home24 SE

Investor Presentation • Nov 27, 2018

home24 Earnings Presentation Q3-18

27 November 2018

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

• Huge and uniquely attractive Home & Living market opportunity of EUR 117 billion
• 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
• Markets characterized by low online penetration of 5% with huge catch-up potential
• Pioneering technologies improve shopping experience and empower data-driven decisions

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

home24: Back on growth path

Q2 2018

Significant revenue increase of 8%¹ despite challenging weather conditions

Introduction of new fulfilment software led to lower processing speed

Q3 2018

Back on growth path with 16%¹ currencyadjusted growth

Strengthening of position as first online destination in Home&Living market

Significant investments will have positive impact on revenue and profitability in FY 2019

Forecast: Q4 2018

25-31%¹ revenue growth expected

Full year revenue of EUR 315-323m forecast, equaling >20%¹ growth compared to 2017

2019 Forecast confirmed:

Revenue growth rate at or above FY18 level

Break-even at the end of 2019 on the basis of adjusted EBITDA

Today's agenda

• Business Highlights
• Financial Update
• Outlook and Q&A

Fulfilment platform as catalyst for growth

• Dual ERP system phase operationally terminated: all orders from old system have been fulfilled
• Old ERP sunset expected by end of Q4-18 for all nonlegal/tax related topics
• New ERP and data platform steadily gaining efficiency, with positive P&L effects through next 4 quarters
• Investment in new warehouse logistics center in Halle fully on track to provide further efficiency gains

Continuous investments in further strengthening unique market position

• Significant marketing investments support positive long-term effects and efficient future marketing scaling
• Well perceived TV campaign supported by Facebook, Instagram and YouTube formats
• 360° campaigns across online and offline channels (e.g. "Drinnenzeit")
• Scaling of Social and Display channels as growth drivers
• Data driven attribution and traffic acquisition
• In a challenging environment, home24 invests to gain market share

New showroom and mega outlet to complement go-to-market approach

• Opening of two additional showrooms. home24 showroom concept now also represented in Switzerland
• Focus of the assortment shown in the showrooms is on private labels, building on home24's strengths in curated, value for money offering
• In addition to the mega outlet in Neu-Ulm (launched in November) home24 will open two mega outlets in Hanover and Cologne in Q1 2019
• Both concepts, showrooms and mega outlets, have proven themselves as a complementary part of the home24 strategy to attract customers and further strengthen brand awareness

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Q3 Financial Update

Order intake growth reinitiated in continuously challenging environment, topline back on growth path

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

• Growth reinitiated, but still impacted by the significant weather-related decline in demand in Continental Europe
• home24 was able to gain market share over its competitors
• Q3 in line with YTD-18 GOV growth of 18%¹
• Catch-up effect post summer not yet materialized

In Q3-18 adjusted revenue growth doubled to 16% after 8% growth in Q2-18

• home24 generated net revenues of EUR 221m YTD-18 (PY: EUR 196m) and, adjusted for foreign currency effects, thus achieved a significant increase of 18% year-on-year¹
• Q3 revenue improved by 16% year-on-year to EUR 70m¹
• Business in Brazil, which was not affected by weather conditions, consistently performed well YTD-18, increasing revenue by 45% year-on-year¹

home24 with significant investments - positive impact on revenue and profitability in the coming year

Adj. EBITDA¹ in EURm and in % of Revenue

• Investments reduce profitability YTD 2018:
• Continued marketing invests despite weaker demand and to acquire active lower funnel and gain market share
• Transition to new ERP system temporarily caused additional costs; new system will enable highly efficient processes at lower costs
• Additional start-up investments were made in further growth, e.g. in new logistics centre, assortment, technology, showrooms and outlets with payback only throughout 2019

Profit and loss statement- Group

In EURm and in % of Revenue

	ACT Q3-18	ACT Q3-17	ACT Q2-18	ACT Q2-17	ACT YTD-18	ACT YTD-17
Revenue	69,9	63,5	66,7	64,9	221,1	196,0
CC1 growth Revenue 1	16%	18%	8%	7%	18%	8%
of sales Cost 1	39 5 ,	35 3 ,	38 3 ,	37 0 ,	124 4 ,	109 9 ,
profit Gross	30,4	28,2	28,4	28,0	96,7	86,0
profit Gross margin	44%	44%	43%	43%	44%	44%
Fulfillment expenses	14 3 ,	10 2 ,	14 0 ,	11 0 ,	43 0 ,	33 4 ,
Fulfillment expenses ratio	20%	16%	21%	17%	19%	17%
Profit contribution	16,1	18,0	14,3	17,0	53,7	52,6
Profit contribution margin	23%	28%	22%	26%	24%	27%
Marketing expenses	16 5 ,	11 4 ,	12 9 ,	9 1 ,	46 0 ,	33 3 ,
Marketing expenses ratio	24%	18%	19%	14%	21%	17%
G&A 2 2	12 6 ,	12 4 ,	10 3 ,	12 5 ,	34 5 ,	37 1 ,
G&A ratio	18%	20%	15%	19%	16%	19%
EBITDA2 Adjusted	-12,9	-5,9	-8,8	-4,7	-26,9	-17,8
Adjusted margin EBITDA	-19%	-9%	-13%	-7%	-12%	-9%

Well on track in delivering strategic growth initiatives

Assortment extension, esp. in high impulse and purchase frequency areas Assortment extension, especially in high impulse and purchase frequency areas

Go-live of payments by installments in Germany

Sundown of old ERP system

Roll out of personalization/CRM tools

Extension of our warehouse footprint

Continuing private label investment, growing our DTC value for money value proposition

Summary & outlook

• Challenging market conditions in Q2 and Q3
• Unusually long and hot weather period until late autumn in Continental Europe
• Online and offline furniture market experienced up to double digit decline in revenue in the previous quarters
• home24 was able to withstand this trend and able to gain market shares over its competitors In a challenging environment
• Record revenues during Black Friday period
• Revenue growth expected to further accelerate to 25-31%¹ in Q4-18
• Forecast of revenue for full year 2018 between EUR 315-323 million – equivalent to > 20%¹ growth (YoY) adjusted for currency effects
• Post IPO investments lead to profitability below previous year
• Medium-term earnings forecast confirmed
• Revenue growth rate that is at or above the FY18 level
• Break-even at the end of 2019 on the basis of adjusted EBITDA

Gross Margin

In EURm and in % of Revenue

Profit contribution

In EURm and in % of Revenue

Liquidity position remains strong despite higher investments

Cash flow YTD in EURm

Adjusted EBITDA reconciliation

In EURm

Group	Q3-2018	Q2-2018	YTD-2018
External revenue	69 9	66 .7	221 .1
EBITDA1 Adjusted	-12 9	-8 8	-26 9
Share based compensation expenses	2 1	2 8	8 0
related the Costs IPO to 1	0 1	1 3	1 5
& of PP&E and right-of-use Amortization Depreciation assets	3 6	4 5	13 0
1 Finance costs - net	0 4	1 0	2 5
before Loss taxes	-19 3	-18 .5	-51.8
Europe	Q3-2018	Q2-2018	YTD-2018
External revenue	53 .4	51.6	171.8
EBITDA1 Adjusted	-12 .7	-8 .5	-27 0
Share based compensation expenses	1 9	2 5	7 1
related the Costs IPO to	0 1	1 3	1 5
& of PP&E and right-of-use Amortization Depreciation assets	3 1	4 0	11 2
Finance costs - net	-0 1	0 5	0 8
before Loss taxes	-17.7	-16 8	-47.6
LatAm	Q3-2018	Q2-2018	YTD-2018
2 External revenue 2	16 .5	15.0	49 3
EBITDA1 Adjusted	-0 3	-0 3	0 .1
Share based compensation expenses	0 3	0 3	0 8
related the Costs IPO to	0 0	0 0	0 0
of and right-of-use Amortization & Depreciation PP&E assets	0 6	0 6	1 8
Finance costs - net	0 5	0 5	1 7
before Loss taxes	-1.6	-1.8	-4.2

¹Adjusted to exclude share-based marketing spend, share-based payments and one-time IPO effects

KPI definitions: External Investor Reporting

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