Farfetch Limited (FTCH) Hosts Capital Markets Day; Announces Financial Forecasts for 2023 and 2025

Gross Merchandise Value (GMV) of $4.9 billion, a forecasted increase of approximately 20% to 22% year-on-year from the company’s full-year 2022 outlook. This is expected to be driven by growth of the underlying business of 8%-10% and GMV from signed partnerships of approximately $500 million.

Adjusted EBITDA Margin of 1% to 3%, an increase from the company’s outlook of (3)% to (5)% in 2022, expected to be driven by improved Gross Profit and Order Contribution margins in addition to operating cost efficiencies of approximately $85 million. This is expected to be partially offset by $170 million costs to support new partnerships.

Farfetch forecasts to deliver GMV of approximately $10 billion across its business pillars for full-year 2025, out of which:

The company’s Marketplaces business pillar (Marketplaces) is projected to represent $3.8 billion of GMV, with expected growth of the underlying business of 8% to 10% per annum.

The company’s Platform Solutions business pillar (Platform Solutions) is forecasted to represent $4.3 billion, driven by the addition of signed partnerships including Bergdorf Goodman, Ferragamo and Richemont’s maisons and Yoox Net-A-Porter, as part of the wider partnership with Richemont which is subject to regulatory approval.

The company’s Brand Platform business pillar (Brand Platform) is forecasted to represent $1.5 billion, driven by 5% to 10% growth of the underlying business and contribution from the signed partnership with Reebok.

Fulfilment Revenue is forecasted to represent $0.9 billion.

Adjusted Revenue is forecasted to be approximately $3.5 billion, out of which:

Marketplaces is forecasted to represent $1.7 billion, mainly driven by third-party revenue growth.

Platform Solutions is forecasted to represent $0.3 billion, mainly driven by the addition of signed partnerships.

Brand Platform is forecasted to represent $1.5 billion.

Gross Profit Margin, as a percentage of Adjusted Revenue, is forecasted to be approximately 60%, underpinned by:

Marketplaces Gross Profit Margin of approximately 60%, driven by increased revenue from high-margin services and a higher mix of third-party GMV.

Platform Solutions Gross Profit Margin of approximately 75%.

Brand Platform Gross Profit Margin of approximately 55%, driven by an increased mix of direct-to-consumer channels.

Order Contribution Margin is forecasted to be approximately 40% of Adjusted Revenue, out of which:

Marketplaces Order Contribution Margin is forecasted to be approximately 40%.

Farfetch Platform Solutions Order Contribution Margin is forecasted to be in line with Gross Profit Margin, with no Demand Generation Expense.

Brand Platform Order Contribution Margin is forecasted to be approximately 48%.

Adjusted EBITDA Margin is forecasted to be 10%, driven by the above mentioned Order Contribution Margin performance, in addition to scaling of operating costs. Adjusted EBITDA Margins across each business pillar are forecasted to be:

Marketplaces Adjusted EBITDA Margin of approximately 5%.

Platform Solutions Adjusted EBITDA Margin of approximately 20%.

Brand Platform Adjusted EBITDA Margin of approximately 20%.