Q2 2024 Global Fashion Group SA Earnings Call Transcript
Key Points
- Gross margin expanded to 45%, the strongest quarterly gross margin to date.
- Adjusted EBITDA margin increased by 6 percentage points due to cost and productivity initiatives.
- Breakeven normalized free cash flow achieved for Q2, demonstrating focus on profitability.
- App-centric strategy led to a 52% increase in app installations year over year.
- Successful cost reduction initiatives resulted in a EUR34 million cost reduction year over year.
- Net merchandise value (NMV) decreased by 12% year over year on a constant currency basis.
- Active customer base declined by 16.7% year over year.
- Order frequency saw a decline, now at 2.3 times.
- Revenue declined 13% on a constant currency basis in Q2.
- Significant competitive and discount-heavy market conditions in Australia and New Zealand impacted gross margin.
Good morning, everyone, and welcome to Global Fashion Group's Q2 2024 results presentation. I'm Christoph Barchewitz, CEO of GFG, and I'm joined today by our COO, Gunjan Soni; and our CFO, Helen Hickman. I will start with the highlights and then Gunjan and I will cover our regional results and key developments. Helen will then take us through the group results and outlook. After that, we'll open it up for Q&A.
In Q2, we continued to make important changes to our business as we navigated market demand challenge. The rate of our active customer decline has started to reduce compared to the past few quarters as a result of our customer expansion and engagement efforts. NMV has also decreased at a slower rate, reflecting the continued subdued demand environment.
However, our operational efficiency has had a positive impact. Gross margin expanded primarily due to stronger performance of our retail business, as you know, reduce the amount of discounting compared to this time last year.
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