Zalando SE ($ZAL)

Good morning. Welcome to Zalando's Annual Press Conference and Business Update. My name is Simon Thiel, and I'm heading Corporate Affairs. I wanted to say thank you for joining us today. We will be presenting our full year results 2025 and sharing our plans for the future, and we're delighted to have so many of you joining our broadcast today.

Good morning also from my side. My name is Patrick Kofler, and I'm heading the Investor Relations department. We have gathered the press, investors and analysts for today's event. It's a pleasure to have you all here.

We will start our conference with a prerecorded presentation by our co-CEOs, Robert Gentz and David Schroder. They will walk you through our progress as we're successfully executing our strategy. At 9:45 a.m. CET, following the presentation, we will open the virtual floor to a live Q&A session for our journalists with our co-CEOs, Robert and David and our new CFO, Anna Dimitrova.

For our investors and analysts, at 9:45 a.m. CET, our CFO, Anna Dimitrova, will walk you through the financial development of the last year and will discuss our outlook in more detail in a prerecorded financial deep dive presentation. After a short break, I'll be hosting a live Q&A session at 10:45 a.m. CET together with Robert, David and Anna. The Q&A system will open within the next few moments and you can begin. When you click on it, you can ask second ask Q&A via video. A recording of the co-CEO speech and the financial deep dive will be available later on the Investor Relations section of our website.

We now turn our attention to Zalando Live Studios, where we create inspiring content for our customers. David and Robert, the stage is yours.

A big hello from Berlin, and thank you for joining us today.

Good morning, and welcome, everyone.

We are very excited to share our 2025 achievements and walk you through our future ambitions and plans.

The last year has been a big one for Zalando. Crucially, we delivered on our strategy and our financial targets. We took massive strides to shape the future of our industry from expanding into new European markets to making the customer experience even better now with AI. We also fundamentally strengthened our business and long-term growth potential by successfully completing the strategic acquisition of ABOUT YOU. And finally, we were thrilled to have Anna Dimitrova as our new Chief Financial Officer. And with over 2 decades of international experience and a proven track record of driving real transformation, her strategic mindset is exactly what we need to help execute our vision. And as we look ahead, we're incredibly energized about the opportunities that this year brings for Zalando, for our customers and for all our valued partners.

Robert and I will now walk you through our strategic and financial achievements in 2025. We'll discuss the strong progress in both our B2C and B2B businesses and how we are successfully leveraging AI to further enlarge our opportunity and accelerate our progress. And last but not least, we will share our perspective on the tremendous value creation opportunity ahead of us. So Robert, let's get started.

For 17 years, we've built the European technology platform for fashion and lifestyle, connecting over 16 million customers with more than 7,000 global and local brands. And this platform is our absolute superpower. For our customers, we've created apps where discovering and buying from the favorite brands feel personal, inspiring and trustworthy. And because we have that deep connection with customers, we become essential to brands. And they partner with us not just to sell their products, but to tell their stories and use our tech to grow their entire business, both on Zalando and beyond. The European fashion market is a EUR 500 billion opportunity, yet only 30% of purchases are made online today. And with roughly 70% of shoppers still conducting most of their shopping in physical stores and with digital shopping now growing at a 6% CAGR a year, the potential for us is huge. So we are the clear #1 in Europe, the fashion and lifestyle center of the entire world. As the European technology platform for fashion and lifestyle, we are perfectly positioned to lead the shift and serve customers and partners in the best possible way. By simplifying a highly complex market and driving real innovation, we're unlocking new value and growth for everyone. So our business across B2C and B2B is powered by a shared data and infrastructure engine supercharged by AI. For B2C, this engine powers our multiple consumer apps designed to inspire lifestyle shopping and keep customers deeply engaged. And for B2B, the same engine serves as our operating system, enabling the e-commerce success of our partners by sharing our sophisticated infrastructure from software to logistics and connecting brands directly with customers. And this engine gets better every day, every second as more and more people use our apps and more and more brands get deeply involved with our ecosystem. And more scale means more data and more data means our solutions just keep getting better. And that makes us unique and so excited about our future. And I will discuss several real-world examples of how we leverage our huge data pool in the next section.

Over the past 17 years, we've built 4 unique platform capabilities that power both our B2C and our B2B businesses. First, our brand network. We've created an unparalleled brand network of more than 7,000 global and European brands with deep insights into their product development pipelines and supply chains. This provides us with unique and detailed data around assortment, content and products. Second, our logistics infrastructure. We've built Europe's leading fashion fulfillment network with 14 locations serving 29 European markets, enabling a fast, reliable, convenient and highly localized experience for customers while ensuring a high level of efficiency. Third, our tech platform. We have attracted and grown an incredible team of around 3,000 tech specialists, allowing us to build a proprietary, highly scalable tech stack, which fuels our growth, drives our efficiency and accelerates our innovation. Fourth, our payment platform. We've built a powerful in-house payments platform, processing more than EUR 34 billion in transactions volume for customers and partners annually. They're off more than 60% leveraging our buy now pay later solutions. No one else has that set of capabilities. They form the core of our data and infrastructure platform, creating a lasting competitive advantage. Since the launch of our updated strategy in March 2024, we've used this powerful engine to successfully execute on our strategy. On our B2C journey, we've focused on deepening customer engagement and inspiration. We've upgraded our loyalty program and launched an AI-powered discovery Feed. And we've successfully acquired ABOUT YOU, so that more than 60 million customers now discover and shop with us across 3 distinct apps. In B2B, we have significantly scaled our operating system by adding 12 new markets and 8 new channels. We've built advanced fulfillment features and are forming deep enterprise partnerships with leaders in retail like NEXT. The addition of the digital commerce platform scale further expands our ZEOS offering, enabling us to support our enterprise partners, not just with their marketplace business, but also with their own D2C business. Now let's turn to our financials. Fueled by our strategy and the acquisition of ABOUT YOU, we significantly accelerated our financial performance in 2025. At the group level, we delivered strong double-digit growth with revenue up nearly 17% and adjusted EBIT climbing to EUR 591 million. In our B2C segment, Zalando and ABOUT YOU continued to grow, reaching over EUR 17.5 billion in GMV and over EUR 530 million in adjusted EBIT. In B2B, we strongly benefited from ZEOS fulfillment and the inclusion of scale. We recorded revenues of over EUR 1 billion, a 14.6% increase on the previous year and more than doubled our adjusted EBIT. Overall, the strong set of results demonstrates the strength of our business model. and marks another important step forward towards delivering our midterm financial targets with further acceleration expected this year. As part of our strategy, we also aim to enable a more sustainable fashion and lifestyle industry at scale and have set ourselves a clear ambition. We want to get to net zero in our own operations and private labels by 2040 and across our entire value chain by 2050. In 2025, we reached important near-term milestones. We've reduced the absolute emissions of our own operations by 81%. We've also reduced the emission intensity from private labels by 37%. While this is good progress, more needs to be achieved by us and the industry. That's why we will stay focused on developing and scaling solutions that not only support businesses across the industry, but also drive positive change. After highlighting our achievements in 2025, it is now time to look ahead and talk about a topic that is on everyone's mind at the moment, AI. I cannot describe how incredibly excited I am personally about how AI allows us to shape the future of Zalando and the future of the entire industry. For us at Zalando, AI is more than a tool. It's a powerful catalyst for innovation, driving growth and efficiency. And we've already proven that we successfully apply it for more than a decade. But before we get into the details, let's now look at a short video to highlight some of the many exciting things we are doing in tech and AI. [Presentation]

Zalando was founded in 2008, we've always had one clear principle. What you cannot measure does not exist. It was tough and it was debated, but it always made sure we ground our business decisions in facts and in data. Data and then machine learning and AI have been at the core of how we create solutions and value from day 1. And we are proud of all the great products and services our teams have built by applying AI to solve problems for our customers and partners. You can find some of the great examples represented on this slide, but rest assured, there are many more. Years of investment into data, machine learning and AI and the talent to build and improve the models have allowed us to build a strong foundation. And that's why with the rise of Gen AI and AI agents, we are even more excited about building on this great foundation to further enlarge our opportunity and to accelerate our progress. Our success on this journey will be fueled by our scale of distribution with customers and partners and our unique and deep data foundation. Many companies out there state that they have data. But I can tell you that we are one of the very few ones, especially if you look here in Europe, that actually have unique and deep data at scale. And most importantly, we've built a data flywheel so that our data advantage grows and gets more valuable over time. Over the life of the company, we've collected an unparalleled amount of data, including customer behavior, assortment, size and fit, rich product content and supply chain data. That is unique data only Zalando has. And scale clearly matters. With more than 60 million customers and more than 7,000 brands and a strong bench of in-house AI talent, we can turn successful pilots into platform-wide services and continuously improve models and applications as we learn from millions of daily interactions. Every time we enrich a customer experience or a partner service with AI, we generate more signals that grow our data pool and enable us to improve our models further. Let me highlight 2 specific examples. First, in size and fit. We help customers to find the right size the very first time. With real body measurements of over 1 million customers, we can provide better size advice than anyone else in the industry. And every single week, more than 20,000 customers scan and submit their body measurements to us. And second, let's take a look at logistics. For every customer order, we use live supply chain data and a virtual model of our network to optimize for fast, reliable delivery at affordable fulfillment cost. And every single year, we generate fulfillment data from almost 300 million customer orders, allowing us to optimize delivery down to postal code level across 29 markets in Europe. These 2 examples demonstrate AI deepens our competitive advantages as we are embedding it across Zalando's end-to-end value chain, driving both efficiency and growth across our B2C and B2B business. Now back to you, Robert, to dive deeper into some of our most exciting AI applications and use cases, starting with a focus on efficiency.

The rates of change that we see across our business that are possible through AI are just incredible. So ideas that seemed impossible a few years ago, all of a sudden become not only imaginable, but a reality. And we see this all across our business now, how it changes the game with what can be done through efficiency and productivity. And here are some interesting examples across our supply chain to illustrate what we see here. First, let's start in digital experience. So as of today, 90% of our product marketing content, which you see in our apps is purely made by AI, like the promotion material, the teasers, the product campaigns. And 1 year ago, this was close to 0. All of it was still shot with cameras and Photoshop, et cetera. This now allows us to move much quicker with campaigns, a process that used to take us 6 weeks from idea to life is now done in days. And on top, we could increase the campaign content by 70% without increasing our overall content investments. So you can really see how this now moves to a real-time and personal campaign world in the future. So some of you might already see your weekly edit in your feet on Zalando, where we leverage generative AI to recommend your products that we hope you might love every week. So it's pretty impressive. So second, moving on to the physical experience. It's an incredibly complex problem to precisely forecast the delivery time of an order for the customer as an order needs to be consolidated across like different logistics centers and is dependent on carriers on traffic, et cetera. But it really is what customers appreciate. And in just 1 year, through the advancement of the AI models, we have been able to improve the precision of our real-time delivery promises by 22 percentage points. So 22 percentage points is huge. Thirdly, of course, our team of around 3,000 tech specialists, engineers and scientists are using AI coding tools. And even in our complex environment, we already see increases of over 20% more code changes. Increasingly, improving AI tools mean we are moving faster than ever. The impact is ding. There are places in our business where road maps that once took years are shrinking into quarters and quarters into weeks. These examples show how AI is changing the efficiency and productivity gain across everything that we do. And these gains are very exciting for us. And we know that in some cases, our advantage is temporary. Our commitment is we will always be the fastest, and we will always be the first. The other big focus of ours is how we invest in AI for growth. So we're moving very fast. So let me ground this in reality. There are 3 concrete examples of how we are using our massive data advantage. Let's start with the basics, searching for fashion and lifestyle items. We developed our own foundational models over the last years that just focus on understanding and matching the right products to the customers and understanding context, product characteristics, g details and learning through our feedback loops with customers. So why did we do this? Because fashion is incredibly fragmented. And combine that with the fact that personal taste is intensely subjective and context dependent and matchmaking becomes a highly complex challenge. But one person finds it horable, another finds horrible. And the advancements we made through our models over the last years show truly impressive results. So for example, 13% more items are being added to bags and wishlist as a result of increasing precision in matchmaking. And they progress by the day, driven by our own unique data sets and focus on fashion and lifestyle. Another exciting example is the size and fit challenge in fashion, the holy grail of fashion e-commerce. We're benefiting from the unique data sets we have grown and keep on growing every day, a knowledge graph of billions of items ordered over the last 10 years and size validated by our customers across a large part of the European population. And on top of that, we have 1 million people who enter body measurements in their size profile and 20,000 more people follow every single week. And based on these amazing data sets, we created our own AI models to recommend or visualize the right sizes for customers. And already now, these solutions reduced size-related returns by more than 8% as they help customers to pick the right sizes in advance. And these models are getting better every day. As a last example, let's talk about our AI-driven Zalando Assistant. So what started as a conversational helper in the Zalando app is now turning into a true companion as we add more and more capabilities into it. So we recently launched shoppability, allowing customers to add to their bag, find items that complement the items in their bag and go to the checkout from within the assistant. We're currently testing new personalization and longer memory, so customers would experience an assistant that is more capable of learning their preference and making great recommendations. We now already have 6 million people who are engaging with it, so 4x more than last year. So why are we so excited? Because it creates a completely new conversational way to shop with Zalando. With the customer's permission, the assistant will soon be able to tap into their purchase history, into the size profile and unique style preferences. It will evolve into a true personal lifestyle companion capable of shopping on their behalf within the Zalando app. In addition, we have partnered with one of the most ambitious AI labs in Europe, Q2 under the leadership of Peter Sale. And together with Q2, we are thrilled to work on the frontier of where fashion and lifestyle needs AI to make a lifestyle agent a reality. So a lot of exciting things are happening. AI is not only exciting inside of our platform. There are also a lot of new opportunities that arise beyond that we are very keen on driving. So particularly the agentic commerce channel. The emerging opportunity for customers to purchase directly through AI chatbot, while it's not yet a reality in Europe today, it will become a reality soon. And there are some estimates that this might become 15% of the entire e-commerce market by 2030. So it's an exciting opportunity for us as we believe it will help to convert more of the 70% offline sales into online as it unlocks a new set of customer groups. So we will be the best at this channel and are pioneering and co-shaping the agentic commerce for Europe. So Zalando is one of the only 2 European companies that are part of the initial launch partners for Google's Universal Commerce protocol, which will basically set the standard for Argentic commerce here in Europe. So being the pioneer ensures that we are the one that are first to learn and scale. And this is the best position to be in, and we're truly excited about what's here to come. So let me summarize a few key takeaways for you. First, AI is our catalyst to build the most leading end-to-end experience in fashion and lifestyle. And we use AI across the entire fashion and lifestyle journey from discovery to purchase to create a highly efficient and personalized experience. So we're eliminating all problems like sizing and discovery by using and building smart AI agents in commerce. So our massive scale in B2C with both consumers and brands gives us a constantly growing data pool. So crucially, 70% of our traffic is organic, which is the engine that fuels our AI data and allows us to deliver cutting-edge solutions back to customers and brands. Our decades of buildup trust and high satisfaction rates ensure that customers trust us with the data and with the AI solutions that we're rapidly building and scaling. Second, the agentic commerce is the massive exciting opportunity of the future. So it is expected to hit 15% of online retail by 2030, and we're uniquely positioned to dominate this channel in Europe, already being the #1 referred fashion platform through chatbots today. So our work on the Lifestyle Assistant ensures we are ready for a world where our agents interact with others. We will shape European agentic commerce, and that will attract new customer groups for our platform. Thirdly, there are also great agentic opportunities in B2B. we said it many times, as it's so true. Europe is beautifully complex. And as a consequence, the European fashion sector is highly inefficient. And we harness that with our B2B offerings. For brands directly participating in agentic commerce offerings, we provide with ZEOS the multichannel solution that unlocks superior unit economics for them, giving a 25% cost advantage on average. And for chatbot AI seeking agentic Commerce, our B2B offerings enable a technical and logistical consolidation. And this reduces coordination efforts, gain speed and increases customer satisfaction. So we're positioned like Spider in the web in B2B for the agentic commerce channel. So looking at all these developments, we're truly excited about the future as we're unlocking the power of AI on our platform and beyond. Okay. So let's move on and focus on our multi-app approach in B2C. So our North across Zalando B2C is to play a big role in people's everyday life. So ideally, creating a touch point every day. As we all ask ourselves each morning, what do I wear? And our consumer apps have inspirations and answers for you. So by now, we have a team of 3 large consumer apps, Zalando, Zalando Lounge and ABOUT YOU. And they enable us to play a broad scope of categories and experiences in fashion and lifestyle. They have different value propositions for customers yet work together as a team. The big Zalando being brand-led, ABOUT YOU and Lounge as a smaller but faster-growing teammates being trend and dealed. And together, this team of apps covers more than 60 million active customers across Europe, and each one engages its user base in a unique manner through content, gamification or daily deals. And while our apps have slightly different value propositions, all of our apps use the same foundational backbone, the same data and infrastructure and the e-commerce capabilities across logistics and payment. So what we strategically care about across our team of apps in B2C is pretty simple. We try to reach as many customers as possible, so our platform distribution. We care that they come as often as possible of frequency and that they spend the highest share possible of their lifestyle spending through our platform, our depth. And our team of apps drives jointly to increase our platform's overall distribution frequency and depth. So looking into our distribution, we actually see that each of our apps has a significant share of unique customers. And increasingly, in our new customer acquisition, there's even less overlap between them. So each one of our apps has an important role to increase our overall reach as a platform. And when we look at our overall potential in Europe, there's still massive room to grow. And one we consider here is the population penetration. So what's the share of a country's population who are an active customer of our platform. In our core markets like the Nordics, Benelux and DACH market, we've already achieved a population penetration of more than 20%. So especially the more recent expansion in Central and Eastern Europe and the Southwest Europe still offer a lot of room for catch-up and scaling. And with our team of B2C apps, we see that we can more efficiently now leverage the app, which sees the most efficient path to further increase our distribution. So a central engine to drive the active customer base at our core at Zalando continues to be the loyalty program Plus. And throughout 2025, we have pushed the cross-country rollout and take-up of the program. And as a result, we now have more than 16.8 million members of our loyalty program, and they have accounted for nearly half of Zalando's GMV in Q4. And I think that's a pretty impressive figure only 18 months after launch. So Plus effectively drives order frequency of customers through its mechanics. We've seen a steady incremental uplift in average order frequency from Plus members every single quarter compared to its control group. So we're very excited about the compounding effect that the loyalty program will have on our customer base going forward as we continue to grow it and optimize the mechanics. Moving on to talk about frequency. And when we talk about frequency of usage of our platform, we don't only mean the frequency of orders. We as well mean the frequency of usage of engagement. So every single touch point with one of our apps is very valuable to us. So it's an opportunity to engage, to learn about preferences and as well an opportunity to market products and services. That's why next to our customer metrics, we increasingly started to drive the usage metrics of our platform. In our core app Zalando, the Feed and its underlying content platform is the major building block to increase the frequency of usage. And we've seen strong user adoption as evidenced by growth in critical engagement areas. So we launched at scale. Since the full launch in January, more than 25 million unique users have interacted with the Feed. And this is driving frequency of use. We now engage and entertain an audience of more than 9 million users on a weekly basis. And we're seeing early signs of this positioning Zalando as a destination for discovery with 5 million users engaging with the Feed daily. So this has led to a significant increase in engagement frequency already. And we're further elevating our content programming strategy to bring our world of inspiration entertainment to life. And with strong brand partner adoption and the scale we've unlocked through generative AI, we are excited to scale this to our entire user base in 2026. As we talk about how to drive up the frequency, it's a good moment to report on the advertising monetization of our platform. Our Retail Media business, combining Zalando and ABOUT YOU grew much faster in 2025. The growth rate has jumped from 12% in '24 to an impressive 42% in '25, mainly driven by Zalando Marketing Services. Our Retail Media revenues are now 1.8% of GMV. And this acceleration comes from a smart strategic move. We shifted from just focusing on transactions to building a deeper, more engaging ecosystem. The key growth drivers were our self-service platform investments, more efficient campaign management and data access and using AI to optimize ad performance. And this hard work is paying off with a higher growth rate in '25. So looking ahead, our new feed and content platform is a massive opportunity. It lets us introduce innovative audience-based full funnel advertising formats for brands. The Feed is perfect for targeting the right customer and using rich content like video to tell a compelling brand story. And the best part, the entire experience is seamlessly shoppable on Zalando, covering the full journey from brand building awareness to making the purchase. And this potential is truly exciting and unique in the market, as shown by our early success here with Jordan. With our team of consumer apps, we cover over EUR 300 GMV now per customer in yearly spend. And the biggest overall growth rates, and this is quite strategically important to us, we see in the lifestyle categories, so beyond fashion, like sports, family, beauty or designer. Here, we saw last year 13% growth of the group's GMV on a like-for-like basis. And this is important to us as we continuously move beyond being only the fashion destination and find our way into all the other segments of consumer spending. And particularly sports is a very exciting opportunity for us as it's a new way to engage consumers and move the perception of platform beyond fashion. To see what this looks like in action, here is a glimpse into how we're energizing the sports experience on our platform. [Presentation]

17 years of strong brand partnerships, combined with technological advancements have been a very crucial driver of our shared success. We started in 2019 strategically shifting our model from that of a retailer to retail enabler, aiming to accelerate our platform strategy. And this involves offering partner technology, content services and infrastructure to help them grow their brands. And we've achieved in 2025, a 32% share of partner business of our overall B2C GMV. Our ambition is to increase the platform share of our B2C business to 40% and beyond by 2028. And we're committed to this ambition because we see that brands achieve superior dynamics when they fully utilize our comprehensive suite of platform services. So furthermore, these strong brand relationships can be leveraged beyond our B2C platform, extending to collaborations outside our own apps through our B2B offerings. Over to David.

So let's now turn to B2B. Our B2B operating system is designed with a single purpose in mind, to allow merchants to focus on building their brand and digital business while we handle the complexity of their back end by leveraging our data and infrastructure engine. From physical logistics and mission-critical software to value-added services, we provide all the key components a merchant needs to run a successful online business. ZEOS provides the infrastructure for smart logistics, enabling a seamless and highly localized delivery and return experience across Europe, regardless of whether merchants are selling on Zalando, theirbrand.com or other channels. SCAYLE offers a high-performance shop and marketplace software built to handle the rigorous demands of enterprise scale direct-to-consumer retail. Tradebyte serves as the integration and trading engine, connecting brands to more than 90 marketplaces around the world through one single integration. Merchants can start with a single product or adopt the fully integrated stack, always benefiting from the proven data and infrastructure engine, the best-in-class experiences as well as the constant innovation of Zalando. So how do we leverage our B2B strategy to further accelerate the growth of our EUR 1 billion B2B business? First, we want to serve as many merchants as possible. We already serve more than 1,200 merchants with our B2B services and aim to leverage our brand network to bring more global brands into our ecosystem. Second, we unlock digital business growth for these merchants, both on and off the Zalando platform. We currently already enable around EUR 11 billion in GMV. There are 35% outside of the Zalando platform. And third, we expand our take rate by cross and upselling our B2B services across logistics, software and services with the potential to reach a total take rate of up to 40% once the merchant leverages our full operating system. We are building our operating system to serve merchants across a vast range of verticals and markets, creating a multibillion euro growth opportunity for Zalando. Our current focus is clear. We aim to become the preferred partner for enterprise-level fashion and lifestyle brands and retailers across Europe. However, the modularity of our operating system and the flexibility of our software stack allow us to capture exciting growth opportunities that extend beyond these segments. First, we are moving beyond Europe. Our technology is no longer bound by European borders as evidenced by the new global partnership between SCAYLE and Levi's, which I will talk more about in a minute. Second, we are expanding into general merchandise. Partners like Netto demonstrate that our high-performance software is just as capable for general merchandise retail as it is for fashion. And finally, we are opening up our stack for the small- and medium-sized business segment. Through integrations with platforms like Shopify, we are making Zalando's enterprise-grade backbone accessible to the next generation of entrepreneurs. To see the tremendous real-world business impact of our operating system, let's take a look at our landmark partnership with NEXT, one of the U.K.'s leading omnichannel retailers. As a strategic partner with GBP 7 billion in revenue, NEXT is utilizing our Continental European infrastructure to drive the international expansion. By consolidating NEXT Continental European inventory in our shared logistics backbone and serving customer orders across next.com, Zalando and other marketplaces from one single inventory pool, we've unlocked massive growth and efficiency in the international business. The results speak for themselves. NEXT has achieved a 33% increase in international online sales while simultaneously seeing a 6.5% reduction in fulfillment costs. We are looking forward to bringing these exciting benefits to more merchants in the coming years. But B2B is not just a logistics story. It is also a software play. And that is why we are incredibly proud to announce an extended strategic partnership with Levi's today, representing a defining milestone in our journey towards becoming a global B2B solution provider. Levi's has selected SCAYLE to power their global direct-to-consumer business across Europe and North America, making them our first enterprise partner for the North American market. Levi's is an iconic global brand, founded and headquartered in the U.S. Their decision to trust our software for their global direct-to-consumer business is the ultimate validation of our tech stack borderless capability. For us, this opens up an exciting new growth opportunity for our B2B software business as the U.S. is undoubtedly the largest software market in the world. But that's enough from us now. Let's hear it directly from Levi's.

Over the past several years, we've been rewiring Levi's to operate as a best-in-class direct-to-consumer first retailer, and that starts with having a deep understanding of exactly how and where our fans want to engage with us. And so this partnership with scale and with Zalando will help us deliver for our fans and centers around 3 core areas. First, we need a trusted partner that combines best-in-class technology with a deep understanding of fashion and its unique nuances in fit, style and storytelling. And this technology is best suited to help us showcase and elevate a Dan lifestyle offering to our global fans. Second, in this environment, speed and innovation are critical to our success. And with scale, we can build a modern e-com infrastructure that integrates advanced AI to deliver a seamless and differentiated fan experience across our global footprint. And lastly, this partnership builds on our long-standing partnership with Zalando, which has been going very well. And so by combining our iconic brand heritage with SCAYLE's cutting-edge e-commerce technology, we're entering a collaboration where we believe we can create a differentiated brand experience that only Levi's can deliver.

Following these detailed insights into our B2C and B2B businesses, let's now move on to our financial outlook. Our financial performance in 2026 and beyond will be fueled by our scalable engine, a shared data and infrastructure platform. This platform with data at its core foundation supports both our B2C and B2B operations. Crucially, AI is the catalyst that supercharges this powerful engine. And you can clearly see this reflected in our financial guidance. We also want to highlight that while the world around us remains volatile, Zalando's engine has never been more finely tuned. We aren't just navigating the change, we are all in to win. In 2026, we will focus on accelerating our financial performance and investing in future growth opportunities in line with our midterm guidance. For the 2026 fiscal year, we expect GMV and revenue growth of 12% to 17% year-over-year. We expect to achieve this growth through a combination of 3 factors: first, the full year inclusion of ABOUT YOU; second, through sustained growth of our active customer base and an increased share of wallet in B2C; and third, through further scaling of our B2B logistics and software businesses. Furthermore, we aim to significantly increase adjusted EBIT to a level between EUR 660 million and EUR 740 million. This includes EUR 40 million worth of synergies in 2026 from the ABOUT YOU transaction and further efficiencies across our OpEx lines. CapEx is expected in the range of EUR 240 million to EUR 300 million. Net working capital will remain in negative territory. Now let me talk about our midterm targets for 2028, which we first shared with you back in 2024. We are on track and fully committed to deliver against these targets. Following our acquisition of ABOUT YOU, we are hereby reiterating and translating our targets into a midterm guidance for the combined group to match our reporting. The expected CAGR 2023 to 2028 for both GMV and revenue based on the reported figures is projected to be in the range of 8% to 13%. We continue to target an adjusted EBIT margin in the range of 6% to 8% in 2028, and we will deliver strong free cash flow throughout the period. Since our strategy update in 2024, we've consistently delivered every single year. In 2026, we are taking another big step towards our midterm targets. We have a clear plan, and we are delivering on that plan. That's why today is exactly the right time to announce this capital allocation framework. This framework has 3 building blocks. First, we will maintain a strong balance sheet with robust liquidity equivalent to 10% of our last 12-month revenues to ensure operational flexibility, guarantee resilience and cover for seasonality. Second, we will continue to prioritize organic investment to deliver on our strategic ambitions. This may be complemented with selective M&A if our strict ROI hurdles are met. Third, we will return excess cash through share buybacks on an opportunistic basis and only when it maximizes value to shareholders. And to put this framework into action, we announced a share buyback program of up to EUR 300 million today. Looking ahead, we remain laser-focused on long-term value creation, and that's why I hand it back to Robert now to talk about the huge opportunity ahead.

Let me add a couple of points about the long-term opportunity. We're absolutely confident to cover a larger than 15% share of the EUR 500 billion fashion market of Europe. The digital transition to higher online share is in full swing again, and we are perfectly positioned with our interplay of B2C and B2B. In B2C, we capture with our own team of B2C apps. And in B2B, we enable brands on all other channels that might emerge. And we're more confident than ever before to reach our long-term target of 10% to 13%. Why? Because, one, now we see that the 6% to 8% margin target in 2028 is well within reach. We are controlling our costs very disciplined, and the platform transition is progressing very well. And second, AI is not only a catalyst for unique growth opportunities, but as well for great efficiency gains. And as a company with unique data, long-standing experience in AI and around 3,000 tech specialists, we will always have a lead against others in our industry in terms of productivity and efficiency. So we're closer than ever before to reach our long-term target of 10% to 13% margin. So let's close this presentation with the key takeaways of today. So firstly, we accelerate our strategy execution. We delivered on our 2025 financial commitments, and we are on track with our 2028 targets, yielding significant cash generation.

And secondly, we build a unique data and infrastructure engine powering our B2C and B2B business and continue to develop our AI capabilities to unlock even more value for customers, for partners and for our business.

And last but not least, we remain laser-focused on long-term value creation and continue to invest into the immense opportunities ahead of us based on our capital allocation framework.

Good morning, everyone. Great to meet you all today. I'm Anna Dimitrova, and I'm thrilled to have joined as CFO of Zalando at the start of this year. I have spent the last 2 decades in the telecom sector, where my focus was navigating teams through periods of major strategic and operational transformation. Throughout my career as a CFO, I have prioritized an open and transparent dialogue with the financial community, and I'm truly looking forward to building that relationship with all of you. Okay. Let's get started. We will begin with a look back at 2025 before turning our attention to 2026 and beyond. Our performance in 2025 was strong. We successfully executed on our strategy, and we delivered growth and profitability at the high end of the 2025 guidance. Our focus on execution continues to deliver strong results. This shows our ability to capture market share even in a market environment characterized by geopolitical instability and economic volatility. And on top of that, we have made exceptional progress in capturing synergies from the ABOUT YOU acquisition, which we successfully closed in July 2025. We exceeded our 2025 synergy targets and delivered EUR 10 million, which on a full year basis equals 20% of our EUR 100 million run rate. We now expect to realize the full EUR 100 million in synergies in 2028, a year early. On the back of this strong performance, we are announcing today the implementation of a capital allocation framework. We ended the year with strong cash position, which gives us choices in terms of shareholder value creation. At the same time, we're investing in our operations to drive future growth and margin expansion. Specifically, we are focused on capturing the 70% of the market that still shops offline through technologies like agentic commerce. Simultaneously, we remain committed to a disciplined investment profile. As a result, we are now reducing our CapEx to revenue ratio from circa 3% of revenues to approximately 2% to 2028. We can do this by investing where it matters, and we will invest proportionally less in our logistic footprint and more in technology and AI. We will use some of the cash we have generated to buy back shares and are announcing a share buyback program of up to EUR 300 million, and we will be canceling all of the shares required to reduce the shares outstanding. This shows our commitment to returning excess capital and on our belief that our shares are currently trading below their intrinsic value. In summary, the business is growing, profits are increasing and our capital allocation is laser-focused on long-term value creation. The strong performance of 2025 provides a solid basis for this. Overall, GMV, revenue and adjusted EBIT all improved significantly in 2025. And in doing so, we are reaching another milestone towards our midterm outlook. The reported increases are driven by solid underlying growth in Zalando and the inclusion of ABOUT YOU from mid-July onwards. On a pro forma basis, as of 11th of July, assuming ABOUT YOU you had been part of the group in the prior year period, we saw healthy growth of 6.8% in GMV and 6.9% in revenue. This shows accelerated growth from Zalando on a stand-alone basis compared to the year 2024 with 4.6% growth in GMV and 4.2% in revenues. I will provide more detail on the performance of ABOUT YOU in a later slide. In summary, this growth reflects our strategy of combining organic growth with selective strategic M&A, and we were successful in turning the overall growth into higher profits. Adjusted EBIT grew 15.6%, reaching EUR 591 million for the year. The Zalando stand-alone adjusted EBIT margin improved year-on-year from 4.8% to 5.3%. And for the first time, ABOUT YOU was breakeven for the reported period after including the EUR 10 million in initial synergy capture. Now let's shift our attention to B2C. We are outpacing the growth rate of the European e-commerce fashion segment. And this performance was supported by growth in both the retail and the partner businesses at Zalando and ABOUT YOU. Putting the market lens on. In 2025, the group grew in all our markets, and we expanded our footprint further by launching Zalando in Portugal and Greece, putting the categories lens on. The growth was fueled by lounge and our lifestyle categories, sports, kids and family and beauty. All of these grew above group average and above the online fashion market growth. Putting the customer lens on, we increased the number of Zalando Plus customers in Q4 by 25% to over 16 million across 17 markets. And this is a very positive development because Zalando Plus customers order more and spend more every single quarter compared to non-Plus customers. Let me turn to our partner business, and I'm pleased to see the partner business growing faster than the retail business. This highlights the continued strong commitment of partners to our platform. While there was strong growth in absolute terms, on a relative basis, the share of partner business was 32.1% due to the lower share of ABOUT YOU partner business. The Zalando partner business actually increased to 34.5% with strong progress of 1.7 percentage points in the last quarter, and this is a good tailwind for our ambition in 2026. Going forward, ABOUT YOU partner share will expand as well. We also saw strong growth in high-margin Retail Media business. Retail Media revenue as a percentage of B2C GMV rose to 1.8%, a 0.4 percentage point increase. In short, our B2C engine is expanding in size and diversifying its revenue mix, thanks to the strong growth of the non-retail business. In terms of customer traction, we aren't just reaching more people. We are becoming a more central part of their daily shopping habits and increasing our share of wallet. First of all, we increased our scale significantly through the acquisition of ABOUT YOU. In 2025, 62 million people across Europe ordered at least Zalando or ABOUT YOU package. This is 15% of the European population. At Zalando, we attracted more customers to our brand-led approach. And at ABOUT YOU, we attracted more customers by being trend-led. And approximately 6 million customers currently use both Zalando and ABOUT YOU. The high share of unique customers on both platforms supports our multi-app approach. We are going to leverage the multi-app approach to drive growth and to cover an even larger share of the European market. Beyond growth in absolute numbers, we also increased our share of wallet with our customers. The average order per active customer remained roughly stable at EUR 4.8. But because the size of the basket increased, customers increased their spending with us. The average basket size increased by 3% to EUR 62.8 driven by a higher value per item, which is a result of higher quality orders, but also a reduction in cancellations and lower return rates. This led to GMV per active customer of around EUR 303, which is a 2.3% higher than last year. The success of our strategy is evident. One, our customers are spending more; two, with ABOUT YOU, we can tap into different customer segments and drive growth; and three, customers that utilize both platforms demonstrate even greater growth and higher spending power. I will give you some more insights into our customer base with the cohort analysis. Overall, our customer base has become larger, more loyal and is characterized by not just higher spending, but also higher profitability. We can see the strength of our customer base in 3 KPIs. First, we have been very successful in acquiring new customers. This resulted in a year-on-year increase in spend of our new customer cohort. In fact, our new customer cohort generated significantly more GMV in 2025 versus 2024. Second, our focus on profitable growth continues to be reflected in the spending dynamics of our older customer cohorts. Third, as you can see, our focus on driving customer lifetime value shown in profit contribution per customer is paying off nicely with particular focus on younger cohorts. Thanks to this, we have further increased the profit contribution per customer over time. This is true for Zalando and about your cohorts. The improvement on all of these KPIs is the result of various initiatives like implementing cross-selling activities and active return management across markets to improve our economics and our focus on driving productivity and logistics. The overall top line growth, stronger partner engagement and improved customer metrics also translated into solid B2C profit growth. Starting with gross profit. Gross profit increased by 13.6% to EUR 4.8 billion with 42.3% gross margin. This is a 1.2 percentage points decrease compared to 2024 despite the strong growth in absolute terms. There are 3 key drivers impacting the gross profit margin. First, the retail margin declined by 1.2 percentage points. This margin development was driven by the strong performance of Zalando Lounge, which operates on a structurally lower gross profit margin profile. Additionally, we deliberately decided to increase the offer for more price-conscious and value-seeking customers as a way to better create returns than in ROI-based marketing. Retail gross margin was also slightly impacted by the revenue deferrals associated with the expansion of our loyalty program. Secondly, we were able to offset some of the retail margin decline by strong growth in the higher-margin partner in Retail Media businesses. And thirdly, the margin was impacted by the acquisition of ABOUT YOU, which currently has a lower margin profile than the Zalando B2C business. This adversely impacted the group gross margin by 0.5 percentage points. The strong growth in gross margin in euro terms has also supported strong growth in adjusted EBIT. Adjusted EBIT grew by 9.6%, reaching EUR 536 million for the year. This corresponds to an adjusted EBIT margin of 4.8%. The Zalando B2C stand-alone margin improved year-over-year to 5.3%. We were able to offset much of the lower gross margin impact by reducing operating expenses from increased marketing efficiencies and operating leverage in admin expenses. As ABOUT YOU is new to the group and the transaction significantly impacts our reported financials, let me give you a bit more detail on the ABOUT YOU performance. Overall, we are very pleased with the ABOUT YOU performance during the first half year of consolidation. We heard your request for more transparency after our Q3 results. So here is some detail on the GMV performance of ABOUT YOU since the acquisition. ABOUT YOU significantly accelerated growth and grew double digit the last 2 quarters. At the same time, Zalando stand-alone GMV growth accelerated in 2025 while growing at mid-single-digit percentage levels, growth was higher as the year before and at a 6x bigger GMV base compared to ABOUT YOU. We will continue to report the development through H1 2026, at which point we will have fully lapped the prior year comparison. I wanted to provide more clarity today as you can see that both ABOUT YOU and Zalando B2C are accelerating in line with our expectations. As we integrate ABOUT YOU into the group, the focus is on scaling their growth engine while rapidly capturing synergies. The team achieved adjusted EBIT breakeven in the second half of 2025 when including initial synergies of EUR 10 million. This strong performance post closing is a great testament to the cultural and operational fit between our 2 organizations. We expect the total synergy capture to accelerate significantly in 2026 to deliver around EUR 40 million synergies. The main driver for this acceleration is the early and higher realization of commercial synergies, including, for example, improved trade terms, exchanging article photos and videos for overlapping assortment and procurement collaborations in transportation, marketing and media buying. And we have also laid the ground for synergies in logistics and payment, which will be more back-end loaded. This gives us very clear and accelerated trajectory towards our target of EUR 100 million in annual group adjusted EBIT 1 year earlier than planned by 2028. The speed of this integration gives us high confidence that ABOUT YOU will be adding to the group profits starting in 2026 in absolute terms. Another key driver of revenue and profit growth is our B2B business. In B2B, in 2025, we saw a sustained double-digit revenue growth. On a pro forma basis, as of 11th of July, assuming ABOUT YOU had been part of the group in the prior year period, the segment also delivered strong double-digit growth of 11.7%, similar growth rates at Zalando B2B stand-alone. This performance was primarily fueled by ZEOS fulfillment, which includes our Zalando fulfillment solutions and our multichannel fulfillment offering. Last year, we served over 70 merchants across 18 different channels, and we have shipped 5x more items than we did in 2024. Soon, we will be also adding Marks & Spencer as another large enterprise customer to our B2B platform. The platform is ready to scale and bring on more and more of these large merchants over the time without requiring incremental investment. Furthermore, SCAYLE, which has very attractive software gross margins, has provided a strategic boost to our revenue profile and achieved double-digit revenue growth in 2025, driven by increased subscriptions and country go-live fees from existing customers. Today, our B2B segment is mostly driven by Logistics as a Service business. ZEOS accounts for more than 90% of our revenue. At the same time, our Software division is growing very fast. This division includes both Tradebyte and SCAYLE. The software share of our B2B revenue grew from 5% in 2024 to 7% in 2025, including scale. This B2B revenue growth translated effectively into higher profits and significant margin expansion, making a greater contribution to the group profit than before. Thanks to the double-digit revenue growth, our B2B gross profit margin expanded by 3.4 percentage points, rising from 11.6% to 15%. This translates into a strong increase in adjusted EBIT, which more than doubled to reach nearly EUR 54 million and also doubling the adjusted EBIT margin to 4.9%. The significant margin expansion was driven by 2 key factors: one, the increased efficiency and scale we are achieving within ZEOS fulfillment; and two, the contribution of high-margin software revenues from SCAYLE. As we scale our B2B operations, we're intentionally building a mix of high-volume logistics services and high-margin software solutions. The faster growth in software will support further margin expansion in B2B over time. Thanks to the strong growth in both B2C and B2B, we are able to deliver a solid overall growth in the group adjusted EBIT. Starting at the bottom, we kept our adjusted EBIT margin stable compared to last year, in line with our guidance. We delivered this by becoming more efficient, so that OpEx savings could offset the slight decline in gross margins in 2025. In 2025, we delivered a group gross margin of 39.9%. Although this shows a decline of 0.8 percentage points year-on-year, the overall gross margin continues to hover around our 40% midterm target. The gross margin was impacted by 3 main factors: a 0.5 percentage points impact from Zalando B2C, a 0.2 percentage point impact from the inclusion of ABOUT YOU B2C business at group level and an 0.1 percentage point dilution due to the continued scaling of ZEOS fulfillment given its structurally lower gross margin. We were able to offset the margin development by driving operating expenses, especially in marketing and admin down. Let me now turn to our balance sheet and cash flow development. Our business generally operates with negative working capital. At the end of Q4 2025, we had a total net working capital position of negative EUR 676 million. Strong Cyber Week trading and the inclusion of ABOUT YOU fueled a robust cash inflow at year-end. As we move into Q1 2026, we expect a corresponding normalization of cash levels as we process high-volume partner payouts from peak season. Our total inventories rose to EUR 2.1 billion, a 36% increase year-on-year, mainly as a result of the integration of ABOUT YOU into our reporting. Zalando B2C inventory grew 12% year-over-year, primarily driven by our lifestyle expansion into higher retail share categories like sports, kids and family alongside growth in lounge. We have seen stronger-than-expected partner business growth in Q4. As a consequence, we are in the process of clearing some extra inventory in H1, which will have an impact on our retail gross margin in H1, respectively. While inventories and payables are currently at elevated levels, we expect net working capital to normalize as payables are settled and we proactively reduce inventory levels. As a result of our strong cash balance at the beginning of the year and the strong operating cash flow generated throughout the year, we were able to fund our organic and inorganic growth from our own cash flows. We started with an exceptionally strong position of EUR 2.6 billion in late 2024. Our operations were the primary engine of liquidity, generating an operating cash flow of EUR 1.1 billion. This was driven by solid operating income and the cash inflows from working capital management. To conclude, we have successfully funded a major acquisition and paid down our convertible bond, all while maintaining a solid cash position that remains among the strongest in the industry. This makes us very well capitalized as we enter 2026, and we are poised to deliver another year of solid growth. This is reflected in our 2026 guidance. We are building strength as a group, which will result in continued growth in GMV, revenues and profit. You heard from Robert and David the targets we are committed to. Let me focus on our adjusted EBIT line. We are targeting a further increase in adjusted EBIT, reaching a range of EUR 660 million to EUR 740 million. The overall growth in adjusted EBIT implies a margin expansion from 4.8% to 5.1%. Overall, this development will be driven by a combination of growth across our businesses and increased focus on efficiency improvements, the accelerated realization of synergies ahead of the initial plan and overall operating leverage of the enlarged group. For transparency, we expect both Zalando and ABOUT YOU to improve underlying stand-alone profitability. To support the growth, we project capital expenditure between EUR 240 million and EUR 300 million. This reflects our updated warehouse consolidation and automation plan alongside an accelerated investment in technology and AI. The amount projected is also in line with our capital allocation framework of CapEx in the range of 2%. Net working capital will be negative. Therefore, it will continue to be a source of funding for our growth in 2026 and beyond. Overall, we are on track to deliver our 2026 numbers, and I'm fully committed to delivering on these targets. Let's now move to our midterm guidance. This year is about getting smarter and building strength. Next year is about unlocking value, and 2028 will be the year of full-scale growth. Our midterm targets are clear: one, top line growth; two, margin expansion; and three, strong cash generation. To better reflect the acquisition of ABOUT YOU and provide a clearer view of our growth trajectory on both a quarterly and yearly basis, we are reiterating and translating our midterm guidance to reflect the combined group approach. It is important to note that our original plan and commitment remain unchanged, and we are updating these targets to be more transparent with you. For both GMV and group revenues, we guide to a 5-year CAGR from 2023 to 2028 of 8% to 13% on a reported basis, which is the translation of a 5% to 10% CAGR and the contribution from ABOUT YOU. For the adjusted EBIT margin, our guidance for 2028 remains 6% to 8% of revenues. We stick to this range in spite of the contribution of ABOUT YOU. that was dilutive to our EBIT margin on acquisition as previously reported. And we will deliver this with CapEx of around 2% of revenues, down from our previous 3% target. These factors will result in strong free cash flow generation throughout the guidance period, which will give us the flexibility to continue returning capital to our shareholders. We have a clear path to deliver on our targets. Let me be transparent about what you can expect. In 2025, underlying margins improved solidly, driven by efficiencies, leveraging OpEx and faster synergy capture. The ABOUT YOU inclusion masks this at the group level, the positive trend is clear. We will build on this in 2026 with improved underlying profitability from lower OpEx and accelerated synergy realization. While the inclusion of ABOUT YOU will dilute group margins for another year, we expect reported margins to expand significantly next year and the year after to deliver on our 6% to 8% midterm corridor in 2028. Over the coming years, we are maintaining our group-wide gross margin target of around 40%. First of all, we expect to grow gross margins in both B2C and B2B over the period. In B2C, we are focused on enhancing the retail gross margin by continuously addressing inventory management, COGS improvement and our efforts to increase full price sell-through, being aware of the current market environment and shifts in our business mix with ABOUT YOU and Lounge. At the same time, the B2C margins will benefit from the faster-growing partner and Retail Media business. The partner business is expected to grow to 40% to 50% of GMV and the Retail Media business to 3% to 4% of GMV over the period. As these businesses have a higher gross margin, the increasing share in the mix will support structurally higher B2C gross margins. Within B2B, we expect a moderate gross margin increase coming from efficiency gains in ZEOS fulfillment and a bigger revenue share from our high gross margin software businesses, SCAYLE and Tradebyte. Therefore, the adjusted EBIT margin expansion will be driven by efficiencies and leverage across our 3 OpEx lines. One, fulfillment. We are targeting substantial cost improvements to increase capacity utilization, further automatization, improved order economics and the deeper integration of AI to drive efficiencies. Two, marketing. We expect to drive operating leverage in marketing with expenses trending downwards as a percentage of revenue in the medium term. And three, administration. As the group grows, we will continue to capture economies of scale and drive administrative efficiencies. The transition to platform and further AI efficiencies are key drivers of lower overhead expenses going forward. We have undertaken the first initiatives with regards to OpEx savings. With the announced reshaping of our logistics footprint and the warehouse consolidation, we are able to drive incremental cost savings of a mid-double-digit million amount from 2028 onwards. Finally, the continued synergy capture from the ABOUT YOU transaction will consistently contribute to increasing our profitability. These synergies will contribute significantly each year, aiming for the full potential of EUR 100 million annually by 2028. 1 year earlier than we announced at the time of the deal. To conclude, we have a clear plan to reach our medium-term target margin corridor of 6% to 8%. As we become more efficient, we can deliver on our targets with structurally lower CapEx as a percentage of revenues. Overall, we will continue to invest in our platform at 2% of revenues, around the same level as we have seen over the last few years. So this is a prudent assumption going forward as well. At the same time, the mix of CapEx spending will change, and we will be spending more on technology and less on our logistics network. Our 2025 capital expenditure was split with approximately 40% dedicated to logistics network and 60% allocated to technology investments supporting growth initiatives and essential capabilities like size and fit, AI and data science as well as personalization, recommendation, search and browse. On the logistics side, the reassessment of our logistic capacity network optimization is complete. We are now focusing on the completion of fulfillment centers in Paris and Frankfurt, the closure of 4 sites, maintenance and upgrades to the existing sites. As a result of more disciplined CapEx for the logistics network, we have increased our ability to invest more in technology and AI, which you heard from Robert and David earlier. In conclusion, we keep investing into our data and infrastructure platform and integrate AI to support long-term profitable growth and efficiencies while keeping CapEx spend around 2% of revenues. This leads me to our capital allocation framework focused on long-term value creation. Robert and David also elaborated on it earlier today. So let me just briefly recap. There are 3 building blocks in how we intend to allocate our cash in the future. First, we want to maintain a strong balance sheet with robust liquidity equivalent to 10% of our last 12 months revenue to ensure operational flexibility, guarantee resilience and cover for seasonality. Second, we will continue to prioritize organic investments to deliver on our strategic ambition. This may be complemented with selective M&A if our strict ROI hurdles are met. Third, we will return excess cash to share buybacks on an opportunistic basis and only when it maximizes value to shareholders. Consequently, we decided to buy back shares for up to EUR 300 million, commencing shortly after our publication. This underscores our commitment to returning excess capital and our confidence in the intrinsic value of our shares. Here are the 3 takeaways of today. One, we delivered at the high end of our 2025 guidance. Two, we will achieve our midterm adjusted EBIT margin target of 6% to 8%. We are unlocking further growth, driving efficiency across our various cost lines and realizing our EUR 100 million synergies from ABOUT YOU in 2028. And three, we announced our capital allocation framework and decided for a buyback of up to EUR 300 million. With that, I conclude the presentation, and I look forward to answering your questions in the Q&A session shortly.

Welcome to our Q&A session. Thanks for joining, and welcome again to everyone. With me here in our studio in Berlin, I have our co-CEOs, Robert and David as well as our new CFO, Anna Dimitrova. We have approximately 45 minutes, and we will keep to try answer as many questions as possible. As usual, I for you also after that meeting and is able to answer any remaining questions. Now without further ado, let's get started. [Operator Instructions] With that, let me start off with the first question. Agent gets in everyone's mind, Robert. I have a question from Andreas Riemann, ODDO BAF. Agentic commerce, you stated you are #1 on the referred brands via chatbot. Can you be more precise, please? You're #1 within the EU fashion category? What chatbots are included here? Linked to that, how has share of organic traffic developed over the last few quarters?

Yes. I mean we -- I mean there's a couple of external studies out there. That's what we are referring to. I think what you ultimately care for is when you have conversations with the most kind of relevant chatbots in the various countries that we're active in and you ask like why would you actually buy a certain brand, where you would buy fashion, where you buy sports? And what kind of picks does actually the various chatbot actually do. And when you actually do it by yourself, like in the most relevant markets that we're in, in most of the cries you can actually imagine Zalando is actually in the categories of fashion lifestyle Zalando is 1, 2, 3. Usually, it's the brand in the brand and then it's actually the leading platform, which in most of these countries, Zalando. And that's why I think in most of these countries were the most preferred chatbot as we optimize for these engines. And I mean the traffic, I mean, is growing a lot, but it's still like at a single -- at a very low single percentage points of organic traffic. So it's not yet very materially, but it's strongly growing, which is exciting.

Cool. Super. There's another question coming from Jurgen Kolb, Kepler Cheuvreux, also in terms of agentic commerce. What are your next plans, scaling in-house or teaming up with any or all large language model or both?

I think it has 3 layers. I think like the most exciting one is what we do actually when we combine our own source of data with agentic experience. So what we do actually on Zalando. So own sources of data, which is like the millions of -- the billions of transaction data, the behavioral data and how we really can create experiences, agentic experiences with the fantasy of our data and agentic kind of flow. We talked about that, that's what we do, for example, with the assistant now. We're actually building -- we build -- we're really doubling down on building a stronger bigger in-house team and as well partnering with one of the most ambitious AI labs for Europe. So we have integrated shopability now into the assistant. We have soon upon us consent as well allow that the assistant can access the purchase history, the history. And our goal is actually to build towards truly lifestyle AI that I think would be quite amazing achievement when we put that off. So that's in-house. That's this part. That's the most exciting one. When it comes to the agentic channel, where kind of chatGPT and others kind of building towards more agentic interfaces, we see this as incremental channel. Because I mean, if you think about it like it's a very intuitive way of how they engage with users. So it's like we have users autonomic like all the people and so on. So we hope to get like the 70% offline share of fashion retail and the much towards online. So will you plan to be like the first and the best one. And we're the first -- as we've outlined, we are 1 of the only 2 companies actually have the unaware was on the UCP on the commerce protocol and with the best because of taking the retraces already the #1 and that's well, I think our game to be the first and the best and doesn't really capture the incremental growth comming from it. And then the third aspect of it is to be the opportunity in. So some of the brands might want to integrate with the agentic commerce channel. So we help them through ZEOS, we help them through Tradebyte to integrate in order for them to actually get better unit economics. And we help as well, which is a big advantage help us with the large language models to have like a technical and logistics consolidation layer because otherwise, there's a lot of kind of coordination costs otherwise. So that's the third opportunity that we are very focused on.

Thanks a lot, Robert. In that regard, also, there's a lot of questions that already too are going into the direction of agentic commerce and how does it work with ZMS. So Adam as well as -- from Deutsche Bank as well as Mia from Exane is asking, we reconfirmed our 3% to 4% GMV target. But what is our view on do we expect brands to meaning fully shift their marketing budget to agentic commerce? And also then lastly, would this impact and also our midterm targets? Any light you can share here?

Yes. I mean ZMS has said, as we said, has a great run. So I think I mean the success of ZMS basically depends on 3 things. So one is the overall traffic of Zalando. So -- and the second one is like the penetration of the traffic, like what's actually the intensity of marketing in the traffic. And the third one is the overall attractiveness of Zalando as a platform towards brands. And I mean here, we actually invest so much now to actually with data insights for the brands. And maybe starting with one like the traffic. So what we see the traffic of Zalando is stable, but actually, the quality is actually growing. So the locked end users, so the ones we actually really know a lot about like the audience. So that one is actually growing. In terms of the penetration of the traffic, if you calculate the advertising revenues divided by the GMV, we're at 1.8%. So we see actually industry benchmarks that you actually can get to like probably at 8%. So -- and we're talking about 3% to 4%. So we might not get to 8% because we might forego some of the tactics that you actually need to get to 8% but getting from 1.8% to 3% to 4%, even at the same traffic, I mean, it's for me like a no-brainer that we can actually get there. And then in terms of the attractiveness of the platform, I mean the attractiveness of platform very much depends on what kind of insights the brand can actually get from platform. And I mean, here, we actually invest so much now to actually with data insights for the brands. We invest in, as I shared in the presentation, with a full final offering where they can actually build audience-based, an audio-based product where they can tell the brand story and do the transaction at the same time, which is pretty unique in the entire marketplace. So an attractiveness of platform actually goes up. So I mean bottom line 3% to 4% for me is actually no-brainer that we should be able to get to this.

Cool. Super. Now we're moving on to video. So Freddie, here you are. So thanks for dialing in via video. And yes, the floor is yours. Please limit yourself to 2 questions. And yes, with that, over to you. Can you hear me, Freddie?

First of all, congratulations on the results, and thank you for all the clarity you've given us over the AI impact on your business. So first of all, my question is you outlined many ways that AI is going to help you engage customers and grow your top line. Can we think about this as actually you think your market share gains within that e-commerce environment should be higher than they have historically been enabled by that data moat? Shall leave go to my second question as well?

Yes, go ahead with the second question as well.

Fantastic. When we think about your comments on the new capital allocation framework, obviously, M&A is still in there and you say you've got still very high ROI hurdle to get there. Does where the shares currently sit, the multiple the business currently sits on influence where you think the sort of return on investment you have to get from ANI from M&A versus doing another buyback?

Super. Let me start with the second question on the capital allocation framework. Anna, would you take that question? And then on the channels, I hand it over to Robert again.

Yes, sure. Frederick, nice meeting you. Thank you for the question. So we introduced today or updated our capital allocation framework to reflect as well that the business going forward will generate more cash. And with all decisions which we do around capital allocation, we always will, on a regular basis, apply this. So first, obviously, it's important to have a strong balance sheet where we very clearly outlined how we are going to do so in terms of the 10% cash threshold of our last 12 months revenue. Second is the topic which you are asking for our decisions around organic growth and as well as selective M&A, where for both, we evaluate them on our very strict investor appraisal framework. And as you said, we are very strict as well that we exceed the cost of capital, and this is how we evaluate this to fuel growth, to fuel efficiencies as well to complement our strategy. And then the return of cash to shareholders where we are very clear that we prefer share buybacks than other instruments. And I think the important point is that we are saying we will do share buyback opportunistically because this gives us more flexibility in terms of the timing, in terms of the size and the criteria how we decide upon it. Now we believe is the right thing to do because as well we are very confident in the future of the company and our share price is undervalued, but this gives us the flexibility as well when we have an opportunity even in inorganic spaces as M&A to go for it.

Super. Thanks. Over to you, Robert, the question on like do you think that agentic and the incremental channel will help the penetration towards online even to accelerate?

I think my view is that it will help. And I would argue that I chat interfaces or conversation interfaces are a very intuitive way of how to engage with consumers. So you have, I think people that can easily interact with these interfaces because they just use natural language. And I think the more you actually can create agentic experiences, commerce experiences in that, that will help to have people to as well adopt online. So that's, I think, my belief. And -- and I mean, like in Europe, we're still talking in fashion about like a 70% offline share and only 30% online share. So I think it will certainly help to convert more of these offline sales towards online. And I think how it will happen, I think it will happen on the one hand, as an incremental channel with ChatGPT and Gemini and those ones adopting agentic flows with commerce. But it will happen as we leverage Zalando, Zalando's very unique data pool with own agentic experience and are able to create an end-to-end experience for fashion lifestyle that at the moment we cannot create. So we can actually have this conversational interface based on the very unique data trophy and really solve questions in another way that was not possible like 3, 4, 5 years ago. So I think this is probably really helping to actually drive online penetration in the future. So that's my personal belief, yes.

Cool. Thanks. Moving back to our slide of question, and thanks, Freddie, again for asking the questions. Moving on to David. There's a question again from Mia on capital utilization in our fulfillment network. Firstly, she wants to know what is it at the moment? And what level do you aim to reach here?

Yes. Maybe before I get started, I think it's important to understand that utilization is obviously a bit of a moving picture given that we are still in the process of ramping up our 2 newest sites, highly automated and with the latest robotics and AI technology in Paris and in Frankfurt. So that is adding new capacity. At the same time, and you've seen that beginning of this year, we've announced our plans to exit 4 sites, most of them smaller sites, but also larger site in Germany, more manual in nature. And so we are making sure that we have the right capacity for our growth plans going forward, and we elevate the efficiency of the entire network. And now let me get back to the specific question. So on capacity utilization, given that we are still undergoing this ramp-up and the exits haven't happened yet. We are currently at a level between 60% and 70% utilization. Our target level of utilization is more 85%, 90%, which we think is allowing us to both provide great customer service, but also achieve a high level of cost efficiency, and that is also reflected in our midterm guidance of 6% to 8%, as Anna outlined in her financial details earlier today, OpEx contribution is significant to help us get to that target and a significant part is also coming from logistics.

Switching slightly the topic, but sticking with you, David, about you, Mia, again from Exane asking what have been the key changes to ABOUT YOU since the acquisition?

Yes. I mean, first of all, if we look at the stand-alone business of ABOUT YOU, I think what we can see also, thanks to Anna's deep dive, very transparent for you. The business has accelerated its growth rate, which is great, double-digit growth at ABOUT YOU, the business has also significantly improved profitability, reached breakeven in the second half of last year for the first time ever actually. And together, we also accelerated our synergy delivery, which now makes us very confident to reach our goal of EUR 100 million synergies per annum already 1 year earlier in 2028. If you look at the underlying business, I think what's fueling the success of ABOUT YOU is that, yes, the model is really resonating well with consumers. They are continuing to roll out their marketplace model, bringing on even more brands and sellers to the platform. And they also launched their loyalty program ABOUT YOU coins,ich is showing some of the great results that we've shared earlier today for that Zalando platform.

Super. Just sticking to ABOUT YOU before we move into another video question. Jurgen Kolb is asking in terms of ABOUT YOU from your integration knowledge and customer behavior, are there any plans to potentially adjust ABOUT YOU strategy? Or is it a rather going concern and keep both proposition and positioning of Zalando and ABOUT YOU as independent and different as currently? So perhaps you can also quickly answer that.

Yes, sure. I mean, as Robert outlined in the keynote, we really think about this as a team of apps, right? The Zalando n app, the Zalando Lounge app and then the ABOUT YOU app. And we think together, these apps help us to attract even more customers and to serve these customers across many more occasions. That's also, by the way, why we see that the overlapping customers, i.e., those that shop with 2 or 3 of these apps, they actually show the highest GMV spend. and also typically the highest customer lifetime value. And we think Zalando is well positioned to keep attracting customers and serving customers that are primarily looking for brands, the great assortment these brands bring, but also the great stories and content these brands bring with ABOUT YOU. We are primarily serving the latest trends and making sure that, that is well connected with an influencer-driven discovery and also gamification. And then with lounge, obviously, we have daily campaigns that really engage with customers because they want to see what's new on a daily basis. And yes, millions of people wake up every day checking that out at 7:00 a.m. in the morning. And I think that really shows the power this team of apps has for us.

Super. Thanks a lot. With that said, I would move over to Luke on the video.

Thanks for the detailed presentation and the extra detail and granularity that you've given today. I've got just 2 then. The first is on Retail Media. And I appreciate you've given some color around how AI is helping you produce more content with the brand, but your cost base hasn't seen the same uplift. So how should we think about that in terms of either EBIT or EBIT margin progression in Retail Media? And then the second question was just more on your cohort chart that you indicated. I think if I read the chart correctly, it looked like existing cohorts you were seeing kind of orders naturally decline each year as you get some churn. And I'm just thinking, if I read that chart correctly, how we think about that new customers that come through the platform each year, where we are in terms of who is joining the platform and just the longevity of that?

Thanks, Luke. Perhaps starting on with Retail Media. Perhaps, Anna, you can give a bit of an idea on like especially EBIT development of Retail Media, and then I would give the cohort to David.

Luke, thank you for the question. So let me share with you how we think about Retail Media. We are very pleased that we see an acceleration in Retail Media in growth, both in Zalando and in ABOUT YOU and because Retail Media has a structurally higher margin obviously, then as well our gross margin benefits out of it. So AI is helping to increase the throughput and as well to increase the volume, which we can play on the platform. The gross margin or the EBIT contribution of Retail Media is very much a function how much is on-site and how much is off-site. So looking forward, we expect that Retail Media will keep contributing and structurally improving our margin.

Moving on to the cohort.

Yes. On the cohorts, I mean, just as a reminder, right, I mean, if we look at the B2C side of our business, obviously, the North Star metric is ultimately customer lifetime value, and that is driven by both the amount of spending customers have on the platform but also obviously, how we monetize that spending through and the engagement through profit contribution coming from either transactions or retail media, right? And when you look at our cohort chart, I think what you see is we are able to develop the spending of customers. And especially in the last year, I think with further improvements in NPS with the rollout of the loyalty program, we've seen that especially our existing customer cohorts developed very nicely in spending. At the same time, we also kept an eye on profit contribution and leverage customer segmentation to make sure that also especially the profit contribution from these cohorts keeps increasing. When we think about new customer acquisition, we still see what we saw in the past, right? So there is typically a dip, especially in the first year of acquisition. But then we are thereafter, especially in year 3, 4, able to meaningfully increase that spend again through the many levers that we have, including our loyalty efforts and also obviously, our lifestyle expansion.

Cool. Super. Thanks again, Luke, for the question. So moving back to slide and moving on to Anna. A recurring topic in our calls have been the gross margin. So Jurgen Kolb is asking a bit of an outlook. What are your thoughts, especially of the retail gross margin in 2026? And what are the building blocks? And as a side note, any indications about current trading effects?

Yes. Thank you, Jurgen, for the question. Let me share with you how I think about the B2C gross margin for 2026 and then zoom in the retail gross margin. So the B2C gross margin, we see some positive impacts for 2026 as we accelerate the partner business and accelerate the Retail Media business, we will -- which are high-margin businesses, we will structurally benefit in the B2C gross margin. On the other side, we will have dilution by ABOUT YOU by the inclusion of ABOUT YOU and as well the current developments in the retail gross margin. So I'm zooming in now to the retail gross margin. Underlying, we see an improvement. Obviously, the retail gross margin is very much influenced by the business mix. Launch is very much appreciated by the customers and is growing double digit and has a structurally lower gross margin compared to Zalando Fashion store. And as I outlined in my keynote, we will now in H1, particularly see the impact on the gross margin for the reduction of the inventory levels, which we have built throughout last year. And this is the consequence of a very successful partner business. So now we will be working on it. And looking into the future, what you can expect, obviously, you can expect that I and my team focus on the gross margin and as well on capturing efficiencies and synergies. But for the gross margin, in particular, we will reduce the inventory and especially as well adjust our buying budgets going forward so that we can see as well an underlying improvement of the retail gross margin. So now as well covering the question about the current trading. Jurgen, we had a very solid start into the quarter. And particularly, we saw very good momentum as we moved into the spring and summer season 2026. And we haven't seen for now any impact on the demand and the business performance from the conflict in the Middle East.

Super. There's a quick follow-up from Mia on the gross margin. What gross margin impact should we expect for the loyalty program in 2026?

Marginal. So I don't think we should even talk about it. So it just washes out as we have communicated previously.

Cool. Super. There was another question on the inventory, but this was -- you already were able to answer in your question beforehand. So Adam, I think your question is here with answered. There's one another follow-up on the gross margin from Georgina. Especially in Q4, we talked about 170 basis bps decline in the gross margin. Can you give a bit of light and shed some light into that development as well, Adam?

Yes. Sure. Thank you, Georgina, for the question. We see it as well on the gross margin for the full year and then more pronounced in Q4. on the gross margin top line for the group, obviously, we have a small impact from the acceleration of in B2B. We have a dilutive impact from ABOUT YOU. And then we have on the B2C margin positive, again, contribution from partner business and ZMS and then a dilution from the retail gross margin zooming in into the retail gross margin and giving you here the building blocks, again, very successful launch performance with a structurally lower margin and as well a cautious decision to be promotional in Zalando fashion store. This was a constant decision to increase the promotional activity and not to increase performance marketing. As you know, that decisions at Zalando are taken very much with an ROI focus. So it was the better decision here to reduce performance marketing and increase the promotional activity.

Cool. Moving on, again, a bit to the agentic space. Robert, there's a follow-up question from Georgina. Is scale now agentic-ready? And for example, can it already support instant checkout in the U.S. should ChatGPT continue to pursue it?

I would probably pass...

Yes, as you heard from Robert before, I mean, we are ourselves partnering with Google to be one of their first partners in Europe, but also SAL is currently integrating with Google's Universal Commerce protocol to enable merchants, both in Europe and the U.S. So that is happening as we speak. And that same can obviously also apply to other protocols and agents. But as we understood, ChatPT has for now abandoned its checkout functionality. If that comes back, we obviously are ready to participate.

Okay. Super. One more thing before we move on to a video question again. Philip is asking a bit on -- can you elaborate a bit on the user behavior and economics of direct channel versus the CEO and the agentic commerce in first indication we are seeing. So any glimpse you are able to share, Robert?

Yes. I mean I think high level, what I can say, I mean the bulk of our -- of the traffic of Sand is direct traffic. So more than 70% of the traffic is direct. So that's like directly opening the app. I mean -- and within this traffic, I think you have probably like half of them that actually go into like a shopping mode. But already now, which I think we're very, very proud of, we actually see that half of this traffic is actually already engaging with the feed experience. And as a result of the engagement, the Feed experience that we have, they engage with the content, they engage with inspiration. And as a result of them, we already see that there's a significant actually uplift now in frequency of usage. So this is actually the thing that we're actually doubling down on we invest a lot into AI to actually bring this frequency of traffic using these content platforms that are in the Feed actually upwards. When it comes to the agentic Commerce referral traffic that we actually get, I mean, this is much more specific already because, I mean, as you can imagine, there has been done some research, I think, in the agentic Commerce interfaces and then they are referred to Zalando and then there's like a higher conversion likelihood in this. So it's a high-quality traffic, but a high-quality traffic in terms of conversion. It's not a high-quality traffic that we're actually that we actually then drive frequency afterwards, but like really high converting traffic.

Cool. With that, we would move over to the video. Joff, can you hear us?

Yes. I guess I want to discuss a little bit about the announcement you made with Levi's this morning and the scale. Can you please first comment on the current size of Levi's online sales? And in that context, can you seize the opportunity to remind us how the scale economics work for Zalando and therefore, how we should think about the Levi's contribution in 2026, but also over the next couple of years as we head into the end of the strategic plan? And obviously, as a follow-up, discussing about scale, can you talk about the pipeline of projects or deals that we could expect tentatively in 2026 or beyond?

Yes, sure. I mean we are super excited, obviously, about working together with Levi's for their global direct-to-consumer business. I think it's a testament to the great partnerships we built. It's a testament to the, yes, borderless reach of our technology platform that doesn't just work well in Europe, but also in the U.S. And I think it really also shows that we can tap into new large opportunities for our software business with the U.S. obviously being the largest software market in the world. I hope you understand that I'm not able to comment on Levi's numbers here. That's what you would need to ask them about. We respect confidentiality, of course, with all our partners. But I'm happy to share that for scale, right, and therefore, also for Zalando, it's a multimillion euro business opportunity in terms of revenue and in terms of profit. The nice thing, as you know, with scale is that it operates at a very high gross margin, around 85%. And that obviously makes it a very attractive business for us to scale and to also contribute to our margin targets going forward. So it doesn't impact the group revenue so much because in a way, it's tiny, right, compared to the overall B2C business, especially, but it can have a meaningful impact on our profit going forward, and that's fully reflected in our midterm guidance, 6% to 8% for the future and also our guidance for this year. And yes, overall, we are super glad to have the B2B segment now as a second growth engine for the business, double-digit growth, accelerating growth as well as we reported in Q4 and also, yes, doubling our margin year-over-year, which I think shows the power that this business can have for us. In terms of pipeline, we are working on a few more deals, both in Europe and in the U.S. And we'll, as always, as we've done in the past, announce them as they come. But yes, you can definitely expect more announcements to happen over the course of the year.

Cool. Super. Thanks a lot. And moving back and going back to Anna. Adam from Deutsche Bank wants to know how do we decide when shares are undervalued for a buyback? Is there a criteria we are willing to share?

Yes. Thank you, Adam, for the question. Yes, listen, so I think if we just look as well at what the sales size has and where we stand today. Obviously, we are -- you are saying as well that we are undervalued, but as well, we have a very strong confidence in our midterm plan in reaching our midterm targets. I did my due diligence as well, and I see that we have taken decisions, which will bring the top line growth and which will bring as well the efficiencies. So we are seeing as well the synergies flowing in. We as well executing on our logistic networks. I can maybe name more of them. So -- and with this share buyback, we sending a very strong message that we have a firm conviction in the future of the company. And then we definitely mean that the shares are undervalued. And as what does this mean for the future and what criteria do we apply, we will, on a regular basis, evaluate our capital allocation and go to the very structured framework, which we have shared with you, decide upon the cash, which we need to operate the business and to navigate through seasonalities and volatility, decide what investments do we need organically and inorganically to grow the business and then on an opportunistic basis, decide on share buyback.

Cool. Super. Switching topic, but staying with finance free cash flow. We generated roughly EUR 700 million before M&A in 2025. What would be your average free cash flow until 2028 after leases is asked by Andreas from ODDO BHF.

Yes. Thank you, Andreas, for the question. So again, our expectation is based on our midterm guidance and our plan, which we are very much on the way of achieving and how you should think about the free cash flow is that we will be on a similar level as before the acquisition of ABOUT YOU.

Then a question a bit going into fulfillment cost line. Marco Barresi is asking in a scenario of persistent higher energy costs, what is the cost impact for Zalando and shipping and logistic costs? Perhaps, David, you are able to shed some light into it.

Yes. Well, I mean, our fulfillment cost line is and especially also logistics, right, is arguably one of the larger ones in the business, roughly speaking, more than EUR 2 billion in spend per year. And only a fraction of that is impacted by energy costs. So there, even in an adverse scenario, we are talking low double-digit million impact. And that tells you that overall, it's really not a big impact for us. And I think probably more interesting question is how will consumer demand develop. As we said, so far, we haven't seen any impact, rather the opposite, very strong trading, especially with our spring/summer season start. But that's probably where the uncertainty sits. It's not so much on the cost side.

Cool. I have one more question from Will on return rates, Robert. Will want to know, can you talk us a bit more about the return rates for Zalando and about you in terms of percentages? And do we have a target or where you wish to get this over the coming years? And any information on drop-through in return at group level. So any light you can shed on that one?

Yes. I mean maybe like first of all, general comments about return. So return rates, like the return proposition for us for Zalando was always as a group is always something where we think it's actually important for consumers actually to enable them that returns are easy because we actually see as well in data that easy returns is actually increasing the CIV because customers can really take a buying decision at home and don't take that digitally. So -- and that increased satisfaction, increases the CV, increase engagement loyalty, everything. That being said, I think it is very clear that there's not one person on earth that actually we lost returns. So there's who loves to good. So we actually work very hard to help to prevent unnecessary returns. And the biggest lever of that is the rate returns. And with the size rate returns, we actually make significant progress with -- I mean, the size and fit. I mean I shared that 8% of the size rate returns are now have been prevented like statistically proven actually by better -- by actually the use of AI last year. So there's actually a significant improvement. When it comes to our team of apps, we see similar rates of return rates across like and ABOUT YOU. But what we as well see on both of these apps is actually that return rates actually are reducing at the moment. So they're going slightly down. And I mean this is to a big extent as well the result of our work. We help with different processes to further prevent some unnecessary returns when we see actually high returning items and so on. And we do that in a way that on the one hand, it increases the customer lifetime value. But on the other hand, as well increases the profit pool for partners because this is what they care for in order to actually offer as well like a lot of selection on the platform because returns as well don't help them to actually have good profit growth. So that's why we're working on it. But we don't have like a very specific target in mind, but our target is to gradually improve decreased return rates over time by not destroying any customer value.

Wonderful. Thanks, Robert. We have another question from Monique Pollard from Citi. I can already see you. Can you hear me?

Yes. Yes, I can hear you.

Wonderful.

So it was just a question, if I can, on the gross margin and also the approach to sort of performance marketing versus the utilization of promotions. So you mentioned that in the 4Q, you did some promotions, and that was partly a decision to spend money there versus the performance marketing. So as I'm thinking into 2026, what I'm trying to understand is in the first half when you said you've got a bit of extra clearance, is part of that as well a decision to allocate money to promotions away from performance marketing? Or is that more about excess inventory? And if you've got excess inventory, what are the particular areas of the business that have this kind of over inventory problem that needs to be cleared during the first half, please?

Monique, thank you for the question. I will ask for help from David for Q4 because I wasn't there, so I think it's proper that he answers the question, and then I can talk about 2026, how we approach that.

Yes. Let me start with Q4. So I mean, first of all, as Anna said, right, we are taking a very much ROI-based approach to our commercial decisions. And we look at the different levers that we have to generate demand. One lever is marketing, one lever is discounts, promotional activities, campaigns. And I think another, by the way, new exciting lever is loyalty, right, where we can also engage with customers and also ideally not just generate quarterly sales, but also longer-lasting relationships and CVs. And so yes, we obviously try to optimize our investments in the full toolbox. And as it happened in Q4, I think we saw price-sensitive consumers, looking for deals, especially around the key commercial campaigns, Singles Day, Cyber Week and so on. That's what we obviously took advantage of. Secondly, we saw that the ROI on these investments seem more favorable compared to spending more on performance marketing. That's why, we dialed performance marketing and discount rates slightly. And yes, to really achieve the best possible commercial result, both in terms of top line, but also in terms of bottom line. And that's something we will continue to do also in the future, right? It's not like a one-off. It's really how we operate in a very data-driven way to maximize the value of the business. And maybe as one last point, it doesn't just take into account the elasticity of demand in terms of how does it react, how do consumers react to discounts or to marketing. It also obviously takes into account our stock position, right, with the question, how do we get the highest absolute gross profit from a given inventory position. And that's all being optimized in real time to yield the best results.

Yes. And exactly this we will continue doing in 2026 in terms of where do we see the inventory. So we see it in lounge, and we see it in Sports and Kids and Family. This is actually where we increased the inventory in order as well to derisk if you want to have it like this for the growth of the partner business. And we will now apply all the toolbox so that at the end, we can balance between reducing the inventory and improving the gross margin.

Can I ask one follow-up question if that's okay?

Because it's you. Go ahead.

It was just on restructuring costs, Anna, whether you could provide any guidance for us on any restructuring or onetime costs relating to about you and the logistics network for this year, please?

Sure. So last year, you have seen we had EUR 203 million of one-off adjustments and how you should think about 2026, we expect around EUR 300 million, so a step-up of EUR 100 million. And next to the 1/3 is share buybacks, then we have around EUR 100 million with the restructuring of the logistics or the optimization of the logistics network and then another EUR 100 million, which is stemming from purchase price allocation, yes, and from integration costs. So we guided that for integration costs for the whole period till 2028, we expect mid-double-digit million amount and 2026 will be the peak.

Cool. Super. thanks, Monique. So we have -- yes, we come to the end of our session. So thanks, everyone, for participating. I would now hand it over back to David, perhaps to summarize the 3 key takeaways of today before I give a small closing remarks. Over to you, David.

Yes, sure. So thanks for joining us today. I hope you enjoyed all the exciting news that we shared. I think for us, it's really important that you take away that we are making super strong progress on our strategy and our financial performance as showcased by our 2025 results, both in terms of financial achievements, but also strategic achievements. I think you heard that we are off to a good start in 2026 and have set our goal really on further accelerating our performance once again, both in terms of strategy and financials. And then last but not least, you heard us very excited about the long-term future of the business, where we leverage, yes, the full power of our team, but also the power of AI technology and the unique data we have and the full technology platform that we've built to drive even more impact with customers and partners and more value for the business.

Super. Thanks David. Thanks, Anna. Thanks, Robert. That is it for now. Thank you so much for your interest today, and we hope to speak to all of you soon. We are on the road also over the next few weeks and available, obviously, also over the phone. So if there are any further questions, do not hesitate to reach out to the IR team and looking forward to seeing you all. With that said, thanks, everyone, and thanks from Berlin. Bye-bye.