Westwing Reports Third Quarter 2019 Results

• Third quarter results with revenue of EUR 59 million and double-digit GMV growth of 13%
• Profitability at -7% adjusted EBITDA margin, impacted by increased marketing spend and typical summer seasonality
• Own and Private label share increased to 27% of Group GMV, +9 percentage points year-over-year
• Contribution margin improved to over 20%, having addressed logistics and cost inefficiencies
• New customer acquisition improving with active customers growing to 926,000, also driven by increased marketing investments

Munich, November 7, 2019. Westwing, the leader in inspiration-based Home and Living eCommerce in Europe, today announced the results for the third quarter of 2019.

Westwing returned to growth in the third quarter with revenue of EUR 59 million (Q3 2018: EUR 55 million) and double-digit GMV growth of 13%. Revenue growth improved in the DACH segment at 15% as well as in the International segment, which returned to growth for the first time since 2018. Impacted by Westwing's increased marketing investments as well as customary summer seasonality, profitability was at -7% adjusted EBITDA margin.

New product releases supported a continued increase in Own and Private label share to 27% of Group GMV in the third quarter, up by +9 percentage points year-over-year. This resulted in an all-time high gross margin for the Group of 44.3% (+1.5 percentage points year-over-year).

Having improved its operating performance by addressing logistics and cost inefficiencies through the completion of its large warehouse move to Poznan (Poland), Westwing managed to increase its contribution margin to over 20% in the third quarter of 2019 (Q3 2018: 18.3%).

Westwing's increased marketing investments saw first returns in the third quarter with active customers growing to 926,000 (Q3 2018: 921,000). To further drive the growth of its customer base, Westwing increased the share of high-converting low price point items in its assortment. Customer loyalty continued to be high with 81% of orders from repeat customers.

Westwing's net cash position remains strong at EUR 68 million.

In the fourth quarter, focus for Westwing will be on strong product offering, the silent running of its operations leading to a strong contribution margin, operating leverage on its SG&A cost base as well as returns from its increased marketing investments through further customer base growth.

"We have seen substantial progress in the third quarter with double-digit GMV growth and a strong contribution margin. This shows that the measures we have implemented have been successful", said Stefan Smalla, Founder and CEO of Westwing. "We will continue investing in marketing to drive our future growth and are expecting further improved results in the fourth quarter."

Westwing confirms its updated guidance of 6 to 12% revenue growth at the lower end for the full year and adjusted EBITDA margin of -3.5% within a range of -1% to +1%. Free cash flow is expected to be positive for the remainder of the year and to not exceed outflows of EUR -29 million for the full year.

Westwing will publish its key financial figures for the Financial Year 2019 on March 19, 2020.

For more information, please visit the Westwing corporate website at:

 

About Westwing
Westwing is the leader in inspiration-based Home and Living eCommerce in Europe with EUR 254m of revenue in 2018. Through its 'shoppable magazine', Westwing inspires its loyal, mostly female customers with a curated product selection and combines that with gorgeous content. With unparalleled loyalty, Westwing is generating more than 80% of sales from repeat customers. Westwing's mission is: To inspire and make every home a beautiful home. The company was founded in 2011 and is headquartered in Munich. Westwing went public on the Frankfurt Stock Exchange in October 2018 and is active in eleven European countries.

Disclaimer
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 rely on these forward-looking statements as predictions of future events and the Company undertakes no obligation to update or revise these statements. The Company's actual results may differ materially and adversely from any forward-looking statements discussed in this press release due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfilment centres, inaccurate personnel and capacity forecasts for fulfilment centres, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels.