Zalando SE Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rocco Strauss - Arete Research Services LLP - Analyst : Two questions for me, please. First is, I mean we are seeing revenue growth at the likes of like Facebook, Instagram, Snapchat, et cetera, kind of like all now being driven rather by prices per ad unit than via impression growth. And with Zalando currently like reinvesting the savings that you're likely seeing from like lower return rates into marketing, to what extent are we seeing kind of like a new normal of marketing as a percentage of sales with a tighter market for impressions? And then secondly, on Connected Retail, I mean given that Zalando had waived commissions for partners in the last kind of like 12 months plus, while we are kind of like seeing Connected Retail already in GMV and the cost for the infrastructure obviously being captured by EBIT, could you elaborate on what this actually means in terms of like EBIT impact for the remainder of the year once commissions are no longer waived and maybe more broadly into '22 as well?

Question: Olivia Townsend - UBS Investment Bank, Research Division - Analyst : I have 2. The first one, I just wanted to clarify on the comments you made about normalizing GMV growth over the last few weeks. So does this mean that for Q3, you would expect GMV growth of about 25% year-on-year? That would be helpful. And if you're able to make any comments about adjusted EBIT, too, that would be great? And my second question is just on the growth differential between the DACH region and Rest of Europe. So I'm just wondering if you are able to sort of disaggregate the difference into higher partner program penetration, longer lockdowns, weather, et cetera, just sort of how we should think about the relative performance of the 2 regions in H2 and next year as well, please?

Question: Clement Genelot - Bryan Garnier & Co Ltd, Research Division - Analyst : I've got 2 questions from my side, if I may. The first one is on marketing spending. You mentioned increased marketing spending in Q2. Is it further related to your willingness to capture as much market share as possible? Or are you also observing the higher marketing costs? Let's say, higher marketing cost you had on campaign? In other words, is the [the platform] increasing right now? And my second question is on inflation. Are you currently facing any supply chain issue with your suppliers? And also, are the price increases likely in H2?

Question: Michael Benedict - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Just had a couple. Firstly, how should we be thinking about marketing investment in H2 in light of growth slowing somewhat? Should we be expecting the marketing ratio to actually normalize back to pre-pandemic levels? And then the second one, I wondered if you could give some color on trading by country or by region. I guess my question is, has growth normalized most in regions where restrictions have dropped completely? Or has it normalized most in regions where, for example, shops are open, but actually events and occasions are yet to restart?

Question: Anubhav Malhotra - Liberum Capital Limited, Research Division - Analyst : I just wanted to ask on the progress that you may have seen in the Pre-Owned category, which you have recently entered? And what kind of consumer interest you are seeing there? And then secondly, on the Beauty category, just in terms of your target mix long term between partner program and wholesale, would it be similar to what you target for the overall business of 50-50 or any different?

Question: Georgina Sarah Johanan - JPMorgan Chase & Co, Research Division - Analyst : I've got a few, please. The first one was just you referenced the working capital position in Q2, and I think with stock position being a bit higher, just to ensure availability given some of the capacity issue. Can you just talk a bit about that, whether you're actually seeing any gaps in availability or if it's more just sort of working hard to ensure the availability is maintained, please? The second question was just a follow-up with regards to what you're saying on seeing some inflation starting to come through in conversations with the brands. Would you -- from what you're hearing from talking to the brands, would you expect to see some of that being pushed through in higher prices for consumers? So are they talking about higher recommended retail prices already, please? And then thirdly, just a clarification question, where you mentioned that you expect the marketing in H2 to be sort of broadly in line with prior year and assume that you were talking about the ratio there rather than in absolute terms, please?

Question: Paul Rossington - HSBC, Research Division - Analyst : Just 1 question for me. Can you perhaps give more detail on the Q2 gross margin, the moving parts behind that impact, for example, of promotional activity?