home24 SE

Investor Presentation • Sep 12, 2018

home24 Earnings Presentation Q2-18

12 September 2018

Today's agenda

• Vision & Highlights
• Q2 Financial Update
• Outlook and Q&A

Our vision: to offer the best value and an inspiring home & living experience to mass market consumers

home24 has multiple drivers for sustainable long-term growth

Platform strategy: we will continue to invest into great assortment and customer experience, driven by tech & data

Well on track in delivering strategic growth initiatives

New TV and advertising campaigns launched in time for peak season

Internationalization of showroom concept: 1st contract in Switzerland signed

Assortment extension ongoing: signature brand "Hülsta" to be launched in Q3

1 st mega outlet in Neu-Ulm opened, 2nd mega outlet in Cologne signed

Warehouse construction at new site in Halle/Germany on track for opening in Q1

Q2 2018 highlights

Introduction of new fulfilment system (ERP) completed

Outbound deliveries from previous ERP system in % of total EU deliveries per CW (EURm)

▪ High scalability of new system allows to implement growth plans in upcoming quarters

• Transition between the old and the new system completed: new orders flowing through new system as of mid April
• Temporary parallel operation of old and the new ERP system preferred go-live scenario vs. migration of live orders
• Unexpected high open order volume at end of Q2 in old system as a result of warehouse handling inefficiency in dual systems
• Continuous system improvement ongoing. Efficiency of fulfilment processes returning to pre transition levels

Promising capital market debut

In a difficult market environment, home24 is still in a position to significantly outperform the market

	Group Revenue
CC1
+30%	+8%	+19%
Q1-18 YoY	Q2-18 YoY	H1-18 YoY

Group Active Customers
+20% to
1.16m
Q2-18 YoY

▪ Q2 revenue with +8% at upper end of range communicated on July 14

• H1 revenue increase of 19% YoY adjusted for FX effects
• Number of active customers increased by 20% YoY to 1.16m
• Despite challenging Q2 overall profitability on PY level

+/- 0pp at -9% H1-18 YoY

Group Adjusted EBITDA²

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

²Adjusted to exclude share-based marketing spend and share-based payments as well as one-time IPO effects of EUR 1.3m. 2018 figures subject to IFRS 16

Q2 Financial Update

Significant growth against industry trend even in very challenging environment

• H1-18 GOV growth of 18%¹
• Temporary deceleration of growth in Q2
• General demand slump in the market for large furniture, home24's core business in DACH, due to the extraordinary hot and dry weather April to August in Germany
• Outperformed growth in comparison to offline peer group which in parts experienced double-digit sales declines

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

Revenue improved by 19 percent year-on-year to EUR 151m in H1-18

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

• Significant revenue increase of 14% YoY. Adjusted for FX effects, increase amounts to 19%
• EU growth significantly affected by Q2 demand shock in DACH region. In addition, processing speed of open orders below target level, resulting in lower realized revenues than expected
• Strong proof of scalability of home24 model in Brazilian market: 46% growth in local currency H1; albeit 25% pp lost due to fx

Lower revenue level impacts Q2 profitability in Europe. Brazil with positive adjusted EBITDA for H1

Adj. EBITDA¹ in EURm and in % of Revenue

• Despite challenging Q2 overall profitability for H1 on PY level
• Broadly flat Gross Margin YOY anticipates devaluation of inventory reserve as a result from lower demand in H1
• One-time effects from temporary parallel usage of the two ERP systems. (e.g. warehouse handling, customer service, cancellation of delayed deliveries)
• Marketing ratio impacted by topline demand slump and efficiency temporarily not being on PY level
• Stable SG&A despite growth even at like for like level excluding IFRS16

Liquidity position positively influenced by IPO proceeds

Cash flow in EURm

• Cash flow from operating activities improved compared to PY period
• Net proceeds from IPO amount to EUR 147.6m
• Investing activities remain focused on internally developed software and acquisition of the new ERP system

¹Adjusted to exclude share-based marketing spend and share-based payments as well as one-time IPO effects of EUR 1.3m ² mainly consists of delta provisions, interest, tax payments , FX effects and IPO costs ³ Adoption of IFRS 16 leads to shift of EUR 3.9m from operating cash flow to financing cash flow

Medium-term growth and earnings guidance confirmed

• Revenue growth target confirmed at c. 2x+ expected online market growth, both for FY18 and medium term, consistently outperforming offline peers
• Q3 financial performance still affected by weatherrelated lower market demand period until August and ERP introduction
• Full year 2018 revenue growth significantly depends on the lower demand period being compensated in the period September to December and, thus, may be below previous expectations
• Strategic goal to reach adjusted EBITDA breakeven on a Group level until end of 2019 confirmed

Financial calendar – upcoming events

Date	Event
Today, September 12th	Publication of half-yearly financial report
September 25th & 26th	Attendance of Berenberg & Goldman Sachs German Corporate Conference, Munich (DE)
November 27th	Publication of quarterly financial report (Q3)
December 3rd	Attendance of Berenberg European Conference (Pennyhill), Ascot (UK)

Despite challenging Q2 overall profitability on PY level

In EURm and in % of Revenue

Revenue	ACT Q1-17 67,5	ACT Q1-18 84,5	ACT Q2-17 64,9	ACT Q2-18 66,7	ACT HY-17 132,5	ACT HY-18 151,2
1 Revenue Growth CC	1%	30%	6%	8%	4%	19%
Cost of Sales 1	37,7	46,6	37,0	38,3	74,6	84,9
Gross Profit Margin Rate	44%	45%	43%	43%	44%	44%
Fulfillment Expenses	12,2	14,7	11,0	14,0	23,2	28,7
Fulfillment Expenses Ratio	18%	17%	17%	21%	17%	19%
Profit Contribution	17,7	23,2	17,0	14,3	34,7	37,5
Profit Contribution Margin	26%	27%	26%	22%	26%	25%
Marketing Expenses	12,7	16,7	9,1	12,9	21,9	29,5
Marketing Expenses Ratio	19%	20%	14%	19%	17%	20%
SG&A	12,2	11,6	12,5	10,3	24,7	21,9
SG&A Rate 2	18%	14%	19%	15%	19%	15%
2 Adjusted EBITDA	-7,2	-5,1	-4,7	-8,8	-11,9	-13,9
Adjusted EBITDA Margin	-11%	-6%	-7%	-13%	-9%	-9%

Glossary

KPI	Definition
Average order value [in EUR]	▪ Gross order value for the relevant period, divided by the number of orders for such period
Gross order value [in EUR]	▪ Aggregated value of 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 [#]	▪ Number of customers having made at least one valid order (i.e. not failed, declined or cancelled) starting the fulfillment process (before rejected & returned) within the last twelve months before end of period
Open customer orders [in EUR]	▪ Gross order value of customer orders, which have not been delivered to the customer as of reporting date
Platform	▪ IT platform including an automatic back-end fulfillment system to optimize end-to-end processes from sourcing, through warehousing, packaging, delivery, payment processing and customer service and an advanced big data analysis tool also based on proprietary software

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.