home24 SE

Investor Presentation • Nov 11, 2020

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home24 Q3 2020 Trading Update

11 November 2020

Management summary

Order intake increased by 45% in Q3 2020 at constant currency, bringing YTD growth to 41%. Momentum remains high: Q4 2020 order intake to date at above 60% currency-adjusted growth.

Q3 2020 with continued strong currency-adjusted revenue growth of +54% year-over-year to EUR 118 million, with YTD now at +38%.

Continued sustainable profitability improvement of 13%-points in adjusted EBITDA year-over-year in Q3 2020, with adjusted EBITDA margin at 4% in Q3 and 3% YTD. Cash flow was again positive in Q3 2020, and thus also YTD and in last twelve months.

Active Customers increased by 400k to 1.95m within the last two quarters, leapfrogging the development of the past two years and providing solid foundation for future growth.

Key priority during these COVID-19 times remains the health and safety of our customers, employees, and partners - and to proactively manage the supply and operations impact.

We upgraded our guidance for FY 2020 and now plan with:

• Revenue growth (currency-adjusted) in a range of 38% to 42%, and
• Adj. EBITDA margin in a range of 2 to 4%.

Today's agenda

• Q3 Business Update
• Q3 Financials
• Outlook and Q&A

Almost 2m Active Customers (1.95m) as solid foundation for future repeat purchases

Active Customers net additions (Group, in k)

• home24 increased Active Customers within two quarters by 400k, leapfrogging the development of the past two years.
• Growth momentum not primarily driven by repeat customer activities, showing additional future potential as these new customers turn into repeat buyers in the future.
• Continued market shift from offline to online combined with home24's mass market approach support future customer and revenue growth potential for many years.

Customer satisfaction continuously improved over the last quarters and remained on high level through the pandemic

NPS (EU, indexed to Q3 19)

• Customer satisfaction as guiding principle in driving sustainable growth.
• Pre COVID-19 NPS level sustained throughout the uncertain times, securing a large base of satisfied customers with increased potential for future repeat purchases.
• home24 strategy to deliberately balance growth vs. profitability expected to pay out as satisfied 1st time buyers translate into repeat customers.

Supply chain and warehouses pro-actively prepared to digest continuous high demand, and inventory levels recovering

Investments into integrated, automated fulfillment pay off

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• Significant investments into automated technology platform over the last years (e.g ERP automation, warehouse extension) prove to pay off.
• Inventory levels slightly recovered from COVID-19 induced lows:
  • EU +25% vs low point in June,
  • LatAm +40% vs. low point in April (in local currency)
  • Still not sufficient to prevent longer delivery times year over year due to strong momentum in industry
• Significant pressure on supply chain persists (e.g. raw material shortages, suppliers with full order books, container shortages in Asia).
• Impact on delivery times proactively managed but will continue to influence revenue realization in next months.

Since reaching profitability milestone in Q4 2019, continuous gradual improvements in order economics achieved

Financial development (Group)

	Q4 19	Q1 20	Q2 20	Q3 20
COGS (in % of Revenue)	54,9%	54,0%	54,1%	53,2%
Fulfillment Cost1 (in % of Revenue)	18,2%	17,9%	17,5%	17,5%
Marketing Cost (in % of Revenue)	14,5%	18,5%	10,5%	14,3%
G&A2 (in % of Revenue)	11,8%	13,1%	10,3%	10,9%
Cash and Cash Equivalents (in EURm)	45,6	43,1	47,4	48,4

¹Including impairment losses on financial assets

²Q4 19 normalized for EUR 2m one-time tax effect in Brazil

All figures preliminary and unaudited

• COGS, fulfillment cost and G&A efficiency gradually improved over past 4 quarters. Proves that we sustainably scale on fully invested platform.
• As we continue to balance growth and profitability, the marketing cost ratio will be the main fluctuating KPI going forward - Q1/Q3 will remain investment quarters with higher marketing ratio, Q2/4 harvesting quarters.
• In line with our long term growth strategy we prepare to best tap into market potential, without jeopardizing adj. EBITDA break-even.
• As revenue growth translates into additional profit, potential opens up to pursue growth investments and establish leading market positioning.

Order intake grew +45% in CC in Q3 bringing YTD growth to +41% with demand remaining on significantly elevated level

GOV in EURm, Active customers and Total gross orders in k, Average order value in EUR

• home24 continues to benefit from positive market environment with GOV growth rate of +45%.
• Growth primarily driven by higher number of orders placed and active customer growth. Stable basket sizes in EU (+1%) and LatAm (+1% in CC).
• Currency impact from decrease in EUR/BRL (Q3 19: 4.4; Q3 20: 6.3) weighing on real currency basket size and growth rate.

All figures preliminary and unaudited

Revenue growth further accelerated to +54% in CC supported by positive spillover effect from Q2 order intake

Revenue in EURm and Growth YoY in %

• Order intake of +45% YoY in Q3 translates into revenue growth of +54% YoY (in CC).
• Order backlog in EU on target level at the end of Q3, whereas in LatAm remains inflated due to supply shortages.
• Q3 growth stronger in LatAm segment as the impact of the Covid-19 pandemic on demand more pronounced during the southern hemisphere winter.

Q3 adj. EBITDA at EUR 5m, leading to YTD adj. EBITDA rate of +3%, an improvement of 15%-points compared to prior year

Adj. EBITDA in EURm and in % of Revenue

▪ Another strong quarter with adj. EBITDA margin of +4% compared to -9% (Q3 2019) and -19% (Q3 2018). Reminder: Q1 & Q3 typically less profitable investment quarters.

• Since reaching core profitability in Q4 2019, home24 reported EUR 13m adj. EBITDA translating into +3% adj. EBITDA margin LTM.
• Both segments with equal development of profitability (EU and LatAm).

Cash flow positive quarter for home24 despite repayment of EUR 6m facility in Brazil. Cash flow positive on LTM basis

Cash flow Q3 2020 in EURm

¹Including e.g. changes in provisions, changes in other assets/liabilities, tax expenses and FX effects ²Adoption of IFRS 16 leads to shift of EUR 2.9m from operating cash flow to financing cash flow All figures preliminary and unaudited

• Favourable trading in last months leads to further small increase in cash in Q3, despite voluntary repayment of EUR 6m facility to reduce interest in Brazil.
• Cash flow positive in LTM, with operating cash improving by EUR 12m in Q3 alone.
• Cash position broadly stable since Q2 2019, between EUR 43m and EUR 48m.
• 1 ▪ We continuously monitor all options to strengthen the cash position, incl. capital measures on the LatAm segment level.

Outlook

• Performance in the last months of 2020 continues to be closely linked to the development of consumer demand and supply chains in the context of the COVID-19 pandemic, and therefore fraught with a significant degree of uncertainty. Key priority remains the health and safety of our customers, employees, and partners.
• In particular, there is increased uncertainty in the reliability of replenishment lead times, driven by bottlenecks in production capacities, raw material shortages, and high utilization rates of logistics and distribution channels as e-commerce continues to boom in general.
• Q4 order intake growth with higher momentum than in Q3: constant currency growth in October at +62% (EU: +67%, LatAm: +46%) and also start into November above +60%. Q4 growth reflects a renewed boost in customer demand for online Home & Living especially in Europe, in addition to higher marketing investment.
• Considering the above, home24 is upgrading its guidance for revenue growth at constant currency in 2020 to the range of 38% to 42% (previously: 25% to 35%).
• The positive order intake will translate into increased profitability, albeit with uncertainty regarding realisation. Accordingly, home24 is raising the guidance for the adjusted EBITDA margin to 2% to 4% (previously 1% to 3%).

home24 remains uniquely positioned to exploit the vast Home & Living opportunity, even more than before the COVID pandemic

Market

Huge market opportunity characterized by low online penetration with huge catchup potential, accelerated by consumer behaviour during the COVID pandemic

Value chain

Scalable and automated value chain that delivers sustainable scale effects

Customer value proposition

Best value offering and most relevant selection brought to life in a customer centric go-tomarket approach

Data & Technology

Pioneering technologies improve shopping experience and empower data-driven decisions

Financial calendar – upcoming events

	Event
November 12th	Berenberg Madrid Seminar Virtual
November 17th	Berenberg West Coast Consumer & E-Commerce Conference Virtual
November 30th	Berenberg European Conference Virtual
February 09th	Trading Update FY 2020
March 31st	Publication Annual Financial Report 2020

Continuous further improvements in unit economics combined with further leveraging of overheads drive profitability

Profit and loss statement - Group, in EURm and in % of Revenue

	ACT Q3-20	ACT Q3-19	ACT Q2-20	ACT Q2-19	ACT YTD-20	ACT YTD-19
Revenue	117.8	84.5	119.1	84.8	339.5	262.5
Revenue growth CC	54%	20%	49%	28%	38%	19%
Cost of sales	62.6	46.5	64.4	48.7	182.4	147.8
Gross profit	55.2	38.0	54.7	36.1	157.1	114.7
Gross profit margin	47%	45%	46%	43%	46%	44%
Fulfillment expenses2	20.6	16.5	20.8	16.9	59.8	52.8
Fulfillment expenses ratio	18%	20%	17%	20%	18%	20%
Profit contribution	34.5	21.5	33.9	19.2	97.3	61.9
Profit contribution margin	29%	25%	28%	23%	29%	24%
Marketing expenses	16.8	15.3	12.5	12.4	48.2	49.0
Marketing expenses ratio	14%	18%	10%	15%	14%	19%
G&A	12.9	13.5	12.3	15.3	38.5	43.6
G&A ratio	11%	16%	10%	18%	11%	17%
Adjusted EBITDA	4.9	-7.3	9.2	-8.6	10.6	-30.8
Adjusted EBITDA margin	4%	-9%	8%	-10%	3%	-12%

Gross profit margin

In EURm and in % of Revenue

Profit contribution margin

In EURm and in % of Revenue

Adjusted EBITDA reconciliation

In EURm

Group	Q3 2020	Q2 2020	YTD 2020
External revenue	117,8	119,1	339,5
Adjusted EBITDA	4,9	9,2	10,6
Share based compensation expenses	0,7	0,7	2,1
EBITDA	4,2	8,5	8,5
Amortization & Depreciation of PP&E and right-of-use assets	5,5	5,6	16,8
EBIT	-1,3	2,9	-8,4
Europe	Q3 2020	Q2 2020	YTD 2020
External revenue	88,9	97,5	265,4
Adjusted EBITDA	2,8	8,9	8,4
Share based compensation expenses	0,6	0,5	1,7
EBITDA	2,2	8,3	6,7
Amortization & Depreciation of PP&E and right-of-use assets	4,4	4,6	13,5
EBIT	-2,2	3,7	-6,8
LatAm	Q3 2020	Q2 2020	YTD 2020
External revenue	29,0	21,6	74,1
Adjusted EBITDA	2,1	0,3	2,2
Share based compensation expenses	0,1	0,1	0,4
EBITDA	2,0	0,1	1,8
Amortization & Depreciation of PP&E and right-of-use as sets	1,1	1,0	3,3
EBIT	0,9	-0,9	-1,5

KPI definitions

KPI	Definition
Gross order value [in EUR]	Defined as the aggregated gross order value of the orders placed in the respective period, including VAT and without factoring in cancellations and returns as well as subsequent discounts and vouchers
Number of active customers [#]	Defined as the number of customers that have placed at least one non-canceled order in the 12 months prior to the respective date, without factoring in returns
Total gross orders	Defined as the number of orders placed in the relevant period, regardless of cancellations or returns
Average order value [in EUR]	Defined as the aggregated gross order value of the orders placed in the respective period, including VAT, divided by the number of orders, without factoring in cancellations and returns as well as subsequent discounts and vouchers
Growth at constant currency (CC)	Defined as growth using constant BRL/EUR exchange rates from the previous year
Adjusted EBITDA [in EUR]	EBITDA defined as the sum of operating result (EBIT) and depreciation and amortization. Adjusted for share-based compensation expenses and costs incurred in connection with the listing of existing shares and other one-off expenses, mainly service fees for legal and other consulting services associated with the IPO

Disclaimer

This presentation has been prepared by home24 SE (the "Company"). All material contained in this document and the information presented is for information purposes only and does not purport to be a full or complete description of the Company and its affiliated entities. This presentation must not be relied on for any purpose.

This presentation contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of the Company. Forward-looking statements should not be construed as a promise of future results and developments and involve known and unknown risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. The Company does not assume any obligationsto update any forward-looking statements.

This presentation contains certain financial measures that are not calculated in accordance with IFRS and are therefore considered "non-IFRS financial measures". The management of the Company believes that these non-IFRS financial measures used by the Company, when considered in conjunction with, but not in lieu of, other measures that are computed in accordance with IFRS, enhance an understanding of the Company's results of operations, financial position and cash flows. A number of these non-IFRS financial measures are also commonly used by securities analysts, credit rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which the Company competes. These non-IFRS financial measures should not be considered in isolation as a measure of the Company's profitability or liquidity, and should be considered in addition to, rather than as a substitute for, income data or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the use of non-IFRS financial measures, including the limitations inherent in determination of each of the relevant adjustments. The non-IFRS financial measures used by the Company may differ from, and not be comparable to, similarly-titled measures used by other companies.

Certain numerical data, financial information and market data, including percentages, in this presentation have been rounded according to established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.