Company Announcements

Farfetch Announces First Quarter 2022 Results

  • Q1 2022 Gross Merchandise Value (“GMV”) and Digital Platform GMV increase 1.7% and 2.5% year-over-year, respectively, to $930.8 million and $809.5 million, respectively
  • Q1 2022 Revenue increases 6.1% year-over-year to $514.8 million
  • Q1 2022 Gross Profit Margin of 44.8% and Digital Platform Order Contribution Margin of 32.7%
  • Q1 2022 Profit after Tax of $728.8 million (includes non-cash benefit arising from impact of lower share price on items held at fair value and remeasurements)
  • Q1 2022 Adjusted EBITDA of $(35.8) million

LONDON--(BUSINESS WIRE)--May 26, 2022-- Farfetch Limited (NYSE: FTCH), the leading global platform for the luxury fashion industry, today reported financial results for the first quarter ended March 31, 2022.

José Neves, Farfetch Founder, Chairman and CEO, said: "Our core business remains very strong, in spite of the macro events in China and ceasing operations in Russia, which impacted our performance and outlook. We are galvanized by the opportunity to focus our efforts in 2022 to further rationalize our business, aligning our fixed cost profile with lower near-term growth, which I believe will enable us to exit 2022 from a position of strength. Outside these external factors, we saw strong marketplace growth in the Americas and the Middle East, in first quarter 2022, our customer and luxury brand relations are going from strength to strength, and we continue to make progress towards our mission of building the global platform for luxury."

Elliot Jordan, CFO of Farfetch, said: “I am pleased that the first quarter 2022 results of Farfetch demonstrate our underlying strength and ability to adapt to the changing macro environment whilst building on the momentum we have achieved over recent years. We have navigated unprecedented challenges, grown Digital Platform GMV 64% on a two-year basis, and continue to operate at scale in the global luxury market. In light of the current environment we will be tailoring our resource allocation with an eye towards leveraging the platform model advantage we have to increase market share, while also positioning ourselves to expand our profitability to deliver shareholder value."

Consolidated Financial Summary and Key Operating Metrics (in $ thousands, except per share data, Average Order Value, Active Consumers or as otherwise stated):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Consolidated Group:

 

 

 

 

 

 

Gross Merchandise Value (“GMV”)

 

$

915,604

 

 

$

930,752

 

Revenue

 

 

485,079

 

 

 

514,803

 

Adjusted Revenue (1)

 

 

408,851

 

 

 

435,937

 

Gross profit

 

 

220,869

 

 

 

230,516

 

Gross profit margin

 

45.5%

 

 

44.8%

 

Profit after tax

 

$

516,667

 

 

$

728,752

 

Adjusted EBITDA (1)

 

 

(19,196)

 

 

(35,782)

Adjusted EBITDA Margin (1)

 

 

(4.7)%

 

(8.2)%

 

Basic Earnings per share (“EPS”)

 

$

1.44

 

 

$

1.93

 

Diluted EPS

 

 

(0.28)

 

 

(0.37)

Adjusted EPS (1)

 

 

(0.22)

 

 

(0.24)

Digital Platform:

 

 

 

 

 

 

Digital Platform GMV

 

$

790,014

 

 

$

809,509

 

Digital Platform Services Revenue

 

 

285,861

 

 

 

316,780

 

Digital Platform Gross Profit

 

 

156,335

 

 

 

171,905

 

Digital Platform Gross Profit Margin

 

54.7%

 

 

54.3%

 

Digital Platform Order Contribution (1)

 

$

94,468

 

 

$

103,726

 

Digital Platform Order Contribution Margin (1)

 

33.0%

 

 

32.7%

 

Active Consumers (in thousands)

 

 

3,272

 

 

 

3,822

 

Average Order Value (“AOV”) - Marketplace

 

$

618

 

 

$

632

 

AOV - Stadium Goods

 

 

326

 

 

 

323

 

Brand Platform:

 

 

 

 

 

 

Brand Platform GMV

 

$

112,315

 

 

$

99,739

 

Brand Platform Revenue

 

 

112,315

 

 

 

100,492

 

Brand Platform Gross Profit

 

 

57,735

 

 

 

49,116

 

Brand Platform Gross Profit Margin

 

51.4%

 

 

48.9%

 

  1. See “Non-IFRS and Other Financial and Operating Metrics” on Page 19 for reconciliations of non-IFRS measures to IFRS measures.

Recent Business Highlights

Digital Platform

  • Third-party transactions generated 83% of Digital Platform GMV at a take rate of 32.0% in first quarter 2022
  • The Farfetch Marketplace continued to offer the most extensive selection of online luxury fashion to consumers from over 1,400 sellers, with both brand partners and multi-brand retailers increasing the stock units year-over-year to nearly 12 million units in first quarter 2022
  • In April 2022, launched Beauty on the Marketplace, Browns and Off-White, offering consumers in Europe and the United States a crossover between fashion and beauty, with a curated selection of the industry’s most sought-after beauty brands including CHANEL, Gucci and Tom Ford, among others
  • Launched #YourChoiceYourFARFETCH brand campaign, which partnered with iconic celebrities, including Kim Cattrall and Josh Hartnett and renowned personalities to highlight unique fashion choices offered by the Marketplace
  • Continued to partner with brands on campaigns highlighting their collections on the Marketplace including:
    • Dolce & Gabbana for the launch of their new ‘Renaissance’ collection for womenswear and men's streetwear drops
    • Valentino Act 2 x Nataal featuring musician Priya Ragu for International Women’s Day
    • Exclusive partnership with Boghossian which embedded 3D viewing technology in editorial content for the first time on the marketplace, bringing to life their high jewelry collection
  • Announced global strategic partnership and investment into Neiman Marcus Group (NMG), which encompasses:
    • Re-platforming the Bergdorf Goodman website and mobile application on Farfetch Platform Solutions (FPS)
    • Neiman Marcus and Bergdorf Goodman joining the Farfetch Marketplace
    • The adoption of selected FPS services by Neiman Marcus including foundational international services
    • Farfetch's $200 million investment in NMG earmarked for digital growth and innovation initiatives
  • In May 2022, FPS continued to expand its client roster with launch of Jacob Cohen's global monobrand e-commerce site
  • In April 2022, acquired Wanna, a virtual try-on technology company, with the aim of expanding and scaling virtual try-on capabilities on the platform
  • Stadium Goods launched two technology products aimed at increasing supply - ‘STADIUMSUPPLY’ app and ‘SOURCE by Stadium Goods’ - which enable consignors to streamline their operations, as well as list and sell products

New Guards

  • Appointed editor-in-chief of Dazed, Ibrahim Kamara, as Art & Image Director for Off-White, to join a collective of creatives in overseeing the artistic direction of the brand
  • New Guards’ brand portfolio continued to create culturally relevant collections:
    • Showcased Fall-Winter 2022 collection for Off-White on runway show during Paris fashion week, and for Palm Angels and Ambush during Milan fashion week
    • Off-White released ‘Paperwork’, its first beauty collection, which includes genderless fragrances, face and body solid pigments, and nail polishes
    • Off-White partnered with footwear brand Church’s to re-imagine their classic Burnwood brogues
    • Palm Angels launched collaboration with rapper, Gunna
    • Ambush launched its inaugural NFT collection, casting its POW! jewelry design in NFT form

Environmental, Social and Governance

  • Donated $250,000 to the UN Refugee Agency (UNHCR) to support its humanitarian efforts in Ukraine
  • Beginning in 2022, developed criteria for our curated Conscious Beauty edit to enable consumers to make conscious choices

First Quarter 2022 Results Summary

Gross Merchandise Value (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Digital Platform GMV

 

$

790,014

 

 

$

809,509

 

Brand Platform GMV

 

 

112,315

 

 

 

99,739

 

In-Store GMV

 

 

13,275

 

 

 

21,504

 

GMV

 

$

915,604

 

 

$

930,752

 

GMV increased by $15.2 million from $915.6 million in first quarter 2021 to $930.8 million in first quarter 2022, representing year-over-year growth of 1.7%. Digital Platform GMV increased by $19.5 million from $790.0 million in first quarter 2021 to $809.5 million in first quarter 2022, representing year-over-year growth of 2.5%. Excluding the impact of changes in foreign exchange rates, Digital Platform GMV would have decreased 0.7% year-over-year.

First quarter 2022 Digital Platform GMV growth reflects order growth across the Marketplace, an increase in AOV from $618 to $632, driven by increases in full-priced item mix and number of items per order, as well as strong growth in the Americas, Middle East and Korea. This was offset by softer demand in other key markets including Russia, where trade was suspended from March 2022 with no indication of when trade might resume, and China, where continuing local COVID-19 restrictions continue to impact orders in Mainland China.

Brand Platform GMV decreased by 11.2% to $99.7 million, due to continued delays in order shipments and resulting cancelations arising from the migration to a new warehouse partner. The transition was completed in May 2022, however, delayed shipments could negatively impact margins into second quarter 2022. The GMV decrease also includes a 4.5% decline due to changes in foreign exchange rates.

In-Store GMV increased by 62.0% to $21.5 million, driven by additional openings of New Guards brands stores in the last twelve months as well as growth from existing stores.

Revenue (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Digital Platform Services third-party revenue

 

$

181,057

 

 

$

195,139

 

Digital Platform Services first-party revenue

 

 

104,804

 

 

 

121,641

 

Digital Platform Services Revenue

 

 

285,861

 

 

 

316,780

 

Digital Platform Fulfilment Revenue

 

 

76,228

 

 

 

78,866

 

Brand Platform Revenue

 

 

112,315

 

 

 

100,492

 

In-Store Revenue

 

 

10,675

 

 

 

18,665

 

Revenue

 

$

485,079

 

 

$

514,803

 

Revenue increased by $29.7 million year-over-year from $485.1 million in first quarter 2021 to $514.8 million in first quarter 2022, representing growth of 6.1%. The increase was primarily driven by 9.3% growth in Digital Platform Revenue to $395.6 million and a 74.8% growth in In-Store Revenue, offset by a 10.5% decrease in Brand Platform Revenue to $100.5 million.

Digital Platform Services Revenue increased by 10.8% ahead of the 2.5% overall growth in Digital Platform GMV, driven by first-party revenue, which increased 16.1%. Digital Platform Services third-party revenue increased ahead of GMV growth at 7.8% reflecting a higher take rate and higher growth in advertising revenue.

Digital Platform Fulfilment Revenue represents the pass-through to consumers of delivery and duties charges incurred by our global logistics solutions, net of any Farfetch-funded consumer promotions, subsidized shipping and incentives. Digital Platform Fulfilment Revenue increased 3.5% year-over-year, slightly above Digital Platform GMV growth of 2.5%, reflecting an increased pass-through of such costs to consumers in first quarter 2022.

Brand Platform Revenue decreased 10.5% primarily reflecting the decrease in Brand Platform GMV, partially offset by the addition of revenue from the Reebok partnership which commenced in March 2022.

Cost of Revenue (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Digital Platform Services third-party cost of revenue

 

$

61,358

 

 

$

56,218

 

Digital Platform Services first-party cost of revenue

 

 

68,168

 

 

 

88,657

 

Digital Platform Services cost of revenue

 

 

129,526

 

 

 

144,875

 

Digital Platform Fulfilment cost of revenue

 

 

76,228

 

 

 

78,866

 

Brand Platform cost of revenue

 

 

54,580

 

 

 

51,376

 

In-Store cost of goods sold

 

 

3,876

 

 

 

9,170

 

Cost of revenue

 

$

264,210

 

 

$

284,287

 

Cost of revenue increased by $20.1 million, or 7.6%, year-over-year from $264.2 million in first quarter 2021 to $284.3 million in first quarter 2022. The increase was driven by growth in Digital Platform Services cost of revenue, partially offset by a decrease in Brand Platform cost of revenue.

Digital Platform Services cost of revenue increased at a higher rate than Digital Platform Services Revenue primarily due to an increased mix of first-party revenue.

Gross profit (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Digital Platform third-party gross profit

 

$

119,699

 

 

$

138,921

 

Digital Platform first-party gross profit

 

 

36,636

 

 

 

32,984

 

Digital Platform Gross Profit

 

 

156,335

 

 

 

171,905

 

Brand Platform Gross Profit

 

 

57,735

 

 

 

49,116

 

In-Store Gross Profit

 

 

6,799

 

 

 

9,495

 

Gross profit

 

$

220,869

 

 

$

230,516

 

Gross profit increased by $9.6 million, or 4.4%, year-over-year, to $230.5 million in first quarter 2022. Gross profit margin decreased 70 bps year-over-year to 44.8%, primarily driven by a reduction in Brand Platform Gross Profit Margin and mix, and a small decrease in Digital Platform Gross Profit Margin.

Digital Platform Gross Profit Margin decreased 40 bps to 54.3% in first quarter 2022 from 54.7% in first quarter 2021, as Digital Platform Services cost of revenue increased at a higher rate than Digital Platform Services Revenue. An increase in Digital Platform third-party gross profit margin was offset by a decrease in first-party gross profit margin primarily due to a lower mix of full-price items and an increase in stock clearance activity on Browns products resulting from 2022 season stock purchases in anticipation of higher levels of consumer demand.

Brand Platform Gross Profit Margin decreased 250 bps year-over-year to 48.9%, driven by a shift in product mix, additional inventory provisioning related to delayed deliveries, partially offset by the elimination of Palm Angels royalty costs from Brand Platform cost of revenue following the acquisition of 60% of the outstanding equity interests of Palm Angels S.r.l (“Palm Angels”) the owner of the Palm Angels trademark.

Selling, general and administrative expenses by type (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Demand generation expense

 

$

61,867

 

 

$

68,179

 

Technology expense

 

 

33,532

 

 

 

34,103

 

Share-based payments

 

 

40,516

 

 

 

35,407

 

Depreciation and amortization

 

 

53,992

 

 

 

81,495

 

General and administrative

 

 

144,666

 

 

 

164,016

 

Other items

 

 

4,721

 

 

 

8,191

 

Selling, general and administrative expense

 

$

339,294

 

 

$

391,391

 

Demand generation expense increased $6.3 million year-over-year to $68.2 million in first quarter 2022 and remained relatively flat as a percentage of Digital Platform Services Revenue at 21.5% compared to 21.6% in first quarter 2021. This was driven by our investment in acquiring and engaging customers in paid channels, and reflects continued cost inflation in digital marketing channels and our redistribution of spend as we continue to implement measures in response to the impact of Apple's recent iOS privacy measures, to channels which exhibited higher unit costs, on average.

Technology expense primarily relates to maintenance and operations of our platform features and services, as well as software, hosting and infrastructure expenses, which includes three globally distributed data centers, including one in Shanghai, which support the processing of our growing base of transactions. Technology expense increased by $0.6 million, or 1.7%, in first quarter 2022 year-over-year driven by an increase in technology staff headcount and software and hosting costs to support growth.

Our total investment in technology, which includes investments in longer term development projects which are treated as capital items, was 14.9% of Adjusted Revenue in first quarter 2022, as compared to 14.0% in first quarter 2021, reflecting our investment in Beauty, which launched during the first quarter 2022.

Depreciation and amortization expense increased by $27.5 million, or 50.9%, year-over-year from $54.0 million in first quarter 2021 to $81.5 million in first quarter 2022. Amortization expense increased principally due to increased technology investments, where qualifying technology development costs are capitalized and amortized over their useful lives, as well as amortization of the $364.1 million intangible asset recognized in relation to the Reebok partnership beginning in March 2022. The Reebok partnership intangible asset, and a corresponding financial liability for the same amount, will be amortized over the 11-year life of the agreement. Depreciation expense increased primarily as a result of new stores and office leases entered into within the last twelve months.

Share-based payments decreased by $5.1 million, or 12.6% year-over-year in first quarter 2022 due to the decreased cost of employment related taxes and cash-settled awards, primarily as a result of the share price movement, partially offset by grants of equity-settled awards, including the performance-based restricted share unit ("PSU") award granted to the Company's Founder, Chairman and CEO, José Neves in May 2021.

General and administrative expense increased by $19.3 million, or 13.3%, year-over-year in first quarter 2022, reflecting investments made towards our longer-term strategic initiatives including marketing initiatives to support Farfetch brand marketing and New Guards brands through campaigns and shows, which were not incurred in the prior year period due to COVID-19 restrictions. This was alongside an increase in warehousing costs as we scale our operations to support our Fulfilment by Farfetch strategy and the launch of Beauty, as well as market pressures on employee compensation which, also impacted technology expense. This was partially offset by a $25.2 million gain arising on settlement of our 2022 foreign exchange hedges, which were in position to cover our future receipts of Russian rubles, but were closed out as we no longer expect to receive rubles for the foreseeable future.

General and administrative expense increased as a percentage of Adjusted Revenue to 37.6% compared to 35.4% in first quarter 2021 primarily driven by slower growth in Adjusted Revenue in addition to investments towards our strategic initiatives to build our brand and launch our Beauty category.

Gains on items held at fair value and remeasurements (in thousands):

 

 

Three months ended March 31,

 

 

 

2021

 

 

2022

 

Remeasurement gains on put and call option liabilities

 

$

28,696

 

 

$

365,941

 

Fair value gains on embedded derivative liabilities

 

 

630,390

 

 

 

542,490

 

Fair value remeasurement of previously held equity interest

 

 

784

 

 

 

-

 

Fair value remeasurement of equity investment carried at fair value through profit or loss ("FVTPL")

 

 

-

 

 

 

1,468

 

Loss on disposal of investment carried at FVTPL

 

 

-

 

 

 

(1,639)

Gains on items held at fair value and remeasurements

 

$

659,870

 

 

$

908,260

 

The $365.9 million of remeasurement gains on put and call option liabilities in first quarter 2022 related to $271.4 million gain on the remeasurement of the put and call option resulting from the November 2020 strategic agreement with Alibaba Group Holding Limited (“Alibaba Group”) and Compagnie Financiere Richemont SA (“Richemont”), a $105.8 million remeasurement gain in connection with Chalhoub Group’s put option over their non-controlling interest in Farfetch International Limited, partially offset by a $6.1 million loss on the remeasurement of the put and call option over the 40% of the share capital in Palm Angels not owned by New Guards and a $5.1 million loss on the remeasurement of the put option over Alanui. S.r.l.

The $542.5 million of fair value gains on embedded derivative liabilities in first quarter 2022 were primarily driven by the decrease in our share price during the period. The fair value gains on embedded derivative liabilities in first quarter 2022 is comprised of the following revaluation gains on our convertible senior notes: (i) $65.5 million fair value gains related to $250 million 5.00% notes due in 2025 (the “February 2020 Notes”); (ii) $362.1 million fair value gains related to $400 million 3.75% notes due in 2027 (the “April 2020 Notes”); and, (iii) $115.0 million fair value gains related to $600 million 0.00% notes due in 2030 (the “November 2020 Notes”). These notes have provided strong liquidity to fund ongoing capital needs and invest in various growth initiatives.

The $630.4 million fair value gains on embedded derivative liabilities in first quarter 2021 were primarily driven by the decrease in our share price during the period. The fair value gains on embedded derivative liabilities in first quarter 2021 were comprised of $214.3 million fair value gains related to the February 2020 Notes; $256.4 million fair value gains related to the April 2020 Notes; and $159.6 million fair value gains related to the November 2020 Notes.

The $28.7 million of remeasurement gains in first quarter 2021 related to the remeasurement gain in connection with the Chalhoub Group’s put option over the non-controlling interest in Farfetch International Limited.

Profit After Tax

Profit after tax increased by $212.1 million year-over-year from $516.7 million to $728.8 million in first quarter 2022. The increase was primarily driven by gains on items held at fair value and remeasurements, which increased $248.4 million year-over-year.

EPS and Diluted EPS

First quarter 2022 basic EPS was $1.93 and diluted EPS was $(0.37). Diluted EPS assumes a full conversion of the convertible notes into shares, and that the Chalhoub liability and Farfetch China Holdings Ltd (“Farfetch China”) liability held on the statement of financial position at March 31, 2022 would have been settled in shares at the beginning of the first quarter 2022. As such, diluted EPS excludes the gains on items held at fair value and interest costs related to the Chalhoub liability, Farfetch China liability and the convertible notes, net of any applicable tax, while including all outstanding equity instruments that have a dilutive impact.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA declined by $16.6 million to $(35.8) million and Adjusted EBITDA Margin declined from (4.7)% to (8.2)% in first quarter 2022 driven by the decline in Brand Platform Revenue.

Liquidity

At March 31, 2022, cash and cash equivalents were $938.0 million, a decrease of $425.1 million compared to $1,363.1 million at December 31, 2021. The decrease in cash and cash equivalents was primarily related to funding working capital and cash payments for business acquisitions.

Post Balance Sheet Events

On April 5, 2022, Farfetch completed the acquisition of Wannaby Inc., trading under the name of Wanna, which provides immersive augmented reality and virtual try on technology for the luxury fashion industry at scale. Total consideration of $29.4 million comprised $24.5 million in cash, subject to closing accounting adjustments, and $4.9 million in shares, based on the Farfetch share price as at the acquisition date. The share consideration is subject to service conditions for certain management team members and employees of Wannaby Inc. remaining with the Company after the acquisition.

On April 5, 2022, Farfetch announced a global strategic partnership with Neiman Marcus Group, the largest omnichannel luxury retailer in the U.S. and the parent of brands including Neiman Marcus and Bergdorf Goodman. The partnership builds on Farfetch's Luxury New Retail vision and advances NMG's pioneering strategy to revolutionize integrated luxury retail. As part of its commitment to the partnership, Farfetch will make a minority common equity investment of up to $200.0 million in NMG.

Outlook

The following forward-looking statements reflect Farfetch’s expectations as of May 26, 2022.

For Full Year 2022:

  • Digital Platform GMV growth of 5% to 10% year-over-year
  • Brand Platform GMV growth of 10% to 15% year-over-year
  • Adjusted EBITDA margin of 0% to 1%

Uncertainties resulting from the impact of the COVID-19 pandemic, macroeconomic factors and geopolitical turmoil, including the war in Ukraine, could have material impacts on our future performance and projections. These factors could potentially impact our future performance include, among others:

  • Disruptions to our operations, fulfilment network, and shipments;
  • weakened consumer sentiment and discretionary income arising from various macro-economic conditions;
  • increased costs to support our operations;
  • slowing e-commerce consumer activity as vaccinations gain acceptance and populations resume to pre-pandemic activities and lifestyles; and
  • reduced demand for our offerings and services.

Conference Call Information

Farfetch Limited will host a conference call today, May 26, 2022, at 4:30 p.m. Eastern Time to discuss the Company’s results as well as expectations about Farfetch’s business. Listeners may access the live conference call via audio webcast at http://farfetchinvestors.com, where listeners can also access Farfetch’s earnings press release and slide presentation. Following the call, a replay of the webcast will be available at the same website for at least 30 days.

Unaudited interim condensed consolidated statement of operations

 

 

for the three months ended March 31

 

 

(in $ thousands, except share and per share data)

 

 

 

 

 

 

 

2021

 

2022

Revenue

485,079

 

514,803

 

 

 

 

Cost of revenue

(264,210)

(284,287)

Gross profit

220,869

 

230,516

 

 

 

 

Selling, general and administrative expenses

(339,294)

(391,391)

Operating loss

(118,425)

(160,875)

 

 

 

 

Gains on items held at fair value and remeasurements

659,870

 

908,260

Share of results of associates

(69

)

18

Finance income

1,019

 

1,846

Finance costs

(25,679)

(17,406)

Profit before tax

516,716

 

731,843

 

 

 

 

Income tax expense

(49)

(3,091)

Profit after tax

516,667

 

728,752

 

 

 

 

Profit after tax attributable to:

 

 

 

Equity holders of the parent

511,236

 

734,326

Non-controlling interests

5,431

 

(5,574)

 

516,667

 

728,752

 

 

 

 

Earnings/(loss) per share attributable to equity holders of the parent

 

 

 

Basic

1.44

 

1.93

Diluted

(0.28

)

(0.37)

 

 

 

 

Weighted-average shares outstanding

 

 

 

Basic

355,052,843

 

381,341,974

Diluted

457,887,449

 

466,083,711

Unaudited interim condensed consolidated statement of comprehensive income/(loss)

for the three months ended March 31

 

 

(in $ thousands)

 

 

 

 

 

 

 

 

 

2021

 

2022

Profit after tax

 

516,667

 

728,752

Other comprehensive income/(loss):

 

 

 

 

Items that may be subsequently reclassified to the consolidated
statement of operations (net of tax):

 

 

 

 

Exchange (loss)/gain on translation of foreign operations

 

(7,281)

 

2,923

Gain on cash flow hedges recognized in equity

 

6,273

 

1,107

(Gain)/loss on cash flow hedges reclassified and reported in net profit

 

(2,691)

 

5,856

Loss on cash flow hedges recognized in equity - time value

 

(1,897)

 

-

Hedge discontinuation gains transferred to statement of operations

 

-

 

(23,387)

Other comprehensive loss for the period, net of tax

 

(5,596)

 

(13,501)

Total comprehensive income for the period, net of tax

 

511,071

 

715,251

 

 

 

 

 

Total comprehensive income/(loss) attributable to:

 

 

 

 

Equity holders of the parent

 

508,106

 

720,810

Non-controlling interests

 

2,965

 

(5,559)

 

 

511,071

 

715,251

Unaudited interim condensed consolidated statement of financial position

 

 

(in $ thousands)

 

 

 

 

December 31,
2021

 

March 31,
2022

Non-current assets

 

 

 

 

Other receivables

 

31,225

 

18,354

Deferred tax assets

 

13,334

 

14,935

Intangible assets

 

1,359,657

 

1,742,564

Property, plant and equipment

 

97,063

 

95,674

Right-of-use assets

 

195,549

 

203,072

Investments

 

17,937

 

17,701

Investments in associates

 

69

 

87

Total non-current assets

 

1,714,834

 

2,092,387

Current assets

 

 

 

 

Inventories

 

255,664

 

301,116

Trade and other receivables

 

374,706

 

422,199

Current tax assets

 

10,201

 

15,205

Short term investments

 

99,971

 

99,642

Derivative financial assets

 

8,010

 

2,404

Cash and cash equivalents

 

1,363,128

 

937,969

Total current assets

 

2,111,680

 

1,778,535

Total assets

 

3,826,514

 

3,870,922

 

 

 

 

 

Liabilities and equity

 

 

 

 

Non-current liabilities

 

 

 

 

Provisions

 

60,545

 

25,223

Deferred tax liabilities

 

156,025

 

151,090

Lease liabilities

 

180,915

 

187,761

Employee benefit obligations

 

12,948

 

6,554

Derivative financial liabilities

 

872,428

 

329,938

Borrowings

 

515,804

 

530,116

Put and call option liabilities

 

836,609

 

380,975

Other financial liabilities

 

13,367

 

345,027

Total non-current liabilities

 

2,648,641

 

1,956,684

Current liabilities

 

 

 

 

Trade and other payables

 

806,406

 

648,639

Provisions

 

14,585

 

10,300

Current tax liability

 

5,189

 

23,241

Lease liabilities

 

33,594

 

34,437

Employee benefit obligations

 

8,296

 

3,351

Derivative financial liabilities

 

21,118

 

32,442

Put and call option liabilities

 

8,321

 

95,828

Other financial liabilities

 

9,748

 

17,406

Total current liabilities

 

907,257

 

865,644

Total liabilities

 

3,555,898

 

2,822,328

Equity

 

 

 

 

Equity attributable to owners of the parent

 

88,608

 

870,693

Non-controlling interests

 

182,008

 

177,901

Total equity

 

270,616

 

1,048,594

Total equity and liabilities

 

3,826,514

 

3,870,922

Unaudited interim condensed consolidated statement of cash flows

 

 

 

 

for the three months ended March 31

 

 

 

 

(in $ thousands)

 

 

 

 

 

 

2021

 

2022

Cash flows from operating activities

 

 

 

 

Operating loss

 

(118,425)

 

(160,875)

Adjustments to reconcile operating loss to net cash outflow from operating activities:

 

 

 

 

Depreciation

 

11,158

 

13,268

Amortization

 

42,834

 

68,227

Non-cash employee benefits expense

 

44,399

 

66,226

Impairment of investments

 

67

 

65

Change in working capital

 

 

 

 

Increase in receivables

 

(73,179)

 

(45,536)

Increase in inventories

 

(25,658)

 

(43,720)

Decrease in payables

 

(114,166)

 

(167,150)

Change in other assets and liabilities

 

 

 

 

Increase in non-current receivables

 

(213)

 

(439)

Decrease in other liabilities

 

(32,879)

 

(40,448)

Decrease in provisions

 

(17,537)

 

(26,171)

Increase in derivative financial instruments

 

2,409

 

45

Income taxes paid

 

(771)

 

(213)

Net cash outflow from operating activities

 

(281,961)

 

(336,721)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Acquisition of subsidiary, net of cash acquired

 

-

 

(45,471)

Payments for property, plant and equipment

 

(5,379)

 

(4,892)

Payments for intangible assets

 

(24,736)

 

(25,649)

Payments for investments

 

(9,107)

 

-

Interest received

 

938

 

1,140

Net cash outflow from investing activities

 

(38,284)

 

(74,872)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Repayment of the principal elements of lease payments

 

(5,630)

 

(8,096)

Interest paid and fees paid on loans

 

(5,265)

 

(2,918)

Settlement of equity-based awards

 

-

 

(4,409)

Proceeds from exercise of employee share-based awards

 

13,086

 

949

Net cash inflow/(outflow) from financing activities

 

2,191

 

(14,474)

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(318,054)

 

(426,067)

Cash and cash equivalents at the beginning of the period

 

1,573,421

 

1,363,128

Effects of exchange rate changes on cash and cash equivalents

 

(7,787)

 

908

Cash and cash equivalents at end of period

 

1,247,580

 

937,969

Unaudited interim condensed consolidated statement of changes in (deficit)/equity

 

 

 

 

 

 

 

 

 

 

 

 

(in $ thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share
capital

 

 

Share
premium

 

 

Merger
reserve

 

 

Foreign
exchange reserve

 

 

Other
reserves

 

 

Accumulated
losses

 

 

(Deficit)/equity attributable to owners of the parent

 

 

Non- controlling
interests

 

 

Total (deficit)/equity

 

 

Balance at January 1, 2021

 

 

14,168

 

 

 

927,931

 

 

 

783,529

 

 

 

(7,271)

 

 

467,565

 

 

 

(4,013,120)

 

 

(1,827,198)

 

 

168,556

 

 

 

(1,658,642)

 

Balance at January 1, 2021 (as previously reported)

 

 

14,168

 

 

 

927,931

 

 

 

783,529

 

 

 

(7,271)

 

 

447,753

 

 

 

(4,010,756)

 

 

(1,844,646)

 

 

168,556

 

 

 

(1,676,090)

 

Correction of misstatements (1)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,812

 

 

 

(2,364)

 

 

17,448

 

 

 

-

 

 

 

17,448

 

 

Revised balance at January 1, 2021

 

 

14,168

 

 

 

927,931

 

 

 

783,529

 

 

 

(7,271)

 

 

467,565

 

 

 

(4,013,120)

 

 

(1,827,198)

 

 

168,556

 

 

 

(1,658,642)

 

Changes in equity/(deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit after tax for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

511,236

 

 

 

511,236

 

 

 

5,431

 

 

 

516,667

 

 

Other comprehensive (loss)/income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,815)

 

 

1,685

 

 

 

-

 

 

 

(3,130)

 

 

(2,466)

 

 

(5,596)

 

Total comprehensive (loss)/income for the period, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,815)

 

 

1,685

 

 

 

511,236

 

 

 

508,106

 

 

 

2,965

 

 

 

511,071

 

 

Loss on cashflow hedge transferred to inventory

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,209

 

 

-

 

 

 

1,209

 

 

 

-

 

 

 

1,209

 

 

Issue of share capital, net of transaction costs

 

 

82

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

 

82

 

 

 

-

 

 

 

82

 

 

Share-based payment – equity settled

 

-

 

 

-

 

 

 

-

 

 

-

 

 

 

9,786

 

 

 

41,012

 

 

 

50,798

 

 

 

-

 

 

 

50,798

 

 

Share-based payment – reverse vesting shares

 

-

 

 

-

 

 

-

 

 

-

 

 

 

6,523

 

 

-

 

 

 

6,523

 

 

 

-

 

 

 

6,523

 

 

Acquisition of non-controlling interest

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

2,337

 

 

 

2,337

 

 

Balance at March 31, 2021

 

 

14,250

 

 

 

927,931

 

 

 

783,529

 

 

 

(12,086)

 

 

486,768

 

 

 

(3,460,872)

 

 

(1,260,480)

 

 

173,858

 

 

 

(1,086,622)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2022

 

 

15,231

 

 

 

1,641,674

 

 

 

783,529

 

 

 

(24,544)

 

 

59,520

 

 

 

(2,386,802)

 

 

88,608

 

 

 

182,008

 

 

 

270,616

 

 

Changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) after tax for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

734,326

 

 

 

734,326

 

 

 

(5,574)

 

 

728,752

 

 

Other comprehensive income/(loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,908

 

 

 

(16,424)

 

 

-

 

 

 

(13,516)

 

 

15

 

 

 

(13,501)

 

Total comprehensive income/(loss) for the period, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,908

 

 

 

(16,424)

 

 

734,326

 

 

 

720,810

 

 

 

(5,559)

 

 

715,251

 

 

Gain on cashflow hedge transferred to inventory

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(473)

 

 

-

 

 

 

(473)

 

 

-

 

 

 

(473)

 

Issue of share capital, net of transaction costs

 

 

59

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

59

 

 

 

-

 

 

 

59

 

 

Share-based payment – equity settled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

18,830

 

 

 

27,977

 

 

 

46,807

 

 

 

-

 

 

 

46,807

 

 

Share-based payment – reverse vesting shares

 

 

2

 

 

 

918

 

 

 

-

 

 

 

-

 

 

 

15,414

 

 

 

-

 

 

 

16,334

 

 

 

-

 

 

 

16,334

 

 

Other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,452)

 

 

(1,452)

 

 

1,452

 

 

 

-

 

 

Balance at March 31, 2022

 

 

15,292

 

 

 

1,642,592

 

 

 

783,529

 

 

 

(21,636)

 

 

76,867

 

 

 

(1,625,951)

 

 

870,693

 

 

 

177,901

 

 

 

1,048,594

 

 

1. Refer to our Consolidated financial statements included in our 2021 20-F filed with the U.S. Securities and Exchange Commission ("SEC") for further information.

Supplemental Metrics 1

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Group:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Merchandise Value (“GMV”)

 

$

721,310

 

$

797,840

 

$

1,056,990

 

$

915,604

 

$

1,007,811

 

$

1,017,314

 

$

1,289,145

 

$

930,752

 

Revenue

 

 

364,680

 

 

437,700

 

 

540,105

 

 

485,079

 

 

523,313

 

 

582,565

 

 

665,651

 

 

514,803

 

Adjusted Revenue

 

 

307,877

 

 

386,778

 

 

464,887

 

 

4`08,851

 

 

439,488

 

 

504,670

 

 

571,095

 

 

435,937

 

In-Store Revenue

 

 

3,926

 

 

11,416

 

 

13,666

 

 

10,675

 

 

17,635

 

 

20,163

 

 

22,448

 

 

18,665

 

In-Store GMV

 

 

3,926

 

 

11,416

 

 

13,666

 

 

13,275

 

 

21,739

 

 

23,553

 

 

25,814

 

 

21,504

 

Gross profit

 

 

159,375

 

 

209,029

 

 

249,148

 

 

220,869

 

 

230,082

 

 

252,180

 

 

313,380

 

 

230,516

 

Gross profit margin

 

43.7%

 

47.8%

 

46.1%

 

45.5%

 

44.0%

 

43.3%

 

47.1%

 

44.8%

 

Demand generation expense

 

$

(47,378)

 

$

(46,185)

 

$

(67,258)

 

$

(61,867)

 

$

(65,888)

 

$

(74,090)

 

$

(89,976)

 

$

(68,179)

 

Technology expense

 

 

(29,284)

 

 

(29,809)

 

 

(29,827)

 

 

(33,532)

 

 

(34,545)

 

 

(32,585)

 

 

(30,746)

 

 

(34,103)

 

Share-based payments

 

 

(61,915)

 

 

(81,840)

 

 

(121,118)

 

 

(40,516)

 

 

(60,173)

 

 

(46,134)

 

 

(49,344)

 

 

(35,407)

 

Depreciation and amortization

 

 

(51,758)

 

 

(54,007)

 

 

(60,135)

 

 

(53,992)

 

 

(62,720)

 

 

(64,807)

 

 

(69,679)

 

 

(81,495)

 

General and administrative

 

 

(107,888)

 

 

(143,349)

 

 

(141,687)

 

 

(144,666)

 

 

(150,229)

 

 

(140,195)

 

 

(156,554)

 

 

(164,016)

 

Other items

 

 

(1,302)

 

 

(860)

 

 

(17,080)

 

 

(4,721)

 

 

(6,828)

 

 

(104)

 

 

(7,077)

 

 

(8,191)

 

Impairment losses on tangible assets

 

 

-

 

 

-

 

 

(699)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Impairment losses on intangible assets

 

 

-

 

 

-

 

 

(36,269)

 

 

-

 

 

-

 

 

-

 

 

(11,779)

 

 

-

 

(Losses) / gains on items held at fair value and remeasurements

 

 

(278,622)

 

 

(373,079)

 

 

(2,057,306)

 

 

659,870

 

 

245,738

 

 

901,173

 

 

216,962

 

 

908,260

 

(Loss) / Profit after tax

 

 

(435,899)

 

 

(536,960)

 

 

(2,263,587)

 

 

516,667

 

 

87,925

 

 

769,129

 

 

96,890

 

 

728,752

 

Adjusted EBITDA

 

 

(25,175)

 

 

(10,314)

 

 

10,376

 

 

(19,196)

 

 

(20,579)

 

 

5,310

 

 

36,103

 

 

(35,782)

 

Adjusted EBITDA Margin

 

(8.2)%

 

(2.7)%

 

2.2%

 

(4.7)%

 

(4.7)%

 

1.1%

 

6.3%

 

(8.2)%

 

Basic (Loss)/Earnings per share ("EPS")

 

$

(1.29)

 

$

(1.58)

 

$

(6.47)

 

$

1.44

 

$

0.24

 

$

2.09

 

$

0.27

 

$

1.93

 

Diluted EPS

 

 

(1.29)

 

 

(1.58)

 

 

(6.47)

 

 

(0.28)

 

 

(0.31)

 

 

(0.25)

 

 

(0.23)

 

 

(0.37)

 

Adjusted EPS

 

 

(0.20)

 

 

(0.17)

 

 

(0.00)

 

 

(0.22)

 

 

(0.17)

 

 

(0.14)

 

 

(0.03)

 

 

(0.24)

 

Digital Platform:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Platform GMV

 

$

651,036

 

$

674,097

 

$

939,444

 

$

790,014

 

$

913,350

 

$

828,471

 

$

1,146,153

 

$

809,509

 

Digital Platform Services Revenue

 

 

237,603

 

 

263,035

 

 

347,341

 

 

285,861

 

 

349,131

 

 

319,217

 

 

431,469

 

 

316,780

 

Digital Platform Fulfilment Revenue

 

 

56,803

 

 

50,922

 

 

75,218

 

 

76,228

 

 

83,825

 

 

77,895

 

 

94,556

 

 

78,866

 

Digital Platform Gross Profit

 

 

130,579

 

 

143,318

 

 

189,102

 

 

156,335

 

 

184,999

 

 

159,036

 

 

229,885

 

 

171,905

 

Digital Platform Gross Profit Margin

 

55.0%

 

54.5%

 

54.4%

 

54.7%

 

53.0%

 

49.8%

 

53.3%

 

 

54.3%

 

Digital Platform Order Contribution

 

$

83,201

 

$

97,133

 

$

121,844

 

$

94,468

 

$

119,111

 

$

84,946

 

$

139,909

 

 

103,726

 

Digital Platform Order Contribution Margin

 

35.0%

 

36.9%

 

35.1%

 

33.0%

 

34.1%

 

26.6%

 

32.4%

 

 

32.7%

 

Active Consumers (in thousands)

 

 

2,524

 

 

2,742

 

 

3,024

 

 

3,272

 

 

3,394

 

 

3,593

 

 

3,687

 

 

3,822

 

AOV - Marketplace

 

$

493

 

$

574

 

$

626

 

$

618

 

$

599

 

$

593

 

$

635

 

$

632

 

AOV - Stadium Goods

 

 

304

 

 

340

 

 

308

 

 

326

 

 

335

 

 

294

 

 

288

 

 

323

 

Brand Platform:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brand Platform GMV

 

$

66,348

 

$

112,327

 

$

103,880

 

$

112,315

 

$

72,722

 

$

165,290

 

$

117,178

 

 

99,739

 

Brand Platform Revenue

 

 

66,348

 

 

112,327

 

 

103,880

 

 

112,315

 

 

72,722

 

 

165,290

 

 

117,178

 

 

100,492

 

Brand Platform Gross Profit

 

 

27,729

 

 

58,738

 

 

51,857

 

 

57,735

 

 

34,252

 

 

80,272

 

 

69,257

 

 

49,116

 

Brand Platform Gross Profit Margin

 

41.8%

 

52.3%

 

49.9%

 

51.4%

 

47.1%

 

48.6%

 

59.1%

 

 

48.9%

 

1. Table is in $ thousands, except per share data, Average Order Value, Active Consumers or as otherwise stated. See “Notes and Disclosures” which includes “Non-IFRS and Other Financial and Operating Metrics” on page 19 f or reconciliations of non-IFRS measures to IFRS measures.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our expectations in relation to the global strategic partnership and investment into Neiman Marcus Group and its completion, the recent acquisition of Wannaby Inc., the ongoing impact of COVID-19 including in Mainland China, the suspension of trade in Russia and our expectations in relation to the receipt of Russian rubles, delayed shipments and cancelations, expectations regarding the artistic direction of Off-White, our Beauty offering in relation to Conscious criteria, the anticipated benefits of our acquisitions, future supply available on Stadium Goods, cost inflation in digital marketing channels, consumer sentiment and e-commerce consumer activity, future financial or operating performance, actions we are taking in relation to Apple’s iOS privacy measures, planned activities and objectives, anticipated growth resulting therefrom, strategic initiatives, our growth and expected performance for full year 2022, statements regarding our profitability, as well as statements that include the words “expect,” “intend,” “plan,” “aim,” “enable,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: purchasers of luxury products may not choose to shop online in sufficient numbers; the effect of the COVID-19 global pandemic on our business and results of operations; our global operations involve additional risks, such as exposure to local economic or political instability, for example, in connection with the conflict between Russia and Ukraine; our ability to generate sufficient revenue to be profitable or to generate positive cash flow on a sustained basis; the volatility and difficulty in predicting the luxury fashion industry; our reliance on a limited number of luxury sellers for the supply of products on our Marketplace; our reliance on luxury sellers to anticipate, identify and respond quickly to new and changing fashion trends, consumer preferences and other factors; our reliance on retailers and brands to make products available to our consumers on our Marketplace and to set their own prices for such products; our reliance on third-party warehouse partners; delays and disruptions with suppliers and distribution partners; New Guards’ dependence on its production, inventory management and fulfilment processes and systems; the operation of retail stores subjects us to numerous risks, some of which are beyond our control; our ability to acquire or retain consumers and to promote and sustain the Farfetch brand; our reliance on highly complex software, which may contain undetected errors; our ability or the ability of third-parties to protect our sites, networks and systems against security breaches, or otherwise to protect our confidential information; our reliance on information technologies and our ability to adapt to technological developments; our reliance on third-party providers to host certain websites and applications; our ability to successfully utilize our data; our ability to manage our growth effectively; the increasing impact of and focus on environmental, social and governance matters could increase our costs, harm our reputation and adversely affect our financial results; José Neves, our Chief Executive Officer, has considerable influence over important corporate matters due to his ownership of us, and our dual-class voting structure will limit your ability to influence corporate matters, including a change of control; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (“SEC”) for the fiscal year ended December 31, 2021, as such factors may be updated from time to time in our other filings with the SEC, accessible on the SEC’s website at www.sec.gov and on our website at http://farfetchinvestors.com. In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. In addition, the forward-looking statements made in this release relate only to events or information as of the date on which the statements are made in this release. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

NOTES AND DISCLOSURES

Non-IFRS and Other Financial and Operating Metrics

This release includes certain financial measures not based on IFRS, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Adjusted Revenue, Digital Platform Order Contribution, and Digital Platform Order Contribution Margin (together, the “Non-IFRS Measures”), as well as operating metrics, including GMV, Digital Platform GMV, Brand Platform GMV, In-Store GMV, Active Consumers and Average Order Value. See the “Definitions” section below for a further explanation of these terms.

Management uses the Non-IFRS Measures:

  • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
  • for planning purposes, including the preparation of our internal annual operating budget and financial projections;
  • to evaluate the performance and effectiveness of our strategic initiatives; and
  • to evaluate our capacity to fund capital expenditures and expand our business.

The Non-IFRS Measures may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate these measures in the same manner. We present the Non-IFRS Measures because we consider them to be important supplemental measures of our performance, and we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. Management believes that investors’ understanding of our performance is enhanced by including the Non-IFRS Measures as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations period over period and would ordinarily add back non-cash expenses such as depreciation, amortization and items that are not part of normal day-to-day operations of our business. By providing the Non-IFRS Measures, together with reconciliations to IFRS, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Items excluded from the Non-IFRS Measures are significant components in understanding and assessing financial performance. The Non-IFRS Measures have limitations as analytical tools and should not be considered in isolation, or as an alternative to, or a substitute for loss after tax, revenue or other financial statement data presented in our consolidated financial statements as indicators of financial performance. Some of the limitations are:

  • such measures do not reflect revenue related to fulfilment, which is necessary to the operation of our business;
  • such measures do not reflect our expenditures, or future requirements for capital expenditures or contractual commitments;
  • such measures do not reflect changes in our working capital needs;
  • such measures do not reflect our share-based payments, income tax benefit/(expense) or the amounts necessary to pay our taxes;
  • although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any costs for such replacements; and
  • other companies may calculate such measures differently than we do, limiting their usefulness as comparative measures.

Due to these limitations, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Revenue should not be considered as measures of discretionary cash available to us to invest in the growth of our business and are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. In addition, the Non-IFRS Measures we use may differ from the non-IFRS financial measures used by other companies and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. Furthermore, not all companies or analysts may calculate similarly titled measures in the same manner. We compensate for these limitations by relying primarily on our IFRS results and using the Non-IFRS Measures only as supplemental measures.

Digital Platform Order Contribution and Digital Platform Order Contribution Margin are not measurements of our financial performance under IFRS and do not purport to be alternatives to gross profit or loss after tax derived in accordance with IFRS. We believe that Digital Platform Order Contribution and Digital Platform Order Contribution Margin are useful measures in evaluating our operating performance within our industry because they permit the evaluation of our digital platform productivity, efficiency and performance. We also believe that Digital Platform Order Contribution and Digital Platform Order Contribution Margin are useful measures in evaluating our operating performance because they take into account demand generation expense and are used by management to analyze the operating performance of our digital platform for the periods presented.

Farfetch reports under International Financial Reporting Standards (“IFRS”) issued by the IASB. Farfetch provides earnings guidance on a non-IFRS basis and does not provide earnings guidance on an IFRS basis. A reconciliation of the Company’s Adjusted EBITDA guidance to the most directly comparable IFRS financial measure cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that are made for future changes in the fair value of cash-settled share-based payment liabilities; foreign exchange gains/(losses) and the other adjustments reflected in our reconciliation of historical non-IFRS financial measures, the amounts of which, could be material.

Reconciliations of the historical non-IFRS measures presented in this press release to their most directly comparable IFRS measures are included in the accompanying tables.

The following tables reconcile Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable IFRS financial performance measure, which are profit/(loss) after tax and profit/(loss) after tax margin, respectively:

(in $ thousands, except as otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/Profit after tax

 

$

(435,899)

 

$

(536,960)

 

$

(2,263,587)

 

$

516,667

 

$

87,925

 

$

769,129

 

$

96,890

 

$

728,752

 

Net finance expense/(income)

 

 

20,751

 

 

14,363

 

 

(2,874)

 

 

24,660

 

 

10,726

 

 

21,901

 

 

16,555

 

 

15,560

 

Income tax (benefit)/expense

 

 

(4,118)

 

 

2,882

 

 

(15,704)

 

 

49

 

 

(3,195)

 

 

4,427

 

 

1,721

 

 

3,091

 

Depreciation and amortization

 

 

51,758

 

 

54,007

 

 

60,135

 

 

53,992

 

 

62,720

 

 

64,807

 

 

69,679

 

 

81,495

 

Share-based payments (1)

 

 

61,915

 

 

81,840

 

 

121,118

 

 

40,516

 

 

60,173

 

 

46,134

 

 

49,344

 

 

35,407

 

Losses/(gains) on items held at fair value and remeasurements (2)

 

 

278,622

 

 

373,079

 

 

2,057,306

 

 

(659,870)

 

 

(245,738)

 

 

(901,173)

 

 

(216,962)

 

 

(908,260)

 

Other items (3)

 

 

1,302

 

 

860

 

 

17,080

 

 

4,721

 

 

6,828

 

 

104

 

 

7,077

 

 

8,191

 

Impairment losses on tangible assets

 

 

-

 

 

-

 

 

699

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Impairment losses on intangible assets

 

 

-

 

 

-

 

 

36,269

 

 

-

 

 

-

 

 

-

 

 

11,779

 

 

-

 

Share of results of associates

 

 

494

 

 

(385)

 

 

(66)

 

 

69

 

 

(18)

 

 

(19)

 

 

20

 

 

(18)

 

Adjusted EBITDA

 

$

(25,175)

 

$

(10,314)

 

$

10,376

 

$

(19,196)

 

$

(20,579)

 

$

5,310

 

$

36,103

 

$

(35,782)

 

Revenue

 

$

364,680

 

$

437,700

 

$

540,105

 

$

485,079

 

$

523,313

 

$

582,565

 

$

665,651

 

$

514,803

 

(Loss)/Profit after tax margin

 

(119.5)%

 

(122.7)%

 

(419.1)%

 

106.5%

 

16.8%

 

132.0%

 

14.6%

 

141.6%

 

Adjusted Revenue

 

$

307,877

 

$

386,778

 

$

464,887

 

$

408,851

 

$

439,488

 

$

504,670

 

$

571,095

 

$

435,937

 

Adjusted EBITDA Margin

 

(8.2)%

 

(2.7)%

 

2.2%

 

(4.7)%

 

(4.7)%

 

1.1%

 

6.3%

 

(8.2)%

 

1. Represents share-based payment expense.
2. Represents (gains)/losses on items held at fair value and remeasurements. See “gains/(losses) on items held at fair value and remeasurements” on page 23 for a breakdown of these items.
3. Represents other items, which are outside the normal scope of our ordinary activities. See “other items” on page 23 for a breakdown of these expenses. “Other items” is included within selling, general and administrative expenses.

The following tables reconcile Adjusted Revenue to the most directly comparable IFRS financial performance measure, which is revenue:

(in $ thousands, except as otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

364,680

 

$

437,700

 

$

540,105

 

$

485,079

 

$

523,313

 

$

582,565

 

$

665,651

 

$

514,803

 

Less: Digital Platform Fulfilment Revenue

 

 

(56,803)

 

 

(50,922)

 

 

(75,218)

 

 

(76,228)

 

 

(83,825)

 

 

(77,895)

 

 

(94,556)

 

 

(78,866)

 

Adjusted Revenue

 

$

307,877

 

$

386,778

 

$

464,887

 

$

408,851

 

$

439,488

 

$

504,670

 

$

571,095

 

$

435,937

 

The following tables reconcile Digital Platform Order Contribution and Digital Platform Order Contribution Margin to the most directly comparable IFRS financial performance measure, which are Digital Platform Gross Profit and Digital Platform Gross Profit Margin, respectively:

(in $ thousands, except as otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Platform Gross Profit

 

$

130,579

 

$

143,318

 

$

189,102

 

$

156,335

 

$

184,999

 

$

159,036

 

$

229,885

 

$

171,905

 

Less: Demand generation expense

 

 

(47,378)

 

 

(46,185)

 

 

(67,258)

 

 

(61,867)

 

 

(65,888)

 

 

(74,090)

 

 

(89,976)

 

 

(68,179)

 

Digital Platform Order Contribution

 

$

83,201

 

$

97,133

 

$

121,844

 

$

94,468

 

$

119,111

 

$

84,946

 

$

139,909

 

$

103,726

 

Digital Platform Services Revenue

 

$

237,603

 

$

263,035

 

$

347,341

 

$

285,861

 

$

349,131

 

$

319,217

 

$

431,469

 

$

316,780

 

Digital Platform Gross Profit Margin

 

55.0%

 

54.5%

 

54.4%

 

54.7%

 

53.0%

 

49.8%

 

53.3%

 

54.3%

 

Digital Platform Order Contribution Margin

 

35.0%

 

36.9%

 

35.1%

 

33.0%

 

34.1%

 

26.6%

 

32.4%

 

32.7%

 

The following tables reconcile Adjusted EPS to the most directly comparable IFRS financial performance measure, which is Earnings per share:

(per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/earnings per share

 

$

(1.29)

 

$

(1.58)

 

$

(6.47)

 

$

1.44

 

$

0.24

 

$

2.09

 

$

0.27

 

$

1.93

 

Share-based payments (1)

 

 

0.18

 

 

0.24

 

 

0.35

 

 

0.11

 

 

0.17

 

 

0.13

 

 

0.13

 

 

0.09

 

Amortization of acquired intangible assets

 

 

0.09

 

 

0.09

 

 

0.09

 

 

0.08

 

 

0.09

 

 

0.10

 

 

0.09

 

 

0.10

 

(Gains)/losses on items held at fair value and remeasurements (2)

 

 

0.82

 

 

1.08

 

 

5.88

 

 

(1.86)

 

 

(0.69)

 

 

(2.46)

 

 

(0.57)

 

 

(2.38)

 

Other items (3)

 

 

0.00

 

 

0.00

 

 

0.05

 

 

0.01

 

 

0.02

 

 

0.00

 

 

0.02

 

 

0.02

 

Impairment losses on tangible assets

 

-

 

-

 

 

0.00

 

-

 

-

 

-

 

-

 

-

 

Impairment losses on intangible assets

 

-

 

-

 

 

0.10

 

-

 

-

 

-

 

 

0.03

 

-

 

Share of results of associates

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

 

(0.00)

 

Adjusted loss per share

 

$

(0.20)

 

$

(0.17)

 

$

(0.00)

 

$

(0.22)

 

$

(0.17)

 

$

(0.14)

 

$

(0.03)

 

$

(0.24)

 

1. Represents share-based payment expense on a per share basis.
2. Represents (gains)/losses on items held at fair value and remeasurements on a per share basis. See “gains/(losses) on items held at fair value and remeasurements” on page 23 for a breakdown of these items.
3. Represents other items on a per share basis, which are outside the normal scope of our ordinary activities. See “other items” on page 23 for a breakdown of these expenses. “Other items” is included within selling, general and administrative expenses.

The following tables represent (losses)/gains on items held at fair value and remeasurements:

(in $ thousands, except as otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Fair value remeasurements:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250 million 5.00% Notes due 2025 embedded derivative

 

$

(135,093)

 

$

(138,171)

 

$

(749,004)

 

$

214,345

 

$

88,393

 

$

159,377

 

$

22,414

 

$

65,481

 

$400 million 3.75% Notes due 2027 embedded derivative

 

 

(77,758)

 

 

(157,108)

 

 

(869,078)

 

 

256,438

 

 

69,047

 

 

307,059

 

 

92,146

 

 

362,053

 

$600 million 0.00% Notes due 2030 embedded derivative

 

 

-

 

 

-

 

 

(272,522)

 

 

159,607

 

 

49,434

 

 

177,188

 

 

43,389

 

 

114,956

 

FV remeasurement of previously held equity interest

 

 

-

 

 

-

 

 

-

 

 

784

 

 

-

 

 

-

 

 

-

 

 

-

 

FV remeasurement of equity investment carried at FVTPL

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,468

 

Loss on disposal of investment carried at FVTPL

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,639)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Present value remeasurements:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chalhoub put option

 

 

(65,771)

 

 

(77,800)

 

 

(165,776)

 

 

28,696

 

 

38,864

 

 

81,272

 

 

7,240

 

 

105,805

 

CuriosityChina call option

 

 

-

 

 

-

 

 

(926)

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Palm Angels put call option and earn-out

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,153)

 

 

(10,037)

 

 

(6,103)

 

Alibaba and Richemont put option

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

184,985

 

 

61,120

 

 

271,352

 

Alanui put option

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,555)

 

 

690

 

 

(5,113)

 

(Losses)/gains on items held at fair value and remeasurements

 

$

(278,622)

 

$

(373,079)

 

$

(2,057,306)

 

$

659,870

 

$

245,738

 

$

901,173

 

$

216,962

 

$

908,260

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farfetch share price (end of day)

 

$

17.27

 

$

25.16

 

$

63.81

 

$

53.02

 

$

50.36

 

$

37.48

 

$

33.43

 

$

15.12

 

The following tables represent other items:

(in $ thousands, except as otherwise noted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2021

 

2022

 

 

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

First
Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction-related legal and advisory expenses

 

$

(1,799)

 

$

(860)

 

$

(17,014)

 

$

(4,654)

 

$

(6,828)

 

$

(71)

 

$

(7,043)

 

$

(8,126)

 

Loss on impairment of investments carried at fair value

 

 

(69)

 

 

-

 

 

(66)

 

 

(67)

 

 

-

 

 

(33)

 

 

(34)

 

 

(65)

 

Other

 

 

566

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Other items

 

$

(1,302)

 

$

(860)

 

$

(17,080)

 

$

(4,721)

 

$

(6,828)

 

$

(104)

 

$

(7,077)

 

$

(8,191)

 

Definitions

We define our non-IFRS and other financial and operating metrics as follows:

“Active Consumers” means active consumers on our directly owned and operated sites and related apps or on third party websites or platforms on which we operate. A consumer is deemed to be active if they made a purchase within the last twelve-month period, irrespective of cancellations or returns. Active Consumers includes the Farfetch Marketplace, BrownsFashion.com, Stadium Goods, and the New Guards owned sites operated by Farfetch Platform Solutions plus third-party websites or platforms on which we operate, including Amazon.com and Tmall Luxury Pavilion. Due to limitations in the data we are provided by certain third-party websites or platforms on which we operate, a limited number of consumers who transact on such websites or platforms and on our directly owned and operated sites and related apps, may be duplicated in the number of Active Consumers we report. The number of Active Consumers is an indicator of our ability to attract and retain our consumer base to our platform and of our ability to convert platform visits into sale orders.

“Adjusted EBITDA” means net income/(loss) after taxes before net finance expense/(income), income tax expense/(benefit) and depreciation and amortization, further adjusted for share-based compensation expense, share of results of associates and items outside the normal scope of our ordinary activities (including other items, within selling, general and administrative expenses, losses/(gains) on items held at fair value and remeasurements through profit and loss, impairment losses on tangible assets, and impairment losses on intangible assets). Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted EBITDA may not be comparable to other similarly titled metrics of other companies.

“Adjusted EBITDA Margin” means Adjusted EBITDA calculated as a percentage of Adjusted Revenue.

“Adjusted EPS” means earnings per share further adjusted for share-based payments, amortization of acquired intangible assets, items outside the normal scope of our ordinary activities (including other items, within selling, general and administrative expenses, losses/(gains) on items held at fair value and remeasurements through profit and loss, impairment losses on tangible assets, and impairment losses on intangible assets) and the related tax effects of these adjustments. Adjusted EPS provides a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance. Adjusted EPS may not be comparable to other similarly titled metrics of other companies.

“Adjusted Revenue” means revenue less Digital Platform Fulfilment Revenue.

“Average Order Value” (“AOV”) means the average value of all orders excluding value added taxes placed on either the Farfetch Marketplace or the Stadium Goods Marketplace, as indicated.

“Brand Platform Gross Profit” means Brand Platform Revenue less the direct cost of goods sold relating to Brand Platform Revenue.

“Brand Platform GMV” and “Brand Platform Revenue” mean revenue relating to the New Guards operations less revenue from New Guards’: (i) owned e-commerce websites, (ii) direct to consumer channel via our Marketplaces and (iii) directly operated stores. Revenue realized from Brand Platform is generally equal to GMV as such sales are not commission based. However, revenue relating to royalties, commission and other fees arising on commercial arrangements may be recognized within Brand Platform Revenue and not Brand Platform GMV.

“Digital Platform Fulfilment Revenue” means revenue from shipping and customs clearing services that we provide to our digital consumers, net of centrally Farfetch-funded consumer promotional incentives, such as free shipping and promotional codes.

“Digital Platform GMV” means GMV excluding In-Store GMV and Brand Platform GMV.

“Digital Platform Gross Profit” means gross profit excluding In-Store Gross Profit and Brand Platform Gross Profit.

"Digital Platform Gross Profit Margin” means Digital Platform Gross Profit calculated as a percentage of Digital Platform Services Revenue. We provide fulfilment services to Marketplace consumers and receive revenue from the provision of these services, which is primarily a pass-through cost with no economic benefit to us. Therefore, we calculate our Digital Platform Gross Profit Margin, including Digital Platform third-party and first-party gross profit margin, excluding Digital Platform Fulfilment Revenue.

“Digital Platform Order Contribution” means Digital Platform Gross Profit after deducting demand generation expense, which includes fees that we pay for our various marketing channels. Digital Platform Order Contribution provides an indicator of our ability to extract digital consumer value from our demand generation expense, including the costs of retaining existing consumers and our ability to acquire new consumers.

“Digital Platform Order Contribution Margin” means Digital Platform Order Contribution calculated as a percentage of Digital Platform Services Revenue.

“Digital Platform Revenue” means the sum of Digital Platform Services Revenue and Digital Platform Fulfilment Revenue.

“Digital Platform Services Revenue” means Revenue less Digital Platform Fulfilment Revenue, In-Store Revenue and Brand Platform Revenue. Digital Platform Services Revenue is driven by our Digital Platform GMV, including commissions from third-party sales and revenue from first-party sales.

“Digital Platform Services third-party revenues” represent commissions and other income generated from the provision of services to sellers in their transactions with consumers conducted on our technology platforms, as well as fees for services provided to brands and retailers.

“Digital Platform Services first-party revenues” represents sales of owned-product, including first-party original through our digital platform. The revenue realized from first-party sales is equal to the GMV of such sales because we act as principal in these transactions and, therefore, related sales are not commission based. Digital Platform Services first-party revenues represent sales net of promotional incentives, such as free shipping and promotional codes, where these incentives are not designated as Farfetch-funded.

“Digital Platform Services third-party cost of revenues” and “Digital Platform Services first-party cost of revenues" include packaging costs, credit card fees, and incremental shipping costs provided in relation to the provision of these services. Digital Platform Services first-party cost of revenues also includes the cost of goods sold of the owned products.

“First-Party Original” refers to brands developed by New Guards and sold direct to consumers on the digital platform.

“Gross Merchandise Value” (“GMV”) means the total dollar value of orders processed. GMV is inclusive of product value, shipping and duty. It is net of returns, value added taxes and cancellations. First-party GMV is also net of promotions. GMV does not represent revenue earned by us, although GMV and revenue are correlated.

“In-Store Gross Profit” means In-Store Revenue less the direct cost of goods sold relating to In-Store Revenue.

“In-Store GMV” and “In-Store Revenue” mean revenue generated in our retail stores, which include Browns, Stadium Goods and New Guards’ directly operated stores. Revenue realized from In-Store sales for Browns and New Guards’ directly operated stores is equal to GMV of such sales because such sales are not commission based. Revenue realized from In-store sales for Stadium Goods does not equal GMV of such sales as a certain portion of those sales are third-party and are commission based.

“Order Contribution” means gross profit after deducting demand generation expense, which includes fees that we pay for our various marketing channels to support the Digital Platform. Order Contribution provides an indicator of our ability to extract consumer value from our demand generation expense, including the costs of retaining existing consumers and our ability to acquire new consumers.

“Third-Party Take Rate” means Digital Platform Services Revenue excluding revenue from first-party sales, as a percentage of Digital Platform GMV excluding GMV from first-party sales and Digital Platform Fulfilment Revenue. Revenue from first-party sales, which is equal to GMV from first-party sales, means revenue derived from sales on our platform of inventory purchased by us.

Certain figures in the release may not recalculate exactly due to rounding. This is because percentages and/or figures contained herein are calculated based on actual numbers and not the rounded numbers presented.

About Farfetch

Farfetch Limited is the leading global platform for the luxury fashion industry. Founded in 2007 by José Neves for the love of fashion, and launched in 2008, Farfetch began as an e-commerce marketplace for luxury boutiques around the world. Today, the Farfetch Marketplace connects customers in over 190 countries and territories with items from more than 50 countries and over 1,400 of the world’s best brands, boutiques and department stores, delivering a truly unique shopping experience and access to the most extensive selection of luxury on a global platform. Farfetch’s additional businesses include Browns and Stadium Goods, which offer luxury products to consumers, and New Guards Group, a platform for the development of global fashion brands. Farfetch offers its broad range of consumer-facing channels and enterprise level solutions to the luxury industry under its Luxury New Retail initiative. The Luxury New Retail initiative also encompasses Farfetch Platform Solutions, which services enterprise clients with e-commerce and technology capabilities, and Future Retail, which develops innovations such as our Connected Retail solutions.

For more information, please visit www.farfetchinvestors.com.

Investor Relations Contact:
Alice Ryder
VP Investor Relations
IR@farfetch.com

Media Contacts:
Susannah Clark
VP Communications, Global
susannah.clark@farfetch.com
+44 7788 405224

Brunswick Group
farfetch@brunswickgroup.com
US: +1 (212) 333 3810
UK: +44 (0) 207 404 5959

Source: Farfetch