Original-Research: Global Fashion Group S.A. (von NuWays AG)

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 € 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 € 61.40 (+2% yoy, -6% yoy after FX).

Accordingly, Q2 sales declined slightly by 1.2% yoy (-8.4% after FX) to € 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 € 3m adj. EBITDA in Q2 (vs. € -3.7m in Q2’24).

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

With a solid pro-forma net cash position of € 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 € 0.80, based on DCF.

You can download the research here: global-fashion-group-sa-2025-08-27-update-en-2ec97
For additional information visit our website: https://www.nuways-ag.com/research-feed

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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