Westwing Group Se · XETR:WEW
Westwing — FY2023 Earnings Presentation
49 slides from Westwing's earnings presentation, Mar 28, 2024
Slide 1: FY 2023 Results
FY 2023 Results Munich, 28 March, 2024 Copyright © 2023 Westwing. All rights reserved.
Slide 2: Disclaimer | Forward looking statements
Disclaimer | Forward looking statements Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made and are subject to significant risks and uncertainties. You should not re
Slide 3: Agenda
Agenda 01 Business update 02 Financial update 03 Path to full value potential 04 Financial outlook 05 Investment highlights 06 Q&A 07 Appendix 3
Slide 4: 1. Business update
1. Business update 4
Slide 5: Key achievements in FY 2023
Key achievements in FY 2023 We delivered strong financial results. • Stable topline vs. 2022 in a shrinking market with EUR 481m GMV (EUR 429m Revenue), in upper half of guidance. • Adjusted EBITDA of EUR 18m, in upper half of updated (increased) guidance, and Free Cash Flow of EUR 30m in FY 2023. W
Slide 6: We delivered on our 2023 topline promise
EUR 481m GMV in FY 2023 We delivered on our 2023 topline promise +4% GMV per Active Customer 1.3m Active Customers for FY 2023, growth in H2 versus H1 2023 Note: All figures unaudited. 6
Slide 7: We clearly outperformed the market in our largest geography
We clearly outperformed the market in our largest geography Year-over-year sales growth [in %] (2) German Online Home & Living market(1) DACH FY 2023 -10% -3% Q4 2023 -6% +2% Note: All figures unaudited. (1) Based on Bundesverband E-Commerce und Versandhandel data. (2) Based on DACH GMV. Austria and
Slide 8: We delivered on our promised Adjusted EBITDA profitability
We delivered on our promised Adjusted EBITDA profitability… Adjusted Adjusted EBITDA EBITDA margin [in EURm] [as % of +22.0 +5.1% Revenue] 17.8 4.1% -4.2 -1.0% FY’22 FY’23 FY’22 FY’23 Note: Figures in this section are presented on an adjusted basis. For details regarding the exact definition of the
Slide 9: We strengthened our balance sheet
EUR 30m Free Cash Flow EUR 82m EUR -8m Net Cash Net Working Capital … and have a very strong cash position with no debt. Note: Free Cash Flow for FY 2023. Net Cash and Net Working Capital as per 31 December 2023. Figures in this section are presented on an adjusted basis. For details regarding the e
Slide 10: Besides focusing on margins and costs, we achieved the results by driving key strategic initiatives
Besides focusing on margins and costs, we achieved the results by driving our key strategic initiatives Westwing Collection OneWestwing Premium positioning Sustainability share increase commercial model 2023 marked the turnaround for Westwing. On top, we were able to prove that our new commercial mo
Slide 11: We made good progress regarding Sustainability in 2023
Our Sustainability report will We made good progress regarding Sustainability in 2023 be released on 4 April 2024 48% 100% 100% 43% of online Westwing transition of non-EU share of plastic Collection products to sustainable and 67% of EU packaging with feature the packaging achieved Westwing Collect
Slide 12: We received validation for our ambitious long-term Science Based Targets
We received validation for our ambitious long-term Science Based Targets Long-term Science Based Targets 75% reduction in GHG emissions(1) for Scope 1 and 2(2) 80% of suppliers(3) have Science Based Targets Validated by Science Based Targets initiative Note: (1) Target set against 2022 baseline; (2)
Slide 13: 2. Financial update
2. Financial update 13
Slide 14: We delivered on our updated FY 2023 guidance
2023 guidance 2023 results We delivered EUR 390 to 440m EUR 429m on our updated Revenue -9% to +2% yoy growth -1% yoy growth FY 2023 EUR 13 to 19m EUR 18m guidance Adjusted +3% to +4% margin +4% margin EBITDA Enabled positive Free Cash Flow in FY 2023 Note: Free Cash Flow was not part of capital mar
Slide 15: We achieved a stable topline in 2023 and returned to growth
We achieved a stable topline in 2023 and returned to growth in the second half of the year Group Revenue [in EURm] • Despite overall market Full year Quarter decline, Westwing achieved -1% +5% topline growth in the second 431 429 93 88 half of the year and gained 59 55% 57% 56% market share. 56% 55%
Slide 16: Topline development of International Segment outperformed DACH Segment
Topline development of International Segment outperformed DACH Segment Segment Revenue [in EURm] DACH Segment -2% 0% • Westwing’s International 242 237 74 74 Segment with growth for Q4 151 52 2023 and FY 2023, outperforming DACH Segment. FY’19 FY’22 FY’23 Q4’19 Q4’22 Q4’23 International Segment +2%
Slide 17: Topline recovery driven by Active Customer development
Topline recovery driven by Active Customer development – turning point reached in Q3 2023 and increasing quarter-over-quarter Active Customers [in m] +1% +1% Q1 ’19 Q2 ’19 Q3 ’19 Q4 ’19 Q1 ’20 Q2 ’20 Q3 ’20 Q4 ’20 Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’21 Q1 ’22 Q2 ’22 Q3 ’22 Q4 ’22 Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 No
Slide 18: Westwing Collection share continued to increase
Westwing Collection share continued to increase Westwing Collection share [as % of Group GMV] 100% 59% 53% 66% 76% 75% 41% 47% 34% 24% 25% FY’19 FY’20 FY’21 FY’22 FY’23 Westwing Collection 3rd party suppliers Note: All figures unaudited. 18
Slide 19: We significantly improved our contribution margin per order
We significantly improved our contribution margin per order Contribution margin per order [in EUR, as % of Revenue] 21.4% 29.5% 28.7% 25.3% 28.6% +12% +23% 43 34 35 31 24 FY’19 FY’20 FY’21 FY’22 FY’23 xx% CAGR Note: All figures unaudited. Figures in this section are presented on an adjusted basis. F
Slide 20: Strong improvements across most of the P&L lines
Strong improvements across most of the P&L lines Delta Delta FY 2019 FY 2022 FY 2023 Q4 2019 Q4 2022 Q4 2023 [as % of Revenue] 23 vs. 22 23 vs. 22 Strong Westwing Gross margin 44.6% 48.1% 50.7% +2.6pp 47.1% 47.3% 51.5% +4.2pp Collection share gains Costs for Fulfilment ratio -23.2% -22.7% -22.1% +0.
Slide 21: FY 2023 with profitable Adjusted EBITDA margin of 4.1%
FY 2023 with profitable Adjusted EBITDA margin of 4.1% Group Adjusted EBITDA [as % of Revenue] • 2023 marked a turnaround for Full year Quarter Westwing in terms of operational efficiency and 4.1% 4.5% profitability. 3.3% • Adjusted EBITDA margin 3.1% profitability in every quarter of 2023. -1.0% •
Slide 22: DACH and International Segment both with positive Adjusted EBITDA margin
DACH and International Segment both with positive Adjusted EBITDA margin in FY 2023 Segment Adjusted EBITDA [as % of Revenue] • Both Segments with improved Adjusted EBITDA profitability DACH Segment +3.5pp year-over-year, driven by 6.8% 7.1% 7.0% Westwing Collection share, 5.7% consolidation, and ef
Slide 23: Westwing achieved a clearly positive Free Cash Flow in FY 2023
Westwing achieved a clearly positive Free Cash Flow in FY 2023 Free Cash Flow [in EURm] • Strong positive Free Cash Full year Quarter Flow in FY 2023 mainly driven +48 by strong Adjusted EBITDA 30 and Net Working Capital improvements. +5 16 12 • Net Working Capital improvement driven by EUR 17m redu
Slide 24: Net Working Capital improved by EUR 11m
Net Working Capital improved by EUR 11m driven by EUR 17m inventory reduction year-over-year Net Working Capital [in EURm] Net Inventory [in EURm] 55 -11 3 -17 45 30 28 23 -3 -8 31 Dec. 19 31 Dec. 22 31 Dec. 23 31 Dec. 19 31 Dec. 20 31 Dec. 21 31 Dec. 22 31 Dec. 23 24
Slide 25: We reduced CAPEX by EUR 9m year-over-year
We reduced CAPEX by EUR 9m year-over-year CAPEX [in EURm, as % of Revenue] 3.2% 1.3% -9 14 5 FY’22 FY’23 Property, Plant and Equipment Intangible 25
Slide 26: We strengthened our balance sheet with EUR 82m Net Cash
We strengthened our balance sheet with EUR 82m Net Cash per end of 2023 Net Cash [in EURm] • Very strong Net Cash balance 30 sheet position with zero debt -4 per end of 2023. 82 -12 0 68 • Strong Net Cash position providing us with strategic optionality and the confidence to focus on our long-term s
Slide 27: 3. Path to full value potential
3. Path to full value potential 27
Slide 28: We are in the middle of a 3-step plan to unlock value potential
We are in the middle of a 3-step plan to unlock Westwing’s value potential Turnaround & Building a Scaling with Strategy Update Scalable Platform Operating Leverage 2022-2023 2024-2025 2025-202x 1 Profitability Organisational rightsizing Complexity reduction Cost discipline levers Westwing Collectio
Slide 29: We are building a lean Technology platform
1 Complexity reduction We are building a lean Technology platform and centralising our organi- sation & product assortment further Mostly Software- Consolidation of as-a-Service local PL/IT/ES (SaaS) Tech Logistics centre solution footprint Restructuring Mostly global of IT/ES product corporate asso
Slide 30: Stronger premium brand positioning
2 Stronger premium brand positioning 360° approach Collaborations Premium services such as Cooperations with premium & Westwing branded delivery luxury brands and well-known fleet, interior design service, personalities. best in class customer care. Product assortment On-site content Unique premium
Slide 31: We just opened our second physical retail space
2 Stronger premium brand positioning We just opened our second physical retail space and first ever store-in- store at Breuninger's flagship fashion & lifestyle house in Stuttgart 31
Slide 32: Westwing is active in 11 European countries
3 Country expansion Westwing is active in 11 European countries – upcoming geographic expansion will follow entirely different setup vs. past Westwing country Upcoming Westwing country expansion expansion in the past • Local setup with office, • Managed by HQ and served by Logistics centre & staff.
Slide 33: 4. Financial outlook
4. Financial outlook 33
Slide 34: Our 3-step plan will help us to unlock value potential
Our 3-step plan will help us to unlock Westwing’s value potential with profitable growth and strong cash conversion Exemplary Scaling with Building a Operating Long-term Scalable Platform Leverage 2024-2025 2025-202x Current state Incremental target P&L(1) Profita- bility Complexity reduction Cost d
Slide 35: Significant one-time costs for complexity reduction will arise in 2024
Significant one-time costs for complexity reduction will arise in 2024 – implementation costs will mostly be adjusted in P&L Measures for complexity reduction Cost impact in 2024 Impact on adjusted P&L Consolidation One-off cash costs Mostly EUR -10 to -15m of local for implementation Software-as-a-
Slide 36: We had a good start into 2024, but high uncertainty remains
We had a good start into 2024, but high uncertainty for rest of the year remains FY 2023 Guidance FY 2024 Comments • Good start into 2024 at +6% GMV year-over-year growth year-to-date. Revenue EUR 429m EUR 415 to 445m • Macro environment likely to remain very challenging. (-3% to +4% yoy growth) • W
Slide 37: 5. Investment highlights
5. Investment highlights 37
Slide 38: Investment highlights
Investment highlights Unique, Strong High relevant Huge brand with margins and Strong customer market high loyalty operating balance value potential and growth leverage in sheet proposition potential scaling • Unique assortment of gor- • Addressing sizeable • Desirable brand among • High margins as
Slide 39: 6. Q&A
6. Q&A 39
Slide 40: 7. Appendix
7. Appendix 40
Slide 41: Continuously expanding share of wallet with customers
Continuously expanding share of wallet with customers Active Customers and average GMV per Active Customer [in k, in EUR] 1,800 400 1,600 1,400 300 1,200 1,000 200 800 600 400 100 200 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 42: KPI overview
KPI overview Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Group KPIs Unit 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 Westwing Collection share in % of GMV 25% 22% 26% 28% 31% 32% 38% 37% 37% 38% 44% 44% 46% 46% 48% 47% Active Customers in k 986 1,178 1,284 1,5
Slide 43: Consolidated income statement
Consolidated income statement EURm, in % of Revenue FY 2022 FY 2023 Q4 2022 Q4 2023 Revenue 430.8 428.6 128.4 131.1 Cost of Sales -228.1 -215.7 -72.0 -66.5 Gross profit 202.7 212.9 56.4 64.6 Fulfilment expenses -94.2 -90.3 -23.3 -26.1 Marketing expenses -40.6 -45.6 -9.3 -16.1 General and administrat
Slide 44: Adjusted income statement
Adjusted income statement EURm, in % of Revenue FY 2022 FY 2023 Q4 2022 Q4 2023 Revenue 430.8 428.6 128.4 131.1 Revenue growth yoy -17.5% -0.5% -13.9% 2.1% Cost of Sales -223.8 -211.4 -67.7 -63.6 Gross Profit 207.1 217.2 60.7 67.4 Gross margin 48.1% 50.7% 47.3% 51.5% Fulfillment expenses -98.0 -94.5
Slide 45: Segment reporting
Segment reporting DACH in EURm FY 2022 FY 2023 Q4 2022 Q4 2023 Revenue 242.4 236.5 73.5 73.9 yoy growth (in %) -18.3% -2.4% -15.1% 0.4% Adj. EBITDA 7.9 16.1 5.1 4.2 Adj. EBITDA margin % 3.3% 6.8% 7.0% 5.7% International in EURm FY 2022 FY 2023 Q4 2022 Q4 2023 Revenue 188.4 192.1 54.9 57.2 yoy growth
Slide 46: In 2023, we adjusted costs related to the Technology migration
In 2023, we adjusted costs of EUR -4.1m related to the Technology migration, of which only EUR -0.2m had cash impact Tech migration costs in 2023 Unadjusted P&L Adjusted P&L Cash impact impact impact Restructuring severances EUR -0.2m - EUR -0.2m Cancellation of capitalisation EUR -3.9m - - of Tech
Slide 47: Issued share capital
Issued share capital Share Information as at 31 December 2023 Type of Shares Ordinary bearer shares with no-par value (Stückaktien) Stock Exchange Frankfurt Stock Exchange Market Segment Regulated Market (Prime Standard) Number of Shares issued 20,903,968 Issued Share Capital EUR 20,903,968 Treasury
Slide 48: Investor Relations Contact
Investor Relations Contact Teresa Fischer Perez-Lozao Director Corporate Finance ir@westwing.de 48
Slide 49: Events
Events 7 May 2024 Publication of first quarter results 14 May 2024 Frühjahreskonferenz Equity Forum 19 June 2024 Annual General Meeting 49