Westwing Group SE

Investor Presentation • Nov 7, 2024

Disclaimer | Forward-looking statements

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 forward-looking statements discussed in these statements due to a number of factors. These include, without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfilment centres, inaccurate personnel and capacity forecasts for fulfilment centres, hazardous materials/production conditions with regard to private labels, insufficient innovation capabilities, inadequate data security, insufficient market knowledge, strike risks and changes in competition levels.

Agenda 01 Business update

02 Financial update
03 Investment highlights
04 Q\&A
05 Appendix

1. Business update

State of Westwing

We continued to grow in a declining market.

• GMV growth of $2 \%$ and revenue growth of $3 \%$ year-over-year (yoy) despite market headwinds and shifts in product assortment.
• In the DACH segment, topline grew 9 percentage points (pp) faster than market. ${ }^{(1)}$
• Adjusted EBITDA of EUR 4 million at 4\% margin ( +1 pp yoy) with improved contribution margin and brand awareness investments.
• Free cash flow of EUR -6 million. Net cash of EUR 63 million (end of Q3).
• Net working capital at EUR -5 million at the end of Q3.

We made good progress on our 3-step plan to unlock Westwing's full value potential.

• We successfully implemented the announced reorganisations in Central and Eastern European countries and in our headquarters.
• Our new technology platform was rolled out to customers in four additional countries, ahead of plan.
• Westwing Collection share increased to 58\% of Group GMV in Q3 2024, a new all-time high.
• We continued to strengthen our premium brand positioning.

We are confirming our FY 2024 guidance.

• Revenue of EUR 415 million to EUR 445 million (-3\% to +4\% yoy growth).
• Adjusted EBITDA of EUR 14 million to EUR 24 million (+3\% to +5\% adjusted EBITDA margin).

We are clearly outperforming the market in our largest geography

Year-over-year sales growth

German online furniture, lighting \& decoration market ${ }^{(1)}$

WESTWING

DACH ${ }^{(2)}$

Delta

Q3 2024	$-5 \%$	$+4 \%$	$+9 \%$

Despite actively cutting back on non-premium assortment, which had negative effects on active customers and topline.

Q2 2024
$-1 \%$
Q1 2024
$-3 \%$
$+8 \%$
$+9 \%$

Recap: We are in the middle of a 3-step plan to unlock Westwing's full value potential

Recap: In August, we shared that we had completed the restructuring of Italy and Spain, including consolidation of logistics centre

Status of measures as of August 2024

Mostly Software- as-a-Service (SaaS) tech platform	Mostly global product assortment for IT/ES
Consolidation of local PL/IT/ES logistics centre footprint	Restructuring of IT/ES corporate functions

Im pact in 2024

Topline loss	Low to mid single-digit \% of FY 2024 Group revenue, main impact in H2
One-off cash costs for implementation	EUR -10 to -12 million
Higher D\&A	EUR -3 to -4 million

Return on investment
SaaS tech platform: Short payback period of one year after full implementation.

Other measures: Complexity reduction with longer payback period.

Positive impact on premium brand positioning.

Recap: In August, we then announced further measures to reduce complexity and to strengthen our premium positioning

Status of measures as of August 2024

Impact in 2024

Topline loss	Low to mid single-digit \% of FY 2024 Group revenue, main impact in H2
One-off cash costs for implementation	EUR -10 to -12 million
Higher D\&A	EUR -3 to -4 million
Return on investment
SaaS tech platform: Short payback period of one year after full implementation.
Other measures: Complexity reduction with longer payback period.
Positive impact on premium brand positioning.

Since August, we have been able to implement all measures according to plan

Status of measures as of November 2024

Mostly Software- as-a-Service (SaaS) tech platform	Mostly global product assortment for IT/ES	Mostly global product assortment for CEE ${ }^{\text {III }}$	Premiumisation of global product assortment
Consolidation of local PL/IT/ES logistics centre footprint	Restructuring of IT/ES corporate functions	Restructuring of CEE ${ }^{\text {III }}$ related business functions	Consolidation of HQ related business functions

Impact in 2024

Topline loss	Low to mid single-digit \% of FY 2024 Group revenue, main impact in H2
One-off cash costs for implementation	EUR -10 to -12 million
Higher D\&A	EUR -3 to -4 million

Return on investment
SaaS tech platform: Short payback period of one year after full implementation.

Other measures: Complexity reduction with longer payback period.

Positive impact on premium brand positioning.

(1) Our new tech platform is now available to customers in six countries!

- Westwing Collection share continued to increase

Westwing Collection share [as \% of Group GMV]

(2) Due to the switch to a mostly global and more premium offering, Westwing Collection share in International is on par with DACH

DACH Westwing Collection share [as \% of GMV]

International Westwing Collection share [as \% of GMV]

Westwing Collection $\quad$ 3rd party suppliers

• We launched a brand awareness campaign in Germany which included out-of-home advertising across major German cities
  

• We announced an exclusive collaboration with the renowned porcelain manufacturer MEISSEN
  

2. Financial update

Revenue growth of $3 \%$ year-over-year in the third quarter of 2024

Group revenue [in EUR million]

Westwing achieved revenue growth and market share gains in third quarter despite

• worsened market conditions.
• increasing negative topline impact from the switch to a mostly global and more premium product assortment.

Both segments grew despite the switch to a mostly global and more premium assortment

Segment revenue [in EUR million]
DACH segment

International segment

• Westwing's DACH segment grew by $4 \%$ year-over-year, outperforming the market despite cutting back on non-premium assortment.
• International segment grew by $2 \%$ year-over-year despite the negative impact of switching to a mostly global and more premium product assortment.

Improvements across most of the P\&L lines

International segment with strong improvement in adjusted EBITDA

Segment adjusted EBITDA [as \% of revenue]
DACH segment

9M'23

Q3'23

Q3'24

International segment

9M'23

Q3'23

Q3'24

• Both DACH and International segment with positive adjusted EBITDA margin in Q3 2024 and 9M 2024.
• DACH segment profitability impacted by continued investments into brand awareness.
• International segment profitability driven by strong increase in Westwing Collection share.

Net working capital remained negative with improvement of EUR 3 million year-over-year

Net working capital [in EUR million, as \% of revenue LTM]

• Net working capital mainly impacted by increased trade payables and decreased prepayments on inventories year-over-year at the end of Q3.
• Net working capital increased by EUR 6 million quarter-over-quarter driven by seasonal inventory buildup.

CAPEX in 9M 2024 slightly increased compared to previous year's level

CAPEX [in EUR million, as \% of revenue]

Free cash flow impacted by restructuring expenses and seasonal inventory increase

Free cash flow [in EUR million]

• Net working capital effect in Q3 2024 of EUR -6 million with seasonal inventory increase of EUR 6 million quarter-over-quarter after 2 years of excess inventory reduction.
• EUR - 1.5 million cash payments in Q3 2024 for restructuring expenses.

Strong net cash position of EUR 63 million at the end of September 2024

FY 2024 guidance confirmed

FY 2023
Guidance FY 2024

Revenue

EUR 429m

EUR 415m to 445m

(-3\% to +4\% year-over-year growth)

Adjusted EBITDA

EUR 18m

EUR 14m to 24m

(+3\% to +5\% margin)

Comments on full year guidance

• Stronger negative impact from centralisation and premiumisation expected in the fourth quarter compared to Q3 2024.
• Due to importance of peak season and challenging market conditions uncertainty remains high.
• However, revenue decline for the full year 2024 is unlikely by now.
• Continued investment into brand awareness.
• Investment for complexity reduction of EUR 10-12 million will be mostly adjusted.
• Free cash flow expected to be break even, including investments in complexity reduction.

3. Investment highlights

Investment highlights

• Unique assortment of gorgeous, own design Westwing Collection and the best 3rd party design brands.
• Best in class inspirational storytelling with distinct visuals and tone of voice.
• Premium services such as interior design service and branded delivery fleet.
• The one-stop destination for premium Home \& Living.
  
• Addressing sizeable premium segment of EUR c. 130b total Home \& Living market ${ }^{(1)}$ in existing 12 Westwing geographies. Future country expansion with additional potential.
• Massive online penetration potential in a mostly offline market.
  
• Desirable brand among design lovers, with a strong presence on social media.
• Clear premium positioning, only getting stronger.
• Huge upside potential from brand marketing invest and offline presence.
• Westwing Collection product brand with attributes of superior design, quality and sustainability.
  
• High margins as a result of pricing power based on a strong brand, as well as the unique Westwing Collection with further GMV share potential.
• Platform \& commercial model allowing for scaling with operating leverage in existing countries and beyond.
  
• Strong net cash position and no debt.
• Strong net working capital.
• Low CAPEX.

4. Q\&A

5. Appendix

Continuously expanding share of wallet with customers

Active customers and average GMV per active customer [in k, in EUR]
As expected, the strategic shift to a more global and premium offering is leading to higher customer churn, particularly in Italy and Spain.

KPI overview

| Group KPIs | Unit | $\begin{gathered} \text { Q1 } \ 2020 \end{gathered}$ | $\begin{gathered} \text { Q2 } \ 2020 \end{gathered}$ | $\begin{gathered} \text { Q3 } \ 2020 \end{gathered}$ | $\begin{gathered} \text { Q4 } \ 2020 \end{gathered}$ | $\begin{gathered} \text { Q1 } \ 2021 \end{gathered}$ | $\begin{gathered} \text { Q2 } \ 2021 \end{gathered}$ | $\begin{gathered} \text { Q3 } \ 2021 \end{gathered}$ | $\begin{gathered} \text { Q4 } \ 2021 \end{gathered}$ | $\begin{gathered} \text { Q1 } \ 2022 \end{gathered}$ | $\begin{gathered} \text { Q2 } \ 2022 \end{gathered}$ | $\begin{gathered} \text { Q3 } \ 2022 \end{gathered}$ | $\begin{gathered} \text { Q4 } \ 2022 \end{gathered}$ | $\begin{gathered} \text { Q1 } \ 2023 \end{gathered}$ | $\begin{gathered} \text { Q2 } \ 2023 \end{gathered}$ | $\begin{gathered} \text { Q3 } \ 2023 \end{gathered}$ | $\begin{gathered} \text { Q4 } \ 2024 \end{gathered}$ | $\begin{gathered} \text { Q1 } \ 2024 \end{gathered}$ | $\begin{gathered} \text { Q2 } \ 2024 \end{gathered}$ | $\begin{gathered} \text { Q3 } \ 2024 \end{gathered}$ | $\begin{gathered} \text { Q4 } \ 2024 \end{gathered}$ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Westwing Collection share | in \% of GMV | 25\% | 22\% | 26\% | 28\% | 31\% | 32\% | 38\% | 37\% | 37\% | 38\% | 44\% | 44\% | 46\% | 46\% | 48\% | 47\% | 51\% | 53\% | 58\% |
| Active customers | in k | 986 | 1,178 | 1,284 | 1,529 | 1,720 | 1,730 | 1,750 | 1,705 | 1,593 | 1,486 | 1,422 | 1,320 | 1,262 | 1,252 | 1,262 | 1,275 | 1,282 | 1,282 | 1,276 |
| Number of orders | in k | 675 | 1,051 | 874 | 1,474 | 1,268 | 1,022 | 819 | 1,262 | 872 | 685 | 620 | 951 | 694 | 614 | 605 | 939 | 676 | 578 | 528 |
| Average basket size | in EUR | 127 | 122 | 129 | 119 | 129 | 135 | 144 | 131 | 147 | 159 | 164 | 149 | 169 | 178 | 177 | 157 | 185 | 198 | 206 |
| Average orders LTM per active customer | in # | 2.5 | 2.6 | 2.7 | 2.7 | 2.7 | 2.7 | 2.6 | 2.6 | 2.5 | 2.4 | 2.4 | 2.4 | 2.3 | 2.3 | 2.3 | 2.2 | 2.2 | 2.2 | 2.1 |
| Average GMV LTM per active customer | in EUR | 324 | 325 | 330 | 328 | 337 | 341 | 340 | 343 | 345 | 349 | 355 | 364 | 373 | 376 | 377 | 377 | 381 | 385 | 388 |
| GMV | in EUR m | 85 | 128 | 113 | 175 | 164 | 139 | 118 | 166 | 128 | 109 | 102 | 142 | 118 | 109 | 107 | 147 | 125 | 114 | 109 |
| Mobile visit share | in \% | 76\% | 79\% | 80\% | 79\% | 79\% | 80\% | 80\% | 80\% | 80\% | 80\% | 80\% | 80\% | 79\% | 78\% | 79\% | 82\% | 81\% | 81\% | 81\% |

KPI definitions

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

Consolidated income statement

EUR million, in \% of revenue	9M 2023	9M 2024
Revenue	297.6	310.4
Cost of sales	$-149.2$	$-152.6$
Gross profit	148.3	157.8
Fulfilment expenses	$-64.2$	$-61.4$
Marketing expenses	$-29.5$	$-40.0$
General and administrative expenses	$-59.6$	$-62.6$
Other operating expenses	$-3.6$	$-5.1$
Other operating income	4.5	4.1
Operating result	$-4.0$	$-7.2$
Financial result	$-0.7$	0.1
Result before income tax	$-4.7$	$-7.1$
Income tax expense	$-0.8$	0.4
Result for the period	$-5.5$	$-6.8$
Reconciliation to adjusted EBITDA
Operating result (EBIT)	$-4.0$	$-7.2$
Share-based compensation expenses	1.6	0.1
Complexity reduction	-	4.5
Depreciation and amortisation	14.3	16.3
Adjusted EBITDA	11.9	13.7
Adjusted EBITDA margin (\%)	$4.0 \%$	$4.4 \%$

O3 2023	O3 2024
92.9	95.8
$-46.6$	$-47.4$
46.3	48.4
$-20.1$	$-18.1$
$-10.6$	$-12.7$
$-19.6$	$-20.1$
$-0.4$	$-1.9$
0.9	1.4
$-3.5$	$-2.9$
$-0.1$	0.0
$-3.6$	$-2.9$
$-0.1$	1.0
$-3.7$	$-1.9$
$-3.5$	$-2.9$
1.0	0.1
-	1.2
4.8	5.1
2.4	3.5
2.5\%	3.7\%

Adjusted income statement

EUR million, in \% of revenue	9M 2023	9M 2024
Revenue	297.6	310.4
Revenue growth year-over-year	$-1.6 \%$	$4.3 \%$
Cost of sales	$-149.2$	$-152.6$
Gross profit	148.3	157.8
Gross margin	49.9\%	50.8\%
Fulfilment expenses	$-64.2$	$-60.6$
Contribution profit	84.2	97.3
Contribution margin	28.3\%	31.3\%
Marketing expenses	$-29.3$	$-39.8$
General and administrative expenses	$-58.1$	$-59.1$
Other operating expenses	$-3.6$	$-5.1$
Other operating income	4.5	4.1
Depreciation and amortisation	14.3	16.3
Adjusted EBITDA	11.9	13.7
Adjusted EBITDA margin (in \%)	4.0\%	4.4\%

Q3 2023	Q3 2024
92.9	95.8
$5.2 \%$	$3.1 \%$
$-46.6$	$-47.4$
46.3	48.4
49.8\%	50.5\%
$-20.1$	$-18.1$
26.2	30.3
28.2\%	31.7\%
$-10.6$	$-12.6$
$-18.6$	$-18.9$
$-0.4$	$-1.9$
0.9	1.4
4.8	5.2
2.4	3.5
2.5\%	3.7\%

Segment reporting

DACH in EUR million	9M 2023	9M 2024
Revenue	162.6	173.6
Year-over-year growth (in \%)	$-3.7 \%$	$6.7 \%$
Adjusted EBITDA	11.9	7.4
Adjusted EBITDA margin (in \%)	$7.3 \%$	$4.3 \%$

9M 2023	9M 2024
162.6	173.6
$-3.7 \%$	$6.7 \%$
11.9	7.4
$7.3 \%$	$4.3 \%$

9M 2023	9M 2024
134.9	136.9
1.0\%	$1.4 \%$
0.3	6.3
$0.2 \%$	$4.6 \%$

O3 2023	O3 2024
51.5	53.6
$3.7 \%$	$4.1 \%$
2.5	1.3
$4.9 \%$	$2.4 \%$

O3 2023	O3 2024
41.4	42.1
7.2\%	$1.8 \%$
$-0.1$	2.2
$-0.2 \%$	$5.2 \%$

Excluding adjustments, Q3 2024 EBITDA of EUR 2.2 million and EBIT of EUR -2.9 million

EUR million	$\begin{gathered} \text { Q1 } \ 2023 \end{gathered}$	$\begin{gathered} \text { Q2 } \ 2023 \end{gathered}$	$\begin{gathered} \text { Q3 } \ 2023 \end{gathered}$	$\begin{gathered} \text { Q1 } \ 2024 \end{gathered}$	$\begin{gathered} \text { Q2 } \ 2024 \end{gathered}$	$\begin{gathered} \text { Q3 } \ 2024 \end{gathered}$
Adjusted EBITDA	5.1	4.4	2.4	6.3	3.9	3.5
Adjusted D\&A	$-4.7$	$-4.7$	$-4.8$	$-5.6$	$-5.5$	$-5.2$
Adjusted EBIT	0.4	$-0.3$	$-2.5$	0.7	$-1.6$	$-1.7$
Share-based compensation expenses	1.0	$-1.6$	$-1.0$	0.7	$-0.7$	$-0.1$
Complexity reduction	-	-	-	$-2.7$	$-0.5$	$-1.2$
EBT	0.9	$-2.0$	$-3.6$	$-1.7$	$-2.5$	$-2.9$
EBIT	1.4	$-1.9$	$-3.5$	$-1.5$	$-2.8$	$-2.9$
EBITDA	6.1	2.8	1.3	4.3	2.7	2.2

Issued share capital

Share information as at 30 September 2024
Type of shares
Stock exchange
Market segment
Number of shares issued
Issued share capital
Treasury shares

Ordinary bearer shares with no-par value (Stückaktien)
Frankfurt Stock Exchange
Regulated market (prime standard)
20,903,968
EUR 20,903,968
885,795

Stock option programs as at 30 September 2024

Program	# of options outstanding	Weighted average exercise price (in EUR)
LTIP 2023(1)	479,221	10.88
ECP 2022	397,245	1.00
VSOPs(2)	645,625	$3.00^{(2)}$
LTIP 2019	$1,828,800$	19.30
LTIP 2016	96,450	0.01
Other	746,675	11.35
Total	$4,194,016$	12.24

Investor Relations Contact

Teresa Fischer Perez-Lozao
Director Corporate Finance
ir@westwing.de

Events

26 November 2024
Deutsches Eigenkapitalforum