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1Q21 Results 9Th June 2021

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1Q21 Results 9Th June 2021 1Q21 results 9th June 2021 1Q21 results Inditex sales grow 50% in 1Q21, with May sales above 2019 levels Inditex’s executive chairman, Pablo Isla, stressed how “our differentiation and strategic transformation towards a fully integrated, digital and sustainable model continues to bear results, supported by the commitment displayed by all the people who work at Inditex” Sales grew 50% in the first quarter of 2021 to €4.9 billion. Online sales in local currencies grew by 67%. Net cash reached €7.2 billion by the end of the Quarter. Gross margin expanded to a robust 59.9%, thanks to the implementation of the business model and the efficiencies unlocked by the digital transformation strategy. Store and online sales in local currencies between 1 May and 6 June 2021 registered year-on-year growth of 102% compared to the same period of 2020, and of 5% compared to 2019. During this trading period, 10% of trading hours were unavailable due to store closures and business restrictions. Inditex´s Headquarters in Arteixo (A Coruña) 2 3 1Q21 results Zara SoHo, New York I. Key figures Inditex Group reported sales growth of 50% in the The integration of the business model has allowed the (€ illin 1Q 2021 1Q 2020 Var. 2120 By the start of the second quarter, as of 7 June, 98% first quarter of 2021 (1 February to 30 April) (56% in effects of the store absorption programme announced Net Sales 4,942 ,0 0 of the Group’s stores were open. Store and online local currencies) to €4.9 billion. Online sales in local in June 2020 to have already been fully recovered in sales in local currencies between 1 May and 6 June Gross Margin 2,962 1,90 54% are tracking 102% above the same period of 2020 and currencies grew by 67%. store and online sales in May 2021. The integrated 59.9% . 5% above that of 2019 helped by the popularity of the stock management system (SINT), which allows EBITDA 1,235 484 1 Spring collections. Throughout that trading period, 10% Sales were higher across all geographies and every an online order to be fulfilled from any store, has EBIT 569 0 of trading hours were unavailable due to store closures brand despite the fact that 24% of trading hours were been pivotal. Net income 421 09 and restrictions. unavailable due to lockdowns and restrictions (16% of the Group’s stores remained closed at the end of One of the highlights of the reporting period was the Inditex is holding its Annual General Meeting in Arteixo the quarter), in addition to other capacity restrictions. trend in gross profit, which amounted to €2.96 billion, Net profit reached €421 million in the quarter, (A Coruña, Spain) on 13 July. The Board of Directors In local currencies, revenue was just 11.5% below the lifting gross margin to 59.9%, 152 basis points above compared with a loss of €409 million in the first quarter will ask the company’s shareholders to approve the level of the first quarter of 2019. the 58.4% recorded in 1Q20 and 47 basis points above of 2020. payment of a total dividend from 2020 profits of€0.70 that of 1Q19. per share, €0.35 of which was already paid out on 3 In light of this figures, Inditex’s executive chairman, Thanks to the solid earnings performance, the May; the balance would be paid on 2 November 2021. Pablo Isla, highlighted how “our differentiation and The first quarter stands out for its solid operating Group’s net cash reached €7.2 billion at the strategic transformation towards a fully integrated, performance, with growth in operating expenses at reporting period, up 25% from a year earlier, and the digital and sustainable model continues to bear fruit only 19%, significantly below sales growth. EBITDA highest in a first quarter. It is also worth highlighting supported by the commitment displayed by all the amounted to €1.2 billion (€484 million in 1Q20), while the control over inventories, which increased by people who work at Inditex”, attributes which are EBIT totalled €569 million (compared to a loss of €508 less than sales compared to the first quarter of crucial as restrictions ease. million in 1Q20). 2020 and is even lower than at the close of 1Q19. 4 5 1Q21 results II. The sustainability commitment In terms of energy sustainability during this quarter, For example, the Manuel Olivencia Prize for Good the Group announced a significant wind power Corporate Governance awarded by the Cuatrecasas generation project in the outer port of Punta Foundation, the Clean List 200 Corporate Knights Langosteira (A Coruña, Spain), that will generate (#47 out of 200) and acknowledgement by the enough electricity to enable self-sufficiency at Financial Times as one of the companies to have Inditex’s headquarters in Arteixo, which spans nearly reduced its emissions intensity relative to revenue one million square metres, with enough excess to most significantly between 2014 and 2019. completely power the neighbouring port. Technology is proving integral to the Group’s integrated, That green power capacity joins the 554 photovoltaic digital and sustainability strategy. Chiefly, the Inditex panels installed on the roof of the new zara.com Open Platform (IOP) is enabling, for example, greater building, with another 2,826 panels installed in the efficiency and agility in inventory management by outdoor car park – complete with electric charging helping to be more efficient with lower inventory, thus points – to account for half of the building’s electricity reinforcing Sustainability in a production model based requirement. With these solar and wind sources from its origins on not having surpluses. combined, all of the building’s energy consumption comes directly from renewable sources. In parallel, the company continues to invest in The Group is working towards delivering its target communities. In India it rolled out an emergency relief to have 90% of the energy consumed at all of its plan to mitigate the effect of the COVID-19 pandemic, facilities worldwide (offices, logistics platforms including the donation of €500,000 to the Red Cross. and stores) to come from renewable sources by The Group also increased the scope of its programme the end of this year. By the end of 2020, 80% of the with UNHCR, to which it donated 1.9 million garments Group’s worldwide energy consumption came for refugee camps in Rwanda, Burkina-Faso, Ethiopia, from renewable sources, which was ahead of its Uganda and Belarus. In Spain, we collaborated with target, with that figure rising to 100% in Spain. the NGO COGAMI, a Galician association for disabled people, in the Alentae project, a special not for profit The continued progress in sustainability was job centre to make facemasks in facilites equiped by evidenced by external rankings during the quarter. Inditex in Bergondo (A Coruña) Photovoltaic panels at Inditex´s Headquarters in Arteixo (A Coruña) 6 7 1Q21 results pendiente foto nueva edificio zara.com Premier sustainable building During the quarter the Group opened a new eco-efficient and technologically advanced building within its Arteixo complex (A Coruña, Spain) to house the new Zara.com studios and the Zara Man central design department. Surrounded by a natural ecosystem of trees and plants, the building features next-generation sustainability and technology developments. The project entailed an overall investment of €110 million. Spanning 67,000 square metres, the building stands out for the 720 high-energy-efficiency glass modules that clad the façade – flooding the interior with natural light. 8 9 1Q21 results III. A digital and integrated Company As a fully digital company, it continues to develop currently available in 17 markets, including Spain its universe of applications and microservices which (in-store and online), Portugal, Germany, UK, France, are being layered over the Inditex Open Platform Netherlands, Poland, Italy, Sweden, Denmark, Austria (IOP). The versatility of this digital architecture and the Czech Republic, with others in the pipeline. makes it easy to create and integrate new services for users and professionals in each of the steps This allows customers to group returns of items of the Company’s activity, besides improving our bought at different times to boost efficiency and customers’ experience. The process is enriched convenience. The app keeps organized a list of the constantly by incorporating new functionalities and items customers can still return in a specific period developments adapted in-house to each need, to using the electronic receipt, so they can group the permanently improve the performance and scope of return along the returning period whenever they like. the IOP platform. In the same vein, Zara also continues to rollout Elsewhere, the integrated stock management in-store Customer Experience areas, with new system, underpinned by the full deployment of radio convenience services and spaces such as fitting frequency identification (RFID) technology providing room waiting areas and showroom areas. Dedicated real-time data on inventory, is enabling the company exchange and returns areas, online order pick up and to operate with even tighter inventory levels, while clothes collection points, and recycling points have improving the customer shopping experience. also been implemented. In Spain, Japan and the UK, Zara has completed the In a bid to continually improve the shopping experience, rollout of its Store Mode app feature, which allows during the first quarter, Inditex inaugurated the new customers to browse items in the store of their choice zara.com building at its head offices in Arteixo through their mobile app to know which items are in (A Coruña, Spain), which houses the audiovisual store before they arrive. It also enables customers to production studios and the teams tasked with purchase these items in advance for collection in half coordinating the brand’s online presence.
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