YOOX Bil Sost 12 ENG 04
Transcription
YOOX Bil Sost 12 ENG 04
2012 SUSTAINABILITY REPORT YOOX GROUP CONTENTS Sustainability highlights ....................................................................................................................................... 3 Chairman’s letter to the stakeholders ................................................................................................................. 4 Guide to the report ................................................................................................................................................ 5 1. Business approach and identity .................................................................................................................. 7 1.1 YOOX profile and activities ........................................................................................................................ 7 1.2 International growth strategy ..................................................................................................................... 9 1.3 Mission, values and principles ................................................................................................................. 10 1.4 Strategy, markets and business model .................................................................................................... 11 1.5 Sustainability management ...................................................................................................................... 12 1.6 Relations with stakeholders and key sustainability topics ....................................................................... 13 1.7 Corporate governance ............................................................................................................................. 15 2. Economic performance ............................................................................................................................... 19 2.1 Economic and financial highlights ............................................................................................................ 19 2.2 Creating and distributing value ................................................................................................................ 21 3. Social performance...................................................................................................................................... 22 3.1 YOOX people ........................................................................................................................................ 22 3.1.1 Human resources management policies ....................................................................................... 22 3.1.2 Breakdown of workforce................................................................................................................ 23 3.1.3 Hiring policies ................................................................................................................................ 25 3.1.4 Diversity and equal opportunities .................................................................................................. 26 3.1.5 Compensation policy and incentive and appraisal schemes ........................................................ 26 3.1.6 Development and training policies ................................................................................................ 28 3.1.7 Workplace health and safety ......................................................................................................... 29 3.1.8 Industrial relations ......................................................................................................................... 30 3.1.9 Internal communication ................................................................................................................. 30 3.2 Customer relations............................................................................................................................... 32 3.2.1 Customer relations management policies ..................................................................................... 32 3.2.2 YOOX’s customers: the figures ..................................................................................................... 32 3.2.3 Services designed to provide an innovative and exclusive shopping experience ........................ 33 3.2.4 Focus on the customer in the shopping process .......................................................................... 35 3.2.5 Communication and marketing ..................................................................................................... 36 3.3 Partners ................................................................................................................................................. 37 3.3.1 Managing relationships with mono-brand online store Partners ................................................... 37 3.4 Suppliers ............................................................................................................................................... 38 3.4.1 Sustainability of Supplier relationships ......................................................................................... 38 3.4.2 Attention to quality ......................................................................................................................... 38 3.5 Shareholders and Lenders .................................................................................................................. 39 3.5.1 Protection of Shareholders and the financial community .............................................................. 39 3.5.2 Relations with Lenders .................................................................................................................. 44 3.6 The community, the local area and Government Authorities .......................................................... 45 3.6.1 YOOX and its relations with the community.................................................................................. 45 3.6.2 Relations with organisations, institutions and associations in the industry ................................... 48 4. Environmental performance ....................................................................................................................... 50 4.1 YOOX and the environment ................................................................................................................ 50 4.2 Management and use of resources .................................................................................................... 51 4.2.1 Energy consumption and atmospheric emissions......................................................................... 51 4.2.2 Purchasing and consumption of paper ......................................................................................... 53 2012 SUSTAINABILITY REPORT | 1 YOOX GROUP 4.2.3 Water consumption ....................................................................................................................... 53 4.2.4 Waste ............................................................................................................................................ 53 4.3 Environmental policy and sustainable conduct ............................................................................... 55 4.3.1 The environmental impact of mobility ........................................................................................... 55 4.4 YOOXYGEN: paving the way for environmental responsibility ...................................................... 56 Objectives for improvement ............................................................................................................................... 58 Index of GRI G3 indicators ................................................................................................................................. 59 Independent Auditors’ Report on the Sustainability Report ........................................................................... 63 2012 SUSTAINABILITY REPORT | 2 YOOX GROUP HIGHLIGHTS 594 employees, of whom 83% are permanent. The number of employees has risen by 60% since 2010 and by 27% since 2011 57% 4,794 of our employees are female, with women representing 44% of managers hours of training provided in 2012 YOOX Group activities YOOXYGEN, the YOOX Group’s permanent eco-friendly programme which was launched in 2009, aims to raise environmental awareness by teaming up with international brands, designers and celebrities 13 million AVERAGE NUMBER OF MONTHLY UNIQUE VISITORS 947 thousand NUMBER OF ACTIVE CUSTOMERS AT 31 DECEMBER 2012 100+ NUMBER OF COUNTRIES WHERE YOOX GROUP DELIVERS 2,330 thousand ORDERS DELIVERED WORLDWIDE IN 2012 2012 SUSTAINABILITY REPORT | 3 YOOX GROUP CHAIRMAN’S LETTER TO THE STAKEHOLDERS Constant commitment to economic, social and environmental sustainability, and therefore listening closely to and ensuring transparent relations with all our stakeholders (customers, employees, partners, suppliers, environment and local communities), are part of YOOX’s DNA. The heartbeat of YOOX’s sustainability drive is our people: a formidable team of 600 women and men working tirelessly across every time zone, whose number and expertise continue to grow. Indeed, the workforce expanded by 27% in 2012. We have a young and hugely multicultural team who are the lifeblood of the Group and in whom we continue to invest heavily: in 2012, we provided nearly 5,000 hours of total training with a view to fostering a culture of excellence and meritocracy. We are proud to have created a young and dynamic working environment, in which around 40% of our employees are under 30 and the average age across the Group is just 32. In 2012, we continued our strong commitment to women and equal opportunities as we increasingly seek to establish ourselves as a benchmark for the sector. Women now make up 57% of our total workforce, with their average pay closer to – or, for some positions, higher than – that of their male counterparts. We are aware of the importance of having a happy and settled team, which is why in 2012 we continued to favour permanent contracts over more flexible employment arrangements: 83% of our employees are now permanent, and we believe this has helped to reduce absenteeism by 20%. It goes without saying that YOOX would not even exist without our loyal male and female customers. They are our raison d’être, and we do everything we can to surprise them, listen to them and understand their needs – everything is aimed at satisfying our customers and building a trusted relationship with them over the long term, the key to a sustainable strategy. We achieved solid financial results in 2012, but our health, safety, security and environmental, performance was no less significant. By carefully managing all areas, we reduced our direct emissions and obtained important certifications; in addition, in 2012 around 20% of the electricity we used was generated from certified renewable sources. YOOX has always been an advocate of sustainable fashion, spreading the environmental message through the sector. In 2009, this stance gave rise to YOOXYGEN, an environmental-sustainability programme that involves day-to-day action as well as special partnerships with international brands, designers and celebrities to raise environmental awareness among all our stakeholders. We do not see this Sustainability Report as the culmination of our work; it encourages us to listen more to our stakeholders and immerse ourselves even deeper into the areas that affect our extraordinary people, our loyal customers, the environment and the relationships we enjoy with all the areas where we operate. We do not just pay lip service to sustainability; it is part of our DNA and drives us on to be ever more innovative and competitive. Chairman of the Board of Directors Federico Marchetti 2012 SUSTAINABILITY REPORT | 4 YOOX GROUP GUIDE TO THE REPORT The Sustainability Report (hereinafter also the “Report”) of the YOOX Group (hereinafter also the “Company”, the “Group” or “YOOX”) presents aspects of financial, social and environmental performance to the various stakeholders (employees, customers, suppliers, commercial partners, shareholders, lenders, government authorities, communities and environmental agencies). The Company intends to use the document to publish the results it achieved and the major projects it carried out in 2012, promoting the monitoring over time of social and environmental impacts. This Report was prepared according to the Sustainability Reporting Guidelines issued by the Global Reporting Initiative (GRI) in 2006 (G3), which currently represent the leading international standard for sustainability reporting. The Report will be published annually; the level of application of the GRI G3 Guidelines is B+. This 2012 Sustainability Report has been presented to the Board of Directors and to the Shareholders’ Meeting following an audit by the Independent Auditors, KPMG S.p.A., whose report is attached hereto. GRI Guidelines levels of application The heads of the various corporate departments were involved in the preparation of the Sustainability Report in order to determine the content of the document and to identify the projects carried out, performance indicators and targets for the future. The data and information in the Report refer to the year ended 31 December 2012 and to some big projects started during the first few months of 2013. Where possible, the trends of the two previous years have also been included to make it easier to compare data over time. Unless indicated otherwise, the reporting scope for the Sustainability Report is the same as for the 2012 Consolidated Financial Statements, from which the economic and financial data included in this Report are taken. This Report was prepared in accordance with the principles of the GRI, including materiality, stakeholder inclusiveness, sustainability context and completeness. The importance of the information included in the Report has been defined according to the Group’s economic, social and environmental impacts and responsibilities, the regulatory framework and the specific features of the sectors in which it operates, and the requirements and expectations of its stakeholders. 2012 SUSTAINABILITY REPORT | 5 YOOX GROUP In order to ensure that the information given is as reliable as possible, priority has been given to directly measurable quantities. Where estimates were required, this has been indicated in the document. In terms of preparing the Sustainability Report, the Company wants to gradually broaden the reporting scope of certain social and environmental indicators, specifically those mentioned in the “Environmental performance” section. With regard to the involvement of stakeholders, the Company is committed to further extending dialogue and engagement. Content of the Sustainability Report The YOOX Sustainability Report is broken down into the following sections: Identity and business approach: this describes the main activities carried out by YOOX in terms of business lines and markets served. It also outlines the Company’s business approach in terms of mission, values and management of social and environmental issues. Economic performance: this presents YOOX’s main economic and financial results as well as a statement showing the value created by the Company and distributed to its stakeholders. Social performance: this describes the Company’s policies for managing stakeholder relations and also includes a selection of quantitative indicators. Environmental performance: this describes YOOX’s approach to managing the environmental issues and impacts resulting from its activities. The “Objectives for improvement” section outlines the areas for particular attention in the coming years with a view to continually improving the Company’s approach to sustainability issues. This highlights the Group’s commitment to following a course that can guarantee continual improvement in its activities. 2012 SUSTAINABILITY REPORT | 6 YOOX GROUP 1. BUSINESS APPROACH AND IDENTITY 1.1 YOOX profile and activities YOOX Group is the global Internet retailing partner for leading fashion & design brands. It has established itself amongst the market leaders with the multi-brand online stores yoox.com, EMPLOYEES AT 31 DECEMBER 2012 thecorner.com and shoescribe.com, as well as with numerous mono-brand online stores all “Powered by YOOX Group”. The Group is also a partner of PPR, with which it has created a joint venture dedicated to the management of the mono-brand online LOCAL OFFICES IN ITALY, THE UNITED stores of several of the PPR Group's luxury brands. STATES, JAPAN, FRANCE, SPAIN, 594 7 CHINA AND HONG KONG yoox.com, established in 2000, is the world’s leading virtual store for multi-brand fashion, design and art. Thanks to long-standing direct relationships with designers, manufacturers and official retailers worldwide, yoox.com offers a never-ending selection of products that are hard to find elsewhere, including: an edited range of end-of-season clothing and accessories from the world’s most prestigious designers, exclusive capsule collections, eco-friendly fashion, a unique assortment of home design objects, rare vintage finds, books and a curated selection of compelling and collectable artworks. 5 TECHNO-LOGISTICS CENTRES IN ITALY, THE UNITED STATES, JAPAN, CHINA AND HONG KONG 8 CUSTOMER CARE CENTRES Launched in 2008, thecorner.com is the luxury online boutique devoted to creating distinctive style and showcasing an eclectic and selective assortment of high fashion, and directional designers for men and women from around the globe through dedicated mini-stores. shoescribe.com, launched in 2012, is the online destination for women, dedicated entirely to shoes and everything that surrounds them: a wide-ranging and carefully edited assortment including everything from top designer names to researched brands, complemented by unique and interesting editorial content and exclusive shoe-related services. Since 2006, YOOX Group designs and manages mono-brand online stores for fashion brands looking to offer their latest collection on the Internet. Thanks to years of experience and online shopping expertise, YOOX Group offers its brand-partners a complete solution including the ideation and implementation of the creative concept, innovative interface design, a customized technological platform, global logistics, excellent customer care and international web marketing. From 2012, YOOX Group is partnering with PPR in a joint venture dedicated to managing the mono-brand online stores of several luxury brands: Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Sergio Rossi and Stella McCartney. “YOOX” The name itself reveals the nature of YOOX, a human touch that fuses with technology: X and Y, the male and female chromosomes, embrace the zero of the binary code, the fundamental language of the information age. As at 31 December 2012, there are 33 active mono-brand online stores: marni.com, emporioarmani.com, diesel.com, cpcompany.com, stoneisland.com, valentino.com, emiliopucci.com, moschino.com, bally.com, dsquared2.com, jilsander.com, robertocavalli.com, coccinelle.com, giuseppezanottidesign.com, napapijri.com, albertaferretti.com, zeishouse.com, maisonmartinmargiela.com, zegna.com, y-3store.com, brunellocucinelli.com, bikkembergs.com, dolcegabbana.com, moncler.com, armani.com, trussardi.com, barbarabui.com, pringlescotland.com, pomellato.com, alexanderwang.com, sergiorossi.com, bottegaveneta.com and stellamccartney.com. The YOOX Group has always prioritised global customer service of the very highest quality, marked by rapid and reliable delivery, fast and easy returns, secure payments, a total privacy warranty, and customer service via phone and e-mail. The Group is always seeking new ideas to guarantee its customers a unique and innovative shopping experience. In order to make sure that its customers enjoy a fully localised shopping experience and excellent service worldwide, YOOX adopts a strong tailored local approach in spite of its global reach. The Group is active in 2012 SUSTAINABILITY REPORT | 7 YOOX GROUP more than 100 countries through five logistics centres located strategically on three continents – in Italy (where the central unit is the Bologna logistics centre), the United States, Japan, China and Hong Kong – and eight customer care centres in various countries. YOOX Group provides its online stores with site content in 11 languages, local payment systems, five currencies and size conversion. Headquarters in Italy 5 Logistics Centres: Italy, USA, Japan, China, Hong Kong 7 Local Offices: Italy, USA, Japan, France, Spain, China, Hong Kong 4 Digital Production Facilities: Italy, USA, Japan, China 8 Customer Care Centres 11 languages 5 currencies The YOOX Group had a total of 594 employees at 31 December 2012, working at seven local offices in Bologna and Milan (Italy), Paris (France), Madrid (Spain), New York (USA), Tokyo (Japan), Shanghai and Hong Kong (China). The Group’s team is characterised by a high female presence (57% of employees) and an average age of just 32. In 2012, the YOOX Group continued its sharp growth in all the major international markets and in both its business lines. As of 31 December 2012, consolidated net revenues, net of returns and customer discounts, amounted to Euro 375.9 million, up 29.1% from 2011. In 2012, the Group had an average of 13 million monthly unique visitors, compared with 10.4 million in 2011. The number of active customers totalled 947 thousand, rising by around 17% compared with 808 thousand in 2011. The number of orders increased from 2,055 thousand in 2011 to 2,330 thousand in 2012, up by around 13% and equal to one order processed every 14 seconds, with the average order value (AOV) equal to Euro 206 (excluding VAT). During 2012, approximately 99% of orders were dispatched within the scheduled delivery times requested by the customers. Thanks to automated picking, which improved the order handling management process, peak demand during the Christmas period was managed very efficiently and the punctuality of deliveries to end customers reached record levels. 2012 SUSTAINABILITY REPORT | 8 YOOX GROUP 1.2 International growth strategy YOOX began with the June 2000 opening of its first the multi-brand online store, yoox.com, which was initially operational in Italy and other European Union countries. Continual growth has been achieved through the desire to always favour international expansion by way of entering new markets. Indeed, foreign markets represented more than 80% of total consolidated net revenues in 2012. The strong experience built up over the years has enabled rapid growth of the Group’s business lines, including through major commercial partnerships. YOOX’S GROWTH STRATEGY IS BASED ON FORMING PARTNERSHIPS AND ENTERING NEW MARKETS The stock market flotation in 2009 made it possible to raise funds for use in accelerating international expansion strategy. The IPO also made it possible to further reinforce technological expertise in order to offer the highest-quality service to customers and to fashion and design brand-partners. The partnership with PPR, which began in 2012, is testament to the market’s appreciation of YOOX Group’s 13 years of experience in fashion ecommerce, as well as its consolidated expertise at global level in powering mono-brand online stores and developing e-tailing strategies for major fashion brands. YOOX intends to continue along the path of constant innovation that has made it a market leader. In its 13 years of business, the Company has helped to bring the fashion and luxury-goods sectors closer to the world of e-commerce, while creating value for its commercial partners. 2012 SUSTAINABILITY REPORT | 9 YOOX GROUP 1.3 Mission, values and principles The YOOX Group always strives for improvement, relying on its passion and creativity to help create value for its end customers and partners. Building relationships of trust with the Company’s various stakeholders is one of the core elements of the YOOX business model. Company activities are carried out in accordance with fundamental and indispensable values shared across all areas and all levels. The Company is committed to continually spreading its corporate values among its employees, paying particular attention to staff training. Understanding and complying with these values as part of business management involves ethical conduct – in both internal and external relations – and helps the Group to assert itself in terms of economic growth and credibility. The Code of Conduct was drawn up to ensure that the fundamental ethical values are clearly defined and represent the cornerstone of the corporate culture as well as the standard for the behaviour of all Group employees when conducting business and, more generally, performing their duties. In addition, the Company has identified the following professional ethical virtues: impartiality and equal opportunities; legality and honesty; professionalism and trust; preventing potential conflicts of interest; accuracy and transparency. The Group has internal regulations that govern specific corporate conduct in line with its core values: honesty, ethics and transparency. All employees are required to comply with these regulations. YOOX’s system of values guides business operations and is the basis for future growth strategies, taking into account the importance of a solid business culture. The core values of YOOX Soul The soul of the YOOX Group is the people who work there. Their hearts, talent and brains are the drivers that create value for the whole YOOX team. Ethics YOOX Group’s success is based on honesty, transparency, integrity and confidentiality in respect of customers and relations between people, and on its capacity to translate a shared ethical vision into credibility and results. Innovation The YOOX Group is different and creates a specific and distinctive identity with its quality, creativity and innovation. Excellent performance The YOOX Group aims to achieve excellence in speed and quality of results, through recognition of its staff and optimisation of their performance and potential. Listening to customers One of the strengths of the YOOX Group is our ability to listen to customers and put ourselves in their shoes. Internationality The international expansion of the YOOX Group requires the ability to accept and respect differences in various countries by integrating with local cultures and identities. Italian DNA YOOX Group was born in Italy, from where it draws its aesthetic sensibilities, world renowned fashion and design products and its capacity to combine flexibility and complexity. Fertile growth The growth of the YOOX Group is fuelled by constant improvement through the elimination of waste and optimisation of energy efficiency in order to protect our environment; YOOX Group firmly believes that the energy for the ideas of the future is green. Source: corporate website. 2012 SUSTAINABILITY REPORT | 10 YOOX GROUP 1.4 Strategy, markets and business model Online retail continued to grow steadily in 2012 in nearly all geographical areas and major product categories. This growth was much faster than in the traditional retail market, which enabled the online channel to further increase its penetration into the overall retail market, demonstrating the growing trend to use the Internet as a complementary shopping channel to physical stores. Forrester Research estimates that the online retail market, excluding the travel, motor vehicle and prescriptionmedicine sectors, recorded sales in 2012 of around Euro 97 billion in Western Europe, an increase of 19% compared with 20111, around USD 231 billion in the United States, an increase of almost 14% compared with 20112, and Yen 5,091 billion in Japan, up 13% compared with the previous year3. Forrester estimates growth of 15% for the online retail market in Western Europe in 2013, 12% in Japan and 13% in the United States. Within the online retail market, the YOOX Group operates in the fashion sector (defined as a combination of the clothing, footwear, jewellery and watches markets), which according to data from Forrester Research represented approximately 21% of the online retail market in Western Europe and the United States in 2012, growing by 23% and 16% respectively compared with 2011. Forrester forecasts a CAGR in this category of around 16% in Western Europe and 10% in the United States. The online fashion market in Japan (defined as a combination of the clothing, accessories and footwear markets) represents about 21% of the entire online retail market, having grown by 11% compared with the previous year, with an estimated CAGR for 2012-2016 of about 9%. According to estimates published by Forrester Research in May 2012, the online fashion market in China (defined as a combination of the clothing, accessories and footwear markets) generated sales of around CNY 229 billion (approximately Euro 28 billion) in 2012, up by 40% on the previous year. Even though this market is still smaller than the others mentioned above, Forrester estimates a much higher CAGR for 2012-16 of around 21%. There are many reasons for the strong growth forecasts for the online retail market throughout the world. These include the wider selection of products offered on the Internet, the desire for convenience and the growing perception of the web as a safe place to make purchases. In addition, the number of Internet users and people making online purchases continues to grow, together with the higher average annual expenditure per user, this confirms the emergence of a new, increasingly digitally native generation. A growing number of fashion, design and luxury companies have further embraced the Internet, aware of the strategic role it can play in helping them expand their visibility and product offering globally and establish a direct relationship with their customers. This has led to more companies investing in improvements to the shopping experience, online content and alternative channels, such as social and mobile commerce, thus sustaining the growth of online sales over the long term. YOOX’s strategic priorities for further consolidating its leading market position include: Further global expansion, with a strong local approach. The YOOX Group intends to continue along its path of international expansion, without overlooking Italy where its roots are based and which will always remain a strategic market where YOOX intends to further consolidate its leading position; Increase of in-season offering through further development of the Mono-brand business line and of thecorner.com and shoescribe.com in the Multi-brand line; Continuing to innovate in order to remain at the cutting edge of the industry, with the ultimate aim of guaranteeing our customers and brand-partners an innovative and impeccable shopping experience and services. Within the YOOX Group, there is a real culture of innovation, taking different facets and permeating into each business area. 1 2 3 Calculations based on Forrester Research data – “Online retail forecast, 2012 to 2017 (Western Europe), Forrester Research Inc., 1 February 2013”. Calculations based on Forrester Research data – “Online retail forecast, 2012 to 2017 (US), Forrester Research Inc., 18 February 2013”. Calculations based on Forrester Research data – “Online retail forecast, 2011 to 2016 (Asia Pacific), Forrester Research Inc., 7 May 2012”. 2012 SUSTAINABILITY REPORT | 11 YOOX GROUP 1.5 Sustainability management YOOX has embarked on a mission to highlight sustainability as part of the management of its business, including by communicating its economic, social and environmental performance. As YOOX expands in the global e-commerce market, it wants to create an ever-widening system of relations with its sector and increase the skills and development opportunities of all its people. The Company creates value by adopting corporate policies and a management approach in line with the various requests it receives from its stakeholders. The Company’s business model uses the corporate mission and values in order to encourage a balance THE APPROACH TO SUSTAINABILITY MANAGEMENT between financial targets and economic growth on the IS BASED ON THE CORPORATE VALUES SET OUT IN THE CODE OF CONDUCT AND THE DEVELOPMENT one hand and the various social and environmental OF TRANSPARENT RELATIONS WITH issues arising from its core business on the other. Indeed, the corporate mission, values and conduct criteria established in the Code of Conduct define the guidelines on how the Company should act, establishing a strategic and cultural framework for operations. As the macroeconomic climate and market dynamics become more complex, YOOX intends to stand out from the crowd through a constant attention to innovation and by focusing on aspects such as: valuing its people; listening to customers’ demands; respecting the environment; developing stable relations with partners and suppliers; listening to requests from shareholders and investors; and committed to fair competition. The Company’s approach to sustainability management also manifests itself in behaviour aimed at ensuring that market activities are conducted properly through transparent relations. In order to favour the adoption of an approach governed by transparent relations with third parties, the Group has embarked on a mission to gradually integrate sustainability issues into its management and strategic processes. This involves using tools that harmonise existing approaches in a single responsible-management process. This Sustainability Report is proof of YOOX’s commitment to encouraging transparent communication with stakeholders and its desire to establish a structured approach to sustainability management. The dimensions of YOOX’s approach to sustainability Social dimension Promote ethical working and business conduct in order to meet legitimate stakeholder expectations in accordance with shared values Environmental dimension Minimise the direct and indirect environmental impact of our commercial activities in order to preserve the environment for future generations Economic dimension Operate in such a way that corporate choices not only increase the value of the business in the short term but also ensure the continuity of the business in the medium-to-long term 2012 SUSTAINABILITY REPORT | 12 YOOX GROUP 1.6 Relations with stakeholders and key sustainability topics For YOOX it is becoming increasingly important to analyse the various requests from stakeholders in order to create mutually beneficial relations based on transparency, trust and consensus. A sustainability-driven approach allows the Company to consider the legitimate expectations of its different stakeholders as part of the decision-making process, in accordance with a balanced perspective and with broader company strategies. This is why YOOX is committed over the coming years to creating opportunities for a structured dialogue with its key stakeholders and to communicating its activities in this area via the Sustainability Report. Indeed, careful management of stakeholder relations is key to creating and sharing the social and economic value that arises from these activities. In this context, stakeholder identification is an essential part of the more general approach to sustainability, partly for the purposes of identifying specific improvement actions in relation to social and environmental reporting. YOOX stakeholders’ map End customers Environment Employees Government authorities Suppliers Communities and media Partners Shareholders 2012 SUSTAINABILITY REPORT | 13 Analysts and Lenders YOOX GROUP In order to facilitate the implementation of a sustainable business practice, YOOX has identified the most important sustainability issues, taking into account their significance for both the Company, in relation to its values, mission and strategy, and the major stakeholders. These issues are reported in the specific sections of the Report. Stakeholder Issue Training and development Employees Health and safety Equal opportunities Communication and dialogue Quality of products and services offered End customers Service innovation IT and transaction security Listening to customers’ demands Economic performance Shareholders and lenders Integrity and transparency Transparent relations Suppliers Fairness in transactions Partners Service excellence Communities and media Support of the community Regulatory compliance Honesty in relations Climate change Monitoring of environmental impacts Development of eco-friendly projects Government authorities Environment 2012 SUSTAINABILITY REPORT | 14 YOOX GROUP 1.7 Corporate governance As well as the Parent Company YOOX S.p.A., with its registered office at Zola Predosa (BO), the YOOX Group has five foreign subsidiaries to serve local markets: the US companies YOOX Corporation and Y Services; YOOX Japan; Hong Kong-based YOOX Asia Limited; and Mishang Trading in Shanghai. The business model dictates that the Italian Parent Company serves as a product purchasing centre for the entire Group and guarantees the supply of products and services to the foreign subsidiaries by way of commercial relations governed by intercompany agreements. Corporate governance Corporate governance is the combination of tools, rules and mechanisms designed to ensure the best possible corporate decision-making process in the interests of the various stakeholders. It is also one of the crucial elements in improving economic efficiency and growth and in increasing investor confidence. This involves a series of relations between managers, the Board of Directors, shareholders and other interested parties, defining the structure used to set corporate objectives, the resources for meeting these objectives and the results already achieved. When it defined its governance structure, YOOX S.p.A. adopted the principles and criteria recommended by the updated December 2011 version of the Italian Stock Exchange’s Corporate Governance Code. The Company has adopted a traditional management and control model (as provided for by Italian law pursuant to Articles 2380-bis et seq. of the Italian Civil Code) based on a Shareholders’ Meeting, the Board of Directors, Board of Statutory Auditors and Independent Auditors. The Board of Directors of YOOX S.p.A. The members of YOOX S.p.A.’s Board of Directors are appointed by the Shareholders’ Meeting, taking into account the eligibility, professionalism and good-standing requirements provided by law and by other applicable provisions. Before making the appointments, the Shareholders’ Meeting must determine the number of directors and the term of office of the Board. Specifically, the number of directors can range from five to fifteen, and their term of office can be no longer than three financial years. There must also be an appropriate number of independent directors as specified by law and, given that the Company is listed on the STAR segment of the MTA electronic exchange, in compliance with the Instructions for Stock Exchange Regulation. Unless already decided by the Shareholders’ Meeting, the Board of Directors elects the Chairman from among its members; it may also elect one or more Vice Chairmen, who will remain in their respective post(s) for the duration of their directorship(s), which expire(s) on the date of the Shareholders’ Meeting called to approve the financial statements of the last year of their term. The Board of Directors is vested with all powers to manage the Company and, to this end, may pass resolutions or carry out any measures that it deems necessary or useful to fulfil the corporate purpose, with the exception of matters reserved for the Shareholders’ Meeting pursuant to the law or the Company Bylaws. The curriculum vitae of every director is filed at the registered office and is available in the “Corporate Governance” section of the Company’s website, www.yooxgroup.com. Lead Independent Director The Lead Independent Director, who is appointed by the Board of Directors pursuant to the Corporate Governance Code, is responsible for dealing with and coordinating requests from the non-executive directors and, in particular, the independent directors. The Lead Independent Director, an independent director with appropriate accounting and financial expertise, is also Chairman of the Director Appointments Committee, a member of the Compensation Committee, Chairman of the Control and Risk Committee and Chairman of the Committee for Related-Party Transactions. Board committees The following committees have been set up within the Board of Directors: Director Appointments Committee: comprising three non-executive directors, two of whom must be independent, the functions of this committee include recommending that the appointment of directors is governed by methods that ensure transparency and a balanced composition of the Board, making sure in particular that there is a sufficient number of independent directors. Compensation Committee: comprising three non-executive directors, two of whom must be independent, this committee has an advisory and recommendatory role, and its main duty is to submit proposals to the Board of Directors regarding the compensation of the Chief Executive Officer and of directors holding 2012 SUSTAINABILITY REPORT | 15 YOOX GROUP specific positions, as well as, at the suggestion of the Chief Executive Officer, the determination of criteria for the compensation of management personnel with strategic responsibilities. Control and Risk Committee: comprising three non-executive directors, all of whom must be independent, this committee advises and makes recommendations to the Board of Directors and to the executive director with responsibility for the internal control and risk management system; in particular, it helps to define the guidelines for the internal control and risk management system and to periodically assess the suitability, efficiency and functionality of said system. Committee for Related-Party Transactions: comprising independent directors, as specified by the “Related-Party Transactions” Procedure, this committee helps the Board to evaluate and approve such transactions. The internal control and risk management system The internal control and risk management system is the combination of rules, procedures and organisational structures that allow the Company, through an appropriate process of identification, measuring, management and monitoring of the main risks, to be run in a sound and correct manner, in line with established objectives. An efficient internal control and risk management system helps to ensure the protection of company assets, the efficiency and effectiveness of corporate transactions, the reliability of financial reporting, and compliance with laws and regulations. The structured and formalised models that the Company has put in place to manage internal controls and corporate risks are as follows: Model pursuant to Law 262/05 referring to the organisation, formalisation and verification of adequacy and functionality of the administrative and accounting procedures and the active procedures for financial reporting; Organisation and management model referring to the prevention of offences pursuant to Legislative Decree 231/2001 as subsequently amended; Workplace health and safety management system conforming to British Standard OHSAS 18001:2007; Group control and planning model, with the aim of ensuring that the Company is being managed in line with the objectives set by senior management; Information security management system based on International Standard ISO/IEC 27001 for managing risks relating to the confidentiality, integrity and availability of corporate information (including the management of risks pursuant to Legislative Decree 196/2003 as subsequently amended). In addition to the above, the Company’s control environment includes: the Code of Conduct, which defines all the values recognised, accepted and shared across the entire YOOX community during the performance of company business, and outlines appropriate conduct in line with these values; the objectives, responsibilities and roles defined and formalised as part of the organisation of the Group; powers and authorisations consistent with organisational responsibilities; a training model for the major regulatory topics, for the Group and the individual business lines; a body of procedures to govern the major corporate processes. Although they are not mentioned above, the Company departments play a key role in the management of internal controls and corporate risks by performing second- or third-level controls on corporate processes or by supporting and advising other departments (e.g. Legal Department, Internal Auditing). Organisational model pursuant to Legislative Decree 231/2001 and the Code of Conduct YOOX S.p.A. adopted an organisational, management and control model to prevent the offences mentioned in Legislative Decree 231/2001 (hereinafter also “Model 231”), as subsequently amended, on 3 September 2009 with a view to ensuring that corporate activities are conducted correctly and transparently, and to protecting its position and image and those of Group companies, shareholders’ expectations and the work of its employees, formulated on the specific requirements determined by the entry into force of Legislative Decree 231/2001. By resolution of the Board of Directors on 16 December 2010, and in view of regulatory changes, the Company adopted a new version of the organisational, management and control model pursuant to Legislative Decree 231/2001 and of the Group’s Code of Conduct. The new model consists of a general part describing, among other things, the general principles for the adoption of the model, and identifying the activities where there is a risk of offences being committed: relations with government authorities; corporate obligations; workplace health, safety and accident prevention; managing commercial and financial activities at risk of money laundering; managing IT systems and electronic documents; confidential information; managing the publication of online editorial content; managing commercial activities at risk of industrial, commercial or counterfeiting crimes. The specific part of the model covers the various categories of offence mentioned in Legislative Decree 231/2001 and considered to be a risk for the activities carried out by the Company. Among other things, its 2012 SUSTAINABILITY REPORT | 16 YOOX GROUP function is to identify crimes that could be committed at the Company and methods of preventing them, and to recommend a code of conduct. An update to the model is scheduled for the first half of 2013. In 2012, the Company began the risk assessments and preparatory work required to update the model with all the offences currently included in Legislative Decree 231/2001. Updating the corporate procedures, including those relating to Legislative Decree 231/2001, is an ongoing process. Model 231 introduces an appropriate system and adequate punitive measures for conduct in violation thereof. The Code of Conduct is an integral part of this model. It outlines the ethical principles and conduct that should be followed by Company employees and other recipients, helping to create a control environment that can ensure the Company’s activities are always based on the principles of fairness and transparency, and reducing the risk of the crimes mentioned in Legislative Decree 231/2001. Compliance with the Code of Conduct and with Model 231 is formally monitored by the Group’s Internal Auditing department, which covers all the various parts of the business. During 2012, the audits aimed at ensuring compliance with Legislative Decree 231/2001 were carried out in conjunction with the other control activities provided for by the department’s business plan as approved by the YOOX S.p.A. Board of Directors. Specifically, controls were carried out pursuant to Legislative Decree 231/2001 in conjunction with annual monitoring pursuant to Law 262/05 of the six macro business cycles that have an impact on the financial statements. In addition, four “231-related” audits were conducted in 2012 on specific corporate processes (store purchases, supplier returns and recovery of costs, powers of attorney for bank transactions, overview of the workplace health and safety management system). These audits did not reveal anything that significantly compromised the adequacy or functionality of Model 231 and of the Code of Conduct. The audit schedule for 2013, which was approved by the Board of Directors on 5 March 2013, includes specific audits on certain areas at risk of crime (gifts and sponsorship, consultancy, recruitment, use of public funds). Supervisory Body The YOOX S.p.A. Supervisory Body, which is appointed by resolution of the Board of Directors and comprises three members (two of whom are external), has independent powers of initiative and control, oversees the functionality of and compliance with Model 231, and is responsible for updating said Model. Specifically, the Supervisory Body is charged with checking the efficiency of Model 231 and compliance with its methods and procedures, and with making recommendations to the Board of Directors on any updates and amendments to the Model. The Supervisory Body produces half-yearly reports for the Board of Directors on its audit and control activities and the outcomes thereof. As a member of the Supervisory Body, the head of Internal Auditing plays a proactive role in helping to understand corporate changes and phenomena, and in implementing the recommendations of the Supervisory Body within the Company. During 2012, the Supervisory Body was always invited to meetings of the Control and Risk Committee, for their full duration, and thus participated in and became aware of all topics for discussion in these meetings potentially pertaining to Legislative Decree 231/2001. The Supervisory Body also holds regular meetings with the management of the Company to ensure agreement on risk profiles, the evolution of the business and organisational structures. No critical aspects arose during the year, and there were no indications of any potential violations of Model 231. Communication and training in relation to Model 231 and the Code of Conduct Raising awareness of Model 231 and the Code of Conduct takes place internally through communication to, and training activities for, employees. New hires are notified in their employment contract and during introductory training programmes. Model 231, the Code of Conduct and corporate procedures are available on the Company’s intranet, which is open to all employees. E-mail notification is given when changes are made to Model 231. In order to ensure compliance with the provisions of Model 231 and the Code of Conduct, third parties (e.g. suppliers, partners, business customers, consultants) are required to agree to specific clauses in their contracts providing for termination in the event of non-compliance. Model 231 and the Code of Conduct are available in the “Corporate Governance” section of the Company website, www.yooxgroup.com. 2012 SUSTAINABILITY REPORT | 17 YOOX GROUP Board of Directors Chairman and Chief Executive Officer Federico Marchetti Vice Chairman Stefano Valerio Non-executive director Mark Evans Independent non-executive director Catherine Gérardin-Vautrin Independent non-executive director Elserino Mario Piol Independent non-executive director Massimo Giaconia Independent non-executive director Raffaello Napoleone Board of Statutory Auditors Chairman Filippo Tonolo Auditor David Reali Auditor Patrizia Arienti Alternate Auditor Edmondo Maria Granata Alternate Auditor Salvatore Tarsia 2012 2011 2010 Total members of the Board of Directors (no) 7 7 7 Executive directors on the Board of Directors (no) 1 1 1 Independent directors on the Board of Directors (no) 4 3 3 10 8 11 Average attendance of directors at Board meetings (%) 87% 91% 87,2% Meetings of the Director Appointments Committee (no) - - - Meetings of the Compensation Committee (no) 6 6 5 Meetings of the Control and Risk Committee (no) 4 4 4 Meetings of the Committee for Related-Party Transactions (no) 1 - - Meetings of the Board of Statutory Auditors (no) 7 9 12 Corporate Governance Meetings of the Board of Directors (no) 2012 SUSTAINABILITY REPORT | 18 YOOX GROUP 2. ECONOMIC PERFORMANCE 2.1 Economic and financial highlights The YOOX Group continued to experience strong growth in 2012 in all its key international markets and in both its business lines. These results confirm the strength of the Group’s business model and of the actions implemented increasingly during the year to be close to its partners and customers. 2012 2011 375,924 291,188 EBITDA 32,085 24,081 Operating profit 18,911 16,423 Consolidated net income (loss) 10,183 10,000 2012 2011 Summary of results (Euro thousands) Consolidated net revenues Reclassified consolidated statement of financial position (Euro thousands) Consolidated net revenues, net 32,061 32,998 of returns and customer Net working capital 55,472 36,911 discounts, amounted to Euro Non-current assets 375.9 million in 2012, an Non-current liabilities (excluding financial liabilities) -340 -296 increase of 29.1% on the Net invested capital 87,193 69,613 previous year. The Group’s net invested capital Shareholders’ Equity 101,762 82,554 went from Euro 69,613 thousand Net debt/(Net financial position) -14,569 -12,941 at 31 December 2011 to Euro 87,193 69,613 87,193 thousand at 31 Total sources of financing December 2012, an increase of 25.3%. This increase was due to the Group’s continuing policy of investment in its techno-logistics platform and in technology. Despite this investment, the net financial position improved from Euro 12,941 thousand at 31 December 2011 to Euro 14,569 thousand at 31 December 2012, thanks to cash flows. The Multi-brand business line, which includes yoox.com, thecorner.com and shoescribe.com, recorded consolidated net revenues of Euro 262.0 million, an increase of 23.1% compared with Euro 212.8 million at the end of 2011. A significant contribution to this performance Consolidated net revenues by business line (Euro millions) came from the growth of yoox.com, which experienced a marked acceleration in sales in the fourth quarter and 375.9 whose Chinese version was also launched during the same period. 2012 was also an extremely positive year for 291.2 thecorner.com and for shoescribe.com, which, following its launch in March 2012, is proving to be a destination of 70% 214.3 choice in the footwear sector. In the fourth quarter of 2012, net revenues of the Multi73% brand business line were 25.5% ahead of the previous year 76% at Euro 75.7 million. Overall, the Multi-brand business line accounted for 69.7% 30% 27% of the Group’s consolidated net revenues as of 31 24% December 2012. 2010 2011 2012 The Mono-brand business line includes the set-up and Multi-brand Mono-brand management of the online stores of some of the leading global fashion and luxury brands. In 2012, this business line posted consolidated net revenues of Euro 113.9 million, an increase of 45.3% compared with Euro 78.4 million at 31 December 2011 thanks to the performance both of the online stores that were already active at the start of 2012 and of those launched during the year. 2012 SUSTAINABILITY REPORT | 19 YOOX GROUP In terms of geographical areas, Consolidated net revenue by geographical area (Euro millions) 2012 2011 North America was once again the 59 57.7 Group’s biggest market, with sales Italy 180.2 141.6 of Euro 81.5 million, corresponding Europe (excluding Italy) to 21.7% of consolidated net North America 81.5 59.7 revenue and up by 36.5% 31.1 19.8 compared with 2011. The other Japan 14.6 6.1 major markets also performed Other countries extremely well in 2012. Net Not country related 9.5 6.3 revenue in Italy rose by 2.4% 375.9 291.2 compared with the previous year Total (+11.8% in the fourth quarter alone). The results for the rest of Europe were also excellent, with growth of 27.3%. The main countries that contributed to the Group’s sales in Europe in 2012 were France, Germany and the UK, all showing increases compared with 2011, and Russia, which continued to post excellent results. Japan, with growth of 56.8% compared with 2011 (+44.8% at constant exchange rates), and the Other Countries area, with China-dominated growth of 139.7% compared with 2011, performed extremely well. Capital expenditure in 2012 amounted to Euro 30.3 million. Investment continued in the new highly automated global logistics platform. Specifically, given the success of previous investments in improving operating leverage and considerably increasing efficiency, the Group decided to bring around Euro 3 million of investments forward to 2012 in order to accelerate the automation of the Bologna logistics centre, a project that was completed successfully at the end of February 2013. The Group also continued to invest in innovation and consolidation of multi-channel technology, with a view to staying ahead of the game in a fast-growing channel such as mobile. Indeed, customers will increasingly be exposed to both fixed and mobile channels. More information on the main features of YOOX Group operations in 2012 can be found in the directors’ report on operations, which is available on the Group’s website as part of the consolidated financial statements. 2012 SUSTAINABILITY REPORT | 20 YOOX GROUP 2.2 Creating and distributing value Calculating directly generated economic value gives an indication of the YOOX Group’s ability to create wealth and distribute it to its various stakeholders. In accordance with GRI guidelines, the statement below distinguishes between three types of economic value: generated, distributed and retained. Economic value generated and distributed (Euro thousands) 2012 2011 Change Economic value generated by the Group 389,176 302,371 28.7% Consolidated net revenues 375,924 291,188 29.1% 14,747 10,591 39.2% 135 59 126.5% Other income Financial income Value adjustments to financial assets (366) - Write-down of receivables (50) - Exchange rate differences (1,212) 533 -327.5% Economic value distributed by the Group 365,501 284,525 28.5% Operating costs 324,655 250,886 29.4% 33,187 26,510 25.2% 726 428 69.9% - - 6,898 6,648 3.8% 35 54 -35.7% Economic value retained by the Group 23,676 17,845 32.7% Depreciation and amortisation 13,174 7,659 72.0% 318 186 70.8% 10,183 10,000 1.8% Employee compensation Payments to lenders Payments to investors Payments to government authorities* Gifts to third parties Provisions Reserves * payments to government authorities include deferred taxes. 2012 SUSTAINABILITY REPORT | 21 YOOX GROUP 3. SOCIAL PERFORMANCE 3.1 YOOX people 3.1.1 Human resources management policies YOOX encourages the professional development and growth of its people, fully aware of how important they are to the success of the business. Managing people involves maximising their potential and creating a collaborative and growth-driven working environment. The underlying principles of YOOX HR management Impartiality and equal opportunities Fairness and transparency Prevention of potential conflicts of interest Legality and honesty Professionalism and trust Striving for excellence in the pursuit of corporate goals involves teamwork and a constant focus on professionalism, passion and motivation. As it enjoys rapid international growth, YOOX implements a series of principles underpinning its people management. These involve developing relationships that are fair, transparent, impartial and honest. YOOX also encourages diversity in its people management in the belief that considering different points of view can create added value and help to enhance professional and personal relationships. YOOX complies with existing Italian legislation and promotes the standards of human resources management and the principles set out by the Group’s Code of Conduct to ensure that the rights enshrined in the Universal Declaration of Human Rights and the principles of the conventions of the International Labour Organisation are upheld in each country in which it operates. These principles underpin selection, management and development, training and internal-communication processes, relationships with trade unions and the focus on health and safety issues. 2012 SUSTAINABILITY REPORT | 22 YOOX GROUP 3.1.2 Breakdown of workforce YOOX’s people play a key role in achieving the corporate objectives. Adopting a long-term outlook with a view to the overall sustainability of the Company involves investing in the development of human resources and creating a collaborative and motivational working environment that can meet the requirements of each individual and maximise their various professional and personal qualities. Human resources management involves trying to strike the right balance between various aspects such as growth, respect, safety, well-being and dialogue. At the end of 2012, the YOOX Group had 594 employees in total, an increase of 27% compared with 2011 and 60% on the figure at the end of 2010, in line with the strong business growth of recent years. The Company remains firmly rooted in Italy, with 88% of its employees based at the two Italian offices and the remaining 12% based abroad. Change in total number of employees 594 469 372 2010 2011 32 AVERAGE AGE OF YOOX EMPLOYEES 83% PERCENTAGE OF EMPLOYEES ON PERMANENT CONTRACTS YOOX wants to encourage stable and long-term employment relationships, which is why 83% of its employees are on permanent contracts. Breakdown of employees by age range - 2012 8% 39% <30 30-40 >40 53% 2012 SUSTAINABILITY REPORT | 23 2012 YOOX GROUP The average age of YOOX employees is 32, which is evidence of a particularly young and dynamic working environment. The average seniority in 2012 was 2.7 years. Total workforce (no of employees and contract workers) Employees 2012 Male Female 2011 Male Female 2010 Male Female 255 339 206 263 163 209 Temporary workers 1 4 19 43 15 17 Project workers - 2 2 10 - 1 Total by gender 256 345 227 316 178 227 Total 601 543 405 2012 2011 2010 YOOX people Employees by status (no) Male Female Male Female Male Female Managers 15 6 20 4 14 2 Junior managers 24 25 17 17 15 15 194 257 155 207 128 174 22 51 14 35 6 18 255 339 206 263 163 209 Office workers Workers based abroad Total by gender Total 594 469 372 NB: the headcount does not include the Chief Executive Officer of YOOX S.p.A., interns or contract workers. 2012 2011 2010 Permanent 492 392 317 Fixed-term 102 73 48 - 4 7 594 469 372 2012 2011 2010 Full-time 558 437 345 Part-time 36 32 27 594 469 372 2012 2011 2010 <30 226 184 157 30-40 318 247 192 50 38 23 594 469 372 Average seniority (years) 2012 2011 2010 Average seniority 2.71 2.67 2.60 Employees by type of contract (no) Apprenticeship Total Part-time and full-time employees (no) Total Employees by age range (no) >40 Total 2012 SUSTAINABILITY REPORT | 24 YOOX GROUP Employees by geographical area (no) Italy Abroad Total 2012 2011 2010 521 420 346 73 49 26 594 469 372 The YOOX workforce is characterised by a wide range of education, professional experience and cultural backgrounds. The Group employs 29 different nationalities. 3.1.3 Hiring policies YOOX is committed to developing and implementing transparent hiring policies founded on the principles of equal opportunities and diversity. Candidates are selected based on their professional qualities and how suited they are to the role. Total Group headcount increased by 125 employees, up 27% compared with 31 December 2011. More than 79% of new hires were made at the Italian offices. More than 72% of new recruits were Italian, with around 53% under 30 years of age. Fixed-term contracts converted into permanent contracts (no) Number of contracts converted 2012 2011 2010 53 29 25 Owing to the highly innovative and technological nature of its business, YOOX makes targeted appointments of people with specific expertise in new technologies. This is why the Group attributes particular importance to recruiting, selecting and successfully integrating people into the company. YOOX looks for dynamic people driven by change and innovation. The main tools and channels used to recruit candidates, particularly young graduates, are the Group website, social media such as LinkedIn and relations with partner schools and universities. The selection and recruitment process aims to find the most talented people who can show that they have the aptitude and the specialist technical expertise necessary for the roles. The selection process features a first phase dedicated to an aptitude and motivation assessment, as well as a second one focusing more on technical and professional aspects. The soft-skill assessment, in particular, covers both the key skills expected of all YOOX staff and the candidates’ affinity with the Group’s corporate values. New recruits are integrated carefully through a detailed induction process which, by balancing training and practical experience, introduce them to the organisation of the Group on a global scale and to the situations in which it operates. There is a lot of room for internal career progression. In general, the search for a candidate to fill a vacant position begins internally through a job-posting system. If this is not successful, the net is cast outside the Group. With a view to strengthening the ‘global’ identity of YOOX people, the Company’s various internal-mobility programmes aim to promote and encourage international career development. YOOX has also always set a good example on the use of internships: young candidates have the possibility to experience the work life at the company through a six-month internship, at the end of which they may be offered an employment contract, and therefore the chance to start a career at the Group, if they perform well. During 2012, 18 interns were given employment contracts. 2012 SUSTAINABILITY REPORT | 25 YOOX GROUP Relations with universities YOOX remains committed to working with the academic world. Specifically, YOOX has maintained relationships with the University of Bologna (at its various faculties and sites), Bocconi University, SDA Bocconi and the Politecnico di Milano by way of meetings, presentations and case studies. Moreover, in line with the Group’s international development, we have increasingly looked to the international market in recent years both for highly qualified specialists and for new graduates, managing relationships and working together with leading business schools such as INSEAD (France), IESE (Spain) and IUM (Monaco). It is not Group policy for YOOX to favour candidates living locally to its corporate offices. Where possible, it tries to consider proximity to operational sites, especially for technical and operational positions. Specifically, 48% of people hired at the Milan site in 2012 live in the same municipality, while 57% of new starters at the Interporto logistics centre and Zola Predosa site live in Bologna. Staff turnover, i.e. the number of employees who left in 2012 as a percentage of the total headcount at the end of the year, was unchanged on the 2011 figure at 17%. Turnover (%) Turnover 2012 2011 2010 17 17 8 NB: employees who left during the year / total employees at 31 December 2012. 3.1.4 Diversity and equal opportunities The equal treatment that YOOX offers to its people manifests itself in the policy of non-discrimination on the grounds of race, gender, nationality, sexual orientation, social status, physical appearance, religion and political orientation, both in the selection process and in all of the Group’s activities. The fact that the majority of the workforce (57%) is female further confirms the Group’s commitment to equal opportunities. Moreover, women accounted for 44% of the managerial positions at the end of 2012. One of the seven members of the Board of Directors is female (14%). As the Board was appointed prior to 12 August 2012, YOOX is currently in compliance with the provisions of Law 120/2011. In addition, YOOX has always strived to identify ways of improving the work-life balance of its employees, particularly working mothers. For example, 12 requests to go part-time were granted in 2012. Under the current employment contracts, offering a switch to part-time work is a useful way to provide employment flexibility and meet the needs of employees. The switch to part-time is voluntary, reversible and compatible both with the technical, organisational and production needs of the business and with the needs of employees. In addition, 22 optional maternity and paternity leave requests were granted. YOOX has also started to offer teleworking contracts. There were two instances of this in 2012: one in Zola Predosa and the other in Milan. By entering into formal agreements with the relevant government authorities, YOOX is gradually adjusting to legal provisions relating to the employment of persons belonging to legally protected categories. 3.1.5 Compensation policy and incentive and appraisal schemes The compensation policy aims to fairly and tangibly reward our people’s commitment and contribution to the success of the Company. In 2012, policies were specifically aimed at ensuring competitiveness in the labour market, in line with the objectives of attracting and developing human resources and making them loyal, as well as differentiating the tools in order to ensure internal consistency based on shared objective criteria. The fixed component of compensation is the monthly salary, which is paid on the basis of contractual provisions and of meritocratic rewards such as bonuses and increases. Pay levels vary according to position held, responsibilities assumed, skills acquired, performance and individual targets achieved. The external market is also a hugely important benchmark. YOOX’s pay systems are based on total compensation and designed to reward individuals differently in accordance with the scale and importance of the position, the strategic nature of the person’s skills and their personal value, in line with market practice. 2012 SUSTAINABILITY REPORT | 26 YOOX GROUP In accordance with the Group’s strategic guidelines, the fixed component of compensation is managed based on increasingly selective criteria. The variable component of compensation has increasingly become a differentiator and a way of aligning pay with Company profits and performance, using the following plans: Management by Objectives (MBO) – these plans foster employee involvement and motivation to help achieve individual performance objectives; Stock Option – these plans encourage senior management to reach corporate financial results targets by awarding stock options if targets are achieved; Retention – these plans award shares to key employees, encouraging them to stay with the Group and retaining a competitive pay structure. In 2012, managers at the Italian offices were awarded a free healthcare policy integrating the national industrywide FASDAC plan. The policy covers healthcare costs incurred following an illness suffered by or an injury to the manager or members of his/her immediate family. Average gross annual pay of women compared with that of men by employment status – Italian offices Managers Junior managers Office workers 2012 2011 2010 88% 87% 88% 102% 98% 100% 91% 88% 88% In 2012, YOOX used performance evaluation to appraise employees, encourage their development and ensure clear and continual dialogue between managers and their staff throughout the year. Performance evaluation analyses the value created by each employee during the performance of their duties. The system has two different methods of evaluation: evaluation of goals; evaluation of achievements (MBO). This system provides the Company with objective, shared and transparent input data with which to calculate the variable component of compensation for eligible employees, as well as the most important indicators for starting staff management and development plans. 2012 SUSTAINABILITY REPORT | 27 YOOX GROUP 3.1.6 Development and training policies Training plays an increasingly important role at YOOX. There were numerous training events in 2012, with various specific targets: Inductions for new starters: introduction to the YOOX business model, presentation of the Company’s procedures and structure, on-the-job digital-production training and customer care training, lasting a total of two months; Specialist and managerial training courses (English, project management, time management, public speaking, leadership and team management); Mandatory training courses on Model 231, the Code of Conduct, privacy and data security, workplace health and safety, first aid and fire safety. 4,794 HOURS OF TRAINING PROVIDED IN 2012 AT GROUP LEVEL 8.1 AVERAGE NUMBER OF HOURS OF TRAINING PROVIDED TO EACH EMPLOYEE IN 2012 (NO OF EMPLOYEES AT 12/31/12) AT GROUP LEVEL Hours of training by subject area - 2012 5% 21% 31% Integration and internal processes Regulatory Managerial development Languages 16% Organisational development A total of 4,794 hours of training was provided in 2012, with 27% a prevalence of induction (31%), regulatory (27%) and language class sessions (21%). An average of 8.14 hours of training was provided to each employee in 2012. Specifically, the average per capita training hours by employment status were: 10 for managers, 12.8 for junior managers and 5.3 for office workers5. In view of the growing importance of training as part of staff development and growth activities, as well as to comply with mandatory regulations, YOOX has set up a team dedicated to training within the Human Resources & Organisation department. Employees can provide feedback on training modules using evaluation questionnaires distributed at the end of each training session, covering both the content and the teaching methods used. Training modules in 2012 were widely appreciated by participants. The YOOX Group launched a pilot mentoring programme in its Italian offices in 2012, aiming to provide a group of talented young employees with the chance to be accompanied in their professional development by more experienced colleagues who have been trained as mentors. Both sides benefit from the programme: the mentee gains a better knowledge of the YOOX culture and organisation as well as the chance to expand their internal network, while the mentor gains exposure to a new way of thinking and working as well as the chance to develop new skills and managerial experience. In the second half of 2013, the pilot mentoring programme will be extended to foreign offices and to new mentors and mentees (who will be chosen from the Group’s talented young employees). Ethics and regulatory compliance are part of the Group’s values and are reflected in all its main policies, including safety, data management and adoption of the organisational, management and control model pursuant to Legislative Decree 231/2001 and of the attached YOOX S.p.A. Code of Conduct. In 2012, new starters received a total of 105 hours of training on these subjects. Training will be spread more widely to all Group employees in 2013 following an update to Model 231. 2012 Hours of training by employment status Managers 211 Junior managers 626 Office workers + abroad 2,779 Total 3,616 NB: this does not include the 1,178 hours of workplace health and safety training. 4 5 Calculated based on the number of employees at the end of 2012 including workplace health and safety training hours. Calculated based on the number of employees at the end of 2012 excluding workplace health and safety training hours. 2012 SUSTAINABILITY REPORT | 28 YOOX GROUP 3.1.7 Workplace health and safety6 The workplace health and safety of all YOOX people, in accordance with applicable legislation and the principles laid down in the Code of Conduct, is a priority. Specifically, the Group strives to provide working conditions that ensure respect for the physical and moral integrity of its workers. There were 10 accidents across the Italian offices in 2012, of which eight occurred during commuting (80%). The two people involved in the non-commuting accidents requested corrective measures to equipment, and these were carried out promptly. There were no fatal accidents during 2012, nor were there any accidents involving contractors working at YOOX sites. There were also no cases of occupational disease. In order to ensure continual focus on workplace health and safety, YOOX pays particular attention to training activities in these areas, drawing up targeted training programmes for the various positions at the Company. A total of 1,178 hours of workplace health and safety training was provided in 2012, of which 128 hours was conducted via e-learning. The training was provided in accordance with the Accordo Stato-Regioni (agreement between the state and the regions) and reported in the training schedule. Separate specific training content was provided for department heads, managers, workers and workers’ safety representatives. Accidents Accidents commuting 2012 2011 2010 10 10 2 8 9 1 2 1 1 73 265 4 35 6 29 no. at work Absence caused by accidents commuting days at work Frequency rate - 11.9 16.4 3.9 Severity rate - 0.13 0.45 0.06 Notes for calculation: Frequency rate: (total number of accidents / total number of hours worked) x 1,000,000. Severity rate: (total number of days lost as a result of accidents / total number of hours worked) x 1,000. Absence rate 2012 2011 2010 Absence rate 5.61 6.98 10.81 2012 2011 2010 173 232 64 64 - - Notes for calculation: Absence rate: (days of absence / working days for whole workforce) x 200,000. Number of people receiving workplace health and safety training Employees Other NB: these figures do not include first-aid courses (12 hours), first-aid refreshers (4 hours), fire safety and evacuation (8 hours), workers’ safety representatives (32 hours), refreshers for workers’ safety representatives (8 hours) and refreshers for health and safety managers (28 hours). “Other” includes workers who have started a training course but have yet to complete it. OHSAS 18001:2007 certification In 2011, YOOX S.p.A.’s Italian offices were OHSAS 18001:2007 certified, and the six-month inspection in February 2012 by independent body CERMET revealed no indications of non-compliance. In relation to the workplace health and safety management system, internal inspections were carried out on all areas and functions specified by applicable regulations. The main risks to workplace health and safety are monitored regularly to ensure that safety levels are maintained over time. The main objectives for 2013 are: • to reduce the number of accidents; • to complete training activities for workers, managers and department heads in accordance with the Accordo Stato-Regioni; • to make the training programmes more accessible by using e-learning tools; • to monitor the compliance of contracted work and services with safety standards; • to implement software for managing health and safety obligation deadlines. 6 Information concerns YOOX S.p.A. excluding the Madrid and Paris offices. 2012 SUSTAINABILITY REPORT | 29 YOOX GROUP 3.1.8 Industrial relations YOOX encourages continual collaboration and dialogue with trade union organisations on the main topics pertaining to HR management and business activities. Employees who are union members (%) Employees who are union members 2012 2011 2010 2.5 3.13 3.51 There were no Company strikes or union complaints during 2012. At present, there are no second-level collective agreements in force. Participation in union activities (hours) Hours of absence for union meetings and authorised leave Hours of absence for national or industry-wide strikes 2012 2011 2010 17 26 40.25 230 226 68 3.1.9 Internal communication Internal communication activities are aimed at fostering a culture based on corporate values, increasing commitment and sense of belonging, and encouraging the sharing of information. Dialogue with employees YOOX stages regular meetings with employees in order to share with them the major aspects of operations and life at the Company. In addition, 2012 saw the launch of the “Summer cleaning” programme for employees to make suggestions and propose solutions of interest to the Company. The best ideas were selected and rewarded, and are now being implemented. The Intranet, electronic newsletters, internal instantmessaging platforms and corporate notice boards are just some of the many different tools and media that enable a constant and targeted flow of communication aimed at encouraging a shared corporate culture and engagement among all Group employees. Through these channels, employees are always kept up to date on the Company’s main issues, strategies, results and events. YOOX has always facilitated internal communication and interaction by way of its Intranet, the primary aim of which is to share Company objectives, communicate changes, disseminate knowledge, promote staff involvement, and answer questions. The Intranet contains a wide range of detailed information, from the Welcome Kit section (corporate mission and values, announcements, communication on organisational processes, manuals, internal rules, etc.) to the section on the main corporate procedures, as well as official presentations and news and press releases. In addition to this information, the Intranet has plenty of tools enabling better integration between the various Company departments and more efficient operations with regard to specific projects and activities. In order to improve productivity and collaboration, the Group uses an instant-messaging system with integrated functionalities for audio, video and web conferencing, voice calls and document sharing. Instant messaging encourages employees to communicate and share information, and it also ensures that dialogue between teams in different offices is always available. In terms of internal communication, YOOX has highlighted the importance of expanding and reinforcing communication activities and channels for expressing and exchanging opinions. It has therefore set up a dedicated unit within its Communication department. In order to improve the sharing, consistency and dissemination of information and the involvement of workers with a view to improving integration and transparency, in 2012 YOOX stepped up its employee communication initiatives via electronic newsletters and the Intranet, promoting the main corporate activities and initiatives. 2012 SUSTAINABILITY REPORT | 30 YOOX GROUP Employee involvement YOOX Birthday – an annual Company event One of the most important events for internal communication and teamwork is YOOX Birthday, when Group employees from across the globe are involved each year (usually in June) in celebrating the Company’s birthday. Employees always look forward to the event, which helps to strengthen relationships between colleagues working in different offices, enabling them to put faces to the names of the people that they e-mail on a daily basis. In 2012, more than 500 employees attended the party at Punta Marina in Ravenna, with famous DJs from Ibiza among the international musical guests. Company Christmas tree contest Another event which encourages teamwork and creativity is the Xmas Tree Contest, which was staged for the third time in 2012. Employees are asked to design and create the Company Christmas tree following simple rules, one of which is that groups must consist of people from different teams across the Company. Since 2012, with a view to improving employees’ working days and providing them with more appealing and useful services, a restaurant and bar area has been added to the Zola Predosa YOOX site and is open throughout the working day. The site now also includes a gym exclusively for YOOX employees, who go there during their lunch break or at the end of the working day. The YOOX Group headquarters in Zola Predosa, Bologna, Italy. 2012 SUSTAINABILITY REPORT | 31 YOOX GROUP 3.2 Customer relations 3.2.1 Customer relations management policies “Listening to the customer” has always been one of the Group’s core values. Placing our customers at the heart of our activities so that we can listen to and understand their needs has been part of YOOX’s strategy since day one, as we strive to offer customers an innovative shopping experience and an ever higher level of service. 947 thousand Over the years, the Group has developed a series of initiatives aimed at finding out customers’ opinions, expectations and day-to-day experiences with a view to fostering a culture based on customer feedback across all the Group’s divisions. NUMBER OF ORDERS IN 2012 NUMBER OF ACTIVE CUSTOMERS AS AT 31 DECEMBER 2012 2,330 thousand 1 order every 14 seconds ORDER FREQUENCY These include the “Voice of the Customer” scheme, which was launched upon the Group’s creation to gather feedback and suggestions from customers which are regularly passed on to the Group’s management. The most significant feedback is often used to devise measures to improve customers’ shopping experience, both online and offline. The Group is also currently developing a new project that will see various corporate departments taking part in workshops on listening to customers. The Group’s customer base is two-thirds female and has an average age of around 30. These people are active users of the Internet and lovers of fashion, design and art. In line with its corporate values and overall strategy, YOOX has defined a series of guidelines to underpin its commitment to its customers: foster stable relationships based on trust and mutual respect; act with honesty, courtesy and transparency; provide high-quality products and services; ensure the highest degree of security in the use of payment systems; listen to customers’ needs; promote corporate social responsibility at all levels of the Group; innovate services. 3.2.2 YOOX’s customers: the figures Overview Number of active customers (thousands) Number of orders (thousands) Average Order Value (Euro) Number of unique visitors per month (millions) 2012 2011 2010 947 808 612 2,330 2,055 1,523 206 180 179 13.0 10.4 8.6 NB: key performance indicators refer to yoox.com, thecorner.com, shoescribe.com and the other mono-brand online stores “Powered by YOOX Group”. Business metrics related to the joint venture with PPR are excluded. In 2012 the Group had an average of 13 million unique visitors per month, compared with 10.4 million in 2011. The number of orders rose from 2,055 thousand in 2011 to 2,330 thousand in 2012, an increase of 13% and equal to one order processed every 14 seconds, with the average order value (AOV) rising sharply to Euro 206 (excluding VAT). During 2012, approximately 99% of orders were dispatched within the scheduled delivery times requested by customers. Thanks to automated picking, which improved the order handling management process, peak demand during the Christmas period was managed very efficiently, and the punctuality of deliveries to end customers also reached record levels. The number of active customers totalled 947 thousand as at the end of the year, rising by 17% compared with the 808 thousand recorded in 2011. 2012 SUSTAINABILITY REPORT | 32 YOOX GROUP 3.2.3 Services designed to provide an innovative and exclusive shopping experience The YOOX Group is home to a real culture of innovation that manifests itself in many different ways and permeates every corporate division – from technology, web design and user experience to logistics, marketing and sales – to offer our clients and partner brands an innovative shopping experience with impeccable service. One of the most significant examples of the Group’s technological innovation in 2012 is the recent launch of the “NEW yoox.com”. The site has a totally new look, not only in MONTHLY AVERAGE NUMBER OF UNIQUE terms of graphics, browsing and structure, but also thanks to VISITORS FOR THE MULTI-BRAND BUSINESS LINE the introduction of major new functions and content. 5.7 million The release is totally new, not only in terms of graphics, browsing and the structure of the website, but also through the introduction of significant functions and content, guaranteeing a completely new shopping experience. Specifically, the new yoox.com introduces advanced instant searches, which allow you to find what you want easily and quickly, and ‘Speak & Shop™’, a LOVIE AWARDS: Silver Award for Retail / revolutionary function in online fashion, introduced for the Shopping and Bronze Award for Lifestyle first time by YOOX Group and developed from the convergence of voice recognition and text-based searches. yoox.com won the Silver award in the The millions of visitors to yoox.com can search for their Retail/Shopping category and the Bronze award in favourite outfit, shoes, accessories or design objects by the Lifestyle category at the 2012 Lovie Awards, a major European awards scheme that recognises simply clicking or writing their favourite colour of the season, excellence and innovation on the internet. or by using the feature ‘Speak & Shop™’, which allows them to state their preferred colour in any one of nine languages. The NEW yoox.com The design of the NEW yoox.com was based on the essential criteria of immediacy and user-friendliness with a view to achieving a balance between technology and design, driven by strong innovation and careful attention to users’ desires. It was initially designed for browsing on tablets and later adapted for desktop computers, in line with the Group’s strategy to fully leverage the trend of sharp growth from mobile channels (smartphones and tablets) and to provide its customers with the best service at any time of day, on any device. The YOOX Group has always researched and developed new and innovative solutions for online product presentation. It was one of the pioneers of the interactive shopping experience, giving customers the chance to buy or reserve a selection of debut items directly from catwalk videos. YOOX now offers this method of shopping through special collaborations with its brands and partners on yoox.com, the corner.com and its many mono-brand online stores. WEB MARKETING ASSOCIATION Outstanding Website The WebAwards, the prestigious international competition held by the Web Marketing Association, named thecorner.com Outstanding Website 2012 in the Fashion category. The site beat more than 2,000 competitors from 42 countries. Multi-channel shopping and social media In line with consumers’ growing preference for multi-channel shopping, YOOX is always keen to incorporate innovative and revolutionary technological solutions into its services. The YOOX Group has been working with mobile channels since 2006 and was one of the very first to offer shopping via the iPhone, launching its first yoox.com app in 2009, before releasing its iPad app on the same day that the iPad was officially launched in the US. The need to offer customers the possibility to choose which device they prefer to use for shopping has prompted YOOX to develop increasingly advanced and complex mobile solutions. The Group has been working hard on such solutions over the last 12 months, developing eight new mobile sites for its multi-brand and mono-brand online stores and optimising the browsability and user-friendliness of all its other online stores for use via tablets. December 2012 saw a number of changes introduced to the native mobile apps for iPhone and Android, which can be downloaded directly from the Apple App Store and Google Play respectively: The new YOOX.COM app for iPhone and Android includes the revolutionary “Speak & Shop™” function, introduced for mobile devices for the first time following the success of the launch on the desktop version of yoox.com. Thanks to this innovation, users can search for their favourite clothes, accessories, 2012 SUSTAINABILITY REPORT | 33 YOOX GROUP shoes and home furnishings simply by saying out loud their preferred colour. The new YOOX.COM app displays a unique selection of fashion and design products in the user’s preselected colour. Another new feature introduced last year is the SHOESCRIBE.COM app for iPhone and Android. In line with the innovative concept of the online destination, the app offers customers a 360° shopping experience, including unique services dedicated to the world of footwear that they can use directly from their phone. Not only can users buy shoes whatever the time of day and wherever they are, they can also photograph and catalogue their shoes using the “My Shoe Closet” section of the app. Thanks to its continuing investment in researching and developing new mobile solutions, the Group has seen an increase in traffic from smartphones and tablets. All the “Powered by YOOX Group” online stores are currently accessible and fully optimised for mobile devices. In light of the continuing rise of multi-channel shopping and the increasing importance of social media as a way of interacting with its customers, in the last few years YOOX has worked on defining and implementing a specific social-media strategy, which is aimed at increasing both brand awareness and customer satisfaction and acquisition. By taking advantage of the specific features of the various social media and defining different approaches for each of them, in the last year YOOX has seen a considerable increase in traffic from the main social-networking platforms. The “Powered by YOOX Group” multi-brand online stores are currently present on all the main socialmedia sites, such as Facebook, Twitter, Pinterest, Google+, Instagram, YouTube and Tumblr. Always keen to tailor its customer relations to each of its local markets, the Group is also active on Chinese social networks such as Douban and Weibo. shoescribe.com: outstanding customer service shoescribe.com, the online store dedicated entirely to women’s shoes that was launched by the YOOX Group in March 2012, is unique in offering an exclusive customer service that is fully focused on footwear. Customers can not only receive suggestions on taking care of their purchases from the Shoe Valet section, but also have the chance to print labels featuring a photo of their shoes or buy premium stackable shoeboxes to help them organise their wardrobe. The site’s other unique features include the Shoescribe Programme subscription scheme, which offers extra benefits such as the chance to receive an exclusive shoe care kit, free delivery for a whole year, free repairs, a dedicated customer care service and a range of other advantages, including the “Cinderella day”, which offers customers the chance to buy a pair of shoes at half price on their birthday. LOVIE AWARDS: Gold Award for Fashion and Beauty shoescribe.com won the Gold award in the Fashion and Beauty category at the 2012 Lovie Awards, a major European awards scheme that recognises excellence and innovation on the Internet. 2012 SUSTAINABILITY REPORT | 34 YOOX GROUP 3.2.4 Focus on the customer in the shopping process The YOOX Group is committed to offering its customers extremely high-quality service and pays close attention to all stages of the shopping experience, from online product presentation and purchasing to packaging and delivery. The Group focuses in particular on guaranteeing customers an excellent shopping experience wherever they are, offering a fully localised service in the different markets in which it operates. The service it offers differs from country to country in terms of: language used for web content; payment systems; sizing conventions; currency; language used for customer care; couriers and delivery services; ad hoc services for some specific markets (e.g. the “butler service” in China). An exclusive service for the Chinese market In order to provide the best possible shopping experience, YOOX offers its Chinese customers a fully localised premium service, which includes fast, reliable deliveries to more than 400 towns and cities in China through FedEx, free returns with the exclusive “butler service” (the courier waits while the customer tries on their purchases in case any items need to be returned), localised site content, customer care in Chinese via e-mail and telephone, size conversions, prices in yuan, secure payments via cash on delivery or using various local payment systems (such as Alipay), and anti-fraud microchip tagging using the latest radio-frequency identification (RFID) tracking technology to guarantee the authenticity of every product. YOOX’s customer service YOOX provides its customers with a tracking service for despatch and returns and, if required, a dedicated customer care service for handling any problems during delivery. The customer care service is organised on two levels: the first level is outsourced via external contact centres coordinated by YOOX; the second level is managed by YOOX operators, who have access to the internal systems and resources and can therefore provide a better and faster solution to complex issues (e.g. logistics, payments). As well as intervening directly in the order management and returns process, second-level operators can change the solutions or methods of handling the various problems relating to any operational area. Customers can contact YOOX in the following ways: e-mail: customers can complete an online form, which generates an e-mail to the customer care team of the relevant store (available on all sites); telephone: customers can call the customer care team. In order to guarantee a high level of service for its end customers, YOOX places a special emphasis on training its customer care centre operators, providing them with targeted training courses. Transaction security and data protection YOOX is committed to using state-of-the-art security systems and standards to guarantee the security of transactions carried out on its sites and to protect its customers’ data. The Company complies fully with the personal data protection regulations in force and uses cutting-edge technology and coding systems for purchases made via its online stores. In order to protect the confidentiality, integrity and availability of information on its customers, employees and partners, in 2011 YOOX launched a project aimed at creating an information security management system (ISMS) based on the ISO/IEC 27001 standard. This framework aims to guarantee a high level of security through the introduction of a formal information risk analysis process based on internationally recognised methods. The risk analysis allows the Information Risk Committee established as part of the framework to carry out quarterly assessments of information risks and take any necessary preventive measures. The system was designed to incorporate and satisfy all regulatory requirements concerning information that are applicable to the Company, whilst also maximising security by sharing the technological solutions and techniques adopted. 2012 SUSTAINABILITY REPORT | 35 YOOX GROUP The entire framework is based on a cyclical approach aimed at continual improvement, in order to guarantee a high level of efficiency and ensure that the Company continues to meet the security challenges facing all modern information systems. Order processing and returns Order processing is particularly significant in guaranteeing a high level of customer service and forms an important part of customer relations. YOOX therefore places a great deal of PERCENTAGE OF ORDERS DELIVERED emphasis on innovation, with a view to ensuring efficient internal WITHIN SCHEDULED DELIVERY TIMES operations, timely deliveries and environmental protection. 99% Aiming to continually improve the service it offers its customers and fuel its future growth, in late 2010 the YOOX Group embarked upon a major project to automate its techno-logistics platform, which became fully operational in September 2011. The project was successfully completed at the end of February 2013. In addition to considerably improving internal operating efficiency, the new automated platform improved the order handling process thanks to automated picking, which not only made it possible to manage peak demand during the Christmas period very efficiently, but also enabled the punctuality of deliveries to end customers to reach record levels. The project was also developed within an eco-sustainable framework, in line with YOOX policies. All the containers used in the plant are made from recycled material and are 100% recyclable, while the technology used allows a considerable energy saving compared with the traditional process. In addition to the protection afforded to consumers by legislation in force in EU countries, the procedure for returning goods is based on the type of products sold and the Group’s sales policies, which emphasise the possibility and the ease with which customers can return goods they have purchased. The returns management phase includes receiving products at the Group’s logistics centres and effecting refunds to end customers. All YOOX websites have a specific area dedicated to returns, which gives clear, detailed instructions on the applicable terms and conditions and on how to return a purchase. 3.2.5 Communication and marketing The YOOX Group’s marketing activities in 2012 focused on three main aspects: acquiring new customers, increasing the retention rate of customers acquired through customer relationship management (CRM) and direct marketing operations, and increasing brand awareness. In order to acquire new customers, campaigns in the major performance areas were optimised, with a particular focus on search engine marketing (SEM) activities (the acquisition of sponsored links on the main search engines), network affiliation management, price comparison websites and behavioural targeting. Direct marketing operations aimed at increasing the profitability of customers acquired were expanded (with a strong focus on purchasing frequency); these operations were implemented mainly by sending dedicated, highly targeted communications to different types of customers. Activities were also pursued regarding the purchase of online advertising space on websites devoted to fashion and online versions of the main daily newspapers worldwide, the negotiation and implementation of new marketing agreements, and the development of new partnerships in general. In 2012, the Group designed and promoted web campaigns that allowed the Multi-brand business segment to reach about 40 thousand sites in more than 50 countries. Around 258 million newsletters, translated into the languages managed by the Group, were sent to subscribed users for the Multi-brand segment. In its management of web marketing investments on behalf of strategic partners of the Mono-brand business segment, the Group is offering support and consulting services to online stores, especially in the fields of SEM management, affiliation marketing and display advertising campaigns. The Branding & Communication team oversaw the development and promotion of a number of special projects on yoox.com, thecorner.com and shoescribe.com, and also participated in the online stores’ communication activities, in close collaboration with the press offices of the respective brands. 2012 SUSTAINABILITY REPORT | 36 YOOX GROUP 3.3 Partners 3.3.1 Managing relationships with mono-brand online store Partners Since 2006, YOOX Group designs and manages mono-brand online stores for fashion brands looking to offer their latest collection on the Internet. NUMBER OF MONO-BRAND ONLINE STORES 33 YOOX Group provides brands with its unique experience and infrastructure to create an online store that delivers great results in terms of sales and transforms shopping into a true brand experience. YOOX Group offers its brand-partners a complete solution including: An effective team of Internet Retailing professionals with full command of e-commerce dynamics and an extensive knowledge of fashion and its means of communications A customized technology platform that has been handling millions of orders annually for over a decade A logistics system designed specifically for fashion merchandise, with hubs in three continents and delivery to over 100 countries A complete mobile offering Premium customer care service A unique combination of creative skills, web usability and user interface design for the planning and design of online flagship stores Unique competences in web & social media marketing on a global level, thanks to an international team handling everything from search engine marketing to social network acquisition campaigns YOOX pays special attention to managing relations with its partners in order to develop stable, long-term relationships based on trust and the sharing of specific experience and competencies. The constant attention to its partners’ needs is one of the distinctive aspects of YOOX’s online store management. Partner relationships are managed in line with YOOX’s Code of Conduct. With a view to constantly engaging in dialogue and sharing experiences, YOOX held several meetings with its partners during the year in order to assess the results of their online stores in comparison with industry benchmarks and to propose strategies aimed at improving the online performance. Community support through online social initiatives A number of dedicated initiatives launched by mono-brand online stores aim to provide social support to the wider community: • • Marni at H&M: a range of eight unique hats in parallel with the launch of the Marni for H&M collection, the proceeds of which supported the Vimala Association. Maison Martin Margiela AIDS T-Shirt: an annual collection of T-shirts, with part of the proceeds being donated to AIDES France. 2012 SUSTAINABILITY REPORT | 37 YOOX GROUP 3.4 Suppliers 3.4.1 Sustainability of Supplier relationships YOOX has spent time developing stable supplier relationships aimed at creating and sharing value. It therefore plays a key role in fostering a culture of sustainability, paying close attention to social and environmental aspects of relationships with its suppliers. The values and principles adopted across the entire Company are also applied to the management of relations with all stakeholders, namely suppliers and, more generally, all parties involved in any part of the supply chain. What YOOX expects from its suppliers In managing relations with its suppliers, YOOX pays particular attention to the following aspects: • the quality of the supplies; • the ethical conduct of the supplier in carrying out its activities; • its compliance with workplace health and safety practices. YOOX is committed to guaranteeing compliance with highquality standards in relation to the supply of goods and the provision of services by its partners, basing this commitment on trust and mutual respect. It has adopted an approach to supplier relations management that is based on the following Group-wide commitments: to act with transparency, probity, integrity and fairness in the contractual relationship; to ensure impartiality in the selection of suppliers; to promote a focus on good sustainability practices; to comply with the agreed payment terms and procedures. YOOX also expects its suppliers to conduct themselves in an ethical manner. It therefore asks that its suppliers, as part of the agreements entered into by both parties, sign its Code of Conduct, which sets out its corporate values. The Group’s supply contracts also contain specific clauses that provide for compliance with the rules and principles set out in the organisational, management and control model pursuant to Legislative Decree 231/2001. Furthermore, buyers are required to sign an affidavit letter, which specifically commits them to complying with the regulations, the Code of Conduct and the procedures that the Company has adopted for managing commercial relations with its suppliers. The process of selecting suppliers and defining conditions of procurement is based on the criteria of legality, competition, objectivity, probity, impartiality, fair pricing, and quality of goods and/or services. Aspects such as suppliers’ service guarantees and the respectability and legitimacy of suppliers’ operations are also assessed, in keeping with legislation on the prevention of money laundering and receiving stolen goods. More generally, before establishing a supply relationship, YOOX obtains commercial information and references that allow it to carry out a preliminary analysis on the supplier in question. Its attention to the topic of sustainability, with a particular focus on the environment, has led it to define a series of specific agreements aimed at promoting the use of recyclable packaging materials for its deliveries. For more information, please see the section on environmental performance. 3.4.2 Attention to quality Attention to quality is extremely important to YOOX. For that reason, it uses procurement processes that are both economical and compliant with specific criteria relating to quality, originality, authenticity and saleability. Thanks to its long-standing direct relationships with designers, manufacturers and authorised retailers, the YOOX Group is able to offer its online store customers a selection of authentic, high-quality products. Before going on sale, all products are subject to rigorous checks by a team of experts to ensure that they meet the Group’s high quality standards. In fact, YOOX has developed a specific set of Group-wide guidelines to be used for product quality checks. These guidelines set out the methods and criteria to adopt and the specific aspects to be assessed when carrying out checks on the various product types. Once they have successfully undergone these strict checks, the items are security tagged to protect them against attempted counterfeiting. 2012 SUSTAINABILITY REPORT | 38 YOOX GROUP 3.5 Shareholders and Lenders 3.5.1 Protection of Shareholders and the financial community In the context of Italian listed companies, which are often YOOX STANDS OUT AS A TRULY PUBLIC characterised by the presence of a dominant shareholder or a COMPANY WITH A WIDESPREAD controlling family, YOOX Group is a rare example of truly public SHAREHOLDER BASE AND A FREE FLOAT OF company in Italy. In light of this distinctive feature, the Group AROUND 76% recognises the financial community as an extremely important stakeholder and therefore strives to engage in constant, positive dialogue through its top management and its Investor Relations division, which was established even before the Group’ stock market debut. Shareholder composition The Group’s ownership structure is characterised by a widespread shareholder base. With a free float of around 76% at 31 December 2012, YOOX ranked first in 2012 among the companies in the FTSE Italia Mid Cap Index, excluding the financial and insurance sector. 2010 As at 31 December 2012, the Company’s share capital was Euro 573,127.88, Total number of shares 57,312,788 53,074,112 51,763,556 represented by 57,312,788 ordinary shares Number of treasury shares 130,662 162,000 62,000 with no indication of nominal value, including 130,662 treasury shares. Over 46% of the share capital was held by 10 major shareholders, which directly or indirectly held a stake of 2% or more each, while the remaining 53.7% was held by other institutional investors and private shareholders. Number of shares 2012 2011 Breakdown of shareholder structure by investor type 100% Based on an analysis carried out as at 29 June 20127, the Group’s shareholder structure is also characterised by a strong presence of institutional investors, which hold more than 60% of the share capital, with a significant component of international investors. In terms of geographic breakdown of institutional investors, the US and UK represent the first and the second countries by origin, while Italian institutional investors represent less than 5% of the total. Key shareholders 26.8% 80% 60% Institutional investors 62.2% 40% 20% 0% Treasury shares 0.3% Retail investors 10.7% Breakdown of institutional shareholders by geographical market8 Italy 4.8% Rest of Europe 12.7% RoW 1.6% Italy 4.8% USA 43.7% UK 37.2% International 95.2% Source: Georgeson, Intelligence sugli Assetti Proprietari del Gruppo YOOX [Information on the YOOX Group’s Ownership Structure] (June 2012). 7 8 Source: Georgeson, Intelligence sugli Assetti Proprietari del Gruppo YOOX [Information on the YOOX Group’s Ownership Structure] (June 2012). The shareholder structure analysis was based on the deposit certificates submitted for the purpose of attending the YOOX S.p.A. Shareholders’ Meeting held on 29 June 2012 and corresponding to 72.045% of the share capital. The remainder of the share capital, which was not represented at the Shareholders’ Meeting, was estimated based on the average figures recorded for Companies with a similar market capitalisation and ownership structure. For the purposes of analysing the shareholder geographic breakdown, the 62.2% of the share capital held by institutional investors was analysed. As at the publication date, no shareholder agreements are in place between Federico Marchetti, Balderton Capital, Red Circle S.r.l. Unipersonale and Red Circle Investments S.r.l., which are referred to as “Key shareholders”. Excluding Balderton Capital. 2012 SUSTAINABILITY REPORT | 39 YOOX GROUP Share performance The initial public offering (IPO) of shares of YOOX S.p.A. (ISIN no. IT0003540470) was successfully completed in December 2009. The Company’s shares were first listed on the STAR segment of Borsa Italiana on 3 December 2009, and on 20 September 2010 YOOX joined the FTSE Italia Mid Cap index, which comprises the country’s 60 largest companies by market capitalisation and liquidity outside the FTSE MIB index. Share and stock exchange data 2012 Closing price at year end (€) 11.92 Highest closing price (€) 12.58 Lowest closing price (€) Market capitalisation at year end (€ million) 7.32 683.2 Data: closing price at year end and market capitalisation at year end as at 28 December 2012; the highest closing price refers to 26 March 2012, while the lowest closing price refers to 6 January 2012. On 28 December 2012, the last trading day of the year, YOOX shares closed at Euro 11.92. During the course of the year, the Group’s share price varied between a low of Euro 7.32 and a high of Euro 12.58, and recorded growth of 42.9% compared with the closing price on 30 December 2011 (the last trading day of that year), outperforming all the benchmark indices (the FTSE MIB, FTSE Italia STAR, FTSE Italia Mid Cap and luxury9 and e-commerce10 sector indices). YOOX share performance compared with the main benchmark indices in 2012 160 150 42.9% 42.0% 140 31.8% 130 120 16.6% 110 7.8% 100 -0.4% 90 80 70 28/12/12 7/12/12 21/11/12 2/11/12 Italy FTSE Mid Cap 16/10/12 28/9/12 7/9/12 FTSE MIB 22/8/12 3/8/12 Luxury index 17/7/12 29/6/12 8/6/12 E-commerce index 23/5/12 4/5/12 17/4/12 30/3/12 9/3/12 22/2/12 3/2/12 17/1/12 30/12/11 YOOX S.p.A. Italy FTSE STAR Source: Factset. Reference period: 30 December 2011 – 28 December 2012. Furthermore, between its stock market debut on 3 December 2009 and 28 December 2012, YOOX saw its share price rise by 177.2% compared with its IPO price (Euro 4.3) and largely outperform the Italian FTSE MIB, FTSE Italia STAR and FTSE Italia Mid Cap indices, as well as the benchmark indices in the e-commerce and luxury sectors. As further proof of the success of its IPO, YOOX continues to be the best performer among all the companies on the FTSE Italia STAR index in terms of share performance since its public debut on the Milan stock exchange11 (+155.8%). 9 10 11 The luxury sector index includes LVMH, PPR, Compagnie Financière Richemont, Hermès, Brunello Cucinelli, Prada, Ferragamo, Tod’s, Geox, Poltrona Frau, Luxottica and Safilo. The e-commerce sector index includes ASOS, Amazon, Blue Nile, eBay and Start Today. Reference period: 3 December 2009 – 28 December 2012. Source: Factset (for the stock market data) and Borsa Italiana (for the composition of the indices). 2012 SUSTAINABILITY REPORT | 40 YOOX GROUP YOOX share performance compared with the main benchmark indices since IPO 300 275 155.8% 250 225 109.7% 200 91.9% 175 150 125 100 -1.6% 75 -28.2% -28.0% -28.0% -28.2% 0 50 28/12/12 1/11/12 6/9/12 12/7/12 17/5/12 Italy FTSE Mid Cap 22/3/12 26/1/12 1/12/11 FTSE MIB 6/10/11 Luxury index 11/8/11 16/6/11 21/4/11 E-commerce index 24/2/11 30/12/10 4/11/10 9/9/10 15/7/10 20/5/10 25/3/10 28/1/10 3/12/09 YOOX S.p.A. Italy FTSE STAR Source: Factset. Reference period: 3 December 2009 – 28 December 2012. Relations with the financial community Through its Investor Relations division, the YOOX Group maintains a constant dialogue with the financial community YOOX’S FINANCIAL COMMUNICATION IS (sell-side analysts, buy-side analysts, shareholders and fund BASED ON THE PRINCIPLES OF TIMELINESS, TRANSPARENCY AND EQUAL ACCESS TO managers) based on the principles of transparency, INFORMATION timeliness, accuracy and equal access to information, with a view to providing all stakeholders with the tools they need to become familiar with the Company and properly understand its business and strategy. Since its IPO, through the participation in conferences and dedicated roadshows, the Investor Relations division has been committed both to consolidating the relationships with investors met during the pre-listing roadshow in Milan, London, New York, Boston, Paris, Frankfurt and Geneva and to promoting the Group’s equity story in new financial markets such as Edinburgh, Stockholm, Copenhagen, Madrid, Vienna, Zurich and Dublin. Periodically during the year, the team is also involved in announcing the Group’s quarterly results to the market and organising dedicated conference calls following meetings of the Board of Directors to approve the Group’s results. In addition to the publication of the quarterly results, 2012 saw the announcement of several significant business developments, such as the launch of shoescribe.com, the new multi-brand online store dedicated entirely to women’s shoes, and the creation of a joint venture with PPR S.A. dedicated to managing the monobrand online stores of several Group’s luxury brands (Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Stella McCartney and Sergio Rossi). Proving that dialogue with the financial community is of strategic importance to YOOX, its Founder and Chief Executive Officer and its Chief Financial Officer are always present alongside the Investor Relations division during the conference calls with analysts and institutional investors that are held upon publication of the quarterly results. 2012 SUSTAINABILITY REPORT | 41 YOOX GROUP Analyst coverage Since the IPO, the Investor Relations division has YOOX confirmed in Goldman Sachs Conviction Buy List been committed to increasing the number of analysts that follow the YOOX stock, which, despite the major In March 2013, Goldman Sachs confirmed YOOX shares restructuring processes occurred in the banking in their Pan-Europe Conviction Buy List for the 24th sector in recent years, still has wide analyst consecutive month. coverage consisting of 11 domestic and international brokers. In particular, in addition to the global coordinators for the IPO, Goldman Sachs International and Mediobanca, the analyst coverage at 13 March 2013 included Equita, Intermonte, Gruppo24Ore, Bank of America Merrill Lynch, Centrobanca, Deutsche Bank, Citi, Cheuvreux and N+1 Singer. Fidentiis also began to cover the stock in early 2012, but has not yet issued a rating. Over 120 reports, previews and updates were published on YOOX’s stock during 2012. At the end of the year, the majority of the analysts (64%) had a positive recommendation on the stock, and the average target price was Euro 12.7. Finally, it is worth mentioning that Goldman Sachs confirmed YOOX in their Pan-Europe Conviction Buy List for the 24th consecutive month. 2012 2011 2010 Italian (no.) 5 5 5 International (no.) 6 7 4 11 12 9 positive negative 7 4 6 4 5 0 neutral 0 2 4 min. 9.0 8.5 7.2 max. 21.5 16.8 11.5 average 12.7 11.7 8.9 Analyst coverage Recommendations (no.) Target price (€) Dividend policy The YOOX Group believes that investing in the consolidation and innovation of its multi-channel technology and global logistics platform is essential to achieve its goal of affirming its leadership position in its sector in the coming years. The Group has therefore decided, since its IPO, to reinvest its cash to improve and consolidate its position, and believes that the return for shareholders under this policy will be considerably higher than what they would receive if dividends were distributed. Moreover, in the current macroeconomic environment, in which access to credit can be difficult and costly, the Company believes it is prudent and in the interests of all stakeholders to maintain the flexibility of using its cash and cash equivalents to finance business operations or other investment projects. Indicators 2012 2011 2010 Earnings per share (€) 0.18 0.19 0.18 Price-to-earnings ratio 67.09x 44.26x 54.62x 2012 SUSTAINABILITY REPORT | 42 YOOX GROUP Communication activities with the financial community The Group’s communication activities with the financial community begin each year with the publication of its financial calendar in January. This enables the community to know well in advance the dates of the Group’s major events, such as the Shareholders’ Meeting, the publication of financial results, its main roadshows and the conferences that it plans to attend. YOOX roadshows In order to raise awareness of the YOOX Group and promote its equity story among new potential investors, YOOX intends to add new financial centres to its list of roadshow destinations. The Group held roadshows in Dublin, Vienna and Zurich for the first time in 2012, while Milan, London, New York, Boston, Paris, Geneva and Frankfurt are already well established markets. The Investor Relations division promptly makes all significant information and documentation available to the market, in compliance with the division’s core principles of transparency, timeliness and accuracy, the laws and regulations on the disclosure of privileged information, the procedures for the disclosure of confidential information, the Consob procedures for the disclosure of pricesensitive information and the regulations on internal dealing. All communications are then published in real time on the “Investor Relations” section of the Group’s website in order to guarantee easy access to important corporate information and prevent information asymmetry. The Group also holds dedicated conference calls with analysts and institutional investors following the Board of Directors’ meetings held to approve the financial statements and interim results as at 31 March, 30 June and 30 September. The details of these conference calls are subsequently published in a press release. Each year, the Company organises and participates in a number of conferences, roadshows and meetings, which As part of its relations with the financial community in 2012, YOOX attended: are often attended by YOOX’s Founder and Chief the Star Conference organised by Borsa Italiana Executive Officer and other members of the top in Milan, for the third consecutive year; management, such as the Chief Financial Officer, General the Deutsche Bank Global Consumer and Luxury Manager and Chief Operating Officer. In 2012, the Conference in Paris and the Bank of America Company increased the number of meetings and Merrill Lynch Global Consumer & Retail roadshows it organised, both in Italy and abroad, with Conference in London, for the second consecutive an increasing top management involvement: YOOX year. visited new financial centres, including Dublin, Zurich and Vienna, and attended traditional conferences such as the STAR Conference organised by Borsa Italiana in Milan, the Deutsche Bank Global Consumer and Luxury Conference in Paris and the Bank of America Merrill Lynch Global Consumer & Retail Conference in London. The Group also ensures constant dialogue with buy-side and sell-side analysts thanks to the large number of conference calls, one-to-one and group meetings organised at its offices in Milan and Bologna, as well as thanks to the daily availability of the Investor Relations division via e-mail and telephone. Contacts with the financial community Conference calls on quarterly results International conferences Roadshows of which: in Italy internationally Individual and group meetings Conference calls and meetings with analysts Conference calls with investors NB: data on contact numbers have been rounded off. 2012 SUSTAINABILITY REPORT | 43 2012 2011 Number No of contacts 4 175 2010 Number No of contacts Number No of contacts 4 160 4 130 6 160 5 110 7 130 14 220 10 150 6 95 4 65 4 45 2 40 10 155 6 105 4 55 30 35 30 80 95 65 65 60 40 YOOX GROUP The YOOX Group counted more than 1,800 contacts over the last three years, of which 700 contacts in 2012 alone. 100% 24% 31% 28% 52% 42% 45% 24% 27% 27% 80% 60% 40% 20% 0% 2012 Conference call quarterly results 2011 Roadshows & conferences 2010 Meetings and calls with analysts & investors 3.5.2 Relations with Lenders The Group aims to maintain appropriate levels of liquidity and available funds to sustain the growth of the business and ensure the timely fulfillment of its obligations. Its financial-management policy involves an appropriate balance between investing capital and borrowing, with a view to guaranteeing sustainable development in both the short and the medium-to-long term. Rather than being concentrated within one specific lender, its committed and uncommitted credit lines are distributed among the main Italian and foreign banks that the Group deals with on a daily basis, testifying to its good relations with the banking sector. Due to the dynamic nature of the business in which it operates, the Group adopts a flexible approach by using revolving credit lines that are indexed to Euribor and give YOOX the possibility to repay individual drawdowns, thereby restoring its available cash. On the other hand, medium- and long-term investments in intangible and tangible assets are financed by dedicated fixed-rate credit lines, in order to prevent interest rate risk. YOOX ended 2012 with a positive net financial position of Euro 14.6 million and liquidity of Euro 35.7 million. 2012 SUSTAINABILITY REPORT | 44 YOOX GROUP 3.6 The community, the local area and Government Authorities 3.6.1 YOOX and its relations with the community YOOX is committed to establishing positive relations with the area in which it operates by gaining an understanding of the needs of its various stakeholders so that it can engage in proactive, transparent dialogue. It is extremely important to YOOX to share its growth with the region and the community in which operates. For this reason, the Company adopts an approach based on respect and probity in its dealings with the community, and supports solid initiatives and projects aimed at: supporting endangered communities and victims of natural disasters, sustaining the local area and promoting artistic and cultural heritage; promoting ethical fashion initiatives that benefit emerging economies; researching, promoting and supporting emerging brands around the world as part of YOOX’s on-going commitment to developing new talent in the fashion industry, both in Italy and abroad; supporting communities in difficulty by creating special communication sales and projects in collaboration with international not-for-profit organisations. Over the years, YOOX has been committed to supporting social initiatives, selecting projects based on their compliance with its corporate values and objectives and taking into account criteria such as quality and social value. When choosing initiatives intended to benefit the community, YOOX also takes into consideration its knowledge of the partner organisations in question, so as to ensure that the project will be carried out professionally. Below is a list of initiatives in which the Group is involved, broken down into each area in which it is active: Supporting endangered communities and victims of natural disasters, sustaining the local area and promoting artistic and cultural heritage Art at yoox.com and Francesco Vezzoli for FAI In support of the areas affected by the earthquake in the EmiliaRomagna region, yoox.com teamed up with Francesco Vezzoli, one of Italy’s most internationally renowned contemporary artists, to produce a limited-edition work that was sold exclusively on yoox.com in December 2012. The entire proceeds of the sale were donated to FAI (the Italian Environment Fund) to go towards rebuilding the town hall of Finale Emilia, which was damaged in the earthquake. This project is particularly important to YOOX, since it is keen to support and promote the artistic heritage of the Emilia-Romagna region, where its headquarters are based. The piece, entitled CON AMORE, FRANCESCO VEZZOLI (FRANCESCO BY FRANCESCO), is the first multiple-copy work that the artist has produced, issued in 399 editions, all numbered and signed, which were sold exclusively on yoox.com for Euro 399 each. CON AMORE, FRANCESCO VEZZOLI (FRANCESCO BY FRANCESCO) for FAI, exclusively for art at yoox.com . 2012 SUSTAINABILITY REPORT | 45 YOOX GROUP yoox.com, Naomi Campbell and Fashion for Relief in support of Care for Children In November 2012, yoox.com, Naomi Campbell and Fashion for Relief teamed up with some of the biggest names in fashion to create a capsule collection of T-shirts inspired by China, with the proceeds going to support the collaboration between Fashion for Relief and Care for Children. Six T-shirts, six designers and one theme: China. Internationally renowned brands and Chinese designers including 3.1 Phillip Lim, Dolce & Gabbana, Masha Ma, Moschino, Qiu Hao and Fashion for Relief joined forces to create six special T-shirts for sale exclusively on yoox.com, with the proceeds going to Care for Children, an Asia-focused not-for-profit organisation that places abandoned children and orphans with local families, in close collaboration with the Chinese government. Care for Children has found homes for over 200,000 children over the last 10 years. Naomi Campbell and Fashion for Relief, exclusively for yoox.com. Credits: Gisela Torres. The World (and Wardrobe) of Margherita Maccapani Missoni on yoox.com for OrphanAid Africa In November 2012, yoox.com presented its fourth initiative in collaboration with OrphanAid Africa: a collection of over 70 vintage items, including daywear, evening wear and accessories, selected from the personal wardrobe of Margherita Maccapani Missoni. All proceeds from the sale of the items will be donated to OrphanAid Africa, a not-for-profit organisation that specialises in helping abandoned children from orphanages to settle in safe family environments, preventing the abandonment of children and protecting children’s rights in Africa. Promoting ethical fashion initiatives that benefit emerging economies Discovered in Africa by Vogue Italia In May 2012, in collaboration with Vogue Italia, yoox.com presented an ethical fashion initiative to promote and develop “Made in Africa” fashion, dedicating a special area of its website to a selection of collections by 10 African designers: Kofi Ansah (Ghana), Lemlem (an Ethiopian label founded by model Liya Kebede), Tiffany Amber (Nigeria), Sabahar (Ethiopia), Koshie O. (Ghana), Braghetterosse (Ethiopia), Lanre Da Silva Ajayi (Nigeria), Crea (Kenya), Le Collane di Betta (Kenya) and Global Mamas (Ghana). Thanks to yoox.com’s presence in more than 100 countries, these talented Africans and their collections have been able to reach a global audience. 2012 SUSTAINABILITY REPORT | 46 YOOX GROUP Researching, promoting and supporting emerging brands around the world as part of YOOX’s ongoing commitment to developing new talent in the fashion industry, both in Italy and abroad Providing support to young designers in the industry is one of YOOX’s core values, and this is backed up by a number of initiatives focused on talents from around the world. Who is on Next? Who is on Next?/Uomo Proving its commitment to supporting young talent in the world of fashion, yoox.com has been the online retail and media partner of five editions of the Who is on Next? competition and of Who is on Next?/Uomo (its menswear equivalent) since 2012. These prestigious competitions, created and organised by Alta Roma and Vogue Italia, aim to find new Italian or Italian-based talents in the fashion industry, providing the best possible launchpad for young stylists and offering scouts the chance to spot the fashion designers of the future. Every year, yoox.com awards a YOOX prize to one of the finalists and offers the winner the chance to present an online preview of his/her creations, making them available for yoox.com’s global audience to view and to buy. Through this initiative, yoox.com aims to use its global reach and international communication network to showcase creative innovation and up-and-coming businesses in fashion, a global industry that is full of homegrown Italian talent. In the 2012 Who is on Next? competition, yoox.com awarded its prize to the Suzanne Susceptible brand. In September 2012, to coincide with Milan Fashion Week, Soo Jung Cha, the South Korean designer behind the brand, presented an exclusive preview of a selection of Spring/Summer 2013 items on yoox.com and designed a cocktail dress especially for the occasion, which was available exclusively on the website. For the 2012 Who is on Next?/Uomo competition, which was created and organised by Pitti Uomo in collaboration with Alta Roma and L’Uomo Vogue, yoox.com chose to award its prize to Andrea Cammarosano. The young designer presented a selection of pieces from his Spring/Summer 2013 collection on yoox.com in September, together with three items that he had created exclusively for the website. The Vogue Talents Corner thecorner.com also launches a number of initiatives each year dedicated to the discovery and promotion of emerging designers from around the world via the Vogue Talents Corner, in partnership with Vogue. Combining their respective expertise in e-commerce and publishing, thecorner.com and Vogue launch wide-ranging and innovative scouting projects to discover new talents. At the second edition of the project, in February 2012, 11 designers from around the world, handpicked by Vogue Italia and thecorner.com, showed their clothing, accessories and jewellery collections in a special slot at Milan Fashion Week. The designers and labels featured in the project were: AI by Andrea Incontri, Pedro Lourenço, Leitmotiv (designed by Fabio Sasso and Juan Caro), Benedetta Bruzziches, C.B. Made in Italy (designed by Cecilia Bringheli), Mungo Gurney, Vernissage (designed by Ilenia Corti and Matteo Mena), Joanne Stoker, Shourouk (designed by Shourouk Rhaiem), Hexa by Kuho (designed by Kuho Jung) and Ricostru (designed by Riko Manchit Au). The show, which was open to everyone, gave all the guests at Fashion Week the chance to view and buy the designers’ creations in real time via a dedicated area of thecorner.com. The event was extremely successful and high profile thanks to the attendance of thousands of guests, including journalists, designers, celebrities and fashion industry insiders from around the world. thecorner.com, in collaboration with Vogue China, also presented the Vogue Talents Corner in China for the second consecutive year, showcasing the work and creativity of two young Chinese designers, Masha Ma and Qiu Hao. An ultra-exclusive event dedicated to the project took place on 30 October 2012, attended not only by famous guests from the Chinese fashion scene, but also by a number of international celebrities and other personalities. For the second year running, thecorner.com – in its capacity as the online retail partner of the prestigious CFDA/Vogue Fashion Fund initiative, sponsored by the Council of Fashion Designers of America and Vogue America – presented an area dedicated to the 10 American designers chosen as finalists for the project, giving shoppers a chance to buy a selection of items in an exclusive preview. ANDAM Fashion Award In another of the Group’s initiatives aimed at promoting and supporting young talent within the fashion industry, thecorner.com is the exclusive online retail partner of the famous ANDAM Fashion Award, dedicating a special area to the finalists (Julien David, Vika Gazinskaya, Cédric Charlier, Calla Haynes, Thomas Tait and Nicolas Andreas Taralis), where their creations can be viewed and purchased. Thanks to thecorner.com’s global shop window, these young designers have the opportunity to make a name for themselves and reach an international audience. 2012 SUSTAINABILITY REPORT | 47 YOOX GROUP Media relations Over 8,000 articles dedicated to the YOOX Group appeared in the Italian and international offline and online media last year, equivalent to an average of 22 articles per day. This significant exposure has been cultivated thanks to the press office’s constant engagement with the media. In addition to making daily contact with and supporting the media, last year the YOOX Group issued over 70 press releases (both in Italy and abroad) and organised three events and nine press days. The Group also provides news and comments of a financial nature, along with any details requested by journalists. 3.6.2 Relations with organisations, institutions and associations in the industry YOOX promotes dialogue with various organisations and institutions, with a view to establishing positive relations that will help to support the growth of its business and of the wider sector in which it operates. The Group monitors regulatory developments, so as to guarantee full compliance, and is committed to correctly managing its relations with government authorities. It also pays special attention to analysing important issues concerning the fashion and e-commerce sectors, including by participating in working groups and round tables organised by the main industry associations. In this respect, the action YOOX takes through both internal initiatives and external collaborations to raise awareness about socio-environmental issues in the fashion industry is particularly important. Managing relations with government authorities YOOX is committed to guaranteeing the utmost integrity and probity in the management of its relations with government authorities, always complying with applicable legislation and regulations. In keeping with the principles of the Group’s Code of Conduct and in compliance with the law – a prerequisite for the Company to play a positive role in society – YOOX conducts its relationships with government authorities with the utmost honesty, transparency and probity. Both in Italy and abroad, YOOX adheres to the values of democracy and political pluralism, and condemns any form of support or tolerance of terrorism in all its manifestations or any form of subversion of the democratic order. The Group conducts its relationships with public officials in compliance with the applicable regulations and with the provisions of the Code of Conduct and the organisational, management and control model pursuant to Legislative Decree 231/2001, and on the basis of the mandates set forth by the Board of Directors. YOOX at the round table for sustainable fashion Confirming its commitment to environmental sustainability, as expressed via the YOOXYGEN initiative since 2009, yoox.com teamed up with the National Chamber for Italian Fashion to write the “Manifesto for Sustainability in Italian Fashion”. The manifesto was developed both under the scope of the work of the “Ecology and Environment” Commission, overseen by the National Chamber for Italian Fashion Vice President Anna Zegna, and through the efforts of a specific round table that brought together various representatives of the fashion industry, including yoox.com as the sole retailer and only online player. The manifesto aims to pave the way for sustainability in Italian fashion by identifying the global challenges to sustainability and setting out a series of wide-reaching guidelines that any company in the sector can adopt in a competitive context in which environmental and social factors play a fundamental role. It takes into account the entire value chain in the sector and is based on 10 key points, ranging from design, choice of raw materials and the manufacturing process (which is the focus of special attention) to supporting the country’s economy and innovation. The manifesto also covers distribution, marketing, corporate ethics and, finally, communication and education both within the industry and with regard to consumers. Key points of the “Manifesto for Sustainability in Italian Fashion” The manifesto takes into account the entire value chain in the sector and is based on the following points: 1. DESIGN. Design quality products that can last for a long time and can minimize their impact on ecosystems; 2. THE CHOICE OF RAW MATERIALS. Use raw materials, materials and fabrics with a high environmental and social value; 3. PROCESSING OF RAW MATERIALS AND PRODUCTION: reduce the environmental and social impacts of activities and acknowledge everyone’s contribution to the product value; 4. DISTRIBUTION, MARKETING AND SALES: Include criteria of sustainability throughout the journey of your product towards the customer; 5. MANAGEMENT SYSTEMS: Committed to continuous improvement in company performance; 6. FASHION AND THE NATIONAL ECONOMIC SYSTEM: Support your territory and “Made in Italy” products; 7. BUSINESS ETHICS: Integrate universal values into your brand; 8. TRASPARENCY: Communicate to stakeholders your commitment to sustainability in a transparent way; 9. EDUCATION: Promote ethics and sustainability with consumers and all other stakeholders; 10. Make the Manifesto come alive. 2012 SUSTAINABILITY REPORT | 48 YOOX GROUP The manifesto came into being because the entire Italian fashion industry came together to write it. The round table that devised the document was made up of major textiles and clothing companies, research centres, universities, retailers and industry associations. Contributors included Salvatore Ferragamo, Gucci, Ermenegildo Zegna, Simonetta, Limonta, Taroni, yoox.com, Material ConneXion, the Politecnico di Milano technical university, Bocconi University, Avanzi and Sistema Moda Italia (an industry federation). The manifesto therefore represents a unique project, in that it includes every aspect of the fashion industry and fosters a sense of solidarity and belonging under the “Made in Italy” banner. The manifesto was approved by the Board of Directors of the National Chamber for Italian Fashion on 13 June 2012 and has been adopted by all the Chamber’s members, including the major fashion houses that show their collections at the Milano Moda Donna event, and by Sistema Moda Italia, which, together with the Chamber, represents the entire fashion and textiles industry. To further celebrate this significant “solidarity and unity” in the fashion industry, on 19 September 2012, at the beginning of Fashion Week, Milan’s Piazza del Duomo hosted an artistic performance by Michelangelo Pistoletto that used the artist’s “The Third Paradise” symbol to present the Italian fashion Manifesto for Sustainability to the assembled crowd. yoox.com supports the Italian fashion Manifesto for Sustainability by using exclusive web content and videos to help spread its message throughout the world. The limited-edition iconic t-shirt dedicated to the manifesto and signed by Michelangelo Pistoletto can be purchased exclusively at yoox.com, from the eco-friendly YOOXYGEN section. The entire proceeds of sales of the t-shirt will be donated to Cittadellarte, a not-for-profit foundation. 2012 SUSTAINABILITY REPORT | 49 YOOX GROUP 4. ENVIRONMENTAL PERFORMANCE 4.1 YOOX and the environment YOOX has chosen to embark on a path of environmental responsibility in the form of YOOXYGEN, a permanent eco-friendly initiative launched on Earth Day 2009 with the aim of raising awareness about the environment among both its internal and its external audience. YOOXYGEN’s approach to environmental responsibility involves various initiatives implemented across the entire Group, with a view to minimising its environmental impact. YOOX shows its commitment to protecting the environment by constantly monitoring the direct and indirect environmental impact of its activities. The various projects and initiatives launched over the years have helped to foster a culture of preventive environmental-risk analysis and proactive management within the Company, with an emphasis on continual improvement. The company supports the logic of “sustainable fashion” by promoting among fashion industry players the concept of innovative eco-friendly fashion. YOOX takes the challenges caused by climate change into consideration when planning its general corporate strategy. It is therefore important to develop a policy for identifying clear, shared targets for improvement and implementing specific actions. YOOX’s commitments to the environment YOOX has identified a series of commitments to the environment, with a view to constantly improving its performance and fostering an eco-friendly culture within the Company. These commitments are: to manage its activities in such a way as to minimise its environmental impact; to take environmental risks into consideration when making corporate decisions; to improve internal eco-efficiency; to raise employees’ awareness in order to strengthen the culture of sustainability; to promote the development and dissemination of eco-friendly projects and products; to raise customers’ awareness regarding the choice of eco-friendly products. As proof of its desire to adopt a structured approach to environmental management, YOOX, having already obtained OHSAS 18001 certification for occupational health and safety management, is now aiming to achieve the ISO 14001 standard. Its environment and safety policy, which defines the Group’s approach to environmental issues and forms the basis for its planned integrated environment and occupational health and safety management system, is currently awaiting approval. More specifically, the policy is based on the identification of the express and implicit needs of internal and external stakeholders with regard to the environment and safety, and is the starting point for the definition of specific, measurable targets for improvement. The Group thus plans to continually improve its environmental performance, particularly with regard to aspects such as reducing energy consumption, increasing the percentage of separated waste collected and adopting mobility management policies. In order to cement the Company’s commitment to these factors, management will use annual review sessions to assess achievement of the targets set each year and adjust these targets if necessary. YOOX’s approach to environmental issues can be seen through the launch of projects that go beyond mere compliance with rules to promote the development of sustainable business practices. In order to ensure that the entire Group is focused on achieving its environmental goals, it is important to promote the involvement of YOOX’s employees. The promotion and sharing of good practices is the first step in the process of helping the Group to improve its environmental performance. To this end, as part of the YOOXYGEN initiative, YOOX has drawn up an eco-sustainable conduct manual for the promotion of ecofriendly practices among employees, particularly with regard to five broad areas: paper, water, energy, waste and mobility. YOOX also respects and protects the environment by identifying specific measures aimed at energy efficiency, reducing consumption and thereby reducing its environmental impact, using energy sustainably, reducing the impact of transportation, using low-consumption lighting systems and computer components, and using renewable energy sources. 2012 SUSTAINABILITY REPORT | 50 YOOX GROUP 4.2 Management and use of resources 4.2.1 Energy consumption and atmospheric emissions Energy efficiency is one of the most important aspects of environmental-impact management. YOOX is committed to seeking tools and solutions aimed at monitoring energy consumption, with a view to improving its energy efficiency. Electricity consumption by source - kWh 3,688,301 3,100,000 100% 20% 80% Renewable sources Non-renewable sources 2011 2012 YOOX’s offices are responsible for the Group’s electricity consumption (direct energy consumption). Following the expansion of its premises and the growth in business volumes, consumption increased in 2012, due in particular to the energy expenditure of the automated techno-logistics platform, though this was still considerably lower than the consumption of a traditional logistics structure with the same capacity. In fact, all the actions carried out at the Group’s offices and on the automated techno-logistics platform over the last few years have been designed to save energy. Automated logistics platform by the YOOX Group at the Interporto logistics centre in Bologna – Credits: Toby Smith Reportage by Getty Images. 2012 SUSTAINABILITY REPORT | 51 YOOX GROUP Confirming the attention the Company pays to reducing the environmental impact of its activities, as of 2012, 20% of the total electricity it consumes comes from renewable sources. This renewable electricity is procured via a green-energy contract with Lifegate, a supplier certified under the renewable-energy certificate system (RECS). The Company intends to further increase the percentage of renewable energy it uses as part of its wider policy to respect the environment. It has also installed a 6 kWp photovoltaic facility at its Zola Predosa headquarters for the production of energy and hot water for the Company’s use. The Group’s direct energy consumption concerns a single energy source, natural gas, which is used exclusively for heating its offices. For YOOX, paying attention to environmental issues has also involved identifying eco-friendly employee mobility solutions. All of the Group’s company cars are hybrid vehicles, which enables it to reduce fuel consumption and atmospheric emissions. It is impossible at the moment to provide precise data on the company cars’ consumption, since there is no specific monitoring system in place. However, based on a calculation of the number of kilometres covered by the cars, we can estimate that they emitted over 72 tonnes of CO₂ in 2012 due to petrol consumption alone. Over the coming years, YOOX plans to define a more structured system for monitoring its environmental performance, so that it can set targets for improvement and continually reduce the impact of its activities. The Group’s ISO 14001 environmental certification, which it is expected to receive in 2013, will further contribute to achieving this goal. The tables below list data relating to the Group’s direct and indirect energy consumption and emissions. Direct energy consumption (m3) 2012 2011 47,892 56,159 2012 2011 Consumption for electricity and heating Natural gas NB: These data are estimated and refer to YOOX S.p.A., excluding the Milan, Madrid and Paris offices. Indirect energy consumption (kWh) Electricity purchased 3,688,301 3,100,000 of which: from renewable sources from non-renewable sources 752,444 - 2,935,857 - 2012 2011 CO₂ 101 CO₂ 118 72.43 56.49 - 14.21 173.43 188.7 NB: These data are estimated and refer to YOOX S.p.A., excluding the Milan office. Total direct emissions (t) Consumption for electricity and heating Natural gas For driving Petrol Diesel fuel TOTAL NB: These data are estimated based on direct energy consumption. A coefficient of 2.1 kg CO2/m3 was used to calculate CO2 emissions from natural gas (Source: Carbon Trust). Emissions from driving were calculated using the coefficients given by the manufacturers of the company cars. Total indirect emissions (t) 2012 2011 CO₂ CO₂ Electricity purchased from third parties 1,483 1,246 NB: These data are estimated based on indirect energy consumption. A coefficient of 402 g CO2/kWh was used to calculate CO2 emissions from electricity (the emission factor used was that which was published by Terna in the document “2010 international comparisons”; source: Enerdata). 2012 SUSTAINABILITY REPORT | 52 YOOX GROUP 4.2.2 Purchasing and consumption of paper YOOX has carried out a number of activities to promote respect for the environment through economical use of raw materials. Cardboard consumption for deliveries represents a significant part of the Group’s total paper and cardboard consumption, and is directly linked to sales volumes. In light of the environmental impact of its deliveries to end customers and in order to further spread the message of sustainability promoted by its YOOXYGEN initiative, since 2009 the YOOX Group has used a new packaging system known as the “ecobox”. YOOX is also keen to ensure that the paper used at its operational sites does not contribute to deforestation. To that end, for all internal uses and in-house materials, it uses paper produced using cellulose from certified forests, which means that they are managed properly and responsibly in accordance with strict environmental, social and economic standards. The ECOBOX for deliveries The YOOX Group has always used recyclable materials for its packaging, which has borne the RESY symbol since 2009. With a view to further improving environmental sustainability, yoox.com, thecorner.com and shoescribe.com now make deliveries worldwide using specially designed packaging YOOXYGEN Ecobox. known as the “ecobox”, which is internationally certified by RESY, FSC, PEFC and SFI. The box and all packaging materials are made using cellulose, produced in compliance with eco-friendly criteria. Consumption of paper and cardboard (kg) 2012 A4 paper 7,151 A3 paper 83 Cardboard for deliveries 878,000 Total 885,234 NB: • These data are estimated and refer to YOOX S.p.A., excluding the Madrid and Paris offices. • The data relating to cardboard for deliveries were estimated based on the number of boxes used for deliveries (including, where applicable, shopping bags and delivery notes) to customers of multi-brand online stores yoox.com, shoescribe.com and thecorner.com and of the mono-brand stores (excluding the Marni and Diesel stores), as well as for deliveries to peripheral warehouses (in the US, Japan and Hong Kong). • Of the total A4 and A3 paper consumed, 82% is FSC certified, while 18% is PEFC certified. 19% of the paper consumed bears the Ecolabel symbol. 4.2.3 Water consumption Most of the Group’s water comes from the mains supply. There are no water sources from which it makes significant withdrawals. The Group’s water consumption is mainly used for hygiene and sanitation purposes and for operational needs. YOOX is committed to fostering good water consumption practices among its employees so as to prevent waste and gradually reduce consumption. Consumption of water (m³) 2012 Water for ordinary consumption 2,486 NB: These data are estimated and refer to YOOX S.p.A., excluding the Milan, Madrid and Paris offices. 4.2.4 Waste YOOX’s desire to continually improve its environmental performance is also reflected in its waste management policy. The Group is committed to complying with the provisions of law on waste management and takes a proactive approach to encouraging its employees to adopt good practices. Thanks to the daily contribution of its employees, YOOX separates the waste generated at its premises into paper, plastic and all the other categories listed in the table below, in order to reduce the quantity of waste sent to landfills and make it easier to set aside waste that can be recovered. The paper bins throughout the Company’s premises are equipped with a padlock and a slot for the proper disposal of sheets of paper, with the aim of not only recycling the paper, but also preserving data confidentiality and destroying documents in a secure manner. 2012 SUSTAINABILITY REPORT | 53 YOOX GROUP The Company has also launched a programme aimed at reusing electronic devices for educational purposes once all data archiving components have been removed. Type of waste (kg) Paper and paper/cardboard packaging Plastic Electronic devices 2012 2011 236,120 228,770 4,170 27,660 418 - 66,290 60,620 Other 320,440 241,930 Total waste produced 627,438 558,980 Wooden packaging NB: • These data refer to waste for which private waste disposal providers are used. They do not include waste that is managed through local, municipally owned companies. • The waste produced is classified under European Waste Catalogue code R13 (storage of waste pending any of the operations numbered R1 to R12). • “Other” refers mainly to packaging made of mixed materials, and partly to building materials generated by the restructuring of the Bologna logistics centre. 2012 SUSTAINABILITY REPORT | 54 YOOX GROUP 4.3 Environmental policy and sustainable conduct As part of its YOOXYGEN initiative, the YOOX Group has begun to develop and implement eco-sustainable procedures by promoting the idea of sustainable development via the eco-sustainable conduct manual, a set of guidelines that aims to promote and disseminate among all employees a series of good environmental practices that can be adopted on a daily basis to save energy and resources. The manual tells employees how to adopt “responsible conduct in the office” with regard to five broad areas (paper, water, energy, waste and mobility), so as to help the environment through small gestures. The YOOX Group has also decided to minimise travel by introducing tele-information services (e.g. videoconferences, web meetings). In cases where travel is necessary, this is arranged through a car-sharing programme for employees. Under this scheme, the use of a shared car may be booked in advance, resulting in savings in consumption and emissions. Choosing the best method of transport plays an important role in maintaining an ecological and eco-friendly lifestyle. For these reasons, YOOX encourages employees to use the train where travel is essential in order to optimise costs and adopt environmentally responsible conduct. The choice of the Company’s fleet of cars, which are all hybrid vehicles, was also made with environmental policy in mind. 4.3.1 The environmental impact of mobility One of the aims of YOOX’s environmental policy is to promote the adoption of good sustainability practices with regard to employee mobility, with a view to reducing fuel consumption and cutting greenhouse gas emissions. In addition to the car-sharing programme, employees can also use a shuttle service that runs between the YOOX site at Zola Predosa and the Bologna Central station at the beginning and the end of the working day. In 2012, YOOX employees covered more than 302 thousand km using their personal cars for company business, generating emissions totalling 71 tonnes of CO₂ equivalent12. The train journeys made by staff for work purposes in 2012 generated a total of 14 tonnes of CO₂ equivalent13. The largest part of the Group’s environmental impact in relation to mobility is attributable to the transportation activities involved in delivering items to locations around the world, which is its core business. YOOX has not yet implemented a monitoring system that can provide an accurate report on the emissions generated by these activities. However, the Group uses leading delivery management companies that pay close attention to environmental issues when carrying out their activities. The indirect environmental impact associated with mobility also includes the impact of collecting goods from storage. YOOX outsources these activities to a company whose vehicles mainly comply with either the Euro 4 or the Euro 5 emissions standard. Over 1.2 million kilometres were covered in 2012 when collecting goods from storage. It is not currently possible to provide a reliable estimate of the CO₂ emissions this generated. 12 13 Estimated data relating to YOOX S.p.A. – average emission factor of diesel and petrol; source: “2012 Guidelines to Defra/DECC’s GHG Conversion Factors for Company Reporting”. Estimated data relating to YOOX S.p.A., excluding the Madrid and Paris offices – international rail (Eurostar) emission factor, “2012 Guidelines to Defra/DECC’s GHG Conversion Factors for Company Reporting”. 2012 SUSTAINABILITY REPORT | 55 YOOX GROUP 4.4 YOOXYGEN: paving the way for environmental responsibility Having always promoted high-quality fashion, it was only natural that the YOOX Group would choose to focus on environmental responsibility by launching the eco-friendly initiative YOOXYGEN in 2009, a project which has developed over time to become one of its core company policies. Eco-commerce: the area dedicated to eco-sustainable fashion and design At the heart of the YOOXYGEN initiative is “Eco-commerce”, a dedicated space on ECOMMERCE AWARDS FOR EXCELLENCE 2012 Green eRetailer of the Year yoox.com promoting eco-friendly fashion and design through a selection of eco-friendly YOOXYGEN, the eco-friendly initiative launched by yoox.com, was fashion, design, jewellery, books and music, received with the Green e-Retailer of the Year Award at the as well as special features and exclusive video eCommerce Awards for Excellence 2012. content. “Eco-commerce” is also a showcase for the exclusive limited edition collections Partnership with Green Cross International created by the numerous designers working with YOOXYGEN. YOOXYGEN is an active partner of a number of not-for-profit The YOOXYGEN range is classified using the organisations and institutions that focus on environmental issues, eco-criteria defined by Eco Fashion World, including Green Cross International (GCI), UNEP (the United based on the most significant characteristic of Nations Environment Programme) and Estethica, a sustainableeach individual product (Ethically produced, fashion initiative promoted by the British Fashion Council. Fair Trade, Organic, Craft-Artisan, Custom, Recycled, Vegan). Since its launch in 2009, YOOXYGEN has been a supporter of GCI, an NGO founded by former Soviet leader Mikhail Gorbachev The project has been a resounding success, that implements environmental- and humanitarian-support achieving strong growth in terms of both initiatives in 31 countries around the world. turnover and the number of participating brands, which totalled 117 in 2012. The main Since 2010, YOOXYGEN has supported GCI’s “Smart Water for geographical areas involved in the initiative Green Schools” project, which aims to establish systems for are Italy, the US, Germany, Russia and rainwater collection, ecological-rehabilitation equipment and France. The number of stock-keeping units environmental awareness in schools located in cross-border water managed in 2012 was 1,300, up by 63% basins. Initially launched with a pilot project in the Volta basin in compared with the previous year. Ghana, the scheme has now been expanded to include 22 YOOXYGEN’s special projects The various special projects launched by YOOXYGEN aim to raise awareness of ecosustainable fashion. These projects are one of YOOXYGEN’s distinctive features and testify to the Company’s commitment to raising awareness about ethical conduct within both its sector and the fashion industry in general. The main projects launched in recent years are described below. communities in Ghana and 16 in Bolivia, providing safe drinking water to over 40,000 people. Some of the project’s most significant results to date are: a reduction in diseases linked to contaminated water; the training of local communities in informed, safe and sustainable use of water resources; an increase in levels of female literacy, education and gender equality. YOOXYGEN supports the organisation’s activities not only by donating the proceeds of its various projects, but also by raising the visibility of GCI’s development programmes on climate change and making them accessible to yoox.com’s vast audience, through video interviews, special content and links to the GCI website. ESTETHICA: since 2010, YOOXYGEN has been the retail partner of Estethica, the British Fashion Council initiative that is at the heart of eco-sustainable fashion at London Fashion Week, offering support to a range of emerging designers committed to ethical fashion. EDUN LIVE: since 2009, YOOXYGEN has been a partner of EDUN (the eco brand founded by Ali Hewson and her husband Bono in 2005) via the EDUN LIVE ever.green series, a range of limited-edition T-shirts designed by celebrities chosen because of their passion for eco-awareness, such as Angela Lindvall, Elettra Wiedemann, Summer Rayne Oakes and Skye Edwards of Morcheeba. The T-shirts, made of organic cotton, are manufactured entirely in Africa by EDUN LIVE, with all proceeds donated to Green Cross International. FROM SOMEWHERE with SPEEDO: in 2011, YOOXYGEN launched a brand-new upcycling project featuring award-winning ethical-fashion brand From Somewhere and Speedo, the world’s leading maker of swimwear. The eco-friendly capsule collection From Somewhere with Speedo, manufactured using excess material and fabric from the revolutionary Speedo LZR Racer swimsuit, was available exclusively at yoox.com, with all proceeds from the sale of three of the items donated to Green Cross International. 2012 SUSTAINABILITY REPORT | 56 YOOX GROUP VIVIENNE WESTWOOD ETHICAL FASHION AFRICA: in 2011, YOOXYGEN supported the Ethical Fashion Africa Project launched by Vivienne Westwood in partnership with the International Trade Centre (ITC), a joint agency of the United Nations (UN) and the World Trade Organisation (WTO). The Ethical Fashion Africa capsule collection of handbags and accessories, designed by Vivienne Westwood and available exclusively online at yoox.com, was 100% handmade by local artisans in Kenya as part of a programme run by the ITC to support the work of marginalised women in African communities, enabling them to become part of the global economy. The ITC thus promotes the growth of sustainable businesses that do not create dependency on international aid, instead generating organic growth within local communities. yoox.com held a dedicated event in partnership with Pitti Immagine in 2011 to showcase the project. Photo by Juergen Teller for the Ethical Fashion Africa Project by Vivienne Westwood, in partnership with the International Trade Centre and YOOXYGEN. Earth Day 2012 celebrations As every year, YOOXYGEN celebrated Earth Day 2012 (which also happened to be its third birthday) with a series of new eco-sustainable partnerships and projects. ECO-AGE.COM BY LIVIA FIRTH: Since Spring/Summer 2012, YOOXYGEN has hosted an eco-age.com shop in shop, which offers a selection of new and innovative products from the world of eco-sustainable fashion and lifestyle. All items have been selected personally by Livia Firth, an icon of green fashion who has been lauded for bringing her ecosustainable style to the red carpet. GREENUP: YOOXYGEN supports GreenUp, the United Nations Environment Programme (UNEP) initiative that aims to raise awareness and change habits among Europe’s citizens by bringing the topic of sustainable economics and development to their doorstep. With the slogan “Buy a Tree-Shirt, Plant a Tree!”, the GreenUp by Vivienne Westwood project uses the proceeds from the sale of a collection of T-shirts, designed by Vivienne Westwood and available exclusively at yoox.com, to support reforestation in Europe. Launched in 2011, the project was promoted again on Earth Day 2012 with a special message from supermodel Gisele Bündchen, in her role as UN Goodwill Ambassador for the Environment. Livia Firth for YOOXYGEN. Photograph by Karel Losenicky. ECO-STYLE GUIDE BY ABOVE MAGAZINE: With the aim of drawing attention to sustainability and raising awareness among its users, YOOXYGEN is due to bring out a special eco style guide published by Above, the US quarterly magazine dedicated to using luxury, fashion, art and design to raise awareness of environmental issues. 2012 SUSTAINABILITY REPORT | 57 YOOX GROUP OBJECTIVES FOR IMPROVEMENT The objectives for improvement that the Group has set itself in the short-to-medium term are set out below: AREA/PERSONS INVOLVED Employees Customers Partners Shareholders and Lenders Environment and safety Stakeholder engagement OBJECTIVE Improve knowledge management and corporate-climate evaluation processes 2013-2014 Develop flexible working models (e.g. teleworking) for employees, particularly with regard to working mothers with dependent children 2013-2014 Introduce a new customer satisfaction system and new KPI measures 2013-2014 Share customer analyses on an annual basis and plan CRM activities 2013 Organise Analyst and Investor Days at the headquarters in Zola Predosa and at its logistics platform at Interporto (Bologna, Italy) 2013 Visit new financial centres based on accurate investor targeting activities 2013 Expand the analyst coverage Obtain ISO 14001 certification 2013 Increase use of electricity from renewable sources 2013-2014 Launch specific projects to monitor paper consumption 2013 Review the environment and safety policy 2013 Hold dialogue with stakeholders to identify their expectations and implement measures for improvement 2013-2014 2012 SUSTAINABILITY REPORT | 58 YOOX GROUP INDEX OF GRI G3 INDICATORS Below is an index of the indicators provided for under the GRI G3 Guidelines, to make it easier to find information in this document. Each indicator is accompanied by a brief description of its content and of the extent to which it is covered, together with a reference to the relevant page number in the Sustainability Report or to other documents. Key: Total: total coverage – all the information required pursuant to the indicator is provided. Partial: partial coverage – part of the information required pursuant to the indicator is provided. None: the indicator is not covered. Not relevant: the information required pursuant to the indicator is not applicable to the YOOX Group due to the nature of its activities and/or its geographical location. Indicator Type Description of indicator Coverage Page/Direct remark PROFILE 1 Strategy and analysis 1.1 Core Statement from the Chairman and the Chief Executive Officer Total 4 1.2 Core Key impacts, risks, and opportunities Total 11-12, 50; Annual Report 2012 (p.76) 2 Organizational profile 2.1 Core Name of the organization Total 5 2.2 Core Primary brands, products and/or services Total 7-8, 33-34 2.3 Core Operational structure Total 7-8 2.4 Core Location of the organization’s headquarters Total 7-8 2.5 Core Countries where the organization operates Total 7-8 2.6 Core Nature of ownership and legal form Total Annual Report 2012 (p.14) 2.7 Core Markets served Total 7-9, 32 2.8 Core Scale of the reporting organization Total 3, 8, 19-20, 39 2.9 Core Significant changes Total 9; Annual Report 2012 (p. 84-85) 2.10 Core Awards received Total 33-34, 56 3 Report parameters Report profile 3.1 Core Reporting period Total 5-6 3.2 Core Date of publication of previous report Total 5-6 3.3 Core Reporting cycle Total 5-6 3.4 Core Contacts and addresses for questions on the report Total Back cover Objective and scope of the report 3.5 Core Process for defining report content Total 5-6 3.6 Core Scope of the report Total 5-6 3.7 Core Limitations on the scope of the report Total 5-6 3.8 Core Information about affiliated companies Total 5-6 3.9 Core Data measurement techniques and bases of calculation Total 5-6 3.10 Core Restatements of information of previous reports Total 5-6 3.11 Core Significant changes from previous reports Total 5-6 3.12 Core GRI Index Total 59-62 3.13 Core External assurance Total 63-64 4 Governance, Commitments, Engagement 4.1 Core Governance structure Total 4.2 Core Indicate whether the Chairman is also an executive officer Total 2012 SUSTAINABILITY REPORT | 59 15-16; Annual Report 2012 (p. 1721; 29) 15-18; Annual Report 2012 (p. 2628) YOOX GROUP Indicator Type Description of indicator Coverage Page/Direct remark PROFILE 4.3 Core Independent and non-executive Directors Total Mechanisms for shareholders and employees to provide Total recommendations to the highest governance body Linkage between compensation for Directors and top management Total and performance 18; Annual Report 2012 (p. 20) 4.4 Core 4.5 Core 4.6 Core Conflicts of interest Total 4.7 Core Qualifications of Directors Total 4.8 Core Mission, values, codes of conduct and principles Total 10, 50 In order to monitor annually the social and environmental performances achieved, the Sustainability Report is presented to the Board of Directors 30, 39; Annual Report 2012 (p. 46) 26-27; Annual Report 2012 (p. 3032) 16-17; Annual Report 2012 (p. 4042) The professional resumes of all Directors are available on the website of the Company at www.yooxgroup.com, at the section “Corporate Governance”; Annual Report 2012 (pag. 17-19) 4.9 Core Procedures to identify and manage economic, environmental and social performance Total 4.10 Core Process for evaluating the Board’s performance Total Annual Report 2012 (p. 25-26) Total 29, 50; Annual Report 2012 (p. 3440) 4.11 Core Method for applying the precautionary principle approach 4.12 Core Adoption of external economic, social and environmental codes and Total principles 48 4.13 Core Memberships in associations Total 48 4.14 Core List of stakeholders engaged by the organization Total 13-14 4.15 Core Basis for identification of stakeholders with whom to engage Total 13-14 4.16 Core Approaches to stakeholder engagement Total 6, 30, 32, 58 Core Key topics and concerns raised through stakeholder engagement and actions taken Total 6, 30, 32, 58 Disclosure on management approach Total 19-20; Annual Report 2012 (p. 5359) 4.17 ECONOMIC PERFORMANCE DMA EC EC1 Core Economic value directly generated and distributed Total 21 EC2 Core Risks and opportunities due to climate change Total 12, 50, 55-56 EC3 Core Coverage of benefit plan obligations Total Annual Report 2012 (p. 141-142) EC4 Core Substantial financing received from the public administration None - EC6 Core Policy, practices and proportion of spending on locally-based suppliers None - EC7 Core Procedures for local hiring Total 26 EC8 Core Development of investments provided for public benefit Partial 21, 45-46, 56-57 Disclosure on management approach Total 12, 50 ENVIRONMENTAL PERFORMANCE DMA EN EN1 Core Raw materials used Total 53 EN2 Core Materials recycled None - EN3 Core Direct energy consumption by source Total 51-52 EN4 Core Indirect energy consumption by source Total 51-52 EN8 Core Water withdrawal by source Total 53 EN9 Additional Water sources significantly affected by withdrawal of water Total 53 EN11 Core Land in protected areas or areas with high biodiversity EN12 Core Description of significant impacts on biodiversity The Company does not own, or plans to own, lease or manage operational sites in, or adjacent to, Total protected areas and areas of high biodiversity value outside protected areas. Considering the activities undertaken by Yoox, no significant Not relevant impacts on biodiversity have been detected. 2012 SUSTAINABILITY REPORT | 60 YOOX GROUP Indicator Type Description of indicator Coverage Page/Direct remark PROFILE EN16 Core Direct and indirect greenhouse gas emissions Total 52 EN17 Core Other relevant indirect greenhouse gas emissions Partial 52, 55 EN19 Core Emissions of ozone-depleting substances EN20 Core Other air emissions EN21 Core Effluents discharge EN22 Core Waste production and disposal methods Total 53-54 EN23 Core Total number and volume of polluting spills Total No spills have occurred. A specific procedure on spills management is in place at Yoox S.p.A. premises of Interporto. EN26 Core Partial 53, 56 EN27 Core None - EN28 Core Initiatives to mitigate environmental impacts of products and services Percentage of products sold and packaging materials reused or recycled To date no ozone-depleting substances have been detected. Considering the activities Not relevant undertaken by Yoox we did not record any significant emissions. Water discharges are integrated to Not relevant residential sewage systems. Total Fines for non-compliance with environmental laws and regulations Total No fines or sanctions for non compliance with environmental laws and regulations have occurred. SOCIAL PERFORMANCE DMA LA Disclosure on management approach Total 12, 22 LA1 Core Breakdown of workforce by employment type, contract and region Total 24-25 LA2 Core Turnover by age group, gender and region Partial 25-26 LA4 Core Collective bargaining agreements coverage Partial 30 LA5 Core Minimum notice period for operational changes Partial In case of significant operational changes, the Group considers the minimum advance notice required by the legislation of the Countries where the Company operates. LA7 Core Injuries and occupational diseases Total 29 LA8 Core Training programs concerning prevention and risk control to assist Total employees regarding serious disorders or illnesses 29; Health and Safety training programs are exclusively addressed to employees. LA10 Core Employee training 28 LA11 LA13 LA14 Total Programs for skills management and lifelong learning for Additional Partial employees Breakdown of employees by gender and other indicators of diversity Core Partial (e.g. disability) Ratio of the base salary of male employees to female employees in Core Total the same category 28 18, 23-24, 26 27 HUMAN RIGHTS DMA HR Disclosure on management approach Total 12, 22, 38 Core Transactions that have undergone human rights screening None - HR2 Core Suppliers and contractors who have undergone human rights screening Partial 17, 37-38; Code of Conduct (p. 14) HR4 Core Discrimination accidents and actions undertaken Total HR5 Core Activities in the course of which freedom of association and the right Total to collective bargaining might be exposed to risks HR6 Core Operations involving a high risk of the use of child labour HR1 2012 SUSTAINABILITY REPORT | 61 Total In 2012 no discrimination accidents occurred. Based on the activities undertaken by Yoox and its presence on the territory, no activities have been undertaken for which freedom of association and the right to collective bargaining have been exposed to risks. Based on the activities undertaken by Yoox and its presence on the territory, no operations have been undertaken for which a high risk of the use of child labour occurs. YOOX GROUP Indicator Type Description of indicator Coverage Page/Direct remark PROFILE HR7 Core Total Based on the activities undertaken by Yoox and its presence on the territory, no operations have been undertaken for which a high risk of the use of forced labour occurs. Disclosure on management approach Total 45, 48 Operations involving a high risk of the use of forced labour IMPACTS ON SOCIETY DMA SO SO1 Core Management of impacts on the community None - SO2 Core Monitoring the risk of corruption Total 16-17 SO3 Core Employees trained in preventing corruption crimes Total 17, 28 SO4 Core Actions taken in response to cases of corruption Total In 2012 no cases of corruption occurred. SO5 Core Positions on public policy and lobbying Total 48-49 SO6 Total value of financial and in-kind contributions to political parties, Additional Partial politicians, and related institutions by country SO8 Core Fines and non-cash penalties for failure to comply with laws and regulations Code of Conduct (p. 14) Total In 2012 the Group did not receive significant sanctions for non compliance with laws and regulations. Total 32-36 Partial 35, 38 Partial 35, 38 None - PRODUCT RESPONSIBILITY DMA PR Disclosure on management approach Health and safety assessment on products and services life cycle stages Information requested for the procedures and services subject to such disclosure requirements Programs to comply with laws and voluntary codes on marketing activities PR1 Core PR3 Core PR6 Core PR8 Additional Complaints regarding breaches of privacy Total PR9 Core Total Fines for non-compliance with laws and regulations In 2012 the Group did not receive formalized complaints related to breaches of privacy. In 2012 the Group did not receive significant sanctions for non compliance with laws and regulations related to the supply or use of products and services. 2012 SUSTAINABILITY REPORT | 62 YOOX GROUP INDEPENDENT AUDITORS’ REPORT ON THE SUSTAINABILITY REPORT 2012 SUSTAINABILITY REPORT | 63 YOOX GROUP 2012 SUSTAINABILITY REPORT | 64 For further information and details: Ivan Dompé Financial and Corporate Communication Director T +39 02 83112811 pressoffice@yoox.com Printed on FSC (Forest Stewardship Council) Mixed Sources certified paper Printed by: Servif RR Donnelley – Milan Silvia Scagnelli Head of Investor Relations T +39 02 83112811 investor.relations@yoox.com