Westwing Group Se · XETR:WEW
Westwing — Q3 2024 Earnings Presentation
38 slides from Westwing's earnings presentation, Nov 7, 2024
Slide 1: Q3 2024 results
Q3 2024 results Munich, 7 November 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 r
Slide 3: Agenda
Agenda 01 Business update 02 Financial update 03 Investment highlights 04 Q&A 05 Appendix 3
Slide 4: 1. Business update
1. Business update 4
Slide 5: State of Westwing
State of Westwing We continued to grow in a declining market. • GMV growth of 2% and revenue growth of 3% year-over-year (yoy) despite market headwinds and shifts in product assortment. • In the DACH segment, topline grew 9 percentage points (pp) faster than market.(1) • Adjusted EBITDA of EUR 4 mil
Slide 6: We are clearly outperforming the market in our largest geography
We are clearly outperforming the market in our largest geography Year-over-year sales growth German online furniture, lighting & decoration market(1) DACH (2) Delta Despite actively cutting back Q3 2024 -5% +4% +9% on non-premium assortment, which had negative effects on active customers and topline
Slide 7: Recap: We are in the middle of a 3-step plan to unlock Westwing's full value potential
Recap: We are in the middle of a 3-step plan to unlock Westwing’s full 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 2 West
Slide 8: Recap: In August, we shared that we had completed the restructuring of Italy and Spain
1 34 Recap: In August, we shared that we had completed the restructuring of Italy and Spain, including consolidation of logistics centre Status of measures as of August 2024 Impact in 2024 Low to mid single-digit % of FY 2024 Topline loss Mostly Software- Mostly global Group revenue, main impact in
Slide 9: Recap: In August, we then announced further measures to reduce complexity
1 34 Recap: In August, we then announced further measures to reduce complexity and to strengthen our premium positioning Status of measures as of August 2024 Impact in 2024 Low to mid single-digit % of FY 2024 Topline loss Mostly Software- Mostly global Mostly global Group revenue, main impact in H2
Slide 10: Since August, we have been able to implement all measures according to plan
1 34 Since August, we have been able to implement all measures according to plan Status of measures as of November 2024 Impact in 2024 Low to mid single-digit % of FY 2024 Topline loss Mostly Software- Mostly global Mostly global Group revenue, main impact in H2 Premiumisation of as-a-Service produc
Slide 11: Our new tech platform is now available to customers in six countries
1 Our new tech platform is now available to customers in six countries! Microsoft Excel Worksheet NL PL DE BE CZ SK AT FR CH IT ES PT New SaaS-based tech platform Old in-house developed tech platform 11
Slide 12: Westwing Collection share continued to increase
2 Westwing Collection share continued to increase Westwing Collection share [as % of Group GMV] 100% 42% 56% 52% 62% 73% 74% 58% 44% 48% 38% 27% 26% Q3’19 Q3’20 Q3’21 Q3’22 Q3’23 Q3’24 Westwing Collection 3rd party suppliers Note: All figures unaudited. 12
Slide 13: Westwing Collection share in International is on par with DACH
2 Due to the switch to a mostly global and more premium offering, Westwing Collection share in International is on par with DACH DACH Westwing Collection share [as % of GMV] International Westwing Collection share [as % of GMV] 100% 100% 42% 42% 51% 49% 58% 62% 56% 65% 67% 68% 83% 83% 58% 58% 49% 51
Slide 14: We launched a brand awareness campaign in Germany
4 We launched a brand awareness campaign in Germany which included out-of-home advertising across major German cities 14
Slide 15: Exclusive collaboration with porcelain manufacturer MEISSEN
4 We announced an exclusive collaboration with the renowned porcelain manufacturer MEISSEN 15
Slide 16: 2. Financial update
2. Financial update 16
Slide 17: Revenue growth of 3% year-over-year in the third quarter of 2024
Revenue growth of 3% year-over-year in the third quarter of 2024 Group revenue [in EUR million] Westwing achieved revenue +4% growth and market share gains 310 298 in third quarter despite • worsened market conditions. 55% 56% • increasing negative topline impact from the switch to a +3% mostly glob
Slide 18: Both segments grew despite the switch to a more premium assortment
Both segments grew despite the switch to a mostly global and more premium assortment Segment revenue [in EUR million] DACH segment • Westwing’s DACH segment grew by 4% year-over-year, +7% outperforming the market 163 174 +4% despite cutting back on 52 54 non-premium assortment. 9M’23 9M’24 Q3’23 Q3’
Slide 19: Improvements across most of the P&L lines
Improvements across most of the P&L lines Delta Delta 9M 2023 9M 2024 Q3 2023 Q3 2024 [as % of revenue] 24 vs. 23 24 vs. 23 Strong Westwing Collection share gains Gross margin(1) 49.9% 50.8% +1.0pp 49.8% 50.5% +0.7pp partially offset by higher container costs and pressure on 3rd party market prices.
Slide 20: International segment with strong improvement in adjusted EBITDA
International segment with strong improvement in adjusted EBITDA Segment adjusted EBITDA [as % of revenue] DACH segment • Both DACH and International -3.0pp segment with positive -2.5pp 7.3% 4.9% adjusted EBITDA margin in 4.3% 2.4% Q3 2024 and 9M 2024. 9M’23 9M’24 Q3’23 Q3’24 • DACH segment profitab
Slide 21: Net working capital remained negative with improvement of EUR 3 million
Net working capital remained negative with improvement of EUR 3 million year-over-year Net working capital [in EUR million, as % of revenue LTM] -0.5% -1.2% • Net working capital mainly impacted by increased trade -3 payables and decreased prepayments on inventories year-over-year at the end of Q3.
Slide 22: CAPEX in 9M 2024 slightly increased compared to previous year's level
CAPEX in 9M 2024 slightly increased compared to previous year’s level CAPEX [in EUR million, as % of revenue] 2.1% 2.5% +2 8 6 9M’23 9M’24 Property, plant and equipment Intangible Note: All figures unaudited. 22
Slide 23: Free cash flow impacted by restructuring expenses and seasonal inventory increase
Free cash flow impacted by restructuring expenses and seasonal inventory increase Free cash flow [in EUR million] • Net working capital effect in Q3 2024 of EUR -6 million -22 with seasonal inventory 13 increase of EUR 6 million quarter-over-quarter after 2 years of excess inventory -9 reduction. 3
Slide 24: Strong net cash position of EUR 63 million at the end of September 2024
Strong net cash position of EUR 63 million at the end of September 2024 Net cash [in EUR million] Free cash flow Q3 2024: EUR -6 million 69 72 -4 63 -2 -3 0 Free cash flow after lease payments Q3 2024: EUR -9 million Net cash Net cash Operating Investing IFRS 16 Other financing Net cash 30 Sep. ’23
Slide 25: FY 2024 guidance confirmed
FY 2024 guidance confirmed FY 2023 Guidance FY 2024 Comments on full year guidance • Stronger negative impact from centralisation and premiumisation expected in the fourth quarter EUR 415m to 445m compared to Q3 2024. Revenue EUR 429m (-3% to +4% year-over-year • Due to importance of peak season and
Slide 26: 3. Investment highlights
3. Investment highlights 26
Slide 27: 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 28: 4. Q&A
4. Q&A 28
Slide 29: 5. Appendix
5. Appendix 29
Slide 30: 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] As expected, the strategic shift to a more global and premium offering is leading to higher customer churn, particularly in Italy and Spain. 1,800 400 1,600 1,400 300 1,200 1,000
Slide 31: KPI overview
KPI overview Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Group KPIs Unit 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 Westwing Collection in % of 25% 22% 26% 28% 31% 32% 38% 37% 37% 38% 44% 44% 46% 46% 48% 47% 51% 53% 58% share GMV Activ
Slide 32: Consolidated income statement
Consolidated income statement EUR million, in % of revenue 9M 2023 9M 2024 Q3 2023 Q3 2024 Revenue 297.6 310.4 92.9 95.8 Cost of sales -149.2 -152.6 -46.6 -47.4 Gross profit 148.3 157.8 46.3 48.4 Fulfilment expenses -64.2 -61.4 -20.1 -18.1 Marketing expenses -29.5 -40.0 -10.6 -12.7 General and admin
Slide 33: Adjusted income statement
Adjusted income statement EUR million, in % of revenue 9M 2023 9M 2024 Q3 2023 Q3 2024 Revenue 297.6 310.4 92.9 95.8 Revenue growth year-over-year -1.6% 4.3% 5.2% 3.1% Cost of sales -149.2 -152.6 -46.6 -47.4 Gross profit 148.3 157.8 46.3 48.4 Gross margin 49.9% 50.8% 49.8% 50.5% Fulfilment expenses
Slide 34: Segment reporting
Segment reporting DACH in EUR million 9M 2023 9M 2024 Q3 2023 Q3 2024 Revenue 162.6 173.6 51.5 53.6 Year-over-year growth (in %) -3.7% 6.7% 3.7% 4.1% Adjusted EBITDA 11.9 7.4 2.5 1.3 Adjusted EBITDA margin (in %) 7.3% 4.3% 4.9% 2.4% International in EUR million 9M 2023 9M 2024 Q3 2023 Q3 2024 Revenu
Slide 35: Excluding adjustments, Q3 2024 EBITDA of EUR 2.2 million and EBIT of EUR -2.9 million
Excluding adjustments, Q3 2024 EBITDA of EUR 2.2 million and EBIT of EUR -2.9 million Q1 Q2 Q3 Q1 Q2 Q3 EUR million 2023 2023 2023 2024 2024 2024 Adjusted EBITDA 5.1 4.4 2.4 6.3 3.9 3.5 Adjusted D&A -4.7 -4.7 -4.8 -5.6 -5.5 -5.2 Adjusted EBIT 0.4 -0.3 -2.5 0.7 -1.6 -1.7 Share-based compensation expe
Slide 36: Issued share capital
Issued share capital Share information as at 30 September 2024 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 Treasur
Slide 37: Investor Relations Contact
Investor Relations Contact Teresa Fischer Perez-Lozao Director Corporate Finance ir@westwing.de 37
Slide 38: Events November 2024
Events 26 November 2024 Deutsches Eigenkapitalforum 38