- Revenue at EUR 61m with growth of -1% in the first quarter of 2019 due to International/Italy, impact of growth investments not yet visible, and strong Q1 2018 baseline
- Solid DACH segment with +11% growth; DACH business model being rolled out internationally
- Profitability impacted by contribution margin and investments into future growth
- Own & Private Label share increased to 21% of GMV, increasing by +8%points
- Revised guidance for fiscal year 2019
Munich, May 7, 2019. Westwing, the leader in inspiration-based Home and Living eCommerce in Europe, today announced the results for the first quarter of 2019.
Results for Q1 2019
Growth within the first three months of 2019 was roughly flat resulting in revenue of EUR 61m (Q1 2018: EUR 62m). While this development was still in line with the expected range due to a strong previous year baseline, weak performance in the International segment, especially Italy, negatively impacted results. The solid DACH segment with +11% growth partially compensated these effects.
To lay the path for future profitable growth, we made several investments in the first quarter of 2019: As part of rolling out the DACH business model internationally, our permanent assortment, WestwingNow, is now live also in Spain since February 2019. Furthermore, our Own and Private Label share is already at 21% share of Group GMV (+8 percentage points yoy). Additionally, we have further intensified our organic marketing efforts with hiring a larger team, and we have successfully completed the opening of our new warehouse of 35,000 sqm in Poznan (Poland). Despite some delay in its ramp-up, the new warehouse is now fully operational and will bring cost savings in the second half of the year.
Due to our investments made, some operational challenges in the business that affected contribution margin, and flat revenue growth, our Adj. EBITDA margin was -6% for the first quarter of 2019. While we currently incur the costs for our investments, we do not see measurable results for many of them yet. We expect that they start to materialize in the second half of the year.
Initiatives to drive future growth and profitability
To accelerate future growth and improve profitability, we have a variety of initiatives in technology, Own and Private label, permanent assortment, and marketing.
On growth, we will continue to roll out our successful DACH business model internationally. We will optimize our DACH assortment towards a higher share of high-converting low price point products. We are reviewing our marketing budgets and allocation for more short-term growth effects.
On profitability, we will push contribution margin improvements strongly, with further Own and Private Label share gains, and by addressing operational inefficiencies. We have started a project to centralize our currently unprofitable French business.
On cash, we will continue to be very cash-efficient by maintaining roughly neutral working capital and an asset-light business model.
Stefan Smalla, Founder and CEO of Westwing, said: "While our current results don't reflect the ambition level for the full year, we are confident that we have the right strategy, team and resources in place to continue to build a profitably growing business. We expect acceleration of growth and improved profitability in the second half of 2019 based on a broad range of initiatives."
Revised outlook for fiscal year 2019
As the current GMV trading for March and April has been below expectations, we have reassessed the outlook for the fiscal year 2019. For the fiscal year 2019, we now expect revenue growth of
6-12% (previously: in line with 2018 levels, i.e. within a range of 2 to 3 percentage points of 16%). Moreover, we expect Adjusted EBITDA to come in slightly lower at around 0% (within a range of -1% to +1%) due to lower expected revenue growth (previously: in line with 2018 levels, i.e. within a range of 1 percentage point of +1%).
For more information, please visit the Westwing corporate website at: www.westwing.com
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|Own & Private Label share (in %)
|GMV (in EUR m)
|Number of orders (in k)
|Average basket size (in EUR)
|Active customers (in k)
|Average orders per active customer LTM
|Average GMV per active customer LTM (in EUR)
|Mobile visit share (in %)
|Results of operations
|Revenue (in EUR m)
|Adj EBITDA (in EUR m)
|Adj EBITDA margin (in % of revenue)
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 85% of sales from customers who visit the company's sites and apps on average 100 times per year. 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.
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.
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