Westwing reports second quarter 2022 results

• Westwing delivered EUR 103m revenue in the second quarter of 2022 at a year-over-year growth rate of -22% against a backdrop of a very low consumer demand in Home & Living
• In comparison to its pre-pandemic size, Westwing’s topline performed strongly, growing at a compound annual growth rate of +21% since the second quarter of 2019
• Adjusted EBITDA for the Group amounted to EUR -2.3m at -2.3% Adjusted EBITDA margin in the second quarter of 2022 caused by a lower topline and investment decisions taken in 2021
• P&L savings of c. EUR 15m implemented, with two thirds of the benefit coming into effect this year
• Strong net cash position of EUR 64m with no financial debt at the end of the second quarter 2022, providing strategic optionality in uncertain times
• Strategic initiatives aimed at evolving the commercial model to unleash Westwing’s full potential announced

Munich, August 11, 2022 // Westwing, the leader in inspiration-based Home & Living eCommerce in Europe, announced its results for the second quarter of 2022.

Westwing delivered EUR 103m (Q2 2021: EUR 132m) in revenue for the second quarter of 2022 at a negative year-over-year growth rate of -22% amid a challenging macro environment. Trading in the first half of 2022 was adversely affected by a very low consumer demand for Home & Living, with the consumer confidence level for the second quarter of 2022 dropping even lower than at the onset of the global COVID-19 pandemic in Q1 2020. Westwing’s performance compared to pre-pandemic levels has however remained strong, and the Company has grown its inspiration and loyalty-based business model by a compound annual growth rate of +21% since the second quarter of 2019 (Q2 2019: EUR 58m), proving the potential of its unique proposition.

Driven by a lower topline as well as investment decisions taken in 2021, Adjusted EBITDA for the Group amounted to EUR -2.3m at -2.3% Adjusted EBITDA margin in the second quarter of 2022 (Q2 2021: EUR 11m at 8.1%). Several measures focusing on margin and cost discipline were implemented in order to retain strong unit economics. Additionally, Westwing took action to adjust its cost base, including a reduction in SG&A as well as marketing expenses. Through a combination of these actions an annual P&L benefit of c. EUR 15m is being realized, with two-thirds of savings coming into effect already from this year.

Westwing reported a net cash position of EUR 64m with no financial debt at the end of the second quarter of 2022, signaling a healthy liquidity position despite high inventory levels in the aftermath of past supply chain disruptions and lower topline. “Liquidity is key to having strategic optionality and outlasting this dynamic environment” says the Group CFO, Sebastian Säuberlich. “In these uncertain times, our financial-debt free balance sheet remains a great asset, as we have ample liquidity to navigate the currently challenging market conditions."

Based on the current challenging demand environment, management lowered guidance for FY 2022 as of 10 August to EUR 410m to EUR 450m revenue at -22% to -14% year-over-year growth and
EUR -15m to EUR 0m Adjusted EBITDA at -4% to 0% Adjusted EBITDA margin. The updated guidance reflects the extremely low consumer sentiment observed across all segments in the last two months, with no significant improvement expected in the second half of 2022.

Westwing Collection will be at the core of the next growth phase

Westwing’s best-in-class inspiration-based business model has resulted in extremely valuable assets: a consumer love brand with creativity, inspiration and loyalty at the very core, gaining a social media following of more than 10 million followers across all channels. The opportunity to convert even more customers into Home Enthusiasts remains massive. In its next phase of growth, Westwing aims to strengthen its position as a one-stop-shop for Home Enthusiasts, by bringing the highly profitable Westwing Collection to the forefront.

Led by new CEO Andreas Hoerning, who previously also served as the Founder of Westwing Collection as well as Chief Commercial Officer, the Company’s new growth model will focus on unlocking Westwing’s full potential through multiple channel customer acquisition and monetization. This will be done through a range of strategic initiatives:

• Rapid assortment build-up of Westwing Collection to get to target share of 50% Group Gross Merchandise Volume (GMV), and together with the best 3rd party design brands assortment become a true one-stop-shop for Home Enthusiasts
• Providing a seamless and personalized digital customer experience with world-class shoppable content and higher visibility for Permanent Assortment and Westwing Collection
• More product focused marketing in conjunction with the opening of a first offline store and offering Westwing Collection in selected external sales channels

"Westwing’s mission ‘to inspire and make every home a beautiful home’ has reached close to 1.5 million loyal Active Customers, and together we have built a very special Love Brand with our inspiration based shoppable content. In the next phase of our evolution, we will continue to build on our strong loyalty model by bringing the Westwing Collection to the forefront and unlocking Westwing’s full potential. Whether it be through further category expansion or opening our first permanent store in Hamburg, we have just begun to scratch the surface of what’s possible for Westwing. There’s much more to come.” says CEO Andreas Hoerning.

Webcast and Conference Call

Westwing's Q2 2022 earnings call will be broadcasted via live stream on August 11, 2022 starting at 10:00 AM (CEST) on the Company's investor relations website: https://ir.westwing.com. The recording of the live stream will be available thereafter at this site.

For further information, please visit Westwing’s investor relations website at: ir@westwing.com.

Contact

Westwing Group SE

Investor Relations

E-Mail: ir@westwing.de

Note: All figures are unaudited.

About Westwing

Westwing is the leader in inspiration-based Home & Living eCommerce in Europe with EUR 522m of revenue in 2021. Through its 'shoppable magazine', Westwing inspires its loyal home enthusiast 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 fulfillment centers, inaccurate personnel and capacity forecasts for fulfillment centers, 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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