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Original-Research: Global Fashion Group S.A. - from NuWays AG

27.08.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
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Classification of NuWays AG to Global Fashion Group S.A.

     Company Name:                Global Fashion Group S.A.
     ISIN:                        LU2010095458

     Reason for the research:     Update
     Recommendation:              Buy
     from:                        27.08.2025
     Target price:                EUR 0.80
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

GFG released Q2 results that were overall marked by further improvements in
top line and margins. In detail: Q2 NMV came in flat yoy at EUR 249m in
constant currency (-8% yoy after FX), highlighting the stabilization of
demand across all regions. Particularly strong recovery was seen in LATAM
(+10.2% yoy before FX) and ANZ (+5.8% yoy before FX) and could offset the
ongoing decline in SEA (-22.5% yoy before FX), which still remains
challenging for now. The stabilisation was the direct effect of (1) a stable
user base (LTM active customers declined by only 2.5% yoy), particularly in
ANZ and LATAM, where new & reactivated customers outpaced churn, coupled
with (2) a stable average order value of EUR 61.40 (+2% yoy, -6% yoy after
FX).

Accordingly, Q2 sales declined slightly by 1.2% yoy (-8.4% after FX) to EUR
163m. Notably, the trend shift towards Marketplace and Platform services and
away from Retail business model continued, with sales from Marketplace and
Platform Services growing by 4% and Retail sales declining by 7% yoy in H1.
This shift coupled with a 1.8pp higher gross margin on retail sales (eNuW)
on the back of less aged inventory, has continued to positively affect the
group's gross margin by 2.9pp yoy to 47.7% in Q2. Further overhead
reductions and a more cost efficient fulfilment (expense per order: -7%
yoy), led to an overall adj. EBITDA margin improvement by 3.9pp yoy and a EUR
3m adj. EBITDA in Q2 (vs. EUR -3.7m in Q2'24).

Consequently, GFG reiterated its FY'25e guidance of adj. EBITDA break even
(eNuW: EUR 1.7m) and NMV ranging from EUR 1-1.1bn (eNuW: EUR 1.06bn). With that,
GFG is also improving the cash generation picture. Although normalized FCF
came in slightly worse than last year at EUR -62m per H1 (vs. -EUR 57m in H1'24)
and at only EUR -1.4m in Q2 (EUR -1m in Q2'24), due to unfavorable WC swings
(specifically trade payables) in H1, the cash generation should nevertheless
improve overall in FY'25e. With operating cashflow to improve from EUR -36
last year to EUR -10m in FY'25e (eNuW) on the back of the visible
profitability gains and with less CAPEX (EUR 3m in Q2 vs. EUR 9m in Q2'24)
expected throughout the year, we expect a drastically improved FY'25e FCF of
EUR -25m (vs. EUR -42m in FY'24).

With a solid pro-forma net cash position of EUR 97.2m, GFG has enough leeway
to continue to drive the ongoing developments and restructurings. Especially
the SEA turnaround (with a new CEO in place and other strategic measures in
the pipeline), which could play a vital role in achieving a positive FCF
over the next years, but this also depends on macro-economic developments.

Against this backdrop, GFG remains undervalued. Especially with positive
FCFs visible on the horizon while simultaneously trading at a negative EV,
current valuation seems unjustified in our view. Therefore, we reiterate our
BUY recommendation with an unchanged PT of EUR 0.80, based on DCF.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=79b5fcb4603d279de3cc296de24c2ef9
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Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2189090 27.08.2025 CET/CEST

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