Good morning, everyone, and welcome to Global Fashion Group's Q2 and H1 2026 Results Presentation. I'm Christoph Barchewitz, CEO of GFG, and I'm joined today by our CFO, Helen Hickman. I will start with highlights for today and then share an update on progress we are making across the business. Helen will then take you through the regional and group financial results and our guidance for the full year. After that, we will open the call for questions. Overall, we are executing on our strategy and delivering financial results in line with our expectations and guidance. We've continued to improve our unit economics with sales and profit per customer and per order growing strongly, creating the foundation for profitable growth. We've made significant progress in enhancing our delivery proposition, strengthening our marketplace, and scaling our platform services offering.
While today's focus will be on Fulfilled by GFG, our platform services also continue to grow, driven by retail media across all three regions and our single stock solution in Southeast Asia. Combined with the integration of AI across our business, initiatives across these areas continue to strengthen our customer value proposition and profitable growth strategy. I'll be sharing more detail on these topics in a moment. On financial results, we delivered our first profitable H1 with our current footprint. For the LTM period to June, adjusted EBITDA improved by a strong EUR 23 million year-over-year, and normalized free cash flow by EUR 28 million. Lastly, we have narrowed our 2026 guidance to take account of H1 results and our current expectations for H2. For NMV, we now expect a year-over-year change of - 4% to 0%.
For adjusted EBITDA, we now expect a range of EUR 18 million to EUR 25 million. Helen will explain these changes in more detail. Turning to our Q2 financial highlights. NMV was broadly stable with a 0.6% constant currency decline, while adjusted EBITDA margin increased by 1.8 percentage points. Our focus on unit economics is delivering results. Increased order frequency and cost discipline are offsetting the impact of fewer active customers and orders. Next, we have our business update. Over the last several years, we have focused on increasing the value and contribution generated from each customer and order, while also reducing our fixed cost structure to drive substantial profitability and cash flow improvements. While this transition has resulted in about a quarter reduction in active customers and orders, it has also fundamentally strengthened our unit economics.
This progress is visible across the entire group as shown, with consistent trends on profit contribution in all three regions. NMV and gross profit per unit have increased, reflecting our more targeted approach to customer acquisition and deepened repeat engagement. These improvements become materially more pronounced further down the P&L. After fulfillment costs, profit contribution per active customer has increased by 47% over the last three-year period, while profit contribution per order has increased by 53%. After both fulfillment and marketing costs, the improvement is even more significant, with profit contribution increasing by 91% per active customer and 99% per order. These results were enabled through a broad range of initiatives, including greater automation, improved terms with our delivery partners, and marketing allocation toward the channels and customers that generate the strongest returns. We will continue to optimize unit economics while reinvesting efficiency gains into customer experience and marketing.
Turning to our delivery proposition, which is a critical driver of both customer experience and unit economics. We continue to deliver a high-quality service with on-time delivery exceeding 90% across all regions and delivery speeds improving by more than 20% in ANZ and SEA compared with 2023, while remaining stable in LATAM. We are also elevating the customer experience through greater choice and transparency. Real-time tracking provides end-to-end order visibility, while our expanded Fulfilled by GFG and Dropship partnerships are strengthening the marketplace delivery experience. We continue to invest in more delivery options. We have rolled out next-day delivery in additional key metro areas, introduced flexible express tiers, and increased the number of automated parcel lockers. Importantly, we delivered these service improvements while continuing to build a more efficient model, having reduced fulfillment costs by 3 percentage points of NMV over the last three years.
This has been achieved through vendor negotiations, route optimization, and an expanded asset-light partner network that allows us to scale capacity without increasing fixed costs. All of these initiatives create a superior delivery experience that drives conversion and growth. Our Fulfilled by service leverages our delivery and fulfillment infrastructure to manage logistics for marketplace brand partners, enabling them to bypass internal operations while providing a more consistent shopping experience for our customers. Fulfilled by is live in all three regions, though they are at different stages of maturity. ANZ launched in early 2023, and adoption has been accelerating so that it now represents 15% of Marketplace NMV, with 88 brands live. In LATAM, the offering has continued to gain traction since its launch in June 2024. Fulfilled by now accounts for 6% of Marketplace NMV across 70 brand partners.
SEA is our most established market, having launched the offering in 2019. Fulfilled by contributes 29% of Marketplace NMV. With 81 brand partners live, our focus has been on optimizing the assortment and brand mix to support stronger unit economics. Overall, Fulfilled by is a key contributor to the group's growing marketplace business. Together, Fulfilled by and platform services deepen our relationships with brand partners, improve their ability to reach and serve customers, and support a more scalable, higher margin revenue mix for GFG. Now looking at our integration of AI into our workflows across the business. In LATAM, we have transitioned to an AI-enabled workflow for image and video generation across our product catalog and marketing campaigns. The impact in Brazil has been significant, where e-production costs have reduced by over 50%.
Beyond cost savings, this greater agility allows us to bring products to market faster and refresh content more frequently at scale. As AI opportunities extend beyond how we create content, we're also focused on how we improve how customers discover our products. In ANZ, THE ICONIC is the only Australian fashion retailer participating in Google's Universal Commerce Protocol, or UCP, pilot. The UCP enables customers to discover select ICONIC products through Google's AI services, including Google Search and Gemini, and move through to an integrated checkout journey. THE ICONIC remains the merchant of record and manages the entire fulfillment and post-purchase customer experience. This pilot allows us to learn from and help shape this emerging channel as shopping journeys evolve. As discovery shifts toward AI-driven search, we are also prioritizing answer engine optimization, or AEO, to ensure our platforms and assortment remain discoverable in these new environments.
We are also applying AI to the commercial decisions we make every day. In ANZ, our automated pricing tool now covers 100% of our retail assortment. This enables faster data-led pricing that helps our team better balance competition, margin, and sell-through. Beyond pricing, we are applying AI across broader commercial workflows, including product descriptions, campaign SKU selection, and buying optimization, all to improve the speed and quality of our decisions. In summary, we are successfully driving a more efficient and profitable business from each of these strategic initiatives.
I will now hand it over to Helen, who will take you through our financial results.
Thanks, Christoph. First, let's look at our regional segment results. Starting with ANZ, our largest region, generating about half of our NMV. ANZ delivered 3% year-on-year NMV growth in both half one and Q2 on a constant currency basis. This was supported by 2% active customer growth and strong engagement across targeted campaigns. In a more challenging discretionary spending environment, ANZ's performance reflects our highly relevant brand and assortment proposition that continue to resonate with customers. Higher living costs and interest rate increases have weighed on consumer confidence so far this year. Gross margin remained broadly stable at 48%. We saw growth driven by a greater mix of higher margin categories, including own brand and women's apparel, alongside increased marketplace participation, offset by our continued investment in the loyalty program launched last year.
As a result of further cost efficiencies, mainly in fulfillment, ANZ's half one adjusted EBITDA margin increased by 2 percentage points to a strong 5%. Moving on to LATAM. Our performance in half one reflects clear resilience on profitability while facing external headwinds. LATAM delivered a solid 3 percentage point step-up in adjusted EBITDA margin and was profitable in half one, despite NMV being down 2% and revenue down 7%. In the second quarter, NMV was down 1% and revenue down 5%, reflecting external headwinds, including record household debt and the World Cup, which redirected consumer attention and spending. It was also a highly competitive environment driven by a tax change favoring cross-border players.
Now turning to SEA. Similar to LATAM, SEA delivered profitability improvements despite facing top-line declines. In half one, adjusted EBITDA margin reached 3%, improving 3 percentage points year-on-year. NMV declined 11% on a constant currency basis. SEA has made strong steps in reducing the fixed cost base to ensure we are well-positioned as growth returns. Across all regions, we have demonstrated this half that we can deliver profitability in competitive markets through business model shifts towards more marketplace and platform services and operating cost improvements.
Now turning to the group results. Order frequency increased by 1.8% year-on-year to 2.4x . We are seeing the customers who shop with us becoming more engaged, whilst active customers declined 5.5% year-on-year. We are continuing to rebalance our customer base towards profitable growth. Turning to NMV. Q2 moderated to a 0.6% decline on a constant currency basis following a 3% decline in quarter one. For half one, NMV declined by 1.7% year-on-year. 5.3% higher average order values substantially mitigated the effect of 6.6% less orders resulting from lower traffic in the first half. Average order value was supported by three main drivers. In order of impact, this included a more favorable regional mix, price inflation, and less discounting.
Turning to revenue and profitability. Half one revenue declined by 3.5% year-on-year on a constant currency basis, reflecting the lower NMV and increased marketplace mix. We improved gross margin by 0.2 percentage points year-on-year to 47.2%. Increased marketplace and platform service share offset a decline in retail margin. We improved adjusted EBITDA margin by EUR 9 million year-on-year to +EUR 1 million, delivering our first positive adjusted EBITDA result for a first half within our current footprint. This represents a 2.8 percentage point margin improvement year-over-year. We delivered this through the benefits of evolving revenue mix and structural improvements to our cost base. We also continued to benefit from FX tailwinds this quarter. Let me take you through our cost actions in more detail.
Our total cost base continued to reduce significantly more than our NMV decline for half one. Fulfillment costs reduced by 1.3 percentage points as a share of NMV, reflecting continued automation and efficiency improvements across our logistics network, specifically reducing delivery and personnel costs. Technology and administrative costs also reduced by 1.3 percentage points, benefiting from headcount reductions and further simplification of the business. Marketing remained broadly stable at 6.9% of NMV, allowing us to maintain investment in the customer and growth initiatives that generate the strongest returns. We expect to deliver further efficiencies as volume returns. Turning to cash flow. In Q2, our EUR 3 million improvement in adjusted EBITDA drove a corresponding improvement in normalized free cash flow as other key components, including leases, working capital, and CapEx, remained stable year-on-year.
On a last 12 months basis, we are making strong progress towards a break-even position, with normalized free cash flow improving by EUR 28 million year-on-year to -EUR 19 million. Our cash position remains robust. We closed Q2 with EUR 105 million in pro forma cash and EUR 89 million in pro forma net cash after accounting for third-party borrowings. Turning now to our full-year 2026 guidance. On NMV, we have lowered the top end of our range to reflect half one performance and our revised expectations for a more challenging second half. This range continues to consider factors specific to our markets, including the upcoming general election in Brazil and sustained cost of living pressures in ANZ. We now expect year-on-year constant currency NMV of - 4% to 0%.
On a reported basis, incorporating half one actuals and using 30th of June 2026 closing exchange rates for the remainder of the year, this translates to EUR 1.05 billion to EUR 1.09 billion. Whilst our original guidance provided in March used December 2025 exchange rates, ongoing strength in the Australian dollar and the Brazilian real offers a potential currency tailwind to our reported euro values if sustained here. On adjusted EBITDA, we have raised the bottom end of our range, and it now stands at EUR 18 million to EUR 25 million, representing a year-on-year improvement of EUR 9 million to EUR 16 million. This revised range reflects our half one performance and the importance of Q4 trading. Our full-year expectations for leases, working capital, and CapEx remain unchanged.
In summary, our focus on unit economics, scaling our platform, and AI integration is supporting our profitable growth goals as proven through our first half results. We've demonstrated that we have the foundation required to navigate varying levels of demand. We'll now open the call to your questions. If you'd like to submit a written question, please click on the speech bubble at the bottom of the page. Thank you.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. We'll pause for a brief moment. Thank you. We'll now take our first question from Anne Critchlow of Berenberg. Your line is open. Please go ahead.
Thanks very much, and thank you, Christoph and Helen, for the presentation. I have a few questions, and perhaps we'll just ask them one by one. First of all, please, could you comment on how you're performing versus your competitors in the different regions?
Sure, Anne. I would say it's a mixed picture, as you would expect. In ANZ, the reporting cycle isn't yet fully done, so we don't have a complete picture on the public companies. But I think generally we feel like we're performing above average. A couple of them have reported weaker sales and especially recent trends being fairly weak. With the growth that we've shown, we think we're a little bit ahead of where the market is in that region. However, I think pressures in the whole industry have intensified in June and July in the region, and that's what a couple of people have commented on, and it's also consistent with our own experience.
In LATAM, some of the competitors and peers have reported softer top line. Where we continue to see strength are in the general merchandisers and in the cross-border players, in particular since there's been a temporary favorable tax decision, which again improves the relative competitive position for the cross-border. In SEA, I would say, again, the large platforms are doing reasonably well. Beyond that, a bit hard to tell given the fragmented nature of the market. Clearly with our trends, we don't think we're gaining share. We think we're losing share in that market, and that's obviously a key focus area to turn around.
Thanks. That's very helpful. Have you stepped up price investment? I'm just wondering how you're balancing price investment versus, say, use of the loyalty programs in the various regions.
Yeah. What we do is we really drive it off, number one, competitive pricing. As the market becomes more aggressive, we will match, and we've seen a bit of an increase in that. Secondly, we obviously look at our inventory position and want to continue to keep that as healthy as it has been over the last couple of quarters. As you've seen from the numbers, Q2 ending position has been clean and healthy. We do take a little bit of pressure on the retail margin as a result. We obviously also always go back to our brand partners and try to share a little bit the dynamics in the market and share the burden of that.
There is a bit of that. There isn't an active down pricing or changing of the price positioning. I would say it's more business as usual with these parameters applying. Clearly, the tougher the competitive environment and the weaker the consumer sentiment, the more pressure on retail margin we see.
That makes sense. Thank you. I just wondered also, is it possible, do you think, to use the automated pricing tool that you have used in ANZ? Would you transfer that into LATAM, and could that improve the gross margin in time?
It is definitely something we are looking at. We have a pretty sophisticated pricing operation in LATAM already. It is also a bit slightly different setup and market when it comes to that. But it is something we are definitely considering. In Southeast Asia, actually, we are using a fairly automated but internally developed pricing tool already. The pricing mechanism is a really important driver of efficiency and also of margin. But in the end, the basics of buying right, merchandising right, and getting the right consumer are still the bigger driver than just the tooling.
Great. Thanks. Could we move on to free cash flow? Just wondering how confident you are that Global Fashion Group can start to generate free cash flow in the medium term and whether anything has changed on the cash flow front.
Morning, Anne. Helen here. Yes, we are still very confident, and that is very much our goal. You will have seen, if we take the last 12 months on our normalized free cash flow, we have stepped forward EUR 28 million in that time to -EUR 19 million. As you know, we generate all of our cash in the second half, mainly in the latter quarter of the year. Given that based in line with our profit guidance and our guidance with regards sort of cash CapEx and leases, which will remain in aggregate at about EUR 30 million. Broadly, we think of it that we need at least EUR 30 million adjusted EBITDA to offset that fixed cost.
Then we will then get some small benefits around working capital. But we have a sort of a runway of about EUR 10 million of interest, tax and other. You add those component parts, and if you think where we are on the guidance, that should give a good indication to us really being able to step much closer to that breakeven target.
Great. Thank you very much. I do have a few more questions, but just wondered if I should take a break and allow anyone else to ask a question on the call.
Why don't you just run through it and then we will be able to go to others.
Okay, great. Thank you. Looking at the active customer decline, I am just wondering how long you might be taking action on the unprofitable customers and how long that might continue to impact the active customer numbers.
Yeah, that's a very good question, Anne. I think it's distinct on a regional basis. In ANZ, we're obviously more in the kind of growth, or at least very stable customer base, depending on which quarter you exactly look at. But I think there we feel like the economics are healthy. There's always more to be done, and we definitely would love to free up more room to invest in growth. We're seeing strong growth, for example, in New Zealand, so we think there's more opportunity in that market to acquire incremental customers, but also in Australia, certainly as a core market in the region. In LATAM and SEA, I think we have more work to do and further to go on really driving the customer profitability and the order profitability to the right level.
We've made huge amounts of progress in both regions over the last few years already, but there's still more room to go. I think it is likely in those markets that we will see first, probably stronger NMV trends and then secondly, stronger order trends, and then thirdly, active customer trends. That really follows the logic of we're driving frequency, we're driving average order value growth. Then naturally, as those metrics are the focus to drive the overall profitability, the active customer number will be the most lagging in turning into positive territory, if that makes sense.
It does. Thank you. On climate, we are beginning to see a bit of climate-related disruption in the supply chain in the industry. Also on the climate piece, are you seeing any disruption to trading due to extreme weather patterns, cognizant that you're in a different hemisphere than the European businesses that we usually cover?
Yeah, we've probably, over the years, seen quite a lot of extreme weather patterns in our markets. We had some wildfire seasons in Australia that have been quite extreme. We have typhoons and have regularly typhoons and other events. We had an earthquake in Colombia this week. So, there are things that are not always climate obviously in the case of earthquake, but that are kind of, let's say, completely innate, natural environment driven. I think there's always a short-term disruption, operational and demand and so on when something dramatic like that happens. That's a very consistent theme. But we also, I think, are very resilient in responding to it and have just kind of experience of quite regularly, maybe a bit different from the European retailers.
What we have seen also in the more longer term trends is that the warmer winters in Brazil and Australia have really shrunk the share of the winter assortment and those categories, making it even more critical to really get that product and those categories sold in the right timing because of the winter just becoming a much shorter period. For example, most recently, April in Brazil was very warm. As a result, the beginning of our winter sales were quite soft. Then that obviously spills into the later part, and we have a bit more markdown to do there, and have done already in June and July. Yes, the answer is it has an impact, but we're experienced in managing those impacts because it's not new.
That's very interesting. Thank you. Looking ahead to the next season, are you expecting price inflation to come through from, say, higher polyester costs and any disruption from the Iran conflict?
Yeah, it's not something that we're seeing dramatically come through. Obviously, we need to be mindful of it, but where we are, we're trying as much as possible through supply negotiations to secure strong prices. Also, we generally tend to pass cost price inflation ultimately on through our sales price. It's not a significant issue as we're facing into the second half.
Really helpful, Helen. Thank you. I'll leave my questions there. Thank you very much.
Thanks, Anne.
Thanks, Anne.
Thank you. We will now take our next question from Russell Pointon of Edison Group. Your line is open. Please go ahead.
Good morning, Christoph. Morning, Helen. Thanks for the presentation. A few questions on Southeast Asia, if that's okay. You're still getting relatively high rates of decline there and in the active customers, and I appreciate it's a lagging indicator, as you often say. Could you just give some idea of what you're seeing below that headline number in terms of client losses versus potentially new customers coming in, and perhaps give some detail on the individual countries? That would be my first question.
The second question is the gross margin. Obviously, the revenue trends are challenging. The gross margin improved a little bit. Just interested in your thoughts on how satisfied you are with that in the context of the changes to the product offer and the relationships with brands you've made over the last year.
My third question is, essentially in half one this year and half two last year, you've had around a 20% decline in operating costs. Perhaps just talk about what you've done there, and given those numbers have been consistent across the two halves, are you starting to annualize the easy gains and perhaps where there are opportunities coming forward?
Great. Maybe I will start, Russell, and good morning, on the Southeast Asia trends. I will let Helen answer the question on the gross margin and on the operating costs. When it comes to Southeast Asia, yes, active customer decline is still pretty strong. It is across the markets. Philippines, Indonesia, Singapore, and Malaysia are the four larger markets, and Hong Kong is the smaller market for us. We are seeing this across all markets. It is in the context of the natural and relatively high churn that is inherent in our business model, but it is elevated. Clearly, we are not able to acquire and reactivate customers at the level of marketing spending that we are willing to commit at this point.
Our constraining of the marketing spend and the payback periods around that is what ultimately leads to this erosion of base, where basically churn is just higher than reactivation and new acquisition of customers because of the marketing spend. We are obviously intensely working on improving retention, improving second order conversion, improving loyalty, and we have many actions and programs underway, including a couple of changes planned for the rest of the year in terms of how we think about loyalty program. We have ours, the ZALORA VIP program in the region, et cetera. Generally, it is a continuation of the trends. We do believe that we are able to retain more higher value customers.
I would say the quality of the customer base is improving, but it is obviously very concerning to see the level of decline, and we want to stop that as quickly as we can, but we need to do it within the disciplined financial framework we are applying, and that is non-negotiable around it.
I hope that helps. I will hand it over to Helen.
Morning, Russell. Hi. First question being gross margin in Southeast Asia. Is it in line with our expectations? Yes, it is in line with our expectations. For the first half, it stepped forward point some percentage points, which actually is the highest of our three regions in the first half. I think if you unpack it, we know that the retail margin in Southeast Asia is slightly lower than in some of our other regions, and I think that is definitely an area for focus for us. Southeast Asia runs with a slightly higher aged inventory position than the rest of our regions.
We do see clearance and some provisioning through that. That is improving, and that is an area of focus for us to continue to improve that retail margin. But on the counter, it runs the highest platform service and marketplace participation, which actually is highly accretive to margin. Blend all those together and it has stepped forward, and it is in line with where we want it to go. But obviously, we are pushing for further improvements.
Your second point then was with regards the cost improvement, which has led to the 3 percentage point adjusted EBITDA margin improvement in the first half and also seeing similar cost improvements in the second half. So we have done a lot of work with regards fixed costs and around headcount. We have done organizational change. We did a large structural change at the start of this year, which whilst we have got the benefits in the first half, obviously we will then see benefits into the second half, which I think addresses part of your question.
We have done a lot of work around renegotiating things like with our delivery partners, et cetera. There are definitely some annualization from last year, which obviously will tail off into this year. But we do have a program of works that that then just will not tail off. It will be in around. We will continue to look at Administrative functions and how we simplify, how we automate, and obviously some of the AI initiatives that Christoph spoke about, how we can continue to roll those out across all of our regions, including Southeast Asia.
Okay. Thank you. Can I have a follow-up question on Latin America, please, in terms of the gross margin. It went down there for the first time in quite a long time, actually, and you have done quite a good job of increasing the gross margin over time, with all the competitive challenges you have. What is the greatest effect on the gross margin in Latin America. Was it the competitor activity, or was it just that you talked about a slight weakness from a top-down perspective.
Yeah. So, for the half it was. In the quarter, you are right, it did step down, marginally up for the half. It is definitely, in the first half, it is a Q2 issue. It was highly competitive. We took some margin investment a little bit to drive trade. The World Cup is disproportionately huge in Brazil and Colombia to some extent, where actually spending tends to move away from clothing onto other areas. There is a little bit around driving trade and also then the sort of the by-product of that, because trade, especially from our retail side of our business, was not as strong as we had anticipated. We also took some relatively aggressive markdown just to maintain, to stop our sort of age inventory creeping up.
I would say the Q2 position very much is around sort of the competitive environment and driving trade.
Great. Thank you, Helen. Thank you, Christoph.
Thank you. Once again, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. We will pause for a further moment. Thank you. We will take a follow-up question from Anne Critchlow of Berenberg. Your line is open. Please go ahead.
Thanks. Just one more question from me, please, on marketing activity. Is there anything that is working for you in particular in the type of media, thinking right across the outdoor and then the split between SEO and AEO, as I think you call it now, social media, whether it is retargeting. Anything that really stands out?
Yeah. Thanks, Anne. I would call out two or three points here. Number one, we have moved a bit more top and mid of the funnel, so basically going back into more brand, and in some ways, maybe more traditional channels, in particular in Australia. I think, as you know, we have had the Got You Looking master brand and underlying campaigns there running for quite some time, and launched that in a first trial in Southeast Asia, in the first half as well. As part of that, in particular in Australia, we are also doing things like even in our radio podcast, outdoor, selectively, to reach also sometimes different audiences and really elevate the brand and be present across a lot more media touchpoints.
The core overall remains obviously, performance marketing in terms of the spend. Within that, we continue to optimize the tooling and the approach, and it is a never ending journey. Obviously, there are always new capabilities that are coming through. Where we are, I think, are getting much better at two dimensions of that. One is to really go after profit versus just sales, and number two, to really target customers and potential customers who we want to have, who have the potential to be profitable, high value, long-term customers. Secondly, avoiding spending on winning over transactions that we would have gotten anyway because we would have reached those customers through CRM, or just any other organic channel as well.
I think the granularity and the targeting around it, around the profit dimension and the selection of the right customers is ever improving. AEO is still a very small part, and that is currently more of an organic effort to really make sure that all of our product and presence online, on our platform, but also off platform, review sites, all of that, is as supportive as possible to make it very clear that we are the leading fashion and lifestyle destination in each of our markets.
Thank you very much indeed.
Thank you. We have no further questions on the line. I will now hand over to Saori for webcast questions.
First question we have from Christian at NuWays. What are the drivers behind the increased order frequency?
Okay, I will take that. I think, Christian, the number one focus is here on the customer quality and retention. It is kind of part of the overall drive of targeting higher value customers who naturally have a higher frequency. We have fewer, let us say, new customers that are just coming for one order and churning through it. They obviously drag down the average. This number going up is positive in many ways, and I am not sure it will go up every single quarter, but definitely the objective for us is to drive it up. If you compare us to some of the more developed market peers, I think we have quite some room to go in improving this metric.
Next question, also from NuWays. How do you expect ANZ and LATAM Fulfilled by GFG to develop going forward? Do you have NMV share targets?
We definitely are pursuing this opportunity very, very ambitiously. We have recently hosted and will be hosting big events in both Brazil and Australia for brand partners, both existing ones that may not be using this particular model yet and for potential new partners. It is more of an enterprise sales cycle, if you want, in terms of people obviously need to sign up to the service, they need to bring the stock physically into our fulfillment centers, et cetera. It is just such a better experience for the customer, and our goal is to maximize the share of orders where we control the fulfillment and delivery experience and to minimize effectively uncontrolled dropshipping, where we do not really have the ability to track where the orders are.
Just to be clear, in dropshipping, in some cases, we can track the orders, and some we can't, and that's really the weakest customer experience. As always, there will be a mixed effect. We don't have a particular target, but we do think that marketplace as a whole will continue to grow in share towards about 45%, and within that, the share of Fulfilled by going up, relative to where we are, and you've seen the regional numbers in the presentation today.
The next question we have from Moritz from ICF BANK. How is current trading?
Good morning. Current trading still remains relatively soft and is quite challenging, reflecting the macro environment that we've spoken about today. That's now built into the revised guidance that we've given this morning. I think it's clear to say, though, as we've been articulating for the past few quarters, our focus very much is to be able to navigate that top-line softness and ensure that our focus very much remains around improved profitability and a strong focus around cash.
A few questions on cash. Q2 normalized free cash flow turned positive for the first time. Could you break down how much of that improvement was operational versus working capital timing? Given the working capital tailwind has largely run its course, how do you think about reaching structurally sustainable free cash flow breakeven?
Okay, let me take both parts. For the quarter, yes, we did generate EUR 2 million normalized free cash flow. That is really broken down by the adjusted EBITDA in the quarter of EUR 6 million that we saw and about EUR 6 million inflow from working capital. That more than then offset our fixed costs around cash costs around leases and CapEx. With regards the ongoing piece, it aligns really to Anne's earlier question, whereby we see the main driver of becoming cash flow breakeven is through our increased adjusted EBITDA and our increased profitability flowing through to cash. We have done a lot of work to maintain and limit our investments around CapEx and leases, which we are forecasting to be broadly in line with last year, which is about EUR 30 million.
On the working capital, obviously, where it is highly seasonal for our business, we do still anticipate this year a small working capital inflow, slightly higher than we saw last year, we are at EUR 3 million. We will continue to, whilst we have done a lot of work over the last couple of years to really bring our inventory levels down, which has released significant amounts of working capital. We will always look to optimize our working capital through ongoing supplier negotiations, ongoing optimization of inventory, and the way in which we manage our business between the retail and the marketplace platform.
Next question, also along the lines of cash flow. Your cash flow is still negative. Do you expect GFG to be cash flow positive this year? If not, when?
Okay. We have historically, and we do not specifically guide on our normalized free cash flow, but if you take the component parts that I have just described, obviously it depends the ends of the adjusted EBITDA that is within our guidance between EUR 18 million and EUR 25 million. But even within that range, we are going to make significant headway to the -EUR 30 million that we saw last year. You can see that on our last 12 months rolling measure where we have stepped forward significantly.
Next question, a few about overall the share buyback program. How are we prioritizing the share buybacks against reinvestment? Is the buyback authorization being actively used? Are repurchased shares being canceled or retained to satisfy employee incentive plans related to that? What's the position and future role of major stakeholders of GFG?
Yeah, I'll take that. Yes, the buyback program that we launched in Q1 is continuing. You can also find the weekly updates on the volumes and the prices on our investor relations websites. To date, we have purchased 1.7 million shares, and these are retained in treasury for use, including for employee incentive or anything else for now. There is clearly a limitation around the daily trading volumes. The volumes that we're actually able to buy back are not that high, but the volumes that we can buy back are being bought back.
In terms of major stakeholders, I really can't speak to them. You need to speak to them. I think, as you know, our two largest shareholders have been very long-term shareholders, since well before the IPO in 2019, and we don't expect any change in that position or situation from what we know.
Next question. How will you make use of the past tax losses and potential future tax credits on the GFG group level in Luxembourg, but not in the regions you are operating in?
Yeah, we have these in Luxembourg. I think we've explained this at various points over the last couple of years and continued disclosure on that. We think it's very difficult to make use of these tax credits. Under Luxembourg rules, it is also not possible to get any binding and clear guidance from the tax authorities about whether they could be used for certain purposes. I wouldn't attribute too much value to these tax losses. It's different in the regions where we also have tax losses, and those are by and large usable and also have quite long life. As the business is shifting into profitability and starting to generate taxable income in the next couple of years, some markets, obviously that's already the case, these will be relevant in minimizing our income tax.
Next question. How do you view the risk posed to GFG's figures by the ongoing war in Iran and the recent weak consumer confidence in Australia? Also, the trend in cash flow shows that GFG will report little to no cash burn in 2027. How does GFG plan to use its still very high cash position?
Thank you. Obviously, with regards the Iran situation, we continue to monitor and assess the position. There's no material impact that we're seeing with regards supply at the time being. The key area that we focus on really is the secondary impacts on consumer confidence, and some of those we've described today. I'd say high oil prices across our regions, but especially in places like Australia, are impacting consumer confidence, and that's a very big area of focus for us. With regards cash and cash burn, we're very cautious around managing our cash position, and at the moment, we're focused on strategic initiatives such as the share buyback that Christoph's just spoken about, and prior to that, the buyback of a significant portion of our convertible bond.
Next question. From what year do you expect to see a similar trajectory of profitable growth in LATAM and SEA overall? Can you give some perspective on the longer-term outlook for these regions? Have you considered strategic alternatives for any of the regions, like a sale of SEA or fully focusing on ANZ?
Yeah. In terms of the longer-term opportunity in both of those regions, it is a very significant opportunity, very clearly. As an industry, fashion e-commerce penetration still lacks many of the more advanced markets like China, but also Australia, Europe, and the U.S. We think there's a long-term continued growth opportunity for fashion e-commerce in these geographies. We also think there's a very significant opportunity to enable the broader ecosystem and our brand partners through our platform services, including the marketing services, the fulfillment services, et cetera, and we'll continue to pursue that in those geographies. Clearly, they are also challenging to operate in. They are very competitive, and in both of those regions, we have more competitors who are willing to take significant losses in the short term for presumed longer-term profitability while we are obviously more focused on the short-term profitability.
They are challenging, but we are confident in delivering profitable, and eventually also growing business in both of those regions. To the question on sales or strategic alternatives, like I think any public company, we are always open to consider strategic opportunities as they present themselves, and our businesses are very well known in their respective markets and in the broader ecosystem. Like any management team of a public company, if there are specific opportunities, we will always evaluate and consider.
There are no further questions for the call. Thank you all for joining today. If you have any further questions, please reach out to the investor relations team directly.