01COMPANY

01.1 6 FOREWORD

01.2 8 REPORT OF THE SUPERVISORY BOARD

01.3 15 CORPORATE STRATEGY

15 Zalandos Purpose is to Reimagine Fashion for the Good of All

15 A Ripe Opportunity For Us

16 Zalandoss Platform Vision

17 Our Strategic Investment Areas

01.4 20 CORPORATE RESPONSIBILITY

20 do.THINK AHEAD

25 do.GROW

34 do.KNOW

40 do.PROTECT

45 do.CONNECT

46 do.RESPECT

01.5 49 CORPORATE GOVERNANCE REPORT

49 Declaration of Conformity

51 Corporate Governance

52 Management Board and Supervisory Board Procedures

56 Target of Female Representation in Management Levels below the Management Board

57 Management Board and Supervisory Board Shareholdings

57 Takeover Law Disclosures Pursuant to Sections 289 (4), 315 (4) HGB and Explanatory Report

61 Remuneration Report

01.6 67 THE ZALANDO SHARE 2016 IN REVIEW

67 Share and Capital Markets Development

01.7 72 HIGHLIGHTS 2016

ZALANDO SE ANNUAL REPORT 2016

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ZALANDO SE ANNUAL REPORT 2016

DEAR SHAREHOLDERS, DEAR FRIENDS,

An extraordinary year lies behind us. For the first time in Zalandos history, revenues exceeded the

one billion Euro mark in a single quarter. Ending 2016 with the most successful quarter we have

ever had is symbolic for a year in which we outperformed our own ambitious profit forecast, despite

extensive investments focused on consumers, partners, and infrastructure.

Reimagine fashion for the good of all. In early 2016, we defined this as Zalandos purpose and

use it as a guiding principle to develop Zalando into the operating system for the fashion industry.

To achieve this, we follow our platform strategy, which combines elements around consumers,

partners, and infrastructure.

Investments into our customer proposition are already paying off and enabling us to make further

headway. The fulfillment hub in Lahr, Germany began operations in August and the new site in

Szczecin, Poland will start operations in the fall of 2017. Our Italian satellite fulfillment center in

Stradella operates in full swing, the first parcels from Moissy-Cramayel near Paris have already been

shipped, and plans for the newest site in Sweden are underway. These investments allow us to offer

new services, such as same day delivery, express delivery, and instant returns, in more countries

and to more customers.

Rubin Ritter David SchneiderRobert Gentz

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One of the key milestones in 2016 was the launch of our integrated commerce activities as we aim

to enable multiple ways of connecting fashion contributors and stakeholders to our platform. The

integration of offline stores is an important element and we are making good progress, as shown by

a successful pilot in close partnership with adidas, linking their Berlin flagship store to our

platform.

Developing and deepening the relationship with our brands is fundamental to these efforts. We

showcased our strong connections with dedicated campaigns throughout the year. Together with

Beyonc we launched her Ivy Park fashion line exclusively on Zalando and Gigi Hadid presented

her co-created Tommy Hilfigers Tommy X Gigi collection for our customers.

Our journey is being watched by millions of consumers and fashion industry players, best displayed

by our inaugural and sold-out Bread&Butter fashion event in Berlin in September. We attracted

more than 20,000 visitors and gained about 800 million impressions online, underlining our success-

ful investment into brand visibility and reach.

Most of these efforts are enabled by technology, so we have further expanded our technology

teams capacity and capability in 2016. More than 1,600 tech employees now work across seven

Zalando tech sites.

Our efforts translated into strong financials for the full year, with revenues growing by 23% to EUR

3,639.0m. At the same time we have never been more profitable, with our adjusted EBIT reaching

EUR 216.3m. 2016 has also been a year of continued recruiting efforts, increasing our staff from

9,987 to 11,998.

We are always aspiring to be more sustainable and want to share our actions and lessons learnt

transparently. This year, for the first time we report in accordance with the Guidelines of the Global

Reporting Initiative (GRI).

Our special thanks go to the entire team that has worked incredibly hard to carry on the Zalando

success story.

Berlin, February 24, 2017

Robert Gentz David Schneider Rubin Ritter

In 2016, we cont inued to register positive tech growth. What is the successful formula of Zalando Tech, Robert? zln.do/en-Robert

In 2016, we celebrated a variety of fashion highlights. Which were your favorites, David? zln.do/en-David

Zalando outperformed finan-cial expectations for 2016. What were your three per-sonal highlights, Rubin? zln.do/en-Rubin

ZALANDO SE ANNUAL REPORT 2016

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01.1 Foreword

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https://zln.do/en-Roberthttps://zln.do/en-Davidhttps://zln.do/en-Rubin

Further information Corporate Governance Report p. 49

DEAR SHAREHOLDERS,

The 2016 fiscal year was a successful year for Zalando. Despite the continued important invest-

ments for the implementation of the platform strategy, such as, the further extension of the logistics

network, the launch of the integrated commerce activities as well as the further expansion of the

technology team, the company ended the year with the most successful quarter ever and even out-

performed its already ambitious profit forecast.

CONSULTATION AND MONITORING

The Supervisory Board duly performed its duties in accordance with statutory requirements, the

Articles of Association, the Supervisory Boards Rules of Procedure as well as the German Corporate

Governance Code. It received regular and detailed written and oral reports on the intended busi-

ness policies, any material issues regarding financial, investment, and personnel planning as well

as the progress of business, including the profitability of the company. In particular, the Management

Board consulted the Supervisory Board on the groups strategy. The Supervisory Board was directly

involved in all material decisions. Transactions requiring approval were presented by the Management

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01.2 REPORT OF THE SUPERVISORY BOARD

8

Board and discussed before decisions were taken. The discussions took place at the meetings of the

plenum of the Supervisory Board and its committees as well as through contact with the Manage-

ment Board outside of the scheduled meetings.

The Supervisory Board is satisfied that the Management Board has established an effective risk

management system capable of recognizing at an early stage any developments that could jeopar-

dize the existence of the company. Furthermore, the Supervisory Board is satisfied with the contin-

ued expansion and effectiveness of the compliance program, which ensures compliance with the

law and with internal guidelines.

Outside of the meetings and without the participation of the Management Board, the chairperson of

the audit committee held detailed discussions with the auditor on topics relating to the audit.

The chairperson of the Supervisory Board was also in regular contact with the Management Board

outside of the scheduled meetings.

The Supervisory Board and Management Board from left to right: Kai-Uwe Ricke Member of the Supervisory Board, chairperson of the audit committee, Dylan Ross Member of the Supervisory Board, Beate Siert Member of the Supervisory Board, member of the remuneration committee, Lorenzo Grabau Deputy chairperson of the Supervisory Board, member of the audit committee, chairperson of the remuneration committee, Robert Gentz Co-founder and member of the Management Board, Jrgen Madsen Lindemann Member of the Supervisory Board, Rubin Ritter Member of the Management Board, Lothar Lanz Chairperson of the Supervisory Board, member of the audit committee, member of the remuneration committee, chairperson of the nomination committee, David Schneider Co-founder and member of the Management Board, Anders Holch Povlsen Member of the Supervisory Board, member of the nomination committee, Konrad Schfers Member of the Supervisory Board, member of the audit committee, Alexander Samwer Member of the Supervisory Board, member of the remuneration committee, member of the nomination committee

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MEETINGS OF THE SUPERVISORY BOARD AND ITS COMMITTEES

The plenum of the Supervisory Board held five meetings in fiscal year 2016. The audit committee

held four meetings, the remuneration committee held two meetings and the nomination committee

held five meetings.

The plenum of the Supervisory Board was infor