home24 SE

Investor Presentation • Sep 3, 2019

home24 Q2 2019 Trading Update

September 2019

Our mission: to be the online destination for Home & Living

• Huge and uniquely attractive Home & Living market opportunity of EUR 117 billion
• Markets characterized by low online penetration of c. 6%¹ with huge catch-up potential
• A leading pure-play Home & Living online platform in Continental Europe and Brazil
• Unique model, combining third-party brands with attractive private labels drive high margins
• Scalable end-to-end automated and vertically integrated value chain
• Pioneering technologies improve shopping experience and empower data-driven decisions
• Attractive margin profile, combining strong growth and path to profitability
• Multiple drivers for long-term growth & differentiation with significant margin upside

¹Source: Euromonitor International for home24 geographies

1

Today's agenda

Business Update

• Q2 Financials
• Outlook

Management summary

Q2 back on track in EU regarding growth (+24% YoY) and profitability improvements (-11% adj. EBITDA; +5%p YoY and +10%p vs Q1), first payoffs of post IPO investments. Assortment extension, esp. in high impulse and purchase frequency areas All key-milestones YTD achieved and major post IPO investment projects completed, paving the way to break even in Q4 2019 on adj. EBITDA level. LatAm with continued strong growth in CC (+43% YoY). Adj. EBITDA at -7% affected by investment ramp-up effects in warehousing and showrooms (-5%p YoY and -7%p vs Q1). Revenue in Q2 2019 at EUR 85m. In the absence of negative one-time effects, order intake of +17% YoY translates into strong IFRS revenue growth of +28% YoY (all at constant currency). First step towards adj. EBITDA break-even, with -10% in Q2 (vs. -16% in Q1). Cash position of 51€m at end of Q2 a result of massive key investments in new logistics centers and new outlets as well as a corresponding inventory build-up in these locations

Growth and profitability outlook for 2019 confirmed. Cash position expected to reduce only moderately towards the end of the year on back of completed post IPO investment projects and Q4 adj. EBITDA break-even

Recap: Selected key milestones on path to profitability

Europe back on growth track at improved marketing efficiency in the absence of one-time effects

• Marketing efficiency in EU in the absence of 2018 demand shocks at 2017 levels
• Significant improvements despite ramp up of TV, especially compared to 2017 (TV with overall lower shortterm marketing efficiency, especially post IPO)
• Improvementsin Gross to Net Ratio, Gross Profit- and Profit Contribution Margin as post IPO investments further materialize, will further drive marketing efficiency to improve beyond pre-IPO levels

Apart from normalization in demand, a significantly more efficient customer acquisition has been achieved

• Various initiatives focusing on personalization and mobile enable improved customer acquisition:
  • roll out user-based bidding for google based channels
  • more refined audiences across marketing channels
  • personalization of mailing content/recommendations
  • increased email database with subscriber exclusive campaigns
  • improved lead generation strategy for APP combined with various product developments
  • mobile first initiatives drive monetization of increasing mobile traffic

Assortment investments support growth and marketing efficiency

• Significant investments in the overall assortment
• Focus on assortment extension in categories with higher crossand upselling potential in order to improve long term repurchase rates, mainly with 3rd party assortment
• Categories with highest assortment extension outperform average category revenue growth rates
• Basket size and private label share stable or improving through counteracting measures, e.g. release of extensive mid-century collection (>1000 items) with significant private label share

Further step-up in YoY order intake growth rates

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

• Further increase in YoY order intake growth rates. Q2 GOV in EUR with strongest YoY growth rate on Group level since Q1 18
• Positive basket size development per segment. Negative group impact results from differences in growth rates and basket sizes of segments
• Brazilian currency broadly stabilizing, reducing the gap on constant currency reporting

In Q2 home24 grew by 28% YoY in CC to revenues of EUR 85m

Revenue in EURm and Growth y-o-y in %

• Order intake of +17% translates into IFRS revenue growth of +28% YoY in CC
• Q2 IFRS growth in EU supported by two factors:
  • Expected decline in order backlog as a result of normalized delivery times for new warehouse in Halle (Q1 one-time effect)
  • Improved YoY G2N rates in absence of 2018 onetime effects, delivering est. 7% of additional growth until year end
• LatAm growth rates strong especially in CC, also fueled by offline expansion

Adjusted EBITDA for Q2 2019 amount to c. EUR -9m or -10% of the Revenue

• Q2 Adj. EBITDA with first significant step towards Q4 break-even
• EU with strong improvements driven by
• absence of negative onetime impacts (weather & ERP introduction)
• first payoffs from post IPO investments (still partly in ramp-up phase)
• Q2 profitability in LatAm vice versa to EU seasonally weaker, but also negatively effected by temporary effects of ramp-up cost of offline roll-out and warehouse expansion

Seasonally induced Working Capital effect paired with inventory investments lead to reduced cash position at end of Q2

Cash flow H1 2019 in EURm

• Temporary ramp up costs in warehouse and outlet setup negatively effecting adjusted EBITDA in H1
• Cash outflow from adjusted EBITDA significantly reduced in Q2 from EUR -15m (Q1) to EUR -9m
• Seasonally induced higher WC paired with inventory ramp up post warehouse investments lead to temporarily negative WC effect of EUR -5m (Q1) and EUR -10m (Q2)
• 1 ▪ Investments in new logistics centers and new outlets (EUR 6m) impact H1 cash outflow

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 4.7m from operating cash flow to financing cash flow All figures unaudited

Outlook and Q&A

• Milestone achievement and absence of adverse 2018 one-time effects will further drive revenue growth and margin improvements
• Close view on cash position and cash management. YE cash position to only reduce moderately as investment ramp-up slows and WC partly reverses
• On track regarding financials and milestones for Q3 2019
• Previous 2019 Forecast confirmed:
  • Revenue growth rate at or above FY18 level (+18%) in CC with the LatAm segment to contribute disproportional to the growth
  • Adj. EBITDA margin to improve to a range between –6% and –9% for 2019 as a whole
  • Break even on adjusted EBITDA in Q4 2019
• Mid term guidance confirmed:
  • Full year break even on adj. EBITDA basis achievable in 2020
• Long term margin profile confirmed:
  • Gross profit margin to reach +50% (in % of revenue)
  • Gross profit margin after fulfilment costs to trend towards low thirties (in % of revenue)
  • Marketing expenses to converge to low teens (in % of revenue)
  • Adj. EBITDA margin to reach the low teens (in % of revenue)

Profit and loss statement- Group

In EURm and in % of Revenue

	Q2-19	Q2-18	Q1-19	Q1-18	H1-19	H1-18
Revenue	84.8	66.7	93.2	84.5	178.0	151.2
growth CC Revenue	28%	8%	12%	30%	19%	19%
1 of sales Cost	48 7	38 3	52 6	46 6	101 3	84 9
profit Gross	1 36.1	28.4	40.6	37.9	76.7	66.3
profit margin Gross	43%	43%	44%	45%	43%	44%
expenses1 Fulfillment	16 9	14 0	19 4	14 7	36 2	28 7
Fulfillment expenses ratio	20%	21%	21%	17%	20%	19%
Profit contribution	19.2	14.3	21.2	23.2	40.4	37.5
Profit contribution margin	23%	22%	23%	27%	23%	25%
Marketing expenses	12 4	12 9	21 3	16 7	33 7	29 5
Marketing expenses ratio	15%	19%	23%	20%	19%	20%
G&A	15 3	10 3	14 8	11 6	30 2	21 9
2 2 G&A ratio	18%	15%	16%	14%	17%	15%
Adjusted EBITDA	-8.6	-8.8	-14.9	-5.1	-23.4	-13.9
Adjusted margin EBITDA	-10%	-13%	-16%	-6%	-13%	-9%

Gross profit margin

In EURm and in % of Revenue

Profit contribution margin

In EURm and in % of Revenue

All figures unaudited

Adjusted EBITDA reconciliation

In EURm

Group	Q2 2019	Q1 2019	2019 H1
External revenue	84.8	93.2	178.0
Adjusted EBITDA	-8.6	-14.9	-23.4
Share based compensation expenses	1.0	1.1	2.1
related the Costs IPO to	0.0	0.0	0.0
1 EBITDA	-9.6	-16.0	-25.5
Amortization & Depreciation of PP&E and right-of-use assets 1	8.0	7.4	15.4
EBIT	-17.6	-23.4	-40.9
Europe	Q2 2019	Q1 2019	H1 2019
External revenue	63.9	71.0	134.9
Adjusted EBITDA	-7.1	-14.9	-22.0
Share based compensation expenses	0.8	1.0	1.8
related the Costs IPO to	0.0	0.0	0.0
EBITDA	-7.9	-15.8	-23.8
of and right-of-use Amortization & Depreciation PP&E assets	7.0	6.5	13.5
EBIT	-15.0	-22.3	-37.3
LatAm	Q2 2019	Q1 2019	2019 H1
External revenue	20.9	22.2	43.1
Adjusted EBITDA	-1.4	0.0	-1.4
Share based compensation expenses	0.2	0.2	0.3
related the Costs IPO to	0.0	0.0	0.0
EBITDA	-1.6	-0.2	-1.8
of right-of-use Amortization & Depreciation PP&E and assets	1.0	0.9	1.9
EBIT	-2.6	-1.1	-3.7

Financial calendar – upcoming events

Date	Event
September 4th	Goldman Sachs Annual Global Retailing Conference New York (USA)
September 23rd	Berenberg & Goldman Sachs German Corporate Conference Munich (Germany)
November 26th	Publication of quarterly financial report (Q3)
December 2nd	Berenberg European Conference (Pennyhill), Ascot (UK)

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]	Defined as earnings before interest, taxes, depreciation and amortization, adjusted for share based payment expenses for employees, media services provided Company 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.