Westwing Group SE — Earnings Release 2021

Nov 11, 2021

Q3 2021 Results

Munich, November 11, 2021

Certain statements in this communication may constitute forward looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made and are subject to significant risks and uncertainties. You should not rely on these forward-looking statements as predictions of future events and we undertake no obligation to update or revise these statements. Our actual results may differ materially and adversely from any forwardlooking statements discussed on this call due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfillment centers, inaccurate personnel and capacity forecasts for fulfillment centers, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels.

AGENDA

Business Update

Financial Update

Summary & Q&A

Appendix

Business Update

Summary

Q3 2021 RESULTS	GROWTH	EUR 103m Revenue, 5% growth on top of strong baseline from Q3 last year
	PROFITABILITY	EUR -0.4m Adj. EBITDA at -0.3% Adj. EBITDA margin
	FREE CASH FLOW	YTD Free Cash Flow at EUR -0.5m driven mainly by seasonality effects and investments into inventory to mitigate against supply chain disruptions
Active Customers		Loyal active customer base at 1.7m end of Q3 2021, +36% vs. Q3 2020
Supply Chain Update		Continued supply chain disruptions impacting profitability; risk of inventory shortage mitigated through stock buffer: good product availability for Q4 expected
Westwing Collection		Strategically important Westwing Collection share up by 12%ppts from Q3 2020 to 38% in Q3 2021
FY 2021 Guidance		Revenue guidance of EUR 510-550m (18-27% growth) confirmed with Adj. EBITDA expected at the lower end of the guided range of EUR 42-55m (8-10% Adj. EBITDA margin)

Note: Unaudited.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items.

Westwing turns 10: A Growth Story

GMV (in EUR m)

Note: Unaudited.

Topline level shift confirmed, continued growth on top of last year's extraordinary baseline

Global Supply Chain situation remains challenging with temporal impact on profitability

Current status

• Global cargo disruptions cause continued increase of sea freight rates and capacity issues; challenges expected to remain at least into H1 2022
• Supply volatility caused bulk delivery peaks from suppliers, resulting in temporary but significant increase in inventory holding, warehouse handling and storage costs
• Sell-off of inventory at lower margins to increase storage capacity

Mitigating measures

• Good product availability for Q4 ensured through significant investments into inventory
• Close collaboration with suppliers to ensure optimal availability (detailed forecasting with suppliers, prioritization and early reservation of production capacity)
• Consumer price increases to partially offset cost inflation from container rates and raw material prices

Financial impact

• External challenges expected to last for the remainder of the year and at least into the first half of 2022, leading to a reduction in gross and contribution margins
• Temporary increase in Net Working Capital over next quarters likely, as we secure stock and ensure supply through pre-payments and inventory buffer

Tremendous growth in Westwing Collection to an all time high of 38% of Group GMV in Q3 2021

Financial Update

Revenue growth of 5% in Q3 2021 on top of last year's extraordinary baseline

YTD 2019 YTD 2020 YTD 2021

Q3 2019 Q1 2020 Q3 2021

International Segment Revenue (in EUR m)

(in % of revenue)	YTD 2019	YTD 2020	YTD 2021	Delta 20 vs. 21	Q3 2019	Q3 2020	Q3 2021	Delta 20 vs. 21
Gross margin	43.3%	48.3%	49.8%	+1.4%pts	44.3%	49.2%	49.0%	-0.2%pts	Higher sea freight rates compensated by increased Westwing Collection share
Fulfilment ratio	-24.3%	-20.5%	-20.7%	-0.2%pts	-24.2%	-19.9%	-22.7%	-2.8%pts	Rise in warehousing costs due to temporary supply chain disruptions
Contribution margin	19.1%	27.8%	29.1%	+1.3%pts	20.2%	29.3%	26.2%	-3.0%pts
Marketing ratio	-8.8%	-7.3%	-9.4%	-2.1%pts	-10.9%	-7.8%	-11.9%	-4.0%pts	Growth investments into Marketing
G&A ratio1) G&A ratio(1)	-21.2%	-14.6%	-14.2%	+0.4%pts	-20.6%	-13.2%	-18.0%	-4.8%pts	Growth investments into Technology and Westwing Collection
D&A ratio D&A ratio	3.7%	2.8%	2.5%	-0.2%pts	4.3%	2.7%	3.3%	+0.6%pts
Adj. EBITDA margin Adj. EBITDA margin	-7.3%	8.8%	8.0%	-0.7%pts	-7.1%	10.9%	-0.3%	-11.3%pts

Note: Unaudited.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items. (1) Includes "Other result".

Group profitability at -0.3% Adj. EBITDA margin in Q3 2021 as a result of growth investments as well as temporary supply chain disruptions and seasonal effects

Note: Unaudited.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items.

Net Working Capital positive at EUR 6m due to higher inventory levels during times of stressed supply chains

Free Cash Flow for YTD 2021 driven by temporal investments into working capital as well as tax payments

Note: Unaudited. Free Cash Flow defined as the sum of Operating Cash Flow and Investing Cash Flow.

Strong Net Cash position of EUR 97m

Note: Unaudited. Free Cash Flow defined as the sum of Operating Cash Flow and Investing Cash Flow.

Guidance for Full Year 2021

EUR 510-550m Revenue

18-27% growth

• Revenue guidance for FY 2021 confirmed

EUR 42-55m Adj. EBITDA

8-10% margin

• Profitability expected at lower-end of guidance range due to ongoing supply chain disruptions
• A risk of profitability guidance revision for FY 2021 remains, given supply chain challenges

Targets 2024/25: European Home & Living eCommerce consumer love brand at EUR 1 billion revenue

Prioritization of growth investments in 2022 to lay the foundation for our 2024/25 target of EUR 1bn in Revenue

	(1) Indicative view on 2022	Targets 2024/25	Long-term target
Revenue	H1 2022: Lower growth (similar growth rate to H2 2021 as still with baseline effects) H2 2022: Higher growth (strong growth rate without baseline effects)	EUR 1bn	Outgrow eCommerce Home & Living market
Adj. EBITDA	Positive (Lower margin level vs. FY 2021 due to supply chain challenges and growth investments)	10-12%	15%
CASH	Free Cash Flow positive	NWC: Negative CAPEX: 2-3%	NWC: Negative CAPEX: 2-3%

Note: Unaudited. (1) Figures provided for 2022 are indicative and do not represent official company guidance.

Summary and Q&A

LTM Revenue: EUR 529m

at 45% growth yoy

LTM Adj. EBITDA: EUR 56m

at 10.5% margin

1.7m Active Customers

4.6m orders delivered LTM

Westwing Collection

Westwing Collection at 38% share towards strategic target of 50%

Q3 2021 Summary Investment highlights

The opportunity is massive

Huge Home & Living market of EUR 120bn very early in eCommerce with exiting growth momentum based on a dynamic online adoption

Customer loyalty at the core

The differentiating creative and inspirational core of Westwing drives superior loyalty with 80% repeat order share(1)

Westwing Collection

Our growing Westwing Collection perfectly leverages the loyalty to our love brand at +12 to +15%pts Adj. EBITDA margin upside vs. 3rd party suppliers

Attractive target P&L

Based on our highly profitable consumer love brand strategy we target a long-term profitability of 15% Adj. EBITDA

Strong cash profile

Structurally negative Net Working Capital and low CAPEX ratio

Note: Unaudited.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items. (1) Based on average of 2019 and 2020.

Growing Active Customer base while expanding share of wallet

Note: Unaudited. Active customer defined as a customer who has made a valid order within the last 12 months.

Loyalty-driven business model results in exceptional repeat order rates

Note: Unaudited. Repeat orders defined as total number of valid orders (excluding failed and cancelled orders) from customers, which have placed a valid order before at Westwing.

KPI overview

Group KPIs	Unit	Q1 2019	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021	Q3 2021
Westwing Collection share	in % of GMV	21%	22%	27%	25%	25%	22%	26%	28%	31%	32%	38%
Active customers	in k	927	909	926	949	986	1,178	1,284	1,529	1,720	1,730	1,750
Number of orders	in k	591	492	539	805	675	1,051	874	1,474	1,268	1,022	822
Average basket size	in EUR	129	132	132	121	127	122	129	119	129	135	144
Average orders LTM per active customer	in #	2.6	2.6	2.6	2.6	2.5	2.6	2.7	2.7	2.7	2.7	2.6
Average GMV LTM per active customer	in EUR	318	322	326	327	324	325	330	328	337	341	340
GMV	in EUR m	76	65	71	98	85	128	113	175	164	139	118
Mobile visit share	in %	75%	76%	77%	76%	76%	79%	80%	79%	79%	80%	80%

KPI definitions

GMV share of Westwing Collection (formerly "Own & Private Label"): GMV of Westwing Collection business as % of GMV Group in the same reporting period Westwing Collection share
A customer who has made a valid order within the last 12 months Active customers
Total number of valid orders (excluding failed and cancelled orders) of a reporting period Number of orders
Weighted average value of an order: GMV divided by total number of orders of the same reporting period Average basket size
Total number of orders of the last 12 months divided by active customers of a reporting period Average orders LTM per active customer
GMV of the last 12 month divided by active customers Average GMV LTM per active customer
Gross Merchandise Volume: Value of all valid customer orders placed of a reporting period (i.e. excluding cancelation and VAT, but GMV	including returns).
Share of daily unique visits per platform via mobile devices (tablets and smartphones) as % of all daily unique visits per platform of a reporting period Mobile visit share

Consolidated income statement

EUR m, in % of revenue, unaudited	YTD 2020	YTD 2021	Q3 2020	Q3 2021
Revenue	277	373	99	103
Cost of Sales	-143	-188	-50	-53
Gross profit	134	186	48	51
Fulfilment expenses	-57	-77	-20	-23
Marketing expenses	-20	-35	-8	-12
General and administrative expenses	-47	-63	-16	-22
Other operating expenses	-2	-2	-1	-0
Other operating income	2	3	0	1
Operating result	10	11	5	-6
Financial result	-2	-1	-1	-1
Result before income tax	8	10	4	-7
Income tax expense	-3	-5	-2	-2
Result for the period	5	4	2	-9
Reconciliation to Adj. EBITDA
Operating result (EBIT)	10	11	5	-6
Share-based compensation expenses	7	9	3	2
Provision tax claim discontinued operations	-	0	-	-1
Expenses SE conversion	-	0	-	0
Centralization France	-0	-0	-0	-
D&A	8	9	3	3
Adj. EBITDA	24	30	11	-0
Adj. EBITDA margin (%)	8.8%	8.0%	10.9%	-0.3%

Note: Unaudited.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items.

Adjusted income statement

EUR m, in % of revenue, unaudited	YTD 2020	YTD 2021	Q3 2020	Q3 2021
Revenue	277	373	99	103
Revenue Growth yoy	55.0%	34.7%	65.9%	4.7%
Cost of Sales	-143	-188	-50	-53
Gross Profit	134	186	48	51
Gross Margin	48.3%	49.8%	49.2%	49.0%
Fulfillment expenses	-57	-77	-20	-23
Contribution profit	77	109	29	27
Contribution margin	27.8%	29.1%	29.3%	26.2%
Marketing expenses	-20	-35	-8	-12
General and administrative expenses	-40	-54	-13	-19
Other operating expenses	-2	-2	-1	-1
Other operating income	2	3	0	1
Depreciation and Amortization	8	9	3	3
Adj. EBITDA	24	30	11	-0
Adj. EBITDA Margin	8.8%	8.0%	10.9%	-0.3%

Note: Unaudited.

.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items.

Segment reporting

DACH in EUR m, unaudited	YTD 2020	YTD 2021	Q3 2020	Q3 2021
Revenue	152	210	54	56
yoy Growth (in %)	52%	39%	59%	4%
Adj. EBITDA	21	28	9	2
Adj. EBITDA Margin %	13.8%	13.4%	16.4%	4.3%

International in EUR m, unaudited	YTD 2020	YTD 2021	Q3 2020	Q3 2021
Revenue	126	163	44	47
yoy Growth (in %)	58%	30%	75%	5%
Adj. EBITDA	4	2	2	-3
Adj. EBITDA Margin %	2.9%	1.3%	4.4%	-5.7%

Note: Unaudited.

.

Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment, Marketing and General and Administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years, (iii) expenses for the SE conversion and (iv) income/expenses for the French business restructuring. "Adjusted EBITDA" is calculated by adjusting for these items.

Net Working Capital Bridge

Note: Unaudited.

Net Working Capital (NWC) breakdown as of September 30, 2021 (EUR m)

Share Information as of September 30, 2021
Type of Shares	Ordinary bearer shares with no-par value (Stückaktien)
Stock Exchange	Frankfurt Stock Exchange
Market Segment	Regulated Market (Prime Standard)
Number of Shares issued	20,903,968
Issued Share Capital	EUR 20,903,968
Treasury Shares	326,475

Stock Option Programs as of September 30, 2021

Program	# of options outstanding	Weighted average exercise price (EUR)
VSOPs(1)	903,000	2.43(1)
LTIP 2019(2)	1,944,000	19.30(2)
LTIP 2016	96,450	0.01
Other	762,725	11.13
Total	3,706,175	13.00

Upcoming Events

Date	Event
November 23, 2021	Deutsches Eigenkapitalforum Forum, Virtual
January 10, 2022	Berenberg: German Corporate Conference USA 2022, New York
March 14, 2022	Berenberg: EU Opportunities Conference 2022, London
March 29, 2022	Publication of the Annual Report 2021
March 30, 2022	Jefferies 2nd Annual Pan-European Mid-Cap Conference
May 12, 2022	Publication of first quarter results 2022
May 18, 2022	Annual General Meeting
August 11, 2022	Publication of half-year financial report 2022
November 10, 2022	Publication of third quarter results 2022