behavior of customers in the last few days. I think in the past, we've seen a sudden drop-off in sales around sort of big global crises and then a return to normal. But just wondering if you're seeing the same pattern. And then also thirdly, on the gross margin outlook, the 30 basis points improvement in Q4 was a bit lower than we've seen looking backwards. Just wondered if that's the sort of trajectory you're looking at perhaps over the year ahead and how quickly you might reach your 47% gross margin target?

Anne, I'll take the first one, pass to Christoph for the second and then come back to you, Anne, on the gross margin question. So as I mentioned, we have seen some softer trading in January and February compared to where we were in Q4. We've seen sort of a declining customer sentiment in Brazil and Australia at the start of the year. And also, we've also had the classic timing impact of some key seasonal events. So whilst the Q4 as a whole, there will be less of an impact within the months, we've seen a shifting of Chinese New Year and Carnival in Brazil, which also has an impact on January and February to date.

Yes. And just over the last few days, I guess you're referencing, obviously, the headlines and events in the Middle East. We haven't seen any substantial deterioration beyond what Helen just said. And also the year-on-year comparisons are impacted by the timing. So there's a bit of difficulty in really parsing through day-by-day numbers but there is no material drop off or something that we have seen in the context of past events around COVID or other major moments. So that is not happening.

And then moving on to gross margin. So yes, obviously, our Q4 year-on-year improvement was softer than the full year as a whole, so the full year stepping forward 1.5 percentage points. We very much continue to expect gross margin expansion into 2026, albeit probably slightly lighter than the full year that we saw in 2025. And also I sort of caution that, that won't necessarily be equal improvements every quarter. But again, our strategy continues and we expect to see those improvements driven by increased marketplace and platform services participation and also continued focus around our retail and our assortment.

Our next question is from Russell Pointon from Edison.

Congratulations on the results. Three questions, if that's okay. First of all, you referenced the active customer declines in LATAM in Q4 and that's due to competitor activity. Could you just talk a bit more about that? Was it focused across certain categories? Or was it fairly broad-based? And my second question is for LATAM and Southeast Asia, you're highlighting that you're near cash flow breakeven. I appreciate that you're expecting EBITDA to improve in those regions over time. But are there other levers that can help you to generate more positive free cash flow? I assume there's still something to go on inventory. And my third question is finally just in terms of the medium-term guidance, it isn't in the presentations deck. So can you just reconfirm that the medium-term targets of 6% EBITDA margin and breakeven free cash flow? And perhaps looking back versus 12 months ago, how are you tracking versus what you probably expected 12 months ago?

Yes. Thanks, Russell. Maybe I'll start here and then Helen can build on that. So on the active customer, general comment, I would say is, it's obviously important to recognize, #1, it's an LTM number. So it's always a bit of a lagging indicator. And we've obviously seen that when you look at, for example, the ANZ evolution over time. And as we're going through, for example, the turnaround in Southeast Asia, we would expect to have NMV lead the recovery before it comes fully through in the active customer, partially because of the LTM and partially because of our focus on higher-value customers and the very disciplined approach around customer activation, both new acquisition and reactivation.

So from a LATAM perspective, it is a function of our approach and the competitive environment and us being disciplined in protecting both the gross margin and the marketing cost at a level that we think is ultimately the optimum from a profitable journey going forward. To answer the second part of your -- or second question around LATAM and Southeast Asia, yes, we're near normalized free cash flow breakeven, which I think clearly indicates we're not doing much on the CapEx side, as you can see from the group number but it's particularly in those 2 regions, it's really a modest investment into technology. We have obviously the leases that go into a normalized free cash flow and we've been releasing a degree of working capital, in particular, in Southeast Asia to counter the decline in the top line. And the working capital will not repeat in that way. We think there's a bit more to go in Southeast Asia on that. We're very optimized in LATAM, if not maybe a little bit light on the working capital.

We will continue to look at all ways of optimizing cash flow but the big driver is really the EBITDA at this point and that's where we want to push in those 2 regions to move higher. And then maybe coming back to the medium-term guidance question around margin. We still believe that we need somewhere around that 5%, 6% or so level of adjusted EBITDA margin. But I think we've chosen to kind of look at the building blocks slightly differently and really focus on the absolute EBITDA, the stable leases, the stable CapEx and generally neutral working capital, although as Helen said, this year, we do expect a bit of cash inflow from the working capital side. So maybe the nuance here is less driving this off the percentage margin and really more looking at the absolute building blocks into moving towards cash flow -- normalized free cash flow breakeven. Hope that helps.

[Operator Instructions] And we have a follow-up question from Anne Critchlow from Berenberg.

So I've got 3 follow-ups, if that's all right. And firstly and what steps did you take to focus on higher-value customers? I'm just wondering what that looks like in practical terms. And then secondly, just an update on your AI strategy and the extent to which you're allowing bots on to your site and maybe supporting them to find information. I'd also be really interested to hear your thoughts on how marketplaces can remain relevant in an AI world, lots of discussion around that topic recently. And then finally, just on Southeast Asia. Just wondering what sort of time frame you're thinking about to reach profitability?

So I'll take the first 2 and then let Helen answer the SEA profitability question. So on the higher-value customers, what it really means is, like every business, we have a very broad range of customer base from people who shop with us literally every other week, very high frequency, very high loyalty, buy both full price and discounted during campaigns and have been with us for many, many years. We're very focused on retaining those customers and giving them value at every part of the journey. And the Front Row program in Australia is a way of doing that in a very tangible way. We have our ZALORA VIP program in Southeast Asia. We're working through a number of initiatives in LATAM around this as well. So this is really focusing on, let's say, the top 25% of the customer base where most of the value comes from in NMV but more importantly, a very, very large share of our profit is really generated. So that's one end of the initiatives.

And the other end of the initiatives is to really look at the customers that are not profitable for us and within that to identify how we can either move them into a profitable position and levers there are around shipping fees, they're around the marketing channels that we use. They're around how we trigger conversion from first-time buyers to second and third purchase because we know that once we have 3 purchases, our loyalty forecast is very, very strong. And so it is really both ends of the distribution, if you want, where we're applying. And I think what we're not saying here is we're only going to focus on higher-value customers. We recognize there will always be a distribution but we're trying to tilt the distribution upwards. And as you can see, for example, from the gross margin per active customer improvement of 14%, this is also about moving those numbers forward.

So there's a marketing side to this and a marketing efficiency side to this whole strategy but there's also a gross margin per active customer element to this and making sure that, in particular, our discounts are targeted at customers that are loyal or can become loyal versus just churning through and taking advantage of a deeply discounted product but are not actually staying on the platform. So I hope that gives you a bit of color around our customer strategy. The AI topic is definitely very, very high up on the agenda. Our strategy so far is to make sure that our visibility across all of the AI players is strong. We're digitally native. We have 15 years of history of optimizing for that visibility. We have a very large assortment. We have a very well-known brand. And in all of the searches that you can do on those platforms, we come up quite well when people are looking for fashion products, categories, specific trends, those types of things, we are doing already quite well but we're continuing to focus on that and making sure that we're ready for an increase in the traffic coming from those players.

So far, this is a very low single-digit percentage across all of our markets. So we're still very early in actually seeing a change in traffic there in our category. How are we addressing the question around the role of platforms in an AI world? I think we generally believe that we are an AI winner, not an AI loser. And obviously, there's a lot of debate in the investor community around that. But we see ourselves as an AI winner. Why is that? #1, because we're digitally native and technology enabled. And so we have a 15-year history of adapting to technology, deploying new technology for the benefit of our brand partners and customers. And we are doing that currently. We've been doing that over the last couple of years. So this is our natural, let's say, playing field. #2, we think that we have always seen players up the funnel that are playing a role in customers coming to our platform. And frankly, this was a fairly concentrated universe of basically 2, 3 companies driving this in all of our markets.

So to some degree, more competition in that, let's say, discovery layer is actually, we think, not a bad thing. And we will -- we are looking very actively at both deeper integration and deeper partnering with those players but also where we want to restrict and make sure that we protect our customer base, our organic traffic, those types of things. It's an evolving topic. We are all over it and very, very focused on it because it is a critical driver of the future. In the end, we're in fashion, which we think is a not purely transactional category but we're browsing, discovery, inspiration, entertainment plays an important role. And we have a very large physical component to delivering to the customer.

And that side, I think, is very far away from being disrupted by any LLMs or other AI players. And so that side of building the assortment and then making it available with fast delivery, with easy returns, with a trusted player is something that we believe is very important. But just to be clear, we [ believe ] both the discovery funnel up to the checkout and the post-checkout experience is something that we will continue to own and benefit from the adoption of AI by our customers but also throughout our business.

Helen, you want to cover the SEA question?

Yes. Thanks, Christoph. And in your question, you asked when we think SEA will become profitable. So on an adjusted EBITDA basis, SEA turned profitable this year. So it stepped forward close to EUR 5.5 million year-on-year despite the full year NMV decline of 15%. So that's sort of a two-pronged approach around gross margin accretion and then also a disciplined focus around cost. We very much go into 2026 with that same approach, focusing around how we improve our gross margin within the region, also maintain a strong focus around cost discipline whilst we then work very much to turn the rate of decline in the region and to slow that and to ultimately move to growth within the region.

Hopefully, that helps.

That does. And sorry, a quick follow-up on that. Could you comment also on free cash flow outlook for Southeast Asia?

Yes. So like all of our regions, our focus very much is to continue to improve their cash position predominantly through improved sustainable profit. So the way Christoph, I think described to an earlier question with the overall structure, it's very much focused around how we improve profit whilst we maintain a disciplined level around CapEx, leases and a slightly favorable working capital position. SEA fits very much in that same framework as we see the evolution of the group.

It appears there are currently no further questions over the phone. With this, I would like to hand over for any webcast questions.

So we have a few questions about SEA, specifically, at what point do you expect the SEA top line to stabilize? And what is the competitive strategy against intensifying regional players as well as when do you expect the decline in customer numbers to turn around? So we'll start there.

Yes. So it's obviously hard to predict the timing. But I think from a NMV stabilization, we're looking at it sequentially. As you heard earlier, we have improved from the minus 15% in Q3 to the minus 10% in Q4 and that was clean in terms of the like-for-likes, in terms of the phasing. We now have obviously Q1 in which we have quite a few changes, like Helen mentioned around the real and the Chinese New Year seasonality. And so there's a bit of differences there but we are looking at it really from that perspective. We're planning conservatively for the year to make sure that we are not overstocked. But we do think that we are moving gradually towards a positive territory but that's definitely still a few quarters away given that we're coming from minus 10% in Q4.

The active customer number will be lagging and it's also impacted by us focusing on the higher-value customers. So what we would expect is that you see improvements in NMV first and then the active customers kind of following that eventually but instead really driving order frequency and average order value as a way of returning to NMV growth. Competitive strategy is very much focused on our assortment differentiation. So the most relevant brands, driving exclusivity within the brands, so having access to segmented product, brands that are only available on our platform and the dot-com.

We also have obviously differentiated experience on the app, especially relative to the general merchandise platforms, which are the main online competitors. And our overall customer engagement is obviously very fashion-centric. The Got You Looking campaign is really stressing that point of differentiation by really being about fashion, style in all aspects of life and about the emotional part of our product category, not focused on price or delivery promise or those types of more hygiene factors that's really dialing up the fashion credibility as a platform and that's a big part of our turnaround strategy here.

Next, we have a few questions on costs. One for marketing. How much of your net cash position will be reinvested into marketing to reverse the declining trend in active customers? Overall, where do you expect to see cost reductions over the next year? And then also, could you address central costs? Do you expect this to stay flat? Or is there a specific plan to scale that down? And finally, on inventory, where do you expect to see these levels overall, those are the cost areas to cover?

Okay. Thank you. So let's start with marketing. So we expect to see our marketing percentage of NMV to stay broadly stable at around 7%, which is a trend that we've seen for the past few years. Our focus very much is in investing in marketing with regards focusing on loyalty and profitable -- and attracting our profitable customer base. I think the second question was more about our general overall cost focus and we are expecting to see cost savings into 2026. The answer to that is very much yes, actually broadly sort of an initiatives level. So proactive things that we are doing at sort of at a similar level to that, that we've seen in 2025. Areas of focus continue to be fulfillment, which is a large cost base but we feel there's more efficiencies within the overall fulfillment network. We continue to optimize and streamline our corporate organizational structure.

And also, obviously, activities that we implemented towards the back end of 2025 also flow through into an annualization benefit and we'll see the benefit of that coming into 2026. I think there was a specific question with regards our central costs, which are at an adjusted EBITDA level, about EUR 22 million. These consist of both corporate and admin costs, so people and non-people fees but also include our central tech teams of which the majority of the work and focus is supporting our regional platforms. So whilst it's included within our other segments, it's worth noting that they're purely for the benefit of the regional operations. We've seen these costs come down by about 20 -- 10%, sorry, year-on-year and over a 2-year basis, closer to 20%. So the same rigor around organizational structure and nonpeople cost review has been applied to the central costs as it has been, as you'd expect in our regional businesses.

And then lastly, on inventory. So we've seen significant declines in inventory over the past 3 years. We expect that very much to stabilize into the future, especially as we then start to build the top line. So we will have to invest in inventory to build and rebuild an retail NMV. However, our focus very much is around efficient assortment. So how we manage the retail and marketplace mix, how we ensure that we've seen improved turns on our inventory and how we maintain that. And also how we keep our aged inventory at levels that we feel comfortable because, again, we've significantly reduced the proportion of our aged inventory over the last couple of years.

The next question we have is, you say you can double NMV without material additional investment in infrastructure. What does that imply for incremental EBITDA margins? And is that the basis for your medium-term margin ambition?

Yes. So this is definitely one of the key opportunities. I think for anyone who's been following us for a longer time, we've been very clear that we have significant capacity in our infrastructure, especially in LATAM and in Southeast Asia, which we're obviously trying to leverage through growing the top line but also through shifting more to Fulfilled by and in Southeast Asia services for brand partners and sales that are not on our platform. We do expect that when -- if you were to get to the scale that is mentioned in this question, we would be definitely materially more profitable than we are today because the incremental flow-through from that NMV and that volume would help our fixed cost coverage in fulfillment but also in other aspects of the business quite materially.

But equally, as you know from our guidance and the building blocks we've talked about, we are not saying that we need a couple of hundred million euro of incremental NMV to achieve normalized free cash flow. So just want to be very clear about that. We think we're on a good journey. Obviously, if we can get to the upper end of our guidance range this year, we would be closer to that. If we're at the lower end on top line and adjusted EBITDA, we'd be a bit further away from that. So I hope that gives you a bit of color of how we think about the path here.

Next, we have a few questions around 2026 guidance, specifically on ANZ, is customer growth accelerating? And is that underpinning the top end of your guidance range? And then can you elaborate on the different H2 dynamics regarding NMV growth? If January and February are starting somewhat slower, should we be interpreting this as a warning sign for the year?

Thank you. So let's firstly touch on Australia. So yes, we're expecting a continued positive trend in our Australia active customers and this being off the back of our focus around customer engagement. So the continued Got You Looking campaign and then the more recently launched loyalty program, Front Row, that was launched back end of the quarter 4 and that gaining momentum into 2026. With regards guidance and half 2, so our 2 largest markets do face near-term headwinds. So as I mentioned, in Australia, we're seeing weaker customer -- consumer sentiment that was driven by a recent interest rate increase and we're seeing persistent inflation.

And in Brazil, we're seeing -- continue to see high interest rates and also is the uncertainty in the middle to back end of the year of the upcoming general election in Brazil. We've also got a general election in Colombia in May and the World Cup, which adds additional volatility. I would say that -- those scenarios are obviously built into our guidance of today of minus 4% to plus 4%. And obviously, it depends on both those big markets but also our rate of reduction or NMV decline and then this -- the rate of that turnaround in SEA also plays into the ability for us to achieve within that range or the pace with which we have achieved in that range.

We have no further questions on the webcast. So thank you all for joining today. If you have any further questions, please reach out to the Investor Relations team directly.

Good morning everyone, and welcome to Global Fashion Group's Q3 2025 Results Presentation. I'm Helen Hickman, CFO of GFG, and I'm here today with our CEO, Christoph Barchewitz, who will join us for Q&A. Today, I'll provide an overview of our third quarter results and full year guidance. After that, we'll open it up for questions.

Starting with a summary of our Q3 performance. Our NMV was broadly stable year-on-year with a 0.4% decrease on a constant currency basis. Our gross margin improved by 1.3 percentage points year-over-year to reach 46.1%. Our adjusted EBITDA margin benefited from the gross margin expansion and disciplined cost management to deliver a strong 4.4 percentage point improvement year-over-year to a positive 1.6%. This marks our first positive adjusted EBITDA on a last 12-month basis for our current footprint.

Let's take a closer look at our group KPIs. For over a year now, we gradually sloped the rate to active customer decline each quarter. In Q3, active customers declined 2.3% year-over-year to EUR 7.4 million, driven by fewer churn customers in all regions. Order frequency increased 0.4% year-over-year to 2.3x, marking the first increase since Q1 '23. In Q3, we generated EUR 239 million of NMV, which is broadly flat from last year on a constant currency basis. The group's marketplace participation increased 2 percentage points to 39%, supported by [indiscernible] fulfilled by offering. Average order venue rose by 1%, primarily due to price inflation, which was partially offset by reduced items per order. Orders declined by 1.4% year-over-year. We continue to experience FX headwinds this quarter a significant impact of the Australian dollar remaining weak, down 8% year-on-year against the euro. This means we had a lower euro reported value for NMV, and average order value earned in Australia, our largest market.

Moving on to revenue and margins. Our revenue decreased by 1.5% on a constant currency basis year-on-year. Our continued gross margin improvement resulted mainly from a higher share of marketplace and platform services across all regions. This rate improved our adjusted EBITDA margin, and combined with cost reductions led to a strong 4.4 percentage point improvement year-over-year. Our robust year-to-date performance has resulted in an adjusted EBITDA loss of EUR 7 million, representing a significant EUR 20 million improvement versus last year. Importantly, we achieved a major milestone for GFG by reaching an adjusted EBITDA profit of EUR 2.4 million on a last 12-month basis.

Now let's turn to our regional performance. Both ANZ and LatAm have continued their positive trends by delivering top line growth each quarter this year. ANZ NMV grew by 9% and LatAm by 3.8% year-over-year on a constant currency basis. LatAm also made return to active customer growth in the quarter. SCA remains challenged and a focus area for us to stabilize and turn around business. All regions delivered year-on-year improvement in rate margin.

Now let's move to our cash flow for the quarter. Our normalized free cash flow improved to EUR 11 million year-on-year, and it debited from a EUR 7 million improvement in adjusted EBITDA and a EUR 6 million CapEx reduction in part to the completion of our 2024 AWMS project investment. We had EUR 6 million on capital outflow, which was elevated versus last year due to payables timing differences. Normalized free cash flow for Q3 was negative EUR 15 million.

Looking ahead, Q4 is our largest quarter along where we seasonally generate strong positive cash flow. We continue to have a solid liquidity position with EUR 176 million of pro forma cash and EUR 35 million of pro forma net cash at the end of Q3. Pro forma net cash tax due to outstanding convertible bond liability and other smaller loans. Since the Q3 close, we repurchased EUR 6.7 million more the bond discount. We remain open to considering all opportunities to strengthen our liquidity, including potential debt financing and repurchases of the remaining EUR 40.9 million of outstanding volumes.

Now looking to the rest of the year. We have delivered on our expectations to be year-to-date. We are now narrowing our NMV expectation for negative 5% to positive 5% to negative 2% to positive 2% on a constant currency basis. This equates to around EUR 1.01 billion to EUR 1.06 billion. Given our positive trajectory on adjusted EBITDA and considering Q4 is our most important trading quarter, we expect to achieve our breakeven target and deliver single-digit [ euro million ] results of adjusted EBITDA for the full year. Our full year expectations that leases, working capital and CapEx remain unchanged. We will share our expectations for 2026 at our Q4 and full year results presentation in early March.

We'll now open the call to your questions. If you'd like to submit a written question, please take on the speech bubble at the bottom of the screen. Thank you.

[Operator Instructions] We will now take our first question from Anne Critchlow of Berenberg.

I've got a few questions, so I'll ask them one by one. First of all, on the level of inventories at the end of Q3. I just wondered how those compared to last year? And also, if you could comment on the composition of those inventories in terms of aged stock and stock being in the right place and the right time and so on.

Yes, of course. So our stock in quarter 3 this year is broadly flat with where we were this time last year with regards to quality confidence in the policy of relating into obviously our busiest trading fees across all of our regions. And our aging profile is broadly the same as we disclosed at the Part 2 results were on our aged inventory and for us, we define over 180 days being about 14% of our total [indiscernible].

14%. And I guess, much depends on Q4. But with regard to normalized free cash flow for the full year, where would you expect to be compared to last year's EUR 42 million outflow at this point?

So obviously, yes, I think you hit the nail on the head in because, obviously, a lot depends on the coming couple of months with regard to that being our seasonal our seasonal peak. But if we sort of go through the component parts, we obviously are guiding to a breakeven to single-digit positive adjusted EBITDA so that will give us a significant improvement year-on-year on our profit flowing through to cash. Last year, we did have significant inflow sort of over EUR 30 million on working capital. And we're saying that this year, that will definitely be definitely muted and closer to sort of a breakeven. And then we've also given an indication with regard of what our levers for a broadly constant year-on-year and our CapEx is running at about EUR 15 million. So all of those will then give us constituting parts and or free cash flow. Obviously, the quantum of the profit is the key moving items in there and the delivery of where we have over the next couple of months, we'll define that.

That's very helpful. I've got a question on CapEx outlook for next year as well. So I understand that various systems investments have been completed now. Do you have a sense of where CapEx could come down to next year, please?

I mean we'll obviously provide all of our next year guidance when we announce Q4 and full year in March. But I think it's safe to say we have no significant infrastructure projects on the horizon in the short to medium term. So our CapEx will definitely be concentrated around our internally technology CapEx, which again makes up the majority of the EUR 15 million this year.

Very helpful. I understand the new -- a question on Southeast Asia. The new Chief Executive has started only in September. But I think previously, you talked about focusing on the top 30 brands in Southeast Asia. So I just wondered if you have a sense of early thoughts on what the potential strategy might be first impressions and possible turnaround.

Yes. Thanks, Anne. I'll take that. So we -- as you say, we have our new CEO for the region in the seat since September. So it's obviously early days for him. But what this mandate is and the objective obviously is to continue the turnaround actions we initiated already quite a while back. The activities we focused on both on the commercial side. So you mentioned the top 30 brands and really curating the assortment more narrowly around the 4 categories and the most relevant brands. That is continuing, and it's also yielding results. So we see better results in the bigger brands than we see in the longer tail, and that's obviously part of the deliberate strategy of discontinuing along the long-tail assortment. And then also on the marketing side, we're seeing some progress in terms of both our efficiency, which protects our online to some degree in this turnaround as well. So I think we're broadly on track with the turnaround action. We don't expect the significant change in direction. And from all I know we -- I would definitely be very confident in the leadership team in place now there, which is driving all of these actions.

So I think, as always, these things take a little bit of time to come through. The one that has the longest kind of period is obviously the buying activity since we have quite a bit of forward commitments. We don't think we're in any way overcommitted, and we've brought down our commitments for this year relative to where we were at the beginning of the year quite substantially. And we're taking a cautious approach for our retail buying and concentrating that on the largest brands for 2026. And I think as you know, we have a very large share, over 50% of our business in the region coming from marketplace. And so from a balance sheet and risk management perspective, we are in a quite favorable position there, and that will also protect cash and help us manage profitability overall.

That's pretty helpful. So you mentioned the share of marketplace giving you some protection. Does that inform your sort of view in patients in turning this around? And how many years do you think you would give it until you might consider an exit from that region?

Yes. I think -- I mean the -- while we're obviously not pleased with the top line trends and the double-digit declines we've not seen for quite a number of quarters is not where we want to be in and there's many factors that we've also covered in cost calls that -- from that. But I think we see definitely a core base of the customer and a core assortment that is very relevant and that is an attractive business to pursue. One thing we don't talk about as much that I think is also very important is we have a quite sizable B2B business in the region, which helps us on the overall financial profile.

And so when you look at the last disclosed regional EBITDA we have is LTM for June this year, and that was under EUR 1 million negative on EBITDA. So it's not like despite all the challenges on the top line we are improving on the gross margin side, and we are managing costs, be it marketing investments and other variable costs, but also the fixed cost base very, very carefully to make sure that the overall, let's say, financial burden on a group is within a manageable range. And we expect that to continue in that way and then obviously improved in the course of '26 and '27.

Just got 3 more questions, but I wondered if anybody else wanted to have a go.

And we will now take our next question from Russell Pointon of Edison.

A couple of questions, if that's okay. First of all, great to see the narrowing of the guidance range for the NMV. That implies obviously -- some good things are not coming quite through as quickly and perhaps there's less negative on some side. So could you just talk about what is a little bit better, what is a little bit worse to narrow that range testing that ANZ is kind of revenue -- the annual revenue growth will decline to? And the second question was in terms of the gross margin, it's mainly mix, which is driving that improvement in gross margin. So therefore, retail margin is flat. So could you just talk about some of the drivers to that retail margin, please?

Yes. So let me take your first question, Russell, with regards to guidance. So would be broadly consistent throughout the year and sort of hitting at that midpoint. So if you think about Q4, we're minus 0.4% and year-to-date, a group we're 0.1%. So given some of it is actually more mathematical in the fact that we've now only got a quarter of trade left. And whilst it's our largest trade to then be reaching the extremities of potentially plus 5 and minus 5. We've been over a quarter worth of trade would have actually made the quarter performance beyond aspiration and terribly bad on the other end. So the narrowing is a reflection of the passage of time and to the fact that to date, where we are at 0. And actually, we still within the quarter, still have a relatively large range even to hit the plus 2 for the year minus 2 for the year. And we wanted to maintain that breadth because as you know, it is our most critical it's also hugely competitive time of the year. So we need to see ourselves to manage that. You're right with regards we've continued to see the growth in LatAm and ANZ. LatAm has come off a little bit compared to where we were at quarter 2. Some of that has been driven by the sort of the change in season and it being seasonally very cold when we're not traditionally, it would have been much hotter in Brazil. So some of our winter inventory running out. But on the flip of that, that whilst we're still disappointed with it, obviously, we're seeing a reduction in the decline in fabs data. So hopefully, that covers the way around the top line.

With regards to margins, so yes, with regard to our 1.3 increase, again, there's a variety of components. But we're seeing -- we are seeing trading margin increase predominantly in LatAm and Southeast Asia and LatAm Australia and some of that driven by actually reduced discounts have on a year-on-year basis. This year, this quarter, on marketplace participation has had a key driver in that 1.3 increase as we've increased our overall participation by 2 percentage points and also was still relatively small. We've also seen a year-on-year increase in our platform services, which has also contributed quite strongly to the gross margin increase in the quarter.

And we'll now take our next questing from Antonio [indiscernible].

Could you provide us a little more color on the main cost drivers of the improvement in adjusted EBITDA, please?

Yes. Of course, Antonio. So they're in line with some of the cost drivers that we've spoken about. So looking around fulfillment efficiencies and capability around picking, scheduling, batching, we've done a lot of work with regards delivery and improving some of our -- times of our delivery carriers. We have had a continued review of our organizational structures, which we've been speaking about for many quarters, so sort of year-on-year, we're about 10% down in total headcount as a result of organizational design and restructuring. We've reviewed all of our tech contracts, so it's really a mixture of efficiency at [indiscernible] cost savings with regards people and structure, all of our G&A contracts, whether that be [indiscernible] general GMM and also being disciplined around reviewing our leases and we've come out of a couple of more expensive sites, office sites, et cetera. So it's very holistic both operationally and more sort of G&A focus.

That's super helpful. I have 2 more questions, if that's okay. What's the short-term plan to turn around Southeast Asia? Is there anything in particular you have in mind that could have a good impact? And also, is there -- maybe this was also asked before, but do you have a time horizon in mind? Or maybe is there a certain point, a certain decision point in which divestment could become an option?

Yes. Thanks, Antonio. I'll try to address that. So I mean the -- there isn't a silver bullet, obviously, in these types of turnarounds in terms of one activity that would drive all the financial profile we'd like to see. So the challenges that we're facing we see as really at a core of the activities of the business. So on the one hand, that is the commercial side, the assortment that we're offering, the level of relevance, exclusivity and competitiveness of the assortment. We've had a very broad assortment to cater to different price points very different audiences across the region. Obviously, between Singapore customers and Indonesia customers, there's many, many differences in their interest, their spending power, their fashion trends, et cetera. But what we're trying to do and have already executed quite a bit on in the course of this year is to really sharpen and focus on the big brands that resonate basically across the region and generally our global brands as well.

So if you look at the side of the app, you will see very familiar global brands has been highlighted as the most relevant assortment I think Helen has also talked about a freshness of our inventory. We have had -- because of the historical performance sometimes challenges with just too much aged stock. And obviously, that impacts the relevancy to the customer. So bringing in as much newness as possible on the retail side where we do the buying, but also working very closely with the marketplace partners to make sure that the stock that is available for sale on the marketplace side is the current season, most event stock, which has not always been the case. So that's the supply side, if you want to where there's much more to be done where we're making some good progress relative to where we were a year ago.

And then the other side, on the demand side, what we're trying to move to is a much stronger focus on higher-value loyal customers and really growing share of wallet with those customers. So what that will eventually mean is that we will have a shrinking customer base, but hopefully, a higher spend per customer for the remaining base due to higher frequency and partially also higher price points that those customers are buying. And so we've adjusted our IT program and other things to really focus on that customer side of that demand side. So also, I would say the 2 sides of the equation that we're focused on, our operations are very efficient and and work well, and we don't have significant issues. There's always room for improvement, but it's not a substantial issue. And our take is also stable and reliable and not a significant issue in this turnaround.

And then the last point I'll add to this is the B2B business where we are serving brands to support sales on the dot-com, and that is something that we will continue to focus on and try to also broaden the customer or the partner base to have a larger number of meaningful partners that can also then leverage the spare capacity we have in the fulfillment centers in the region in a better way. So while we want to turn around the top line of the B2C business, getting a bit more volume on the partners on the B2B business can help with the overall financial profile. And so at this point, we don't have any intention of divestment or anything like that. As always, in business, we will always reconsider and look at options that present themselves, but fundamentally, we want to improve the core dynamics of the business, and we are confident that we can do that with the team in place, the learnings over the years and also our track record of growing the business in ANZ and LatAm after some challenging periods in those markets post COVID as well. So I hope that gives you a bit of context of where we're going here.

This is super helpful. If there's still room for one question, I would like to ask you, in terms of seasonality we -- or I know that Q3 is usually weaker compared to the high peak quarters to Ramadan or to the holiday season in Q4. But it was this Q3 a normalized weaker Q3, so to say, as usual? Or it was more pounced or even better? What did you see? What were the trends for the quarter?

Yes, that's a good question. So you're completely right on the seasonality, and I think one thing always to call out that the holiday period and Black Friday 11/11 are fixed in the calendar, although even there the day of the week that these events fall on, we see as usually a bit of an impact on how a year turns out or a simple trading period turns out. Obviously, on a Ramadan season, we have a change in the calendar every year. And so it moves earlier in the year, every year. So that seasonality we've obviously seen this year in particular, that the cutoff between Q1 and Q2 in Southeast Asia having an impact.

Coming back to Q3 in your question, we have had no abnormalities on a year-on-year basis or any hard or soft concept would be material. Yes, there's always some details around certain actions, certain events in the market when exactly did a certain campaign fall in the calendar, but big picture, I would say this is a fairly low quarter that we we've seen.

Maybe just thinking about your last answer to the strategy in Asia. You told us that the continuous focus is to target the core customer base, this loyal, high-value customer base. But we've seen that the, for example, the turnaround efforts, the customer numbers in LatAm and Australia and New Zealand have paid off with successful marketing campaigns. Can we expect as well a significant marketing effort to drive or to reconnect or to capture this or doing better with this core customer base? Or will it be more on the price side or the offer side?

Yes. Thank you. Great question, actually. So we definitely see an opportunity and a need to reinvest into our brands in South Asia. We have very high brand awareness. But I think we clearly need a refresh of what the brand stands for, for the customer. From a timing perspective, we only want to do that when we feel like we have all of our capabilities and our assortment lined up to exactly deliver that. So simply speaking, we're still going through clearing a lot of a stock it's probably not polite moment to go with a brand campaign that is focused on business, exclusivity, the best global brands, et cetera. So we need to bring that in balance. And that is definitely something that is on the horizon for 2026. And we have seen, in particular, with the [indiscernible] campaign in Australia that, that can really make both existing customers for [indiscernible] brands in a new and different way and also bringing back a lot of churn customers or bring new customers to the platform and certainly as a business that's now 12, 13 years old, 14 in some markets, we have had continuous need of reinvigorating the brand and articulating to customers of what the brand we stands for. And so this is on the cards for 2026. Don't expect a big one-off investment that goes materially beyond our existing marketing budgets. I saw, but we may have some quarters in which we put some extra marketing investment in and that may delay some profitability improvements by the business. .

And we'll now take the follow-up question from Anne Critchlow of Berenberg.

I've got about 5 questions, please, if that's all right. So just a follow-up on Southeast Asia for background understanding, do you target different products between the different country sites? So Singapore versus Indonesia, for example, or do you put everything on all of the sites and basically let the customers filter down themselves?

Yes. Thanks, Anne, that's a really good question. So this is part of the complexity of Southeast Asia because it is not fully up to us. So the principle we try to apply is all brands, all assortments across all markets. That's the ambition level. But then when you go into the next level of detail, we run into the brands very often having different setups. So a given brand may have a distributor in Indonesia, have a subsidiary in Philippines and have no presence in Malaysia. And so in Philippines, we may be able to happen trade on marketplace in Indonesia, we have the distributor trade on marketplace. But for Malaysia, we need to buy the stock. So these have complexities are a big driver of challenges in the region. If you order more positively, when you build those capabilities of actually operating across multiple geographies, multiple business models and multiple partners for the same brands that is a moat that is not that easy to try to replicate in the market. So we have the ambition of having all stores and all products available, but we run into the degree of restrictions and preferences of the brands that make it different.

And then from a consumer perspective, we obviously have different references. And even within the same brands, different products, different price points may resonate. So to give you an example, as you know, the big sports brands will be in our top brands, they may be contributing significantly to sales in all markets, but when you double-click into what products are selling, there may be slightly lower price points in Indonesia and in Philippines and higher price points, for example, Singapore, in terms of what the customer is actually buying, and we need to obviously reflect that in the assortment that we offer. So there's definitely a significant degree of complexity around that, which we think has some structural impact on all players around gross margins and inventory efficiency in the region, but we're not trying to use that as an exclusive. We definitely want to do better in how we manage our commercial activity. I hope that this clears some context.

It does. But just to be clear, in a particular country, for example, a brand may say that you mustn't show the customer's product for that brand. Is that correct? Or do you just put everything on all of the websites?

No, it depends on the relationship and the contractual agreement with the brand. So the brand will say, okay, if you're buying this from us, this is only for sale in Malaysia because in another country, we have a local distributor who has an exclusive right to that market. And so you need to work with that distributor in that market to have new products on the platform. So there are these restrictions, and we -- as you can imagine, we're always pushing against those or can trying to partner through kind of maximize sales for our brand partners across the region, and we will be much more comfortable taking inventory risk when we can settle the product across the market. On balance, the vast majority of our assortment is regional. But when you go into the nuances of what sells and the restrictions behind it and the business model of how it is implemented, it is not all the regional assortment.

Understood. That's really helpful. I've got a question about social media, but also now identic commerce. So from the 2 channels that, in theory, threaten online aggregators, but also 2 channels that you can work with. So I just wondered what your approach was here and where you think this is headed for the industry?

Yes, very exciting topic. I think we -- so one of the big benefits here is we've been at this for many years, and we've seen evolutions of both for the customers they are in terms of the platforms they're using, what type of engagement they have. You were obviously trying to be in sync with the customers. And so that has led us to be more active on TikTok, et cetera, et cetera. So in terms of the platforms, we're obviously agnostic, and we're going where the customers are and that's very important.

From an agentic perspective, this is emerging, and it's going to be very exciting and interesting. I think we are very well positioned given that we have a long history of making sure that our assortment, the brands we carry, the content that is on our platform is very visible historically on SEO with especially Google the same kind of applies in this new world. So obviously, we're learning, there are 2 things. We're -- it's a bit foggy and it's not clear where that lands. But I think we feel very, very comfortable that we can adopt this. And again, one benefit we have with our footprint is that by and large, a lot of these things play out first in other geographies. So if you think about the rollout of certain features in some of the global AI platforms. They usually start in the U.S. and then kind of roll out the board in some cases in China and then roll out into other geographies. And so we can get the insight of what the impacts are and how to work with it and then give an early adopter in our geography. So we feel pretty comfortable that on balance, this is upside for us and not down to it.

Really interesting. And I've got a question on tariffs, of course. And just an update on tariff impacts, if you would, either in the supply chain or in the consumer perspective.

Thanks, Anne. We've been consistent in talking about this in previous questions that we're not seeing anything of significance we haven't in the past, and there's nothing to note now across our relationships with our suppliers or customer sentiment in our region. So obviously, it's an ongoing dialogue with our suppliers, but there's nothing to note on nothing that's looking as wide concern.

So second to last question on the competitive environment in various regions, just wondering how that's trending with regard to, say, [indiscernible]. And also perhaps the growing importance of secondhand, how does that affect your markets? And then then any insight into consumer behavior and sentiment generally would be interesting.

So yes, Anne, I'll try to cover that. That's a very broad question. But I think -- so on [indiscernible] and the broader, let's say, low price on fast fashion side, there isn't really any significant new development. We've moved our assortment upwards quite substantially, and we're definitely seeing more the competition playing out between the different platforms being fashion specific or general merchandise that are offering those lower price point, largely unbranded products. So there's very, very intense competition in Brazil around this, also in Asia, obviously. So in that sense, nothing new for us, and we don't see any change in the impact to us from that side. Sorry, what was the second part of your question? .

Just if you could give an insight into consumer behavior generally ANZ versus LatAm, for example?

Yes. So ANZ consumer sentiment is reasonably okay. I think we see people focused on big campaigns and big events and maybe sometimes rolling back a little bit in between. So the promotional activity and the competitive intensity around that is quite high. But as you can see from the gross margin, we're able to manage that and very top position around our inventory. We know from some of our competition that they may have a bit more hang on the inventory side and then that obviously drives the pricing behavior. The big campaigns or seasonal sales is just underway at kind of [indiscernible] these days. So we'll see how that kicks out of over the 4, 6 weeks. But generally, I would say the consumer is there, but what knows there's going to be deals and is kind of looking for those deals, and I think that's fairly consistent. Obviously, we always try to push further on our exclusive product with our own brands and also exclusive third-party brands or lines from third-party brands and kind of differentiated that way our loyalty program. So we launched in the region, and that's very exciting, and we think this is going to be a driver of getting more of the wallet share from our higher value customers and really getting people who maybe currently are buying let's say, 4, 5 times a year to give us another 1, 2 or 3 purchases every year. So that's a big focus. So feel pretty good about that.

And then LatAm, I mean, some of the headline indicators recently have been more negative in terms of consumer sentiment. But then at the same time, when we look at the industry more broadly, we do see some growth. So it may not be clearest of pictures there and the reporting season for Q3 that gives us better visibility on some of the fashion players is underway right now. So I think we see that and maybe to comment on Colombia, that's has been in the news from a geopolitical perspective a lot. And certainly, that has a degree of influence on what's happening in the market, but we've been executing very well on that market. And I think as we note also enter Q2. Colombia is going better or in line with Brazil. So very pleased with that performance in particular.

Very helpful. And then the final question from me is just on fulfilled. If you could talk a bit about the margin structure? And how that basically benefits the gross margin? Because I think as many players fulfilled buyers largely logistics and really quite low margin. I'm just wondering how that works and also how it's progressing.

Thanks, Anne. So fulfilled buyers is part of our wider marketplace offering with our marketplace partners, so as you would imagine, we have a higher commission rate with those partners to actually be able to manage their inventory and delivery and fulfillment within our existing infrastructure. So where we see the benefit is obviously we are firstly utilizing some potential excess capacity within our fulfillment center we then obviously get many more benefits for our customer with regards to more seamless deliveries, especially if they're ordering maybe a retail product and marketplace product, actually, that's the pick packing delivered at the same time. There's also the efficiency with that with regards packaging.

With regard our sort of profile. So we're most advanced in our Southeast Asia region with regards to fulfilled by offering. It's now very much a growth engine in Australia. The implementation of our OWMS system at the back end of last year actually opened up and facilitated fulfilled buy to make it much more easy for our connect business and our from partners in Australia and want it on our pipeline in Latin America, it's relatively but again, a growth engine for '26 and beyond.

We have no further questions in queue. I'll now hand over for webcast questions.

So 2 questions from Dan Curtis on the webcast. First, [indiscernible] Brazil, CIDP tax had a big impact on their results as the [indiscernible] and learn exposures to that 10% tax on overseas payments?

Yes. I mean what I'd say is [indiscernible] has got quite different exposure to Netflix with regards to our mix of payments et cetera, is different compare something like the Netflix licensing where that licensing content from offshore. So it's not something that high on our radar, but we're super confident that all of our cross-border supplier payments are managed within existing intercompany and enhance pricing rules and obviously, we're compliant with all taxies.

The next question, how do you see an increase in referral traffic from customers via AI chat box? And if so, do those materially better than traditional SEO traffic?

Yes, that's a good question. And I think we've touched on that briefly earlier. It's still a very small share of our traffic. I think what is very important is that our ambition, especially for our core existing customers is that the starting point for engaging with expansion in our app. And we obviously have now early high app share across the group. And so we want people really to start from the app either because they get a notification from us, so they may get an e-mail from us that kind of keeps our interest or because the [indiscernible] will go to place is the app. And then obviously, within the app, we want to drive a better and better discovery journey, leveraging an eye and letting the customer engage in a somewhat similar but more relevant way than they would be on a generalist AI platform like chatGPT. So I think that's a focus area for us in particular.

Then when it comes to acquiring outside traffic and new customers, certainly, this channel will play an important role, and we do see that it is a high-end channel relative to some others. But I think it's very early to say. And I think we also can obviously tell at this point, what the types of customers are that are coming through this channel, generally, we would expect it to be early adopters probably a little bit more affluent than the typical customer, et cetera. So there will be some bias in that for data. So we're monitoring that fully.

Next we have questions on M&A to summarize, are we planning to pursue any external growth opportunities via AI and what are our debt financing plans?

Yes. So we're not looking at any acquisitions or anything, at least not of any meaningful size in the context of the group. So -- and that's not a open area for us. We're very focused on delivering, obviously, this year, profitable EBITDA and then continued improvement next year and improving cash flow situation as well in the balance sheet that we have. And I think we've been very clear around our financing that, obviously, we've managed the convertible liability very proactively over the last few years, given the change in circumstances for the group. And I think captured a very significant discount for our shareholders, and we will continue to manage all of our debt, including some of the smaller facilities we use for working capital bank guarantees and those types of things. And so there's no bigger plans here, but we always look at how we optimize our balance sheet and in particular, manage the seasonality in our business, which, as you all know, is quite strong with significant cash out in Q1 and significant cash in Q4. .

That is all the questions. Thank you all for joining today. If you have any further questions, please reach out to the Investor Relations team directly.