MYTHERESA(MYTE) - 2025 Q2 - Quarterly Report

Financial Results and Key Operating Metrics This section details Mytheresa Group's financial performance and key operating metrics, including non-IFRS measures, for the three and six months ended December 31, 2024 Overview of Metrics The company utilizes operating and financial metrics, including non-IFRS measures such as Adjusted EBITDA and Adjusted Net income, to assess performance by excluding non-recurring items, acknowledging their inherent limitations - Company uses Adjusted EBITDA, Adjusted Operating income, and Adjusted Net income (and their margins) as non-IFRS measures to evaluate performance and highlight trends, excluding items outside management's control or not reflective of ongoing operations[6] - These non-IFRS measures have limitations due to exclusion of certain expenses and potential incomparability with other companies' similarly titled measures[7] Key Operating and Financial Metrics Summary Mytheresa Group reported significant profitability improvements for the three months ended December 31, 2024, with Adjusted EBITDA up 114.8% to €16.2 million and Adjusted Net income up 299.6% to €10.6 million, alongside robust net sales and GMV growth Key Operating and Financial Metrics (Three Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | Change (%) / BPs | |:---|:---|:---|:---| | Gross Merchandise Value (GMV) | 218.7 | 244.7 | 11.9 % | | Active customer (LTM in thousand) | 856 | 843 | (1.5)% | | Total orders shipped (LTM in thousand) | 2,037 | 2,089 | 2.5 % | | Net sales | 196.6 | 223.0 | 13.4 % | | Gross profit | 97.9 | 113.6 | 16.0 % | | Gross profit margin | 49.8 % | 50.9 % | 110 BPs | | Operating loss | (4.8) | (2.5) | 46.8 % | | Net loss | (5.8) | (4.7) | 19.3 % | | Adjusted EBITDA | 7.5 | 16.2 | 114.8 % | | Adjusted EBITDA margin | 3.8 % | 7.3 % | 350 BPs | | Adjusted Operating income (loss) | 3.7 | 12.2 | 232.0 % | | Adjusted Operating income (loss) margin | 1.9 % | 5.5 % | 360 BPs | | Adjusted Net income (loss) | 2.7 | 10.6 | 299.6 % | | Adjusted Net income (loss) margin | 1.3 % | 4.8 % | 350 BPs | Key Operating and Financial Metrics (Six Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | Change (%) / BPs | |:---|:---|:---|:---| | Gross Merchandise Value (GMV) | 422.5 | 461.2 | 9.2 % | | Active customer (LTM in thousand) | 856 | 843 | (1.5)% | | Total orders shipped (LTM in thousand) | 2,037 | 2,089 | 2.5 % | | Net sales | 384.1 | 424.7 | 10.6 % | | Gross profit | 177.4 | 202.2 | 14.0 % | | Gross profit margin | 46.2 % | 47.6 % | 140 BPs | | Operating loss | (18.2) | (32.6) | (78.5)% | | Net loss | (18.0) | (28.2) | (56.8)% | | Adjusted EBITDA | 6.4 | 19.1 | 199.6 % | | Adjusted EBITDA margin | 1.7 % | 4.5 % | 280 BPs | | Adjusted Operating income (loss) | (0.9) | 11.1 | 1389.3 % | | Adjusted Operating income (loss) margin | (0.2)% | 2.6 % | 280 BPs | | Adjusted Net income (loss) | (0.6) | 16.0 | 2767.1 % | | Adjusted Net income (loss) margin | (0.2)% | 3.8 % | 400 BPs | Reconciliation of Non-IFRS Measures This section provides detailed reconciliations of net loss to Adjusted EBITDA, operating loss to Adjusted Operating income, and net loss to Adjusted Net income, highlighting the impact of key adjustments like transaction-related expenses and share-based compensation Reconciliation of Net Loss to Adjusted EBITDA (Three Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | Change (%) | |:---|:---|:---|:---| | Net loss | (5.8) | (4.7) | 19.3 % | | Finance costs, net | 1.2 | 2.0 | 63.2 % | | Income tax expense (benefit) | (0.2) | 0.2 | 218.9 % | | Depreciation and amortization | 3.8 | 3.9 | 2.3 % | | EBITDA | (0.9) | 1.4 | 248.3 % | | Other transaction-related, certain legal and other expenses | 3.6 | 9.6 | 167.2 % | | Share-based compensation | 4.9 | 5.1 | 6.0 % | | Adjusted EBITDA | 7.5 | 16.2 | 114.8 % | | Adjusted EBITDA margin | 3.8 % | 7.3 % | 350 BPs | Reconciliation of Operating Loss to Adjusted Operating Income (Loss) (Three Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | Change (%) | |:---|:---|:---|:---| | Operating loss | (4.8) | (2.5) | 46.8 % | | Other transaction-related, certain legal and other expenses | 3.6 | 9.6 | 167.2 % | | Share-based compensation | 4.9 | 5.1 | 6.0 % | | Adjusted Operating income (loss) | 3.7 | 12.2 | 232.0 % | | Adjusted Operating income (loss) margin | 1.9 % | 5.5 % | 360 BPs | Reconciliation of Net Loss to Adjusted Net Income (Loss) (Three Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | Change (%) | |:---|:---|:---|:---| | Net loss | (5.8) | (4.7) | 19.3 % | | Other transaction-related, certain legal and other expenses | 3.6 | 10.1 | 181.1 % | | Share-based compensation | 4.9 | 5.1 | 6.0 % | | Adjusted Net income (loss) | 2.7 | 10.6 | 299.6 % | | Adjusted Net income margin | 1.3 % | 4.8 % | 350 BPs | Unaudited Interim Condensed Consolidated Financial Statements This section presents the unaudited interim condensed consolidated financial statements, including statements of profit & loss, financial position, changes in equity, cash flows, and accompanying notes Index to Financial Statements This index outlines the unaudited condensed consolidated interim financial statements, encompassing the Statements of Profit & Loss, Financial Position, Changes in Equity, Cash Flows, and their corresponding Notes Unaudited Condensed Consolidated Statements of Profit & Loss and Comprehensive Income For the six months ended December 31, 2024, Mytheresa Group reported a net loss of €28.2 million and a widened operating loss of €32.6 million, despite net sales growth to €424.7 million, with basic and diluted earnings per share decreasing to €(0.32) Consolidated Statements of Profit & Loss and Comprehensive Income (Six Months Ended December 31) | Metric | 2023 (€ thousand) | 2024 (€ thousand) | |:---|:---|:---| | Net sales | 384,096 | 424,685 | | Cost of sales, exclusive of depreciation and amortization | (206,673) | (222,467) | | Gross profit | 177,423 | 202,219 | | Shipping and payment cost | (60,825) | (63,058) | | Marketing expenses | (47,157) | (55,069) | | Selling, general and administrative expenses | (80,439) | (104,739) | | Depreciation and amortization | (7,238) | (11,057) | | Other income (expense), net | (13) | (876) | | Operating loss | (18,249) | (32,580) | | Finance costs, net | (2,205) | (3,174) | | Loss before income taxes | (20,455) | (35,753) | | Income tax (expense) benefit | 2,468 | 7,542 | | Net loss | (17,987) | (28,211) | | Comprehensive loss | (18,160) | (30,484) | | Basic & diluted earnings per share | €(0.21) | €(0.32) | Unaudited Condensed Consolidated Statements of Financial Position As of December 31, 2024, total assets increased to €715.8 million, driven by current assets, while total shareholders' equity decreased to €414.7 million and total liabilities rose to €301.1 million due to increased current borrowings Consolidated Statements of Financial Position (as of December 31, 2024) | Metric | June 30, 2024 (€ thousand) | December 31, 2024 (€ thousand) | |:---|:---|:---| | Assets | | | | Total non-current assets | 253,643 | 254,064 | | Total current assets | 442,867 | 461,776 | | Total assets | 696,511 | 715,840 | | Shareholders' equity and liabilities | | | | Total shareholders' equity | 435,643 | 414,736 | | Total non-current liabilities | 43,282 | 41,695 | | Total current liabilities | 217,585 | 259,410 | | Total liabilities | 260,867 | 301,105 | | Total shareholders' equity and liabilities | 696,511 | 715,840 | Unaudited Condensed Consolidated Statements of Changes in Equity Total shareholders' equity decreased from €435.6 million to €414.7 million for the six months ended December 31, 2024, primarily due to a net loss and other comprehensive loss, partially offset by share-based compensation Consolidated Statements of Changes in Equity (Six Months Ended December 31, 2024) | Metric | Balance as of July 1, 2024 (€ thousand) | Net loss (€ thousand) | Other comprehensive loss (€ thousand) | Share-based compensation (€ thousand) | Balance as of December 31, 2024 (€ thousand) | |:---|:---|:---|:---|:---|:---| | Subscribed capital | 1 | — | — | — | 1 | | Capital reserve | 546,913 | — | — | 9,642 | 556,489 | | Accumulated Deficit | (112,767) | (28,211) | — | — | (140,978) | | Accumulated other comprehensive income | 1,496 | — | (2,273) | — | (777) | | Total shareholders' equity | 435,643 | (28,211) | (2,273) | 9,642 | 414,736 | Unaudited Condensed Consolidated Statements of Cash Flows For the six months ended December 31, 2024, net cash outflow from operating activities increased to €32.6 million, largely offset by a €32.9 million net cash inflow from financing activities due to higher revolving credit facility utilization Consolidated Statements of Cash Flows (Six Months Ended December 31) | Metric | 2023 (€ thousand) | 2024 (€ thousand) | |:---|:---|:---| | Net loss | (17,987) | (28,211) | | Net cash used in operating activities | (14,770) | (32,607) | | Net cash (used in) investing activities | (4,551) | (1,708) | | Net cash inflow (outflow) from financing activities | (4,316) | 32,911 | | Net decrease in cash and cash equivalents | (23,638) | (1,404) | | Cash and cash equivalents at end of the period | 6,437 | 13,836 | Notes to the Interim Condensed Consolidated Financial Statements These notes detail corporate information, accounting policies, economic impacts, segment performance, revenue, share-based compensation, the pending YNAP acquisition, and the revision of comparative figures due to an IFRS 15 error Corporate Information MYT Netherlands Parent B.V. operates Mytheresa Group, a global luxury fashion digital platform, offering curated products and personalized shopping, controlled by MYT Holding LLC, USA - MYT Netherlands Parent B.V. is a holding company operating Mytheresa Group, a global luxury fashion digital platform, through its subsidiary Mytheresa Group GmbH (MGG)[31] - Mytheresa Group offers a highly curated selection of luxury products, exclusive capsule collections, in-house content, and a personalized shopping experience[31] - As of December 31, 2024, MYT Holding LLC, USA, held 77.5% of the company's shares, with MYT Ultimate Parent LLC, USA, as the ultimate controlling party[32] Basis of Preparation Interim condensed consolidated financial statements are prepared under IAS 34 and IFRS, on a historical cost basis in Euro, with a fiscal year ending June 30, assuming a going concern - Interim financial statements are prepared according to IAS 34 and IFRS, on a historical cost basis, presented in Euro, with a fiscal year ending June 30[33][35] - The financial statements are prepared under the going concern assumption, with management believing adequate resources exist for foreseeable operations[36] Impacts to Financial Statements due to Economic Uncertainties Global economic uncertainties, including geopolitical conflicts and inflation, negatively impacted Mytheresa Group's business and sales for the three and six months ended December 31, 2024, though management anticipates no long-term adverse effects - Operational stability maintained, but global economic uncertainties (war in Ukraine/Middle East, geopolitical factors) may impact business activities and future sales[38] - Inflationary pressures affect customer prices and increase cost inflation across the business model, despite the luxury market's resilience to demand shifts[39] - Negative effects of economic uncertainties were visible in Q3 and H1 FY2025 and are expected to continue, but management does not anticipate long-term adverse effects[41] Significant Accounting Policies Accounting policies applied in these interim condensed consolidated financial statements align with those used in the company's fiscal year 2024 annual consolidated financial statements - Accounting policies in interim statements are consistent with fiscal year 2024 annual consolidated financial statements[42] Critical Accounting Judgments and Key Estimates and Assumptions Financial statement preparation involves management judgments, estimates, and assumptions impacting reported amounts, which remain consistent with those applied in the fiscal year 2024 consolidated financial statements - Preparation of financial statements involves management judgments, estimates, and assumptions affecting reported amounts[43] - Significant judgments and key estimation uncertainties are consistent with those in the fiscal year 2024 consolidated financial statements[44] Revision of Comparative Figures Comparative figures for the three and six months ended December 31, 2023, were revised due to an immaterial IFRS 15 error in customer voucher breakage, impacting net sales, gross profit, and net loss, but not EPS - Comparative figures for Q3 and H1 FY2024 (ended Dec 31, 2023) were revised due to an immaterial error in IFRS 15 application for customer voucher breakage amounts[45] - The revision led to decreases in net sales and gross profit by €399 thousand and €711 thousand respectively for the three and six months ended December 31, 2023, and corresponding increases in operating loss and net loss[47] - Accumulated deficit and total shareholders' equity decreased by €4,002 thousand as of July 1, 2023, and by €4,713 thousand as of December 31, 2023, with no impact on basic and diluted EPS[47] Segment Information Mytheresa Group's two operating segments, online and retail stores, are assessed by Segment EBITDA, with online net sales of €416.9 million and retail stores at €7.8 million for the six months ended December 31, 2024 - Operating segments are identified as online operations and retail stores, with performance measured by Segment EBITDA (operating income excluding depreciation and amortization)[45][46] Segment Net Sales and EBITDA (Six Months Ended December 31, 2024) | Segment | Net Sales (€ thousand) | Segment EBITDA (€ thousand) | |:---|:---|:---| | Online | 416,927 | 25,800 | | Retail Stores | 7,759 | 2,461 | | Segments total | 424,685 | 28,261 | | Reconciliation adjustments | — | (49,784) | | IFRS consolidated Net loss | 424,685 | (28,211) | - Reconciliation adjustments for the six months ended December 31, 2024, included €9.2 million in corporate administrative expenses, €31.0 million in other transaction-related/legal expenses, and €9.6 million in share-based compensation expenses[50] Net Sales and Geographic Information Mytheresa Group's worldwide online revenue is geographically determined by customer delivery, with Europe (excluding Germany) contributing 42.1% of net sales for the six months ended December 31, 2024 - Revenue is earned worldwide through online operations, with retail store revenue in Germany. Geographic online revenue is based on customer delivery location[51] Net Sales by Geographic Location (Six Months Ended December 31) | Geographic Location | 2023 (€ thousand) | 2023 (%) | 2024 (€ thousand) | 2024 (%) | |:---|:---|:---|:---|:---| | Germany | 61,956 | 16.1 % | 59,238 | 13.9 % | | United States | 75,253 | 19.6 % | 87,025 | 20.5 % | | Europe (excluding Germany) | 151,905 | 39.5 % | 178,830 | 42.1 % | | Rest of the world | 94,982 | 24.7 % | 99,591 | 23.5 % | | Total | 384,096 | 100.0 % | 424,685 | 100.0 % | - Net sales are primarily from luxury goods sales and rendering of services (below 10% of total net sales). No single customer accounts for more than 10% of net sales[53] Cost of Sales, exclusive of Depreciation and Amortization Inventory write-downs, classified under Cost of sales, exclusive of depreciation and amortization, significantly increased for both three and six months ended December 31, 2024, reflecting instances where net realizable value fell below carrying amount Inventory Write-downs (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (716) | (1,751) | | Six Months Ended December 31, | (4,542) | (5,335) | - Inventory is written down when its net realizable value is below its carrying amount, considering selling prices and estimated costs to complete the sale[55] Finance Costs, Net Total finance costs, net, increased to €1,953 thousand and €3,174 thousand for the three and six months ended December 31, 2024, respectively, primarily due to higher interest expenses on revolving credit facilities Finance Costs, Net (€ thousand) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | |:---|:---|:---|:---|:---| | Interest expenses on revolving credit facilities | (446) | (1,227) | (701) | (1,820) | | Interest expenses on leases | (752) | (675) | (1,505) | (1,354) | | Total finance costs | (1,197) | (1,953) | (2,206) | (3,174) | | Other interest income | — | — | 1 | — | | Total finance income | — | — | 1 | — | | Finance costs, net | (1,197) | (1,953) | (2,205) | (3,174) | - Mytheresa Group utilized €40.6 million and provided €8.3 million in guarantees under the €75.0 million Revolving Credit Facility as of December 31, 2024[56] Income Taxes The effective tax rate for the three months ended December 31, 2024, was negative (4.3)%, primarily due to non-deductible share-based compensation expenses, which also caused a tax expense despite a net loss Effective Tax Rate (%) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 2.7 % | (4.3)% | | Six Months Ended December 31, | 12.1 % | 21.1 % | - Change in effective tax rate and tax expense primarily driven by non-deductible share-based compensation (SBC) expenses[58] - For Q3 FY2025 (ended Dec 31, 2024), a tax expense was reported despite a net loss, because excluding SBC, the result would have been a profit before income taxes, leading to a negative effective tax rate[58] Property and Equipment Property and equipment decreased by €4.8 million to €38.9 million as of December 31, 2024, including a €3.1 million impairment loss on the closed Heimstetten distribution center - Property and equipment decreased by €4,752 thousand to €38,901 thousand as of December 31, 2024, from €43,653 thousand as of June 30, 2024[59] - Included in depreciation and amortization is an impairment loss of €3.1 million on property, plant, and equipment at the Heimstetten distribution center, which closed in August 2024, with a recoverable amount of zero[59] Other Assets Total current other assets decreased to €34.0 million as of December 31, 2024, primarily due to reduced right of return assets and DDP duty drawbacks, while non-current other assets remained stable Current Other Assets (€ thousand) | Metric | June 30, 2024 | December 31, 2024 | |:---|:---|:---| | Right of return assets | 13,205 | 9,658 | | Current VAT receivables | — | 968 | | Prepaid expenses | 4,233 | 3,361 | | Receivables against payment service providers | 1,086 | 1,123 | | Advanced payments | 2,582 | 1,984 | | Deposits | 152 | 31 | | DDP duty drawbacks | 14,352 | 8,463 | | Other current assets | 9,696 | 8,396 | | Total | 45,306 | 33,983 | Non-Current Other Assets (€ thousand) | Metric | June 30, 2024 | December 31, 2024 | |:---|:---|:---| | Other non-current receivables | 29 | 1 | | Non-current deposits | 1,431 | 1,593 | | Non-current prepaid expenses | 6,112 | 6,136 | | Total | 7,572 | 7,730 | - Non-current prepaid expenses primarily relate to prepayments made to Climate Partner for carbon emission offsets[63] Share-based Compensation Mytheresa Group utilizes various share-based compensation arrangements, including IPO-related awards, annual plans, a Long-Term Incentive Plan, and an Employee Share Purchase Program, all influencing recognized compensation expense Description of Share-based Compensation Arrangements The company's share-based compensation encompasses IPO-related awards, annual Restricted Share Units for Supervisory Board Members, a Long-Term Incentive Plan for key management, and an Employee Share Purchase Program, each with distinct vesting conditions - IPO-related awards include the 'Alignment Grant' (share options vesting over four years) and the 'Restoration Grant' (phantom shares fully vested on grant date, subject to transfer restrictions)[65][66][67] - Annual plans include RSUs for Supervisory Board Members (vesting after one year) and a Long-Term Incentive Plan (LTI) for key management, comprising time-vesting RSUs and non-market performance RSUs (vesting over three years, with performance conditions based on gross profit, GMV growth, and adjusted EBITDA margin)[68][72][73] - Stock options under the LTI plan for key management vest over three years and have exercise prices of USD 4.00 or USD 5.07[79][80][83] - The Employee Share Purchase Program (ESPP) allows eligible employees to acquire ADSs at a discount (one-fourth of investment, effectively receiving four ADSs for the price of three), with 29,641 shares issued in 2023 and 13,149 in 2024[87][88] Measurement of Fair Values Fair values for Alignment Grant and LTI share options are determined using the Black-Scholes formula, while Restoration Grant phantom shares and RSUs are valued based on the closing share price at grant date - Fair value of Alignment Grant share options is measured using the Black-Scholes formula, with expected volatility based on historical volatility of peer companies[89][90] - Fair value of LTI stock options is measured using the Black-Scholes formula, with expected volatility based on historical volatility of peer companies (before June 30, 2024) and the Company's own shares (after June 30, 2024)[91][92][93] - Restoration Grant phantom shares and RSUs have grant date fair values based on the closing share price, as they are not subject to an exercise price[94] Share-based Compensation Expense Recognized Total share-based compensation expense recognized for the six months ended December 31, 2024, was €9,576 thousand, a decrease from the prior year, with 13,787 shares withheld to cover RSU vesting tax obligations Share-based Compensation Expense Recognized (Six Months Ended December 31, € thousand) | Metric | 2023 | 2024 | |:---|:---|:---| | Expense related to: | 11,336 | 9,576 | | Share Options (Alignment Grant) | 8,790 | 3,787 | | Share Options (LTI) | 478 | 1,805 | | Restricted Shares | — | 181 | | Restricted Share Units | 2,068 | 3,803 | | Classified within capital reserve (end of year) | 169,789 | 185,167 | - During the six months ended December 31, 2024, 13,787 shares were withheld to cover tax obligations related to RSU vesting, with a total value of €66 thousand[95] Reconciliation of Outstanding Share Options As of December 31, 2024, Alignment award share options decreased to 6,041,925, while LTI share options significantly increased to 6,580,035 due to new grants, each with distinct average exercise prices and remaining contractual lives Alignment Award Share Options Outstanding | Period | Options | Wtd. Average Exercise Price (USD) | |:---|:---|:---|\ | June 30, 2023 | 6,197,415 | 8.55 | | December 31, 2023 | 6,197,415 | 8.55 | | June 30, 2024 | 6,063,090 | 8.57 | | Forfeited | (21,165) | 11.58 | | December 31, 2024 | 6,041,925 | 8.56 | | Average remaining contractual life (Dec 31, 2024) | | 6.06 years | LTI Share Options Outstanding | Period | Options | Wtd. Average Exercise Price (USD) | |:---|:---|:---|\ | June 30, 2023 | — | — | | Granted | 3,597,828 | 4.00 | | December 31, 2023 | 3,597,828 | 4.00 | | June 30, 2024 | 3,309,066 | 4.00 | | Exercised | (6,508) | 4.00 | | Granted | 3,277,477 | 5.07 | | December 31, 2024 | 6,580,035 | 4.53 | | Average remaining contractual life (Dec 31, 2024) | | 9 years | Financial Instruments and Financial Risk Management As of December 31, 2024, financial instruments are primarily measured at amortized cost, with derivatives at fair value (Level 2), resulting in a negative net cash flow hedge reserve of €2,291 thousand Financial Instruments (as of December 31, 2024, € thousand) | Category | Carrying amount | Fair value | Fair value hierarchy level | |:---|:---|:---|:---| | Financial assets | | | | | Non-current deposits | 1,593 | — | — | | Trade and other receivables | 9,387 | — | — | | Cash and cash equivalents | 13,836 | — | — | | Other assets (deposits) | 31 | — | — | | Other assets (derivatives) | 73 | 73 | Level 2 | | Other assets (other financial assets) | 15,665 | — | — | | Financial liabilities | | | | | Non-current lease liabilities | 38,795 | — | — | | Borrowings | 40,594 | — | — | | Current lease liabilities | 8,561 | — | — | | Trade and other payables | 71,923 | — | — | | Other liabilities (derivatives) | 3,251 | 3,251 | Level 2 | | Other liabilities (other financial liabilities) | 17,480 | — | — | - Foreign exchange forwards are valued at present value of future cash flows based on forward exchange rates, classified as Level 2 fair values[103] - As of December 31, 2024, Mytheresa Group recorded €2,291 thousand in negative net cash flow hedge reserve; without hedge accounting, this amount would have been recorded in profit or loss[106] Business Combinations (Pending acquisition of YNAP) On October 7, 2024, Mytheresa agreed to acquire YNAP from Richemont, involving YNAP's €555 million cash position, Mytheresa issuing 33% of its shares, and a €100 million RCF, with closing expected in H1 2025 - On October 7, 2024, Mytheresa agreed to acquire 100% of YOOX Net-a-Porter Group S.p.A (YNAP) from Richemont Italia Holding S.P.A[108] - YNAP will be sold with a €555 million cash position and no financial debt[108] - Mytheresa will issue shares representing 33% of its fully diluted share capital to Richemont as consideration[108] - Richemont International Holding S.A. will provide YNAP with a 6-year €100 million revolving credit facility (RCF)[108] - The transaction is subject to regulatory approvals and customary closing conditions, with an expected completion in the first half of calendar year 2025[108] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Mytheresa Group's financial condition, liquidity, and results of operations, including forward-looking statements and key performance drivers Special Note Regarding Forward-Looking Statements This section cautions that the report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially, and the company undertakes no obligation to update them - The report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially from projections[110] - Forward-looking statements are identified by words like 'anticipate,' 'believe,' 'expect,' and are based on management's current beliefs and assumptions[110] - The company undertakes no obligation to update forward-looking statements beyond the report date, except as required by law[110] Overview Mytheresa is a leading global luxury multi-brand digital platform offering curated products and a unique digital experience, though recent performance has been impacted by global economic uncertainties and inflation, with no long-term adverse effects anticipated - Mytheresa is a leading luxury multi-brand digital platform shipping to over 130 countries, offering a curated selection from up to 250 coveted brands across various categories[111] - The company provides a unique digital experience combining exclusive products, content, differentiated global customer service, and leading technology, building a community for luxury enthusiasts[111] - Global economic uncertainties, including geopolitical conflicts and inflation, have negatively impacted business activities and sales in the three and six months ended December 31, 2024, but management does not anticipate long-term adverse effects[112][113][114] Pending Acquisition of YNAP Mytheresa's definitive agreement to acquire YNAP from Richemont, announced October 7, 2024, involves YNAP's €555 million cash, Mytheresa issuing 33% of its shares, and a €100 million RCF, with closing expected in H1 2025 - Mytheresa entered a definitive agreement on October 7, 2024, to acquire YOOX Net-a-Porter Group S.p.A (YNAP) from Richemont Italia Holding S.P.A[118][120] - YNAP will be sold with a €555 million cash position and no financial debt; Mytheresa will issue shares representing 33% of its fully diluted share capital to Richemont[120] - Richemont International Holding S.A. will provide YNAP with a €100 million revolving credit facility (RCF)[120] - The acquisition is subject to regulatory approvals and customary closing conditions, with an expected completion in the first half of calendar year 2025[120] Key Operating and Financial Metrics Mytheresa Group assesses performance using key operating and financial metrics, reporting GMV growth of 9.2% to €461.2 million and net sales growth of 10.6% to €424.7 million for the six months ended December 31, 2024, with Adjusted EBITDA increasing substantially to €19.1 million Key Operating and Financial Metrics (Six Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | |:---|:---|:---| | Gross Merchandise Value (GMV) | 422.5 | 461.2 | | Active customer (LTM in thousand) | 856 | 843 | | Total orders shipped (LTM in thousand) | 2,037 | 2,089 | | Average order value (LTM) | 672 | 736 | | Net sales | 384.1 | 424.7 | | Gross profit | 177.4 | 202.2 | | Gross profit margin | 46.2 % | 47.6 % | | Operating Loss | (18.2) | (32.6) | | Net Loss | (18.0) | (28.2) | | Adjusted EBITDA | 6.4 | 19.1 | | Adjusted EBITDA margin | 1.7 % | 4.5 % | | Adjusted Operating income (loss) | (0.9) | 11.1 | | Adjusted Operating income (loss) margin | (0.2)% | 2.6 % | | Adjusted Net income (loss) | (0.6) | 16.0 | | Adjusted Net income (loss) margin | (0.2)% | 3.8 % | - Adjusted EBITDA, Adjusted Operating income (loss), and Adjusted Net income are non-IFRS measures used by management, analysts, and investors to evaluate performance by excluding non-core operational items[123] Reconciliation of Net Loss to Adjusted EBITDA (Six Months Ended December 31) | Metric | 2023 (€ million) | 2024 (€ million) | |:---|:---|:---| | Net Loss | (18.0) | (28.2) | | Finance costs, net | 2.2 | 3.2 | | Income tax expense (benefit) | (2.5) | (7.5) | | Depreciation and amortization | 7.2 | 11.1 | | EBITDA | (11.0) | (21.5) | | Other transaction-related, certain legal and other expenses | 6.1 | 31.0 | | Share-based compensation | 11.3 | 9.6 | | Adjusted EBITDA | 6.4 | 19.1 | | Adjusted EBITDA margin | 1.7 % | 4.5 % | Non-IFRS Financial Measures Definitions This section defines Mytheresa Group's non-IFRS financial measures, such as Adjusted EBITDA and Adjusted Net income, which are calculated by adjusting IFRS figures to exclude non-recurring expenses for a clearer view of core operating performance - Adjusted EBITDA is net income before finance expense (net), taxes, and depreciation and amortization, adjusted to exclude Other transaction-related, certain legal and other expenses and Share-based compensation expense[132] - Adjusted Operating income is operating income, adjusted to exclude Other transaction-related, certain legal and other expenses and Share-based compensation expense[133] - Adjusted Net income is net Loss, adjusted to exclude Other transaction-related, certain legal and other expenses and Share-based compensation expenses[134] - Other adjusted non-IFRS measures include Adjusted shipping and payment costs, Adjusted selling, general and administrative, Adjusted depreciation and amortization, and Adjusted finance costs, net, all designed to exclude non-core operational impacts[136][137][138] Factors Affecting our Performance Mytheresa Group's performance is shaped by economic trends, brand awareness, luxury brand partnerships, online luxury growth, category expansion, inventory management, infrastructure investments, and the capital-efficient Curated Platform Model Overall Economic Trends Overall economic conditions, including employment, inflation, interest rates, and geopolitical conflicts, significantly impact Mytheresa's business and customer spending, potentially leading to higher labor costs during low unemployment periods - Overall economic environment and consumer behavior changes significantly impact business, with positive conditions promoting spending and weakness having a negative effect[141] - Global macroeconomic factors like employment rates, inflation, interest rates, and regional military conflicts affect customer spending patterns[141] - Low unemployment periods generally lead to higher labor costs[141] Growth in Brand Awareness Mytheresa plans continued investment in brand marketing activities to expand awareness and attract new customers, recognizing that ineffective promotion could negatively impact net sales growth and profitability - Company invests in brand marketing activities (campaigns, physical experiences, exclusive collections, in-house content) to expand brand awareness and attract new customers[142] - Failure to cost-effectively promote the brand or convert impressions into new customers may adversely affect net sales growth and profitability[142] Luxury Brand Partners Mytheresa's business relies on curated luxury brand assortments and strong partner relationships, which are crucial for competitive advantage; failure to maintain these could adversely affect operations - Business relies on access to curated top luxury brands, leveraging long-standing relationships and data-informed buying expertise[143] - Maintaining existing and developing new brand relationships is a competitive advantage; failure to do so could adversely affect business and results[143] Growth of Online Luxury Online luxury penetration is projected to reach 33% by 2030, a shift Mytheresa aims to capture through product offerings and collaborations, though competitive activity could adversely affect customer growth - Online penetration of luxury personal goods is expected to increase from 20% to 33% by 2030, driven by consumer preference for online shopping and multi-brand sites[144] - Mytheresa aims to capture this online spending shift through brand collaborations and exclusive product offerings[144] - Failure to capture the online shift or competitive promotional activity could adversely affect customer growth and results of operations[144] Growth in Men's, Kidswear and Life Mytheresa expanded into men's, kidswear, and lifestyle categories, including pre-owned luxury watches and fine jewelry, leveraging brand relationships and exclusive content to capture underserved markets and deepen customer engagement - Mytheresa launched Mytheresa Kids (2019) and Mytheresa Men (2020) to expand into underserved categories, leveraging brand relationships and exclusive content[145] - The 'Life' category launched in May 2022, extending luxury lifestyle offerings to home décor and other products, deepening customer relationships[145] - Introduced certified pre-owned luxury watches and expanded fine jewelry assortment in Q4 FY2023, making Mytheresa a unique multi-category luxury destination[145] Inventory Management Mytheresa employs customer data and brand collaboration for inventory optimization, using demand prediction and product insights to minimize risk and increase sell-through, with future enhancements from data science integration - Customer data and brand collaboration are used to curate product assortment and optimize inventory position[146] - Data-driven insights predict demand, sizing, and colorways, minimizing portfolio risk and increasing sell-through[146] - Buying process will be enhanced by growth in global data repository and leveraging data science[146] Investment in our Operations and Infrastructure Mytheresa plans future investments in operations and infrastructure, including a new distribution center, to enhance inventory, fulfillment, and logistics, supporting expansion into new categories and brand partnerships - Future investments in operations (e.g., new distribution center in Leipzig) and infrastructure will support offering enhancement and customer base growth[147] - Capital will be invested in inventory, fulfillment capabilities, and logistics infrastructure to drive efficiencies, localize offerings, and support new categories/brands[147] - The company will selectively invest in fulfillment capacity and automation[147] Curated Platform Model (CPM) The Curated Platform Model (CPM) integrates Mytheresa with brand partners, enhancing capital efficiency and growth by providing product access, with Mytheresa managing fulfillment while brand partners retain inventory ownership until customer delivery - CPM integrates Mytheresa with brand partners' direct retail operations, offering access to desirable products, improving capital efficiency, and boosting top- and bottom-line[148] - Mytheresa maintains customer relationships and manages fulfillment, but inventory is owned by the brand partner until customer delivery[148] - Unsold merchandise is returned to the brand partner or carried forward; CPM platform fees are recorded as net sales[148] Components of our Results of Operations This section defines Mytheresa Group's key operational components, including Net sales, Cost of sales, Gross profit, Shipping and payment costs, Marketing expenses, Selling, general and administrative expenses, Depreciation and amortization, Other income (expense), net, and Finance costs, net - Net sales include revenue from merchandise sales, shipping, duties, and platform fees from the Curated Platform Model (CPM), recognized upon delivery to the end customer[149] - Cost of sales includes merchandise cost, inventory write-offs, and delivery costs from brand partners; for CPM revenue, no cost of sales is incurred as the brand partner bears the purchase price[150] - Gross profit is net sales minus cost of sales, with gross profit margin fluctuating based on industry promotional intensity[151] - Shipping and payment costs cover delivery fees, packaging, international duties, and payment processing, increasing with international sales and higher AOV[152] - Marketing expenses include online advertising, marketing to existing customers, events, communication, and creative content development, expected to remain stable as a percentage of net sales/GMV[153] - Selling, general and administrative expenses comprise personnel costs (salaries, benefits) and general administrative expenses (IT, rent, consulting, insurance, share-based compensation, transaction-related costs), expected to decrease as a percentage of net sales/GMV in the medium term[154] - Depreciation and amortization include depreciation of property and equipment, right-of-use assets, and amortization of intangible assets, plus impairment losses[155] - Other income (expense), net, consists of foreign currency gains/losses, gains/losses on asset disposal, and miscellaneous items[156] - Finance costs, net, include interest expense on leases and revolving credit facilities[157][158] Results of Operations Analysis Mytheresa Group's six-month results ended December 31, 2024, show net sales growth to €424.7 million and improved gross profit, but operating loss widened to €32.6 million due to increased marketing and SG&A expenses, partially offset by a deferred tax benefit Gross Merchandise Value (GMV) GMV increased by 11.9% to €244.7 million for the three months and 9.2% to €461.2 million for the six months ended December 31, 2024, primarily driven by higher average order value Gross Merchandise Value (GMV) (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 218,699 | 244,678 | | Six Months Ended December 31, | 422,453 | 461,234 | - GMV increased by 11.9% for the three months and 9.2% for the six months ended December 31, 2024, primarily driven by an increase in average order value (AOV)[162] Net sales Net sales increased by 13.4% to €223.0 million and 10.6% to €424.7 million for the three and six months ended December 31, 2024, respectively, with higher growth than GMV attributed to wholesale brand performance Net Sales (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 196,630 | 222,985 | | Six Months Ended December 31, | 384,096 | 424,685 | Net Sales Percentage of GMV | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 89.9 % | 91.1 % | | Six Months Ended December 31, | 90.9 % | 92.1 % | - Higher net sales growth compared to GMV growth is due to better performance of wholesale brands versus individual CPM brands, where only commissions are reflected in net sales[163] Cost of sales, exclusive of depreciation and amortization Cost of sales, exclusive of depreciation and amortization, increased by 10.8% to €109.4 million and 7.6% to €222.5 million for the three and six months ended December 31, 2024, respectively, aligning with GMV and net sales growth Cost of Sales, exclusive of depreciation and amortization (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (98,695) | (109,399) | | Six Months Ended December 31, | (206,673) | (222,467) | Cost of Sales as Percentage of Net Sales | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (50.2)% | (49.1)% | | Six Months Ended December 31, | (53.8)% | (52.4)% | - Increase in cost of sales is aligned with GMV and net sales developments[164] Gross profit Gross profit increased by 16.0% to €113.6 million and 14.0% to €202.2 million for the three and six months ended December 31, 2024, respectively, with margins improving due to a higher share of full-price sales Gross Profit (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 97,935 | 113,585 | | Six Months Ended December 31, | 177,423 | 202,219 | Gross Profit Margin (Percentage of Net Sales) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 49.8 % | 50.9 % | | Six Months Ended December 31, | 46.2 % | 47.6 % | - Gross margin improved by 110 BPs (three months) and 140 BPs (six months) due to a higher share of full-price sales[165] Shipping and payment costs Shipping and payment costs increased to €33.7 million and €63.1 million for the three and six months ended December 31, 2024, respectively, but the cost ratio to GMV decreased due to higher average order value Shipping and Payment Costs (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (32,513) | (33,698) | | Six Months Ended December 31, | (60,825) | (63,058) | Shipping and Payment Cost Ratio (Percentage of GMV) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (14.9)% | (13.8)% | | Six Months Ended December 31, | (14.4)% | (13.7)% | - Shipping and payment cost ratio decreased due to an increase in Average Order Value (AOV)[166] Marketing expenses Marketing expenses significantly increased to €30.1 million and €55.1 million for the three and six months ended December 31, 2024, respectively, driven by increased campaigns targeting new customers, leading to a higher marketing cost ratio Marketing Expenses (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (23,458) | (30,076) | | Six Months Ended December 31, | (47,157) | (55,069) | Marketing Expense Ratio (Percentage of Net Sales / GMV) | Period | 2023 (Net Sales) | 2024 (Net Sales) | 2023 (GMV) | 2024 (GMV) | |:---|:---|:---|:---|:---| | Three Months Ended December 31, | (11.9)% | (13.5)% | (10.7)% | (12.3)% | | Six Months Ended December 31, | (12.3)% | (13.0)% | (11.2)% | (11.9)% | - Increase in marketing cost ratio driven by an uptick in marketing campaigns and events targeting high-potential new customers[169] Selling, general and administrative expenses Total SG&A expenses increased to €48.7 million and €104.7 million for the three and six months ended December 31, 2024, respectively, primarily due to transaction-related costs, though adjusted SG&A as a percentage of GMV decreased Selling, General and Administrative Expenses (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (42,012) | (48,726) | | Six Months Ended December 31, | (80,439) | (104,739) | - Increase in SG&A primarily driven by 'other transaction-related, certain legal and other expenses' (€9.6 million for three months, €30.9 million for six months ended Dec 31, 2024)[171] Adjusted SG&A Expenses (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Adjusted SG&A | (33,879) | (33,933) | | Adjusted SG&A Percentage of GMV | (15.5)% | (13.9)% | - Excluding share-based compensation and other transaction-related costs, adjusted SG&A expenses as a percentage of GMV decreased for both three and six months ended December 31, 2024, compared to prior year periods[175] Depreciation and amortization Depreciation and amortization expenses increased to €3.9 million and €11.1 million for the three and six months ended December 31, 2024, respectively, with the six-month increase largely due to a €3.1 million impairment loss on the Heimstetten distribution center Depreciation and Amortization (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (3,842) | (3,929) | | Six Months Ended December 31, | (7,238) | (11,057) | - The €3.8 million increase for the six months ended December 31, 2024, is largely driven by an impairment loss of €3.1 million on property, plant, and equipment at the Heimstetten distribution center, which closed in August 2024[178] Finance costs, net Finance costs, net, increased to €1.95 million and €3.17 million for the three and six months ended December 31, 2024, respectively, primarily due to higher utilization of bank borrowings and RCF amendment costs Finance Costs, Net (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | (1,197) | (1,953) | | Six Months Ended December 31, | (2,205) | (3,174) | - Finance costs, net, increased due to higher utilization of bank borrowings (€40.6 million as of Dec 31, 2024, vs. €4.9 million in prior year)[180] - Included in Other transaction-related, certain legal and other expenses for the six months ended Dec 31, 2024, are €0.5 million costs to amend the RCF agreement for a business combination, classified as finance costs[181] Income tax (expense) benefit For the six months ended December 31, 2024, the company reported an income tax benefit of €7.5 million, driven by deferred and current tax benefits, while the three-month effective tax rate was negative (4.3)% due to non-deductible share-based compensation Income Tax (Expense) Benefit (€ thousand) | Period | 2023 | 2024 | |:---|:---|:---| | Three Months Ended December 31, | 161 | (193) | | Six Months Ended December 31, | 2,468 | 7,542 | - Income tax benefit for the six months ended December 31, 2024, is driven by a deferred tax benefit of €6.5 million and a current tax benefit of €1.1 million[182] - The negative effective tax rate for the three months ended December 31, 2024, resulted from non-deductible share-based compensation expenses, which caused a tax expense despite a reported loss before income taxes[183] Liquidity and Capital Resources Mytheresa Group's liquidity, sourced from operations, cash, and a €75 million RCF, totaled €13.8 million in cash and equivalents as of December 31, 2024, with management confident in sufficient resources for the next twelve months despite operating cash outflow Overview of Liquidity and Capital Mytheresa's liquidity comprises cash from operations, existing cash and equivalents (€13.8 million), and a €75 million RCF, with €40.6 million drawn as of December 31, 2024, and management affirming sufficient resources and RCF covenant compliance - Primary liquidity sources are cash from operations, available cash and cash equivalents, and a €75 million Revolving Credit Facility (RCF)[185] - As of December 31, 2024, €40.6 million was drawn under the RCF, and €8.3 million in guarantees were provided[185] - Cash and cash equivalents were €13.8 million as of December 31, 2024, with a new RCF agreement (maturity September 2026) in place[186][187] - Management believes existing cash balances, expected cash flows, and RCF are sufficient for operating requirements for at least the next twelve months, and all RCF covenants were in compliance[189][190] Cash Flow Information For the six months ended December 31, 2024, net cash outflow from operating activities increased to €32.6 million, while net cash inflow from financing activities significantly rose to €32.9 million due to higher RCF utilization Consolidated Statement of Cash Flow Data (€ thousand) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | |:---|:---|:---|:---|:---| | Net cash flow from operating activities | 18,547 | (5,952) | (14,770) | (32,607) | | Net cash outflow from investing activities | (1,444) | (413) | (4,551) | (1,708) | | Net cash flow from financing activities | (18,056) | 11,010 | (4,316) | 32,911 | - Net cash outflow from operating activities increased for the six months ended December 31, 2024, mainly due to a decrease in other current liabilities[193] - Net cash outflow from investing activities decreased due to lower expenditure on property and equipment and intangible assets[194] - Net cash inflow from financing activities was driven by higher utilization of the Revolving Credit Facility (€40.6 million utilized as of Dec 31, 2024, vs. €4.9 million in prior year)[195] Quantitative and Qualitative Disclosures About Market Risk This section discusses Mytheresa Group's exposure to market risks, including interest rate risk and foreign exchange risk, and the strategies employed to manage these exposures Interest Rate Risk Mytheresa Group's cash and cash equivalents are not significantly impacted by interest rate fluctuations, and no material effect on results of operations is anticipated - Fair value of cash and cash equivalents (short-term deposits) not significantly affected by interest rate changes[197] - No material impact of interest rates on results of operations is expected[197] Foreign Exchange Risk Mytheresa Group's revenue, generated in eight currencies including USD and GBP, is subject to foreign exchange risk, which is partially hedged through short-term contracts, though not entirely eliminated - Revenue generated in eight currencies, with significant sales in U.S. Dollars and Pound Sterling, leading to foreign exchange risk[198] - Foreign exchange risk is less pronounced for cost of sales and operating expenses, as most purchases (90%) are in Euros and most employees (95%) are in Eurozone countries[198] - The company hedges foreign currency exposure in five major currencies (including USD and GBP) with contracts typically less than one year, but this does not eliminate all risk[199] Recent Accounting Pronouncements Detailed information regarding recent accounting pronouncements is available within the company's consolidated financial statements - Detailed discussion on recent accounting pronouncements can be found in the consolidated financial statements[200] Legal Proceedings This section outlines Mytheresa Group's involvement in legal proceedings and claims arising in the ordinary course of business, and management's assessment of their potential impact Overview of Legal Proceedings Mytheresa Group is involved in ordinary course legal proceedings, which management believes will not materially adversely affect business, operating results, cash flows, or financial condition, though future litigation may be necessary - Company is involved in legal proceedings and claims in the ordinary course of business[202] - Management believes no current legal proceedings would have a material adverse effect on business, operating results, cash flows, or financial condition[202] - Additional litigation may be necessary in the future to enforce intellectual property and contractual rights or protect confidential information[202]