home24 SE — Earnings Release 2019

Feb 11, 2020

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home24 FY & Q4 2019 Trading Update

11 February 2020

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FY & Q4 2019 selected highlights

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1. Revenue growth shown in year-on-year constant currency (+19% FY 2019 YoY in EUR).

2. Excluding Other Operating Expenses and Other Operating Income.

3. Adjusted only for share-based compensation expenses for directors, officers and employees of the Group. All figures preliminary and unaudited.

Today's agenda

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• Management Update
• Preliminary FY Financials

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Outlook and Q&A

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Management Update

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Management update

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Marc Appelhoff

Brigitte Wittekind

Johannes Schaback

Chairman of the Management Board

Finance, Marketing & Sales, Commercial, International, Legal

Management Board Member

Operations, Product Quality & Safety, Customer Service, Outlets, Internal Control System

Management Board Member

Technology, Data, HR

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Preliminary, unaudited FY Financials

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Management summary

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Assortment extension, esp. in high impulse and purchase frequency areas home24 is break-even in Q4 2019 on adjusted EBITDA basis – both as a Group and in the business segments Europe and LatAm, improving adj. EBITDA by 17pp year over year

Post-IPO investments successfully pay off after ramp-up phase, driving profitability improvements across all P&L line items

Significant currency-adjusted growth of 21 % to EUR 109m revenue in Q4 2019 compared to Q4 2018. Balanced growth across segments (20% in EU, 24% in LatAm in CC)

Annual revenues in 2019 amounted to EUR 372m and grew 20% on a currency-adjusted level compared to 2018

Cash flow from operating activities positive in H2 2019. Cash position at EUR 46m at year end leaving ample headroom for 2020

For 2020 we expect stable revenue growth of 15-20% (in CC) in similar range to 2018 and 2019 and adj. EBITDA break-even in FY 2020 (plus to minus 2% adj. EBITDA margin)

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Record quarterly Gross Order Value in Q4, greater EUR 150m. Active customers exceeding 1.5m threshold

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

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• Healthy Q4 GOV growth rates leading to FY GOV growth of +15% YoY in CC
• ▪ Slight deceleration in Q4 YoY growth rates linked to profitability focus
• Stable YoY Basket size in Q4 as well as FY
• Brazilian currency fx vs EUR broadly in line with previous year. Currently only limited impact of constant currency reporting

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Positive order intake to revenue development leading to significant growth to FY 2019 revenue of EUR 372m

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Revenue in EURm and Growth YoY in %

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All figures preliminary and unaudited.

^▪ Order intake of +11% in CC in Q4 translates into IFRS revenue growth of +21% YoY, with revenues of EUR 109m

^▪ Diligent execution of strong campaigns paired with YoY improved order intake to revenue realization at year end supported positive IFRS growth rate

^▪ EU with further positive growth momentum. LatAm growth rates remain strong

Crucial IPO milestone of adj. EBITDA break-even within 18 months after IPO successfully achieved in Q4 2019

Adj. EBITDA in EURm and in % of Revenue

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▪ Post-IPO investments start to pay off: Q4 adj. EBITDA positive for Group, EU and LatAm (adjustments solely for share based payments)

▪ FY 19 adj. EBITDA significantly improved not only in relative terms (+5pp), but also in absolute figures (+EUR 12m)

• EU adj. EBITDA improved by 20pp in Q4 (FY: +7pp) indicating the relevance of one-time effects and investment ramp-up costs in 2018, but also proving resulting efficiency and operating leverage in 2019
• LatAm with profitable Q4, incl. c. EUR 2m one-time effect in Brazil (tax ruling)

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Operating cash flow positive for second half of 2019

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Cash flow FY 2019 in EURm

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1 Including e.g. changes in provisions, changes in other assets/liabilities, tax expenses and FX effects. 2 Adoption of IFRS 16 leads to shift of EUR 4.1m net (EUR 5.7m gross) from operating cash flow to financing cash flow in H2 2019. All figures preliminary and unaudited.

• As per previous guidance, cash level decreased only moderately by EUR 6m in second half of 2019, to a cash level of EUR 46m at year end
• Positive operating cash flow in H2 19 supported by Working Capital development
• Available factoring facility in EU only drawn by c. EUR 1.5m
• Investments into IT and fixed assets continued in H2 19 with EUR 9m bringing FY 19 investments to record high level of EUR 22m
• Positive financing cash flow results from reverse factoring facility in Latam (+EUR 5m)

Outlook & Q&A

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Significant growth and profitability improvements through FY 2019 as investments pay off. 2020 margins expected c. at Q4 level

		Main financials 2019
		Q1	Q2	Q3	Q4		2020 outlook and guidance
h 1 C) wt C o n Gr (i	GOV	16%	17%	16%	11%
	Revenue	12%	28%	20%	21%		at around 15-20% in CC
ns argi m &L P	Cost of sales	56%	57%	55%	55%		margins expected on Q4 19 baseline ▪ Further operating leverage in SG&A expected
	Fulfillment costs	21%	20%	20%	18%
	Marketing costs	23%	15%	18%	14%
	Adj. EBITDA2	-16%	-10%	-9%	2%
m) w o R h fl U n E Cas (i	Cash flow from investing activities	7	6	6			major investment projects expected in 2020
	Change in net working capital	-5	-10	8			between growth and profitability

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• 2019 growth supported by reversal of negative one-time effects from 2018 (e.g. normalized GOV to Revenue ratio)
• ▪ FY 2020 revenue growth expected at previous years levels, at around 15-20% in CC
• Further improvements in cost of sales and fulfillment cost margins expected on Q4 19 baseline
• Absolute marketing expenses to moderately increase while marketing ratio continues to improve. Seasonal pattern remains (Q1 & 3 investment, Q2 & 4 harvesting quarters)
• Further operating leverage in SG&A expected
• ▪ FY 2020 adj. EBITDA ratio expected in corridor of -2 to +2%
• Major post-IPO investments successfully implemented, no major investment projects expected in 2020
• Cash position implies continuous conscious trade-off between growth and profitability

1 Growth shown in year-on-year constant currency.

2 Adjusted to exclude share-based compensation expenses. Figures subject to IFRS 16.

All figures preliminary and unaudited.

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After successful foundation work and path to break-even, main focus will now go into strengthening home24 key differentiators

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	We remain committed to creating the best value and inspiring Home & Living experience to everyday people
	by offering great value products people love		in a convenient and inspirational shopping experience
	Broad but relevant, curated assortment empowering customers to choose from a wide range of styles, materials and prices		Fast, reliable and flexible delivery times paired with convenient payment methods
	Exclusive assortment only available at home24,		Effective & friendly customer service support and transparent communication whenever needed
	combined with a broad selection of relevant third party products		Opportunities to get a touch and feel for the product offering online, but also in showrooms
\$	With a great value for money and product quality aspiration, creating happy homes, and a clear commitment to sustainability		Personalized relevant content that inspires and consults, helping to make a complex purchase decisions easier (ref. no strong consumer brands)

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While we focus primarily on financials and KPIs in company updates, we are continuously expanding our customer offering... 204 234 245

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...or adding relevant styles. Data driven and curated. Empowering customers to create the homes they dream of.

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6 main target customer groups

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For 2020, we have exciting initiatives lined up to further strengthen our customer value proposition

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Having reached core profitability, home24 is uniquely positioned to become the preferred online destination and exploit vast market potential

Market

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Huge market opportunity characterized by still low online penetration with huge catch-up potential

Value chain

Scalable and automated value chain based on latest SAP solutions and proprietary service based tech setup

Customer value proposition

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

Data & Technology

Pioneering technologies improve shopping experience and empower data-driven decisions

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Financial calendar – upcoming events

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Date	Event
March 26th	Bankhaus Lampe German Conference Baden-Baden, Germany
April 7th	Publication annual financial report
May 12th	Publication quarterly financial report (Q1)
June 3rd	Annual General Meeting
August 18th	Publication half-yearly financial report
November 10th	Publication quarterly financial report (Q3)

Profit and loss statement- Group

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In EURm and in % of Revenue

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1
1
2 2

Gross profit margin

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In EURm and in % of Revenue

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All figures preliminary and unaudited.

Profit contribution margin

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In EURm and in % of Revenue

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All figures preliminary and unaudited.

KPI definitions

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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

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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 obligations to 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.