home24 SE

Earnings Release • Feb 13, 2019

home24 FY 2018/Q4 Trading Update

13 February 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
• 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
• Strong financial profile, combining strong growth and path to profitability
• Multiple drivers for long-term growth & differentiation with significant margin upside

1

Today's agenda

• Management Update
• Preliminary FY Financials
• Outlook and Q&A

Management update

the AGM in June

2

Management summary - preliminary unaudited financials

Assortment extension, esp. in high impulse and purchase frequency areas Re-acceleration of revenue growth to 19% ¹ and EUR 92m in Q4 2018, despite partial shift of revenue recognition to Q1 2019

Total annual revenues for 2018 of EUR 313m corresponds to 18%¹ revenue growth

Significant outperformance of the online furniture market in our geographies, which grew by c.10%, and the total market that showed no growth²

LatAm first region that is profitable for the full year 2018 with EUR 0.6m on adjusted EBITDA basis, on the back of significant growth

Group adjusted EBITDA 2018 at -13%, reflecting missing operating leverage caused by the weak demand in EU April to October, Q4 revenue shift and key investments ramp-up

Concrete milestones defined for 2019 to reach goal of break even on adjusted EBITDA basis by the end of 2019

Continuous increase in order intake growth rates since Q2

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

• Continued marketing investments enabled home24 to partially offset the weather-related weakness in demand to gain market share and continue to grow
• Around the Black Friday shopping event at the end of November 2018, home24 reported the most successful week in the company's history

CC

¹Based on constant currency using previous year BRL/EUR FX rates All figures preliminary and unaudited

home24 grew by 18% YoY in 2018 with revenues of c. EUR 313m

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

¹Based on constant currency using previous year BRL/EUR FX rates

²Sources: Euromonitor International, BVDM

All figures preliminary and unaudited

• The offline market declined in some countries. The total furniture market in the home24 geographies showed virtually no growth in 2018²
• home24 significantly outperformed the online furniture market, which grew by c. 10% in the home24 geographies in 2018²
• In the absence of negative demand side effects, LatAm continued its strong growth trajectory
• In Q4 2018, home24 increased its revenue by 19%¹ to EUR 92m YoY, with partial shift of revenue recognition to Q1 2019

¹Adjusted to exclude share-based marketing spend and share-based payments as well as one-time IPO effects of EUR 1.5m. 2018 figures subject to IFRS 16 All figures preliminary and unaudited

Adj. EBITDA¹ in EURm and in % of Revenue

• -12 -13 -39 -4 -6 -22 Group Europe -13 -13 -40 -4 -5 -20 0 0 1 0 0 -2 LatAm Q4 18 Q4 17 Q3 18 Q3 17 FY 18 FY 17 Q4 18 Q4 17 Q3 18 Q3 17 FY 18 FY 17 Q4 18 Q4 17 Q3 18 Q3 17 FY 18 FY 17 -14% -5% -19% -9% -13% -8% -19% -6% -24% -11% -17% -9% 2% 0% -2% -3% 1% -4%
• Adjusted EBITDA for 2018 reflects missing operating leverage caused by the weak demand in EU April to October and Q4 revenue shift, plus key investments ramp-up
• LatAm first region to be profitable on adjusted EBITDA basis, at EUR 0.6m for 2018
• Transition to new ERP system in EU caused temporarily higher handling and personnel costs thus also impacting earnings
• Key investments for 2019 already with cost impact in Q3/4 2018, e.g. EU warehouse and mega outlets

Adjusted EBITDA for 2018 amounted to c. EUR -39m or -13%

FY 2018 with significant progress in difficult market environment

		Main financials
		2015	2016	2017	2018	2018 financials key drivers
h 1 C) wt C o n Gr (i	Revenue	51%	5%	12%	18%	▪ Re-acceleration of growth in FY 2018, albeit below expectations ▪ Outperformance of online market growth by factor 2 broadly intact ▪ Slower YE revenue realization and weak EU demand drag on FY 2018 growth
n argi M	Cost of sales	62%	58%	55%		▪ Stable Cost of Sales in EU ▪ Slight increase in LatAm Cost of Sales
	Fulfillment costs	22%	20%	17%		▪ SAP introduction led to warehouse handling inefficiencies and increased fulfilment costs in EU ▪ Price increases of distribution carriers through towards end of year
	Marketing costs	22%	17%	18%		▪ Various temporary effects on marketing efficiency after Q1 2018, esp. missing operating leverage during weak demand period in EU and delayed YE revenue realization
	Adj. EBITDA2	-32%	-16%	-8%	-13%	▪ Lower operating leverage on overheads than planned, parallel ERP systems operations (incl. lower Gross to Net ratios) and ramp-up costs of investments ▪ Positive accounting effect from reclassification of rental expenses (IFRS 16)
w o h Fl Cas	Investing CF in EURm	-20	-14	-14	-24	▪ SAP introduction paired with significant post IPO investments into warehouses and outlets
	CF from change in Working Capital in EURm	-20	5	-2		▪ Discontinued factoring facility in EU leading to overall negative CF from WC ▪ Cash generation in growth phase due to negative Working Capital cycle

¹Revenue growth shown in year-on-year constant currency

²Adjusted to exclude share-based marketing spend and share-based payments as well as one-time IPO effects. 2018 figures subject to IFRS 16 All figures preliminary and unaudited

Liquidity position remains strong despite higher investments

Cash flow FY in EURm

Path to profitability: selected key milestones

2019 Forecast confirmed:

Revenue growth rate at or above FY18 level

Break even on adjusted EBITDA basis by the end of 2019

Q2 2019

• rd party assortment extension & private label add. styles push

Q3 2019

▪ Warehouse Brazil

▪ Additional brands

▪ Regional Returns clearance EU

▪ Customer Service

automation phase 2

automation phase 2

▪ EU warehouse

• Mega Outlet North

• Personalized customer acquisition & conversion

• Mobile push

• 3

Q1 2019

▪ Warehouse EU

▪ Mega Outlet West

▪ Old ERP switch off

▪ Brazil offline B2B roll-out

▪ In-house programmatic customer acquisition

Milestone achievement over the course of the year will drive revenue growth and margin improvements, esp. in H2 2019

			Main financials
		2018	Target	2019 initiatives
h wt o Gr	1 C) Revenue C n (i	18%		▪ Drive conversion rate optimization and repeat though strategic assortment extensions, technology innovations and more personalized offering & promotions ▪ Return to 'pre summer level' of 1st order profitable customer cohort acquisition ▪ Tap into vast growth opportunity in Brazil with offline B2B in highly fragmented market
n argi M	Cost of sales			▪ Attractive private label extensions ensure high sales share at attractive margins, despite 3rd party assortment extension in new categories ▪ Mega outlets enable higher return recovery rates after initial ramp up phase
	Fulfillment costs			▪ New warehouses enable orders to be processed even more efficiently after ramp up phase ▪ Additional invests into automation for existing warehouses to drive handling costs down ▪ Regional clearance of returned goods to reduce distribution costs and handling damages
	Marketing costs			▪ More precise targeting of potential customers and personalizing the shopping experience to reduce customer acquisition costs and increase repeat sales ▪ Further automation of attribution and customer acquisition in back of proprietary data platform
	Adj. EBITDA2	-13%		▪ Operating leverage and efficiency gains in overhead ▪ Further invest into process automation, e.g. in customer service ▪ Avoidance of redundant ERP costs through shutdown of the old system
w o h Fl Cas	Investing CF in EURm	-24		▪ Continued investment into technology innovation and 2019 extra effort in supply chain infrastructure and offline outlet strategy
	CF from change in Working Capital			▪ Working Capital cycle to remain negative, providing additional cash in growth phase also pre break-even

¹Revenue growth shown in year-on-year constant currency

²Adjusted to exclude share-based marketing spend and share-based payments as well as one-time IPO effects. 2018 figures subject to IFRS 16 All figures preliminary and unaudited

Summary & outlook

• Significant outperformance of the online furniture market in our geographies, which grew by c. 10%, and especially the total market, that showed virtually no growth in 2018
• 2018 revenues of EUR 313 million corresponds to 18% currencyadjusted revenue growth, considering Q4 shift at c. 2x online market growth
• In the absence of demand and system effects, Brazil showing strong growth and profitable for the full year 2018 with EUR 0.6 million on adjusted EBITDA basis
• Group adjusted EBITDA 2018 at -13%, reflecting missing operating leverage caused by the weak demand in EU April to October and Q4 revenue shift, as well as ramp-up costs of key investments on path to profitability
• Clear milestones defined to reach goal of break even on adjusted EBITDA basis by the end of 2019

Financial calendar – upcoming events

Date	Event
April 25th	Publication of annual financial report
May 28th	Publication of quarterly financial report (Q1)
June 19th	Annual General Meeting
September 3rd	Publication of half-yearly financial report
November 26th	Publication of quarterly financial report (Q3)

KPI definitions

KPI	Definition
Gross order value	Defined as the aggregated value of orders placed in the relevant period, incl.
[in EUR]	VAT, irrespective of cancellations, returns, subsequent discounts and vouchers
Number of active	Number of customers having placed at least one not cancelled order during the
customers [#]	twelve months prior to the respective date, irrespective of returns
Total gross orders	The number of orders placed in the relevant period, irrespective of cancellations and returns
Average order value	Gross order value for the relevant period, divided by the number of orders for
[in EUR]	such period

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.