-
Platform GMV Growth Continued to Outpace Online Personal Luxury
Goods Market with 53% Year-Over-Year Increase in Q3 2018
-
Generated $1.25 Billion Gross Merchandise Value over Last Twelve
Months
-
Q3 2018 Revenue Grew 52% with Platform Services Revenue Up 61%
Year-Over-Year
-
Active Consumers Up 42% with Number of Orders Increasing 55%
Year-Over-Year in Q3 2018
-
Expanded Brand and Boutique Relationships – Marketplace Now Offers
Luxury Products from More than 1,000 Sellers Across 48 Countries
-
Successfully Completed IPO – Company Well-Capitalized with $1.0
Billion Cash and Cash Equivalents at Quarter-End
LONDON--(BUSINESS WIRE)--
Farfetch Limited (NYSE: FTCH), the leading global technology platform
for the luxury fashion industry, today reported financial results for
the third quarter ended September 30, 2018.
“I am extremely proud of the progress Farfetch continues to make across
all our strategic initiatives. As the leading technology platform for
the $300 billion luxury fashion industry, Farfetch delivered outsized
growth with Platform Gross Merchandise Value growing at approximately
twice the rate of the online luxury market in the third quarter of
2018. We also broadened our network of brands and boutiques, and now
department stores, as we continued to leverage our unique positioning to
be the category leader for the luxury industry,” said José Neves,
Farfetch Founder, CEO and co-Chairman.
“We believe the luxury fashion industry will see online sales expand by
an incremental $100 billion over the next ten years. Our mission is to
be the global platform for the industry, and we are squarely focused on
capturing the lion’s share of this massive opportunity.”
Elliot Jordan, CFO of Farfetch said, “I am delighted with our
performance in the third quarter of 2018, and our delivery of strong
Gross Merchandise Value and revenue growth during the period. This
growth, coupled with attractive unit economics and improving operating
efficiencies allows us to make further investments to continue to
capture market share into the future.”
Consolidated Financial Summary and Key Operating Metrics (in
thousands, except as otherwise noted):
|
|
Three months ended September 30,
|
|
|
|
2017
|
|
|
|
2018
|
|
Consolidated Group:
|
|
|
|
|
|
|
|
Gross Merchandise Value (“GMV”)
|
|
$204,601
|
|
|
|
$309,973
|
|
Revenue
|
|
86,913
|
|
|
|
132,179
|
|
Adjusted Revenue
|
|
70,487
|
|
|
|
110,380
|
|
Adjusted EBITDA
|
|
(20,620)
|
|
|
|
(32,311)
|
|
Adjusted EBITDA Margin
|
|
(29.3%)
|
|
|
|
(29.3%)
|
|
Loss After Tax
|
|
(28,179)
|
|
|
|
(77,255)
|
|
Platform:
|
|
|
|
|
|
|
|
Platform GMV
|
|
$200,262
|
|
|
|
$305,884
|
|
Platform Services Revenue
|
|
66,148
|
|
|
|
106,290
|
|
Platform Gross Profit
|
|
43,258
|
|
|
|
65,487
|
|
Platform Order Contribution
|
|
26,434
|
|
|
|
43,384
|
|
Platform Order Contribution Margin
|
|
40.0%
|
|
|
|
40.8%
|
|
Farfetch Marketplace:
|
|
|
|
|
|
|
|
Active Consumers
|
|
854.7
|
|
|
|
1,216.8
|
|
Number of Orders
|
|
427.7
|
|
|
|
662.5
|
|
Average Order Value (“AOV”) (actual)
|
|
$605.2
|
|
|
|
$584.6
|
|
Recent Business Highlights
-
The Farfetch Marketplace continued to increase its share in the online
personal luxury market, and all three geographic regions – Americas,
EMEA and APAC – posted their best ever Q3 in terms of GMV
-
Continued to add breadth and depth to the Marketplace offering:
-
Signed new brands, including Moschino, Victoria Beckham, and Tory
Burch, and widened boutique network to now include partners in
Russia and Estonia
-
Launched historic British luxury department store, Harvey Nichols,
as the first department store partner on the Marketplace
-
Partnered with Dover Street Market, a boutique renowned for its
fine jewelry expertise, to bring their unique collection to the
Marketplace, which was showcased with specifically designed
editorial content at launch
-
Enhanced fashion discovery for iOS mobile users with a new visual
search function allowing consumers to act upon inspiration by
uploading photos or images to find similar products
-
Farfetch Black & White Solutions launched two new brands, Roberto
Cavalli and Neil Barrett, on its white label platform, providing the
brands with an e-commerce solution with the same technology, features,
and ongoing innovations as the Farfetch Marketplace
-
Agreed to acquire CuriosityChina, a digital technology company with
best-in-class social CRM and digital marketing solutions to provide a
plug-and-play suite of services aimed at helping brands expand in
China via web, app, WeChat Stores and Mini Programs
-
Completed integration with JD.com to operationalize Farfetch’s
third-party Shanghai warehouse, the company’s third global facility
supporting Fulfillment by Farfetch, a logistics service for
Marketplace sellers
-
Dream Assembly, Farfetch’s technology accelerator, kicked off in
September 2018 and welcomed an inaugural cohort of 10 startups which
are developing solutions aimed at shaping the future of e-commerce
Third Quarter 2018 Results Summary
Gross Merchandise Value and Platform GMV
Gross merchandise
value (“GMV”) increased by $105.4 million from $204.6 million to $310.0
million in third quarter 2018, representing year-over-year growth of
51.5%. Platform GMV increased by $105.6 million from $200.3 million to
$305.9 million, representing year-over-year growth of 52.7%.
The increases in GMV and Platform GMV were primarily driven by a 54.9%
increase in Number of Orders from 427,700 to 662,500, which resulted
from 42.4% growth in Active Consumers to 1.2 million, and an increase in
the average number of orders per Active Consumer as we saw strong demand
from consumers across our global markets. These factors were partially
offset by a 3.4% decrease in AOV from $605.2 to $584.6 over the same
period.
Revenue
Revenue increased by $45.3 million year-over-year
from $86.9 million in third quarter 2017 to $132.2 million in third
quarter 2018, representing growth of 52.1%. The increase was driven by
higher platform services revenue and platform fulfilment revenue.
Platform services revenue increased $40.1 million or 60.7%
year-over-year, primarily due to the increase in third-party Platform
GMV, which was partially offset by a lower Third-Party Take Rate; as
well as an increased mix of first-party Platform GMV.
Revenue by type of good or service (in thousands):
|
|
Three months ended September 30,
|
|
|
|
2017
|
|
|
|
2018
|
|
Platform services revenue
|
|
$66,148
|
|
|
|
$106,290
|
|
Platform fulfilment revenue
|
|
16,426
|
|
|
|
21,799
|
|
Browns in-store revenue
|
|
4,339
|
|
|
|
4,090
|
|
Revenue
|
|
$86,913
|
|
|
|
$132,179
|
|
Cost of Revenue and Gross Profit
Cost of revenue increased
by $23.6 million, or 57.2% year-over-year from $41.2 million in third
quarter 2017 to $64.8 million in third quarter 2018. The increase was
primarily driven by the increases in cost of goods associated with
first-party sales, as well as the delivery, packaging and transaction
processing expenditures incurred as a result of an increased Number of
Orders.
Our gross profit margin decreased from 52.6% in third quarter 2017 to
51.0% in third quarter 2018 primarily due to the increased mix of
first-party Platform GMV, as well as lower fulfillment revenue per
order, on average, as more customers took advantage of our free shipping
offer in third quarter 2018 than in the prior year quarter.
|
|
Three months ended September 30,
|
|
|
|
2017
|
|
|
|
2018
|
|
Demand generation expense
|
|
$16,824
|
|
|
|
$22,103
|
|
Technology expense
|
|
8,335
|
|
|
|
19,034
|
|
Depreciation and amortization
|
|
2,932
|
|
|
|
6,014
|
|
Share based payments
|
|
5,249
|
|
|
|
38,475
|
|
General and administrative
|
|
41,150
|
|
|
|
58,561
|
|
Selling, general and administrative expense
|
|
$74,490
|
|
|
|
$144,187
|
|
Third quarter 2018 demand generation expense increased 31.4%
year-over-year to $22.1 million, or 20.8% of platform services revenue,
representing a year-over-year improvement of 460 bps, which primarily
resulted from performance marketing efficiencies in driving Platform GMV
growth. These efficiencies also contributed to the 82 bps year-over-year
improvement in Platform Order Contribution Margin from 40.0% in third
quarter 2017 to 40.8% in third quarter 2018.
Technology expense, which is primarily related to research and
development and operations of our Marketplace features and services,
increased by $10.7 million, or 128.4%, year-over-year in third quarter
2018, primarily driven by a 67.5% increase in technology staff headcount
and higher software and infrastructure expenses to support the continued
growth of the business. We currently operate three globally distributed
data centers, which support the processing of our growing base of
transactions, including one in Shanghai dedicated to serving our Chinese
customers.
General and administrative expense increased by $17.4 million, or 42.3%,
year-over-year in third quarter 2018, primarily driven by a 65.6%
increase in non-technology headcount across a number of areas to support
the expansion of the business. General and administrative costs as a
percentage of Adjusted Revenue decreased from 58.4% in third quarter
2017 to 53.1% in third quarter 2018, reflecting improved efficiency of
our semi-variable and fixed costs.
Share based payments increased by $33.2 million, or 633.0%,
year-over-year in third quarter 2018, due to the fair value
re-measurement of our cash-settled share based payment awards and
provision for employment related taxes on share based payment awards.
Adjusted EBITDA
Adjusted EBITDA loss increased by $11.7
million, or 56.7%, year-over-year in third quarter 2018, to $32.3
million. Adjusted EBITDA margin remained flat at (29.3%) over the same
period, as we continued to invest in our customer offering,
infrastructure and technology expenses to support our continued growth
in GMV and Adjusted Revenue.
Outlook
The following forward-looking statement reflects
Farfetch’s expectations as of November 8, 2018:
Based on the positive performance of the Marketplace through the initial
fourth quarter 2018 selling season, Platform GMV for the fourth quarter
of 2018 is expected to be within the range of $435 million and $445
million, which is higher than the Company’s previous estimates. The
Company believes it is in the early phase of its investment cycle as it
builds on its position to become the platform for the luxury fashion
industry, and expects to continue to invest in the future growth of the
business.
Conference Call Information
Farfetch will host a conference
call today, November 8, 2018 at 5:15 p.m. Eastern Time to discuss the
Company’s results as well as forward-looking information 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 30 days.
Unaudited interim condensed consolidated statement of operations
for
the three month period ended September 30
(in $ thousands,
except share and per share data)
|
|
|
|
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
86,913
|
|
|
|
132,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
|
|
(41,224)
|
|
|
|
(64,792)
|
|
|
|
Gross profit
|
|
|
|
|
|
|
|
45,689
|
|
|
|
67,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
(74,490)
|
|
|
|
(144,187)
|
|
|
|
Share of profits/(losses) of associates
|
|
|
|
|
|
|
|
8
|
|
|
|
(5)
|
|
|
|
Operating loss
|
|
|
|
|
|
|
|
(28,793)
|
|
|
|
(76,805)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income
|
|
|
|
|
|
|
|
839
|
|
|
|
733
|
|
|
|
Loss before tax
|
|
|
|
|
|
|
|
(27,954)
|
|
|
|
(76,072)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
(225)
|
|
|
|
(1,183)
|
|
|
|
Loss after tax
|
|
|
|
|
|
|
|
(28,179)
|
|
|
|
(77,255)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share attributable to owners of the parent
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
|
|
(0.12)
|
|
|
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ordinary shares outstanding
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
|
|
241,527,626
|
|
|
|
256,163,135
|
|
|
|
Unaudited interim condensed consolidated statement of operations
for
the three month period ended September 30
(in $ thousands,
except share and per share data)
|
|
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
|
|
|
|
(28,179)
|
|
|
|
(77,255)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be subsequently reclassified to consolidated
statement of operations (net of tax):
|
|
Exchange differences on translation of foreign operations
|
|
|
|
|
|
11,720
|
|
|
|
(7,702)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(expense) for the period, net
of
tax
|
|
|
|
|
|
11,720
|
|
|
|
(7,702)
|
|
Total comprehensive loss for the period, net of tax
|
|
|
|
|
|
(16,459)
|
|
|
|
(84,957)
|
|
Unaudited interim condensed consolidated statement of operations
for
the nine month period ended September 30
(in $ thousands,
except share and per share data)
|
|
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
259,484
|
|
|
|
399,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
(119,447)
|
|
|
|
(195,434)
|
|
Gross profit
|
|
|
|
|
|
140,037
|
|
|
|
204,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
(200,250)
|
|
|
|
(352,988)
|
|
Share of profits of associates
|
|
|
|
|
|
23
|
|
|
|
18
|
|
Operating loss
|
|
|
|
|
|
(60,190)
|
|
|
|
(148,717)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income
|
|
|
|
|
|
2,529
|
|
|
|
4,951
|
|
Loss before tax
|
|
|
|
|
|
(57,661)
|
|
|
|
(143,766)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax credit/ (expense)
|
|
|
|
|
|
204
|
|
|
|
(1,897)
|
|
Loss after tax
|
|
|
|
|
|
(57,457)
|
|
|
|
(145,663)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share attributable to owners of the parent
|
|
Basic and diluted
|
|
|
|
|
|
(0.26)
|
|
|
|
(0.58)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average ordinary shares outstanding
|
|
Basic and diluted
|
|
|
|
|
|
217,433,134
|
|
|
|
252,572,520
|
|
Unaudited interim condensed consolidated statement of comprehensive
loss
for the nine month period ended September 30
(in
$ thousands)
|
|
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
|
|
|
|
(57,457)
|
|
|
|
(145,663)
|
|
Other comprehensive income/(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be subsequently reclassified to consolidated
statement of operations (net of tax):
|
|
Exchange differences on translation of foreign operations
|
|
|
|
|
|
27,897
|
|
|
|
(16,836)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(expense) for the
period,
net of tax
|
|
|
|
27,897
|
|
|
|
(16,836)
|
|
Total comprehensive loss for the period, net of
tax
|
|
|
|
|
|
(29,560)
|
|
|
|
(162,499)
|
|
Unaudited interim condensed consolidated statement of financial
position
(in $ thousands)
|
|
|
|
|
|
December
31, 2017
|
|
|
|
September
30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables NC
|
|
|
|
|
|
9,193
|
|
|
|
13,861
|
|
Intangible assets
|
|
|
|
|
|
74,041
|
|
|
|
91,884
|
|
Property, plant and equipment
|
|
|
|
|
|
26,696
|
|
|
|
37,354
|
|
Investments
|
|
|
|
|
|
278
|
|
|
|
334
|
|
Investments in associates
|
|
|
|
|
|
58
|
|
|
|
78
|
|
Total non-current assets
|
|
|
|
|
|
110,266
|
|
|
|
143,511
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
50,610
|
|
|
|
68,288
|
|
Trade and other receivables
|
|
|
|
|
|
18,180
|
|
|
|
111,745
|
|
Cash and cash equivalents
|
|
|
|
|
|
384,002
|
|
|
|
1,043,509
|
|
Total current assets
|
|
|
|
|
|
452,792
|
|
|
|
1,223,542
|
|
Total assets
|
|
|
|
|
|
563,058
|
|
|
|
1,367,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
9,298
|
|
|
|
11,980
|
|
Share premium
|
|
|
|
|
|
677,674
|
|
|
|
773,045
|
|
Merger reserve
|
|
|
|
|
|
-
|
|
|
|
783,529
|
|
Foreign exchange reserve
|
|
|
|
|
|
633
|
|
|
|
(16,203)
|
|
Other reserves
|
|
|
|
|
|
38,475
|
|
|
|
55,167
|
|
Accumulated losses
|
|
|
|
|
|
(329,177)
|
|
|
|
(474,840)
|
|
Total equity
|
|
|
|
|
|
396,903
|
|
|
|
1,132,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
5,142
|
|
|
|
23,005
|
|
Other liabilities
|
|
|
|
|
|
5,123
|
|
|
|
24,317
|
|
Total non-current liabilities
|
|
|
|
|
|
10,265
|
|
|
|
47,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
|
136,744
|
|
|
|
187,053
|
|
Other liabilities
|
|
|
|
|
|
19,146
|
|
|
|
-
|
|
Total current liabilities
|
|
|
|
|
|
155,890
|
|
|
|
187,053
|
|
Total liabilities
|
|
|
|
|
|
166,155
|
|
|
|
234,375
|
|
Total equity and liabilities
|
|
|
|
|
|
563,058
|
|
|
|
1,367,053
|
|
Unaudited interim condensed consolidated statement of cash flows
for
the nine month periods ended September 30
(in $ thousands)
|
|
|
|
|
|
2017
|
|
|
|
2018
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Loss before tax
|
|
|
|
|
|
(57,661)
|
|
|
|
(143,766)
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
2,507
|
|
|
|
4,952
|
|
Amortization
|
|
|
|
|
|
5,444
|
|
|
|
10,581
|
|
Non-cash employee benefits expense – equity-settled share based
payments
|
|
|
|
10,131
|
|
|
|
16,692
|
|
Net loss on sale of non-current assets
|
|
|
|
|
|
9
|
|
|
|
1,045
|
|
Share of profits of associates
|
|
|
|
|
|
(23)
|
|
|
|
(18)
|
|
Net finance income
|
|
|
|
|
|
(551)
|
|
|
|
(4,880)
|
|
Net exchange differences
|
|
|
|
|
|
(7,263)
|
|
|
|
3,145
|
|
Decrease in the fair value of derivatives
|
|
|
|
|
|
-
|
|
|
|
1,889
|
|
Changes in working capital
|
|
|
|
|
|
|
|
|
|
|
|
Increase in receivables
|
|
|
|
|
|
(29,885)
|
|
|
|
(93,563)
|
|
Increase in inventories
|
|
|
|
|
|
(30,000)
|
|
|
|
(17,678)
|
|
Increase in payables
|
|
|
|
|
|
50,176
|
|
|
|
34,684
|
|
Changes in other assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Increase in non-current receivables
|
|
|
|
|
|
(2,778)
|
|
|
|
(4,667)
|
|
Increase in other liabilities
|
|
|
|
|
|
6,029
|
|
|
|
21,058
|
|
Increase in provisions
|
|
|
|
|
|
|
|
|
|
17,889
|
|
Interest paid
|
|
|
|
|
|
(591)
|
|
|
|
(68)
|
|
Income taxes paid
|
|
|
|
|
|
(264)
|
|
|
|
(780)
|
|
Net cash outflow from operating activities
|
|
|
|
|
|
(54,720)
|
|
|
|
(153,485)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
|
|
|
(6,961)
|
|
|
|
(18,014)
|
|
Payments for intangible assets
|
|
|
|
|
|
(14,455)
|
|
|
|
(31,208)
|
|
Interest received
|
|
|
|
|
|
1,693
|
|
|
|
4,948
|
|
Net cash outflow from investing activities
|
|
|
|
|
|
(19,723)
|
|
|
|
(44,274)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issue of shares, net of issue costs
|
|
|
|
|
|
322,098
|
|
|
|
859,525
|
|
Repayment of loan notes
|
|
|
|
|
|
(21,955)
|
|
|
|
-
|
|
Net cash inflow from financing activities
|
|
|
|
|
|
300,143
|
|
|
|
859,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
|
|
225,700
|
|
|
|
661,766
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
|
|
|
150,032
|
|
|
|
384,002
|
|
Effects of exchange rate changes on cash and cash equivalents
|
|
|
|
|
|
29,543
|
|
|
|
(2,259)
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
|
405,275
|
|
|
|
1,043,509
|
|
Unaudited interim condensed consolidated statement of changes in
equity
(in $ thousands)
|
|
|
|
Share
capital
|
|
|
|
Share
premium
|
|
|
|
Merger
reserve
|
|
|
|
Foreign
exchange
reserve
|
|
|
|
Other
reserves
|
|
|
|
Accumulated
losses
|
|
|
|
Equity
attributable
to the
parent
|
|
|
|
Non-
controlling
interest
|
|
|
|
Total equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2017
|
|
|
|
7,844
|
|
|
|
340,988
|
|
|
|
-
|
|
|
|
(32,871)
|
|
|
|
19,857
|
|
|
|
(216,901)
|
|
|
|
118,917
|
|
|
|
(1)
|
|
|
|
118,916
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital
|
|
|
|
1,445
|
|
|
|
336,689
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
338,134
|
|
|
|
-
|
|
|
|
338,134
|
|
Total comprehensive income/ (loss)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,897
|
|
|
|
-
|
|
|
|
(57,457)
|
|
|
|
(29,560)
|
|
|
|
-
|
|
|
|
(29,560)
|
|
Share based payment – equity settled
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,131
|
|
|
|
-
|
|
|
|
10,131
|
|
|
|
-
|
|
|
|
10,131
|
|
Transactions with non- controlling interests
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
Balance at September 30,
2017
|
|
|
|
9,289
|
|
|
|
677,677
|
|
|
|
-
|
|
|
|
(4,974)
|
|
|
|
29,988
|
|
|
|
(274,358)
|
|
|
|
437,622
|
|
|
|
-
|
|
|
|
437,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1,
2018
|
|
|
|
9,298
|
|
|
|
677,674
|
|
|
|
-
|
|
|
|
633
|
|
|
|
38,475
|
|
|
|
(329,177)
|
|
|
|
396,903
|
|
|
|
-
|
|
|
|
396,903
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital reorganization
|
|
|
|
652
|
|
|
|
(677,674)
|
|
|
|
783,529
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
106,507
|
|
|
|
-
|
|
|
|
106,507
|
|
Issue of share capital
|
|
|
|
2,030
|
|
|
|
773,045
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
775,075
|
|
|
|
-
|
|
|
|
775,075
|
|
Total comprehensive loss
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16,836)
|
|
|
|
-
|
|
|
|
(145,663)
|
|
|
|
(162,499)
|
|
|
|
-
|
|
|
|
(162,499)
|
|
Share based payment – equity settled
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,692
|
|
|
|
-
|
|
|
|
16,692
|
|
|
|
-
|
|
|
|
16,692
|
|
Balance at September 30,
2018
|
|
|
|
11,980
|
|
|
|
773,045
|
|
|
|
783,529
|
|
|
|
(16,203)
|
|
|
|
55,167
|
|
|
|
(474,840)
|
|
|
|
1,132,678
|
|
|
|
-
|
|
|
|
1,132,678
|
|
Farfetch Limited
Supplemental Metrics
|
|
2016
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
Fourth
Quarter
|
|
|
|
First
Quarter
|
|
|
|
Second
Quarter
|
|
|
|
Third
Quarter
|
|
|
|
Fourth
Quarter
|
|
|
|
First
Quarter
|
|
|
|
Second
Quarter
|
|
|
|
Third
Quarter
|
|
|
|
(in thousands, unless stated otherwise)
|
|
Consolidated Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Merchandise Value (“GMV”)
|
|
$197,248
|
|
|
|
$176,701
|
|
|
|
$217,806
|
|
|
|
$204,601
|
|
|
|
$310,718
|
|
|
|
$292,692
|
|
|
|
$338,543
|
|
|
|
$309,973
|
|
Revenue
|
|
82,431
|
|
|
|
79,425
|
|
|
|
93,146
|
|
|
|
86,913
|
|
|
|
126,482
|
|
|
|
122,707
|
|
|
|
144,801
|
|
|
|
132,179
|
|
Fulfilment Revenue
|
|
17,931
|
|
|
|
16,128
|
|
|
|
17,632
|
|
|
|
16,426
|
|
|
|
23,996
|
|
|
|
22,535
|
|
|
|
28,016
|
|
|
|
21,799
|
|
Adjusted Revenue
|
|
64,500
|
|
|
|
63,297
|
|
|
|
75,514
|
|
|
|
70,487
|
|
|
|
102,486
|
|
|
|
100,172
|
|
|
|
116,785
|
|
|
|
110,380
|
|
Browns In-Store Revenue
|
|
3,265
|
|
|
|
3,715
|
|
|
|
3,616
|
|
|
|
4,339
|
|
|
|
3,764
|
|
|
|
4,021
|
|
|
|
3,170
|
|
|
|
4,090
|
|
Demand Generation Expense
|
|
(15,337)
|
|
|
|
(12,429)
|
|
|
|
(16,694)
|
|
|
|
(16,824)
|
|
|
|
(23,255)
|
|
|
|
(19,363)
|
|
|
|
(21,895)
|
|
|
|
(22,103)
|
|
Technology Expense
|
|
(4,592)
|
|
|
|
(5,078)
|
|
|
|
(6,050)
|
|
|
|
(8,335)
|
|
|
|
(12,147)
|
|
|
|
(13,896)
|
|
|
|
(17,135)
|
|
|
|
(19,034)
|
|
Share Based Payments
|
|
(5,860)
|
|
|
|
(3,770)
|
|
|
|
(4,752)
|
|
|
|
(5,249)
|
|
|
|
(7,715)
|
|
|
|
(6,567)
|
|
|
|
(5,956)
|
|
|
|
(38,475)
|
|
Depreciation and Amortisation
|
|
(3,060)
|
|
|
|
(2,313)
|
|
|
|
(2,706)
|
|
|
|
(2,932)
|
|
|
|
(3,029)
|
|
|
|
(4,875)
|
|
|
|
(5,463)
|
|
|
|
(6,014)
|
|
General and Administrative
|
|
(27,065)
|
|
|
|
(29,537)
|
|
|
|
(42,433)
|
|
|
|
(41,150)
|
|
|
|
(52,861)
|
|
|
|
(51,571)
|
|
|
|
(62,080)
|
|
|
|
(58,561)
|
|
Adjusted EBITDA
|
|
(4,676)
|
|
|
|
(4,190)
|
|
|
|
(9,858)
|
|
|
|
(20,620)
|
|
|
|
(23,411)
|
|
|
|
(23,657)
|
|
|
|
(25,418)
|
|
|
|
(32,311)
|
|
Adjusted EBITDA Margin
|
|
(7.2%)
|
|
|
|
(6.6%)
|
|
|
|
(13.1%)
|
|
|
|
(29.3%)
|
|
|
|
(22.8%)
|
|
|
|
(23.6%)
|
|
|
|
(21.8%)
|
|
|
|
(29.3%)
|
|
Platform:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform GMV
|
|
$193,983
|
|
|
|
$172,985
|
|
|
|
$214,190
|
|
|
|
$200,262
|
|
|
|
$306,954
|
|
|
|
$288,671
|
|
|
|
$335,373
|
|
|
|
$305,884
|
|
Platform Services Revenue1 |
|
61,235
|
|
|
|
59,582
|
|
|
|
71,898
|
|
|
|
66,148
|
|
|
|
98,722
|
|
|
|
96,151
|
|
|
|
113,615
|
|
|
|
106,290
|
|
Platform Gross Profit
|
|
38,914
|
|
|
|
40,759
|
|
|
|
49,735
|
|
|
|
43,258
|
|
|
|
62,829
|
|
|
|
59,365
|
|
|
|
74,222
|
|
|
|
65,487
|
|
Platform Order Contribution
|
|
23,577
|
|
|
|
28,330
|
|
|
|
33,041
|
|
|
|
26,434
|
|
|
|
39,574
|
|
|
|
40,002
|
|
|
|
52,327
|
|
|
|
43,384
|
|
Platform Order Contribution Margin
|
|
38.5%
|
|
|
|
47.5%
|
|
|
|
46.0%
|
|
|
|
40.0%
|
|
|
|
40.1%
|
|
|
|
41.6%
|
|
|
|
46.1%
|
|
|
|
40.8%
|
|
Farfetch Marketplace:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Consumers
|
|
651.7
|
|
|
|
728.2
|
|
|
|
796.3
|
|
|
|
854.7
|
|
|
|
935.8
|
|
|
|
1,017.8
|
|
|
|
1,118.0
|
|
|
|
1,216.8
|
|
Number of Orders
|
|
407.7
|
|
|
|
385.0
|
|
|
|
468.2
|
|
|
|
427.7
|
|
|
|
600.1
|
|
|
|
578.3
|
|
|
|
727.0
|
|
|
|
662.5
|
|
Average Order Value (actual)
|
|
$614.0
|
|
|
|
$581.2
|
|
|
|
$600.4
|
|
|
|
$605.2
|
|
|
|
$670.4
|
|
|
|
$647.1
|
|
|
|
$602.4
|
|
|
|
$584.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Platform Services Revenue was also referred to as
Adjusted Platform Revenue in previous filings with the SEC
|
|
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 expected financial performance and operational performance
for the fourth quarter of 2018, as well as statements that include the
words “expect,” “intend,” “plan,” “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; 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 retailers and brands for the supply of products on our
Marketplace; our reliance on retailers and brands 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
information technologies and our ability to adapt to technological
developments; our ability to acquire or retain consumers and to promote
and sustain the Farfetch brand; 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
ability to successfully launch and monetize new and innovative
technology; our dependence on highly skilled personnel, including our
senior management, data scientists and technology professionals, and our
ability to hire, retain and motivate qualified personnel; Mr. Neves 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 final prospectus under Rule 424(b) filed with the U.S.
Securities and Exchange Commission (“SEC”) on September 24, 2018 in
connection with our initial public offering as such factors may be
updated from time to time in our other filings with the SEC, which are
accessible on the SEC’s website at www.sec.gov.
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 its 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.
Non-IFRS and Other Financial and Operating Metrics
This release includes certain financial measures and metrics not based
on IFRS, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Revenue, Platform Services Revenue, Platform Gross Profit, Platform
Order Contribution, and Platform Order Contribution Margin, as well as
operating metrics, including GMV, Platform GMV, Active Consumers, Number
of Orders and Average Order Value.
Management uses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Revenue, Platform Services Revenue, Platform Gross Profit, Platform
Order Contribution, and Platform Order Contribution Margin
-
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.
Items excluded from these non-IFRS measures are significant components
in understanding and assessing financial performance. Adjusted EBITDA,
Adjusted EBITDA Margin, Adjusted Revenue and Platform Services Revenue
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
(credit)/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,
Adjusted Revenue and Platform Services 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 financial measures used by Farfetch
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.
Reconciliations of these non-IFRS measures to the most directly
comparable IFRS measure are included in the accompanying tables.
The following table reconciles Adjusted EBITDA to the most directly
comparable IFRS financial performance measure, which is loss after tax:
(in $ thousands, except as otherwise noted)
|
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
Fourth
Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss after tax
|
|
|
|
$(13,786)
|
|
|
|
$(9,333)
|
|
$(19,945)
|
|
$(28,179)
|
|
$(54,818)
|
|
|
|
$(50,727)
|
|
$(17,681)
|
|
$(77,255)
|
|
Net finance costs/(income)
|
|
|
|
(1,941)
|
|
|
|
(1,085)
|
|
(605)
|
|
(839)
|
|
20,171
|
|
|
|
15,101
|
|
(19,319)
|
|
(733)
|
|
Income tax expense/(credit)
|
|
|
|
57
|
|
|
|
152
|
|
(581)
|
|
225
|
|
374
|
|
|
|
527
|
|
187
|
|
1,183
|
|
Depreciation and amortization
|
|
|
|
3,060
|
|
|
|
2,313
|
|
2,706
|
|
2,932
|
|
3,029
|
|
|
|
4,875
|
|
5,463
|
|
6,014
|
|
Share based payments(a)
|
|
|
|
5,860
|
|
|
|
3,770
|
|
4,752
|
|
5,249
|
|
7,715
|
|
|
|
6,567
|
|
5,956
|
|
38,475
|
|
Other items(b)
|
|
|
|
2,078
|
|
|
|
-
|
|
3,823
|
|
-
|
|
126
|
|
|
|
-
|
|
-
|
|
-
|
|
Share of results of associates
|
|
|
|
(4)
|
|
|
|
(7)
|
|
(8)
|
|
(8)
|
|
(8)
|
|
|
|
-
|
|
(24)
|
|
5
|
|
Adjusted EBITDA
|
|
|
|
$(4,676)
|
|
|
|
$(4,190)
|
|
$(9,858)
|
|
$(20,620)
|
|
$(23,411)
|
|
|
|
$(23,657)
|
|
$(25,418)
|
|
$(32,311)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents share based payment expense. (b) Represents
other items, which are outside the normal scope of our ordinary
activities or non-cash, including fair value remeasurement of
contingent consideration of $2.1 million in fourth quarter
2016 and $3.3 million in second quarter 2017 and legal fees
directly related to acquisitions of $126,000 in fourth quarter
2017, all of which are included within the general and
administrative component of selling, general and administrative
expenses. There were no other such items in the first, second
and third quarter 2018.
|
|
The following table reconciles Adjusted Revenue and Platform Services
Revenue to the most directly comparable IFRS financial performance
measure, which is revenue:
(in $ thousands, except as otherwise noted)
|
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
Fourth
Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$82,431
|
|
|
|
$79,425
|
|
$93,146
|
|
$86,913
|
|
$126,482
|
|
|
|
$122,707
|
|
$144,801
|
|
$132,179
|
|
Less: Platform Fulfilment Revenue
|
|
|
|
(17,931)
|
|
|
|
(16,128)
|
|
(17,632)
|
|
(16,426)
|
|
(23,996)
|
|
|
|
(22,535)
|
|
(28,016)
|
|
(21,799)
|
|
Adjusted Revenue
|
|
|
|
64,500
|
|
|
|
63,297
|
|
75,514
|
|
70,487
|
|
102,486
|
|
|
|
100,172
|
|
116,785
|
|
110,380
|
|
Less: Browns In-Store Revenue
|
|
|
|
(3,265)
|
|
|
|
(3,715)
|
|
(3,616)
|
|
(4,339)
|
|
(3,764)
|
|
|
|
(4,021)
|
|
(3,170)
|
|
(4,090)
|
|
Platform Services Revenue
1
|
|
|
|
$61,235
|
|
|
|
$59,582
|
|
$71,898
|
|
$66,148
|
|
$98,722
|
|
|
|
$96,151
|
|
$113,615
|
|
$106,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Platform Services Revenue was also referred to as
Adjusted Platform Revenue in previous filings with the SEC
|
|
Platform Gross Profit, Platform Order Contribution and 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 Platform
Gross Profit, Platform Order Contribution and 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
platform for the periods presented. We also believe that Platform Gross
Profit, Platform Order Contribution and Platform Order Contribution
Margin are useful measures in evaluating our operating performance
within our industry because they permit the evaluation of our platform
productivity, efficiency and performance.
The following table reconciles Platform Gross Profit and Platform Order
Contribution to the most directly comparable IFRS financial performance
measure, which is gross profit:
(in $ thousands, except as otherwise noted)
|
|
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
|
|
Fourth
Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
$40,241
|
|
|
|
$42,854
|
|
$51,494
|
|
$45,689
|
|
$64,729
|
|
|
|
$61,173
|
|
$75,693
|
|
$67,387
|
|
Less: Browns In-Store Gross Profit(a)
|
|
|
|
(1,327)
|
|
|
|
(2,095)
|
|
(1,759)
|
|
(2,431)
|
|
(1,900)
|
|
|
|
(1,808)
|
|
(1,471)
|
|
(1,900)
|
|
Platform Gross Profit
|
|
|
|
38,914
|
|
|
|
40,759
|
|
49,735
|
|
43,258
|
|
62,829
|
|
|
|
59,365
|
|
74,222
|
|
65,487
|
|
Less: Demand generation expense
|
|
|
|
(15,337)
|
|
|
|
(12,429)
|
|
(16,694)
|
|
(16,824)
|
|
(23,255)
|
|
|
|
(19,363)
|
|
(21,895)
|
|
(22,103)
|
|
Platform Order Contribution
|
|
|
|
$23,577
|
|
|
|
$28,330
|
|
$33,041
|
|
$26,434
|
|
$39,574
|
|
|
|
$40,002
|
|
$52,327
|
|
$43,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Browns In-Store Gross Profit is Browns In-Store Revenue less the
direct cost of goods sold relating to Browns In-Store Revenue
|
|
“Active Consumers” means active consumers on the Farfetch Marketplace. A
consumer is deemed to be active if they made a purchase on the Farfetch
Marketplace within the last 12-month period, irrespective of
cancelations or returns. The number of Active Consumers is an indicator
of our ability to attract and retain an increasingly large consumer base
to our platform and of our ability to convert platform visits into sale
orders.
“Adjusted EBITDA” means loss after taxes before net finance
costs/(income), income tax (credit)/expense and depreciation and
amortization, further adjusted for share based compensation expense,
other items and share of results of associates. 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 others.
“Adjusted EBITDA Margin” means Adjusted EBITDA calculated as a
percentage of Adjusted Revenue.
“Adjusted Platform Revenue” means Adjusted Revenue less Browns In-Store
Revenue. Adjusted Platform Revenue is driven by our Platform GMV,
including revenue from first-party sales, and commission from
third-party sales The revenue realized from first-party sales is equal
to the GMV of such sales because we act as principal in these
transactions, and thus related sales are not commission based.
“Adjusted Revenue” means revenue less Platform Fulfilment Revenue.
“Average Order Value” (“AOV”) means the average value of all orders
placed on the Farfetch Marketplace excluding value added taxes.
“Browns In-Store Revenue” means revenue generated in our Browns retail
stores.
“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. GMV does not
represent revenue earned by us, although GMV and revenue are correlated.
“Number of Orders” means the total number of consumer orders placed on
the Farfetch Marketplace, gross of returns and net of cancellations, in
a particular period. An order is counted on the day the consumer places
the order. The Number of Orders represents an indicator of our ability
to generate sales opportunities for luxury sellers through our
Marketplace. Analyzed in the context of Active Consumers, the Number of
Orders provides an indicator of our ability to attract recurring
purchases on our platform and also, the effectiveness of our targeted
advertising.
“Platform Fulfilment Revenue” means revenue from shipping and customs
clearing services that we provide to our consumers, net of consumer
promotional incentives, such as free shipping and promotional codes.
“Platform GMV” is consistent with the definition for GMV given above but
excludes Browns In-Store Revenue.
“Platform Gross Profit” means gross profit excluding Browns In-Store
Gross Profit.
“Platform Order Contribution” means gross profit after deducting demand
generation expense, which includes fees that we pay for our various
marketing channels. 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.
“Platform Order Contribution Margin” means Platform Order Contribution
calculated as a percentage of Platform Services Revenue.
“Platform Services Revenue” has the same meaning and is calculated in
the same manner as Adjusted Platform Revenue. Platform Services Revenue
was previously referred to as Adjusted Platform Revenue in the Company’s
SEC filings and other disclosure. In this earnings release and other
Company disclosures going forward, management intends to refer to
Platform Services Revenue instead of Adjusted Platform Revenue.
“Third-Party Take Rate” means Adjusted Platform Revenue excluding
revenue from first-party sales, as a percentage of GMV excluding GMV
from first-party sales and 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
technology 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.com Marketplace connects customers in 190 countries
with items from more than 48 countries and over 1,000 of the world’s
best boutiques and brands, delivering a truly unique shopping experience
and access to the most extensive selection of luxury on a single
platform. Through its business units, which also include Store of The
Future, Farfetch Black & White Solutions, and Browns, Farfetch continues
to invest in innovation and develop key technologies, business
solutions, and services for the luxury fashion industry.
For more information, please visit www.farfetch.com.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181108005997/en/
Farfetch
Investor Relations Contact:
Alice
Ryder
VP Investor Relations
IR@farfetch.com
or
Media
Contacts:
Susannah Clark
VP Communications, Global
susannah.clark@farfetch.com
+44
7788 405224
or
Brunswick Group
farfetch@brunswickgroup.com
US:
+1 (212) 333 3810
UK: +44 (0) 207 404 5959
Source: Farfetch