Zalando SE "Fulfilment deep dive shows clear upside risks" (Buy) Rajani

Research evidence excerpt

Zalando SE "Fulfilment deep dive shows clear upside risks" (Buy) Rajani

Why is fulfilment a big driver of

operating leverage and why do a

fulfilment deep dive now?

We note that fulfilment so far has not been front and centre of the debate because:

a) Zalando has been investing in the most recent warehouses of Frankfurt and Paris

which are not yet fully ramped up;

b) Zalando has also been building its B2B ZEOS business integrating partners like

NXT and M&S where we have only recently started seeing the benefits;

c) YOU warehouses are still part of the network which are being decommissioned and

YOU is operationally being integrated into the ZAL fulfilment network.

Going into the 2H'26 and beyond, we are excited by the opportunity of the fulfilment

leverage as ZAL ramps up through their utilisation. We are doing the fulfilment deep

dive because fulfilment is one of the largest levers in the Zalando margin bridge.

There's two very clear areas we are excited about:

1. Capacity utilisation: ABOUT YOU synergies and network optimisation

The first source of upside is higher utilisation of the existing fulfilment network. This

matters because a large part of fulfilment cost is fixed or semi-fixed: warehouse

occupancy, automation, engineering, systems, labour planning and returns

infrastructure. If more volume flows through the same network, cost per order should

fall.

YOU is important here. Zalando now expects the full €100m synergy potential one year

earlier, by 2028, with synergy sources including the combined logistics network,

combined payment infrastructure, combined B2B offering and commercial

collaborations. The fulfilment read-across is straightforward: a combined network

should reduce duplicated capacity, improve fixed-cost absorption and allow more