Good morning, everyone. Welcome to our annual press conference. We will take you through our full year results and tell you what we have in store for the future. My name is Simon Thiel, and I lead the Corporate Affairs Department. Thank you very much for joining us.
I'm Patrick Kofler, and I lead the Investor Relations Department. For this event, we've brought together the press, investors, and analysts. It's great to have you all here.
We'll start our conference with a pre-recorded presentation by our co-CEOs, Robert Gentz and David Schröder. They will walk you through how we're executing our strategy to become the leading pan-European fashion and lifestyle e-commerce ecosystem. At 9:45 A.M. Berlin Time, following the presentation, we will open the virtual floor to a live Q&A session for journalists with Robert and David.
For our investors and analysts, I'll be hosting a live Q&A session at 10:45 A.M. Berlin Time together with Robert, David, and our Vice President of Finance, Roeland Loof. The Q&A system will be open within the next few moments, and you can begin submitting your questions. If you'd like to ask your questions, please click the button on the right-hand side of your screen. You also have the possibility to ask questions during the live Q&A. A recording of the speech will be available later on our Investor Relations section of our website.
Now, let's go over to our Zalando Live Studios, where we bring entertainment to life for our customers. David and Robert, the floor is yours.
A big hello from Berlin, and thank you for joining us today.
Good morning and welcome, everyone.
We're excited to be here today to share our achievements in 2024 and to take you through our ambitions and plans for the future.
Last year was a really exciting year for Zalando, and most importantly, we delivered on our strategy and our financial targets. We also navigated a pretty challenging market environment. We've successfully adapted to evolving customer needs, and we continue to invest in our platform and services. Looking forward, we're very excited about what this year has in store for us, for our customers, and our partners.
Today, Robert and I are going to take you through our strategic and key financial highlights. We'll dive into the exciting developments in our B2C and B2B growth pillars, and we'll give you an outlook on what lies ahead. At the end of our presentation, we are also going to talk about our plan to team up with About You. We believe this will be an important step forward for Zalando and will help us to serve our customers and our partners even better.
When we talked to you last March, we outlined a clear strategic path for Zalando and explained to you how we are building the leading pan-European ecosystem for fashion and lifestyle e-commerce, and now we're very focused on executing that vision and making the right investments to capture future growth. Before we start to reflect on last year and look forward to the year ahead, I'd like to take a few moments to remind you of our strategy. Our updated strategy shifts us from a platform to an ecosystem. That's how we capture a larger share of the market. So in B2C, we want to become the go-to destination for quality fashion and lifestyle. That means we go beyond fashion and expand into more areas of lifestyle. It also means going beyond pure transactions and creating ways to inspire and entertain our customers even before the moment of the purchase.
And while we can capture a meaningful market share with our consumer business, we can add a whole new dimension by building a very strong B2B business. So far, for our partners, we've built a platform that enables them to connect their inventory and drive their business on Zalando. It's a really good platform, but still a closed system. We expanded this by offering solutions that allow them to run their e-commerce on and also off Zalando. We let them leverage all the capabilities we've built up over the last 15 years. And this shift to an ecosystem will drive strong growth and margin expansion through 2028. First of all, we have one great piece of news to share. 2024 marks the first year since the pandemic where e-commerce penetration in Europe is back to its long-term growth trend.
And more and more customers are shopping online, and as a result, we remain very bullish about the long-term opportunity. We operate in a massive EUR 450 billion market where our offering meets the needs of more and more customers. So last year, we set ourselves some tough targets, and I'm really proud that we not only achieved but actually exceeded them. And this wouldn't have been possible without the energy, the dedication, and the hard work of all Zalando teams, and I can't thank them enough. So now let's look at the numbers. GMV and revenue were both in the upper half of our updated guidance. GMV grew by 4.5% to EUR 15.3 billion, and revenue grew by 4.2% to EUR 10.6 billion. And I think these results show that even in a rather muted macroeconomic environment, there are pockets of growth, and we know how to find them.
It is also supported by more positive signals in the consumer sentiment. In terms of profitability, we exceeded our updated adjusted EBIT guidance by more than EUR 30 million, with an adjusted EBIT of EUR 511 million . That's a margin of 4.8%. Coming from 3.5% in 2023, that's a significant step towards our 6%-8% adjusted EBIT margin target in 2028. And David, I will now walk you through our 2024 numbers in more detail.
Thanks, Robert. Let's start by taking a closer look at our B2C growth vector. B2C delivered accelerated growth of both GMV and revenue with significantly improved profitability. We grew GMV by 4.5% to EUR 15.3 billion and revenue by 3.8% to EUR 9.7 billion. We've also experienced growth acceleration throughout the year, achieving over 6% GMV growth and revenue growth in the second half. Also, our adjusted EBIT came in at EUR 489 million. That's EUR 178 million more than last year, yielding a margin of over 5%. Our acceleration in GMV was driven by a return to active customer growth. By year-end, we served 51.8 million active customers, an increase of more than two million customers, marking a new all-time high. Spend per customer remained flat at around EUR 295, with order frequency and basket size developments offsetting each other. Now, let's look at the development of our customer cohorts.
Overall, our customer base is moving in the right direction towards a healthier and higher-value customer base. There are three key takeaways from the numbers we are reporting today. First, we've been particularly successful in acquiring new customers. This resulted in a year-over-year increase in spend of our new customer cohort. Second, our focus on profitable growth, as well as some ongoing macro impacts, continues to be reflected in the spending dynamics of our older customer cohorts. Third, and as you can see on the chart, our focus on driving customer lifetime value helped us to further increase the profit contribution per customer across our cohorts. These developments make us confident that we'll continue to deliver sustainable and profitable long-term growth for our B2C business. Let's move to the gross margin development in our B2C business.
As planned, we've made a significant step forward in strengthening our B2C gross margin with an increase of more than 200 basis points year-on-year to 43.5%. Our retail business, which is characterized by full inventory ownership, drove the majority of the increase via improved inventory management as reflected in strong inventory sell-through and historically low overstock levels. The improvement in our B2C gross margin was a key contributor to the increase in our bottom line margin. Overall, we feel that our B2C business is in really good shape, and we're looking forward to the year ahead. Let's now move on to our second growth vector, the B2B business. We recorded revenues of EUR 953 million in 2024. That's an 11.5% increase on the previous year and significantly ahead of group revenue growth. Growth was largely driven by ZEOS Fulfillment, including Zalando Fulfillment Solutions, as well as multi-channel fulfillment.
Our adjusted EBIT of EUR 23 million, with a margin of 2.4%, came in below last year's profitability level. The temporarily lower profitability was driven by our front-loaded overhead and infrastructure investments into future growth across ZEOS Fulfillment and software. As part of our ecosystem strategy, we also aim to enable a more sustainable fashion and lifestyle industry at scale and have set ourselves a clear ambition. We want to get to net zero in our own operations and private labels by 2040 and across our entire value chain by 2050. On our path to net zero and in pursuit of our near-term targets for 2025, we've made really good progress. Since 2017, we've reduced the absolute emissions of our own operations by 82%. Since 2018, we've also reduced the emission intensity from private labels by 48%.
We think this is pretty remarkable progress, but we are equally convinced that more needs to be achieved by us and the industry. We are thus working hard on developing and scaling solutions that support businesses across the industry and drive positive change at the same time. With that, let me hand it back to Robert.
Thanks, David. Okay, let's move on and focus on our B2C business and our plans for this year. Our message is pretty simple. We're delivering on our three strategic pillars that will drive growth of our B2C platform. And let me quickly recap what these pillars actually are. So first, differentiation through quality. It's absolutely fundamental to our approach in all areas, and that makes us unique. Next, lifestyle expansion. We know our customers have broader needs in fashion and lifestyle. They play sports, they have families, and many of them actually use us for beauty products. This means they have more needs than we're currently serving, and it's a huge opportunity for us. And finally, inspiration and entertainment. This is about expanding the customer experience beyond just transactions. We want to inspire and entertain our customers through lifestyle content integrations and have all customers using Zalando more frequently.
Okay, now let's dive deeper into our plans with each of these growth pillars, starting now with quality. We want to be the quality leader in fashion and lifestyle e-commerce in Europe. And so we continued in 2024 to execute against that ambition. That's our North Star, and our plan consists of four elements. One, a highly relevant assortment and content. And we elevated our assortment with new brand additions last year, such as Versace, Diane von Furstenberg, and On Running. Two, a tailored digital experience. So for example, we had about 300,000 customers that have already used our body measurement option for the size and fit. Three, more sustainable and inclusive choices. So we're expanding our sustainable and adaptive fashion offerings only last year with 170 new adaptive styles launched. And four, a localized and personalized convenience experience.
So for example, we've made our payment options broader and more flexible. This has removed the big friction point and was a big success in Germany, and now we've expanded it to eight more markets. The differentiation through quality is very dear to brands as it provides them with a trusted environment where they can expand their brand equity and ultimately a great place for them to advertise their story and products through ZMS. And this is as well very dear to our customers, which they ultimately award with their loyalty. This actually leads me to our next topic. So we've upgraded our loyalty program last year. Now it's a program that rewards all our customers for their loyalty through engagement and purchases. So how does it work? Customers are rewarded with points for their spend and engagement on our platform.
They collect these points and can unlock three different levels, and each level comes with an increasing number of benefits. Engaged and happy customers translate into increased order frequency and more loyalty. Since the upgrade, we've already close to 10% of our customer base participating in our loyalty program, and that's great news. First, we're already impacting our loyalty at a big scale through that program, and second, there's so much more potential for us, so 90% of our customers are not yet participating, so we're very excited about the future, but please take a look for yourself, so there's a lot of exciting topics coming this year to drive growth as a quality destination in fashion and lifestyle e-commerce.
One core initiative is that we are rolling out the new loyalty programme and making it available in most of our markets in 2025, so we can have a bigger part of our customer base participating in the program. Another exciting initiative is that we're bringing the Zalando platform into some of the remaining European markets where we're not yet in, so we launched this year in Portugal, Greece, and in Bulgaria. Last example to mention here is that we're focused this year on further enriching our product detail pages, so displaying richer product details we're collecting, visually enriching through 3D images and videos, and integrating more content formats, and this is very exciting because we see that customers really appreciate the more details and investments with better conversions.
It's something very unique, only we can execute given our scale across so many thousands of brands and our focus on fashion and lifestyle. There are a lot of exciting things we're executing for this year for our growth. Now let's talk about the second pillar, the lifestyle expansion. We know that our customers have a wide range of needs across different aspects of their lifestyle. Catering to these needs is a huge opportunity for us. Expanding deeper into lifestyle areas means a lot more than just offering more items. We said last year that we want to serve more of our customers across more of our distinct so-called propositions. Propositions are holistic experiences we build that serve different parts of the entire lifestyle wallet of our customers, like fashion, like sports, and beauty, etc. As you can see, we're making progress.
The number of customers that buy different propositions on Zalando is increasing. We're becoming more and more a holistic solution of the lifestyle wallet of our customers. Let's take a closer look at two of these propositions, starting with beauty, to show how we're driving the progress. We launched beauty in 2018, and since then, we've gained valuable insights from customer feedback, successful brand partnerships, and our collaboration with Sephora, and we've applied these learnings to develop our beauty offering even further and develop many beauty-specific customer experiences. And we see great traction here, both from our customers and as well from the new brands' partnerships. In 2024, it has been driving strong double-digit growth, and we're excited to welcome even more high-quality brands to our platform in 2025, so brands like Dyson, Armani, and ghd.
So for 2025, I'm confident we'll look forward to another year of strong growth in beauty. This is great for our ZMS, as the beauty proposition has a very high share of ZMS adoptions for brands. So let me talk about our latest example of a new proposition, which is sports. We know that sports are increasingly important in our customers' lives, both as a lifestyle choice and as a means of social connection. It's also a huge and fast-growing online segment. And our strategy is showing good results with consistent customer growth and double-digit GMV growth in sports in 2024. For 2025, we now go deeper into subsegments of sports, where we invest into dedicated experiences to further cement our sports competence for customers and for brands. So in running, in outdoors, in fitness, and in football.
These are very important segments of sports, and building credibility and competence here is important to be the leader. So in running, we've already last year made great progress by offering the most elevated running assortment in the market, then elevating premium products through storytelling and showcasing innovation, expanding livestream and editorial content to provide expert advice, and launching UX features to enhance the decision-making process, and the results are staggering. 70% of our running shoe assortment now sells at a price point above EUR 100 . That's an amazing result to prove our sport competence as a platform, so we're very satisfied with the progress and excited about what's to come this year. Please look for yourself, so growth through lifestyle expansion means first, going deeper in the propositions, as just explained with beauty and sports, to capture a higher share of our customers.
And second, by bringing more of our propositions into more of our markets. So in 2025, we rolled out more of our propositions into more European markets. This year, we rolled out beauty to Spain and Finland. There will be 13 markets in total for beauty. And Lounge by Zalando will also expand into five more markets, so bringing it to a total of 22. So in summary, we're executing many exciting initiatives in the lifestyle pillar of our B2C business. Now let's move to our third pillar, inspiration and entertainment. We want the Zalando experience to be even more inspiring and entertaining, to connect with consumers on a deeper and more emotional level. This is an area where we test and iterate a lot to assess the impact of newly introduced experiences. So last year, we continued to improve one of our large-scale experiments, the Stories on Zalando.
Here we integrate high-quality curated content with our e-commerce experience. Since the launch in late 2023, we've published over 500 stories featuring over 700 brands and 7,000 products. It's really a great way to elevate even the most exciting assortment. We get access to the most sought-after products of the brands. We're able to participate and even co-create product types. It has elevated the way of how we partner with brands. Many customers love these launches. Let's take a quick look back at our journey last year. Next to stories, we also launched and iterated many other content engagement formats last year. Based on social content formats such as talent profiles, live shopping, or boards, and based on generative AI, such as our Assistant, the Trend Spotter, or Outfit Builder. We learned a lot and got exciting feedback and encouraging customer signals.
In 2025, now we're bringing these engagement formats into a personalized discovery feed into the Zalando mobile app, and this is going to be an exciting and a very different way to access your fashion and lifestyle universe and see what's new and what's interesting for you today, so here's a quick glimpse at what we have planned for this year. That's now a challenge for B2B. As a reminder, in our B2B business, our aim is to become the operating system for fashion in Europe, unlocking digital business opportunities for brands and retailers. Last year, we built a strong foundation for logistics, and we are now in a great position to further scale and advance our ZEOS offering with a particular focus on logistics and software solutions in 2025, so let's first talk about logistics. In our logistics offering, we made significant progress in 2024.
We now serve 12 markets as we launched three new markets for our merchants: Switzerland, Poland, and Spain. Beyond that, our merchants can now sell on 10 different channels, including nine marketplaces that collectively cover 85% of the total marketplace volume in Europe. We also gave merchants more control over their fulfillment operations as we launched and expanded logistics functionalities in ZEOS One, our central control panel. Since our ultimate goal is to unlock digital business opportunities for brands and retailers, let's take a look at how this actually worked in the case of Pepe Jeans. We've spoken about Pepe Jeans before, but I'd like to give you an update as it shows how we've moved forward. Pepe is one of our earliest ZEOS clients. For those that don't know them, they specialize in high-quality denim jeans and are present in over 60 countries worldwide.
When Pepe Jeans joined Zalando, they initially used to dropship all items sold on Zalando from their own warehouse in Spain. After experiencing some limitations with this model, Pepe Jeans switched to Zalando Fulfillment Solutions for most items ordered on Zalando, then they extended their contract to multi-channel fulfillment to fulfill items sold outside the Zalando platform on About You, and finally, they decided to leverage ZEOS to fulfill orders for their own website, pepejeans.com, across Europe. As a result, their items sold increased by more than nine times since they started with us at the end of 2019, and we are now aiming to replicate this success with more brands and retailers that are interested to join our ecosystem to benefit from our solutions. We are thus excited to launch our new partnership with Next in 2025.
With GBP 5.8 billion total sales reported in 2024, they are a leading U.K.-based retailer, growing their international business significantly. Together with Next, we've designed and are in the process of building a set of new fulfillment features that in the future, all ZEOS merchants will be able to benefit from. We'll introduce advanced fulfillment capabilities like virtual bonded warehousing, offer enhanced onboarding and inventory management capabilities, and expand our services to 10 additional European markets to support Next in all the continental European markets they are already trading in. All these innovations will further increase the value that ZEOS can unlock for Next, as well as other brands and retailers, and will make our pan-European multi-channel logistics offering even more unique and compelling. Now let's move on to our ZEOS software solutions. 2024 marked a pivotal year as we began building our software ecosystem.
To support merchants across all online channels, we focused on three key areas. First, we expanded our marketplace connectivity by working with marketplace integrators, most notably Tradebyte and Rithum. Second, we strengthened our support for the most important channel of our merchants, i.e., their own e-comm, by forging new ecosystem partnerships with leading shop systems, and third, we launched powerful steering and optimization tools that help our merchants to grow their digital business based on rich and unique data insights. Overall, our ecosystem helps merchants to select and combine the solutions they need to drive their digital business forward. For this coming year, our priorities and software are clear. We'll continue to build out our software ecosystem through strategic partnerships with leading sales channels, integrators, and shop systems, and we'll build out our steering and optimization tooling and launch even more powerful tools across ZEOS and Tradebyte.
With our great progress across ZEOS logistics and software, we are fully on track to deliver on our B2B strategy and to cover a larger share of the European fashion and lifestyle market in the years to come. Let me hand it back to you, Robert.
Thanks, David. Now let's move to our outlook. First, I'll talk about our strategic plans and second, about our financial outlook. You've now heard a lot about how we are organically building the leading ecosystem of fashion and lifestyle e-commerce. On December 11th, we announced our intention to make a voluntary public tender offer for 100% of About You's share capital. Insofar as more than 90% of About You's shares in total, excluding treasury shares, have been secured. So this deal plays perfectly into our strategy, allowing us to accelerate even more.
So in B2C, About You's addition will enable us to execute a dual brand strategy with two distinct and separate experiences to service customers and partners better. It has just been laid out by David. In B2B, we'll continue to expand our offering across ZEOS. So the transaction unlocks significant value and longer-term synergies. I expect it to be around EUR 100 million per year on an adjusted EBIT basis. We're currently awaiting approval from regulatory authorities to finalize the transaction, and closing is anticipated for summer 2025 with full consolidation following thereafter. In our strategy update from March last year, we reaffirmed our strong confidence in our growth potential in the European fashion market, aiming to capture a larger share of this EUR 450 billion market. With regard to profitability, we're confirming our long-term target margin profile.
And also taking About You into consideration, subject to regulatory approvals, we continue to target a 10%-13% Adjusted EBIT margin for the combined group and across both B2C and B2B growth areas. Now let me talk about our midterm targets for 2028. Looking ahead, we're excited by the value creation opportunities ahead of us, having laid the strategic groundwork last year. Our midterm guidance for the combined group, including About You, until 2028, reflects our ambition to return to strong growth and to continue margin expansion. The GMV and revenue CAGR of 5%-10% represent a clear path to outperform the online segment and continue to gain market share. At the other end, with double-digit growth, we will outperform the online segment by a factor of two.
At the same time, we push towards an adjusted EBIT margin in the corridor of 6%-8% in 2028, along with strong free cash flow throughout the period. With that, let's have a look at our guidance for 2025. In 2025, we will focus on accelerating growth while continuing to drive further improvements in adjusted EBIT and investing in future growth opportunities in line with our midterm guidance. Our guidance is based on Zalando's standalone performance and doesn't include any financial impact from the anticipated About You consolidation. For the 2025 fiscal year, we expect GMV and revenue growth of 4%-9% year on year on group level. We expect to achieve this growth through a combination of factors in B2C by continuing to grow our active customer base and increasing share of wallet through new customer acquisitions, enhanced loyalty, and lifestyle expansion.
And in B2B, by further scaling our ZEOS Fulfillment Solutions. Regarding segment-level performance, please note the following two points. One, our growing B2B business, including ZFS and multi-channel fulfillment, generates additional revenues not reflected in the GMV figures, which are exclusively driven by our B2C business. And two, we project that B2B segment revenue growth will significantly outpace B2C revenue growth. Furthermore, we will continue to improve profitability. We aim to further increase adjusted EBIT to a level between EUR 530 million and EUR 590 million. At the midpoint, this guidance range implies an adjusted EBIT margin of around 5%. Starting from 3.5% in 2023, we delivered a 4.8% margin in 2024. This means we made a big step forward towards our 6%- 8% corridor for 2028. In 2025, we're now expecting a more moderate adjusted EBIT improvement.
This is driven by our continued growth investments, in particular the expansion of our loyalty program and our investments into inspiration and entertainment, and the ongoing build-out of our pan-European logistics network will lead to an increase in fixed costs. Our strategic investments set us up for our continued success in the long term. CapEx is expected in the range of EUR 180 million-EUR 280 million as we continue to invest in our infrastructure as well as the technology. The net working capital will remain in negative territory. Let's close this presentation with the key takeaways of today. Firstly, our ecosystem strategy is progressing very well. We're making great progress, and we achieved our 2024 financial targets. Secondly, in 2025, we have exciting plans to further advance our strategy across our B2C and B2B growth vectors. The planned About You acquisition plays perfectly into our strategy.
Thirdly, our long-term opportunity is huge. We aim to further accelerate our growth organically and via the acquisition of About You. And this yields an attractive financial profile at scale. Thank you very much. We will now move to Q&A.