windeln.de SE — Earnings Release 2015

Mar 17, 2016

Full year and Q4 2015 results

March 17th, 2016

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windeln.de reaches targets for 2015

Group Financials

• ü Revenues growth of 76% year over year
• ü 955active customers as of yearend (+525)
• ü Gross margin increase to 26%; adjusted net fulfillment costs lowered
• ü Stable adjusted EBIT margin of approx. (8)% despite strong European expansion
• ü Strong liquidity position of EUR 89 million in cash

Segment Financials

• ü Windeln.de now present in 10 European countries with growth across all of our regions
• ü European business excl. DACH already 17% of revenues in Q4 (EUR 40 million annualised)
• ü International business adding strong growth; margin development in line with expansion plan
• ü Adjusted EBIT for German Shop increased from 2.2% to 4.0% year over year

2016 Outlook

• ü Approx. 50% growth in revenues
• ü Higher gross margin of 28+%
• ü Improved adjusted EBIT margin of (6) to (8)% despite European expansion

Group Financials

1 CAGR calculated based on full-year 2011 revenues as per HGB and full-year 2015 revenues as per IFRS reporting.

2 Q4 2015 multiplied by 4.

1 Number of customers who placed an order within the last twelve months.

2 NPS measures the loyalty that exists between a provider and a consumer. NPS can be as low as -100 (everybody is a detractor) or as high as +100 (everybody is a promoter); average 2015 for windeln.de shop; tracked by windeln.de. 3 Number of orders from customers who had previously purchased from windeln.de at any point in time, irrespective of returns.

4 Refers to the share of repeat customer orders (in % of number of orders) that we define as the number of orders from repeat customers divided by the number of orders during the measurement period (last twelve months).

5 Number of orders divided by the number of repeat customers in the measurement period.

6 Order intake (incl. VAT and shipping) divided by total number of orders during respective year.

7 Share of mobile traffic from non-Chinese customers on windeln.de and windeln.ch and Nakiki.de; does not include traffic on the windeln.de magazine.

KPIs continued to improve for 2015…

…also on a quarterly basis

feedo (Q3) and bebitus (Q4) acquisition

	Q1 '12	Q2 '12	Q3 '12	Q4 '12	Q1 '13	Q2 '13	Q3 '13	Q4 '13	Q1 '14	Q2 '14	Q3 '14	Q4 '14	Q1 '15	Q2 '15	Q3'15	Q4'15
Site Visits (in thousand) ¹	1,385	1,697	2,263	2,837	4,682	6,120	5,759	5,874	7,323	8,483	10,647	12,459	14,299	14,785	18,516	24,014
Mobile Visit Share (in % of Site Visits) 2	9.9%	13.2%	16.7%	19.7%	26.2%	32.6%	39.3%	42.0%	47.9%	52.7%	58.2%	60.5%	65.5%	66.5%	64.2%	61.9%
Mobile Orders (in % of Number of Orders) 3	6.2%	8.6%	10.0%	12.2%	16.4%	21.2%	26.8%	27.8%	32.7%	37.3%	41.2%	42.3%	46.7%	47.6%	45.8%	43.6%
Active Customers (in thousand) 4	92	117	142	163	194	229	259	290	334	372	430	496	556	613	743	955
Number of Orders (in thousand) 5	62	78	92	114	154	198	202	219	273	303	363	416	454	460	575	698
Average Orders per Active Customer (in number of orders) 6	1.8	1.9	2.0	2.1	2.3	2.4	2.6	2.7	2.7	2.7	2.7	2.7	2.8	2.8	2.7	2.4
Orders from Repeat Customers (in thousand) 7	36	48	58	82	114	153	158	175	211	238	286	328	350	369	453	479
Share of Repeat Customer Orders (in % of Number of Orders) 8	59.1%	62.0%	63.6%	71.7%	73.9%	77.5%	78.0%	79.7%	77.2%	78.7%	78.8%	78.9%	83.6%	83.8%	83.3%	81.4%
Gross Order Intake (in € thousand) 9	4,188	5,638	7,148	9,862	12,209	15,034	15,676	18,226	23,241	26,208	32,111	38,891	41,970	44,133	50,306	62,880
Average Order Value (in €) 10	67.9	72.6	77.9	86.3	79.3	76.1	77.5	83.2	85.2	86.6	88.5	93.5	92.5	95.9	87.5	90.1
Returns (in % of Net Merchandise Value) 11	4.4%	4.1%	4.9%	4.4%	4.3%	4.6%	4.9%	5.8%	5.1%	5.8%	6.8%	5.1%	6.0%	7.4%	7.3%	5.4%

5 Note: Including feedo from Q3 2015 and bebitus from Q4 2015 onwards (returns excl. feedo and bebitus). See appendix for footnotes.

Margins improved significantly in 2015…

1 Gross profit minus marketing and adjusted fulfillment costs.

2 Adjusted to exclude share-based compensation expenses, IPO related expenses, acquisition, expansion and integration costs as well as costs for reorganization and restructurings under corporate law.

3 Margin of (5.3)% represents combined margin for business segments German Shop andShopping Clubs assuming that 15% of shared services costs in 2015 can be attributed to expansion (segment International Shops). 6

…and year over year…

1 Marketing costs consist mainly of advertising expenses, including search engine marketing, online display and other marketing channel expenses, as well as costs for our marketing tools, which include tools for automated SEA bidding and multivariate landing page optimization, and allocated overhead costs, but not costs related to our loyalty program. Allocated overhead costs include rent and depreciation, but not costs of shared services.

2 Fulfillment costs comprise logistics and rental expenses, adjusted to exclude costs of reorganization that are fulfilment related.

3 We define adjusted other SG&A expenses as selling and distribution expenses plus administrative expenses and other operating expenses less other operating income, but excluding marketing and fulfillment costs; adjustments see Adjusted EBIT.

4 Adjusted to exclude cash settled share-based compensation expenses resulting from virtual stock option programs (VSOP), IPO related expenses, acquisition and integration costs as well as costs for reoganization and restructurings under corporate law; in the fiscal year ended December 31, 2012, all income/expenses were allocated to the business segment "windeln.de".

5 Adj. EBIT contribution margin from German Shop business segment.

6 Adj. Net Fulfillment costs are defined as Fulfillment costs less shipping income.

1 Adj. fulfillment costs comprise logistics and related rental expenses.

2 Adj. Net Fulfillment costs are defined as Fulfillment costs less shipping income.

3 Marketing costs consist mainly of advertising expenses, including search engine marketing, online display and other marketing channel expenses, as well as costs for our marketing tools, which include tools for automated SEA bidding and multivariate landing page optimization, and allocated overhead costs, but not costs related to our loyalty program. Allocated overhead costs include rent and depreciation, but not costs of shared services.

4 We define adjusted other SG&A expenses as selling and distribution expenses plus administrative expenses and other operating expenses less other operating income, but excluding marketing and fulfillment costs; adjusted to exclude share-based compensation expenses, acquisition, integration and expansion costs and IPO related expenses and income.

5 Adjusted to exclude cash settled share-based compensation expenses resulting from virtual stock option programs (VSOP), IPO related expenses, acquisition and integration costs as well as costs for reorganization and restructurings under corporate law.

Strong liquidity position

Operational and other improvements

Enterprise Resource Planning (ERP) Upgrade	‒ Migration from Microsoft Navision 2009 to Microsoft AX 2015 ‒ Intensive preparation and testing phase almost completed ‒ Go-live planned for April 1
New Shopsystem / Micro-services	‒ Pannolini and nakiki shop already upgraded ‒ Other shops to follow in the course of 2016 ‒ To allow for agile development processes ‒ Enables faster roll-out of multiple countries and languages
Head of Sourcing	‒ Head of sourcing hired (previously with consulting firm specialized on sourcing) ‒ Focus on centralizing sourcing across shops and regions
Warehouse Move Switzerland	‒ Strong reduction of Uster warehouse in Switzerland to save logistics costs ‒ Move to Grossbeeren warehouse in Germany in progress

Segment Financials

windeln.de now present in 10 European countries…

1 windeln.de management estimate for baby product market in Europe (0-6 years) based on Euromonitor data. 2 http://de.statista.com/statistik/daten/studie/162133/umfrage/anzahl-der-geburten-in-europa

Highlights European market

• ‒ Large adressable market: €56.5bn1
• ‒ High number of births: 5m annually2
• ‒ Fragmented market structure
• ‒ Increasing online penetration

Windeln.de Group leadership

• ‒ 955' active customers Dec-15
• ‒ 698' orders in 2015
• ‒ EUR 179m revenues in 2015
• ‒ Q4 2015 annualized: EUR 241m

…with revenues growth across our regions

Note: Growth rates Q4 2014 to Q4 2015 based on net merchandise value (same calculation methodology as in 2015).

Increasing contribution from European business

International shops adding strong growth…

…also in Q4

Margin development consistentwith expansion plan

Outlook 2016

Strong outlook into 2016

	2015	Outlook 2016	Outlook 2016	Business model potential
Revenues (€, % yoy growth)	€179m +76%	approx. +50%	Increasing online penetration l Higher growth in "new" markets l Decreasing growth rates due to l larger basis	€1bn+
Gross Profit Margin %	26.4%	28+%	Better purchasing terms due to scale l Positive full year impact from China l Direct Delivery	>30%
Adj. EBIT Margin %	(8.5)%	(6) to (8)%	Improving adj. EBIT margins l Continuous improvement in existing l businesses / German Shop Earnings "dilution" due to European l expansion (but at improving margins)	>5%

Appendix

Selected key performance metrics - Definitions

• 1) We define Site Visits as the number of series of page requests from the same device and source in the measurement period and include visits to our online magazine. A visit is considered ended when no requests have been recorded in more than 30 minutes. The number of site visits depends on a number of factors including the availability of the products we offer, the level and effectiveness of our marketing campaigns and the popularity of our online shops. Measured by Google Analytics.
• 2) We define Mobile Visit Share (in % of Site Visits) as the number of visits via mobile devices (smartphones and tablets) to our mobile optimized websites divided by the total number of Site Visits in the measurement period. We have excluded visits to our online magazine and visits from China. We exclude visits from China because the most common online translation services on which most of our customers who order for delivery to China rely to translate our website content are not able to do so from their mobile devices, and therefore very few of such customers order from their mobile devices. Measured by Google Analytics.
• 3) We define Mobile Orders (in % of Number of Orders) as the number of orders via mobile devices to our mobile optimized websites divided by the total Number of Orders in the measurement period. We have excluded orders from China. Measured by Google Analytics.
• 4) We define Active Customers as the number of customers placing at least one order in the 12 months preceding the end of the measurement period, irrespective of returns.
• 5) We define Number of Orders as the number of customer orders placed in the measurement period irrespective of returns. An order is counted on the day the customer places the order. Orders placed and orders delivered may differ due to orders that are in transit at the end of the measurement period or have been cancelled. Every order which has been placed, but for which the products in the order have not been shipped (e.g., the products are not available or the customer cancels the order), is considered ''cancelled''.
• 6) We define Average Orders per Active Customer as Number of Orders divided by the number of Active Customers in the measurement period.
• 7) We define Orders from Repeat Customers as the number of orders from customers who have placed at least one previous order, irrespective of returns.
• 8) We define Share of Repeat Customer Orders as the number of orders from Repeat Customers divided by the Number of Orders during the measurement period.
• 9) We define Gross Order Intake as the aggregate Euro amount of customer orders placed in the measurement period minus cancellations. The Euro amount includes value added tax and excludes marketing rebates.
• 10) We define Average Order Value as Gross Order Intake divided by the Number of Orders in the measurement period.
• 11) We define Returns (in % of Net Merchandise Value) as the Net Merchandise Value of items returned divided by Net Merchandise Value in the measurement period.

Income statement

In €k	2015	2014	Q4 2015	Q4 2014
Revenues	178,602	101,324	60,290	34,201
% growth	76.3%		76.3%
Cost of sales
Gross profit	47,115	23,455	16,919	8,192
% margin	26.4%	23.1%	28.1%	24.0%
Selling and distribution expenses	-53,877	-26,668	-19,755	-8.198
Administrative expenses	-23,332	-8,678	-8,457	-6166
Other operating income	3,164	267	232	90
Other operating expenses	-569	-99	-167	-73
EBIT	-27,499	-11,723	-11,228	-2,499
% margin	-15.4%	-11.6%	-18.6%	-7.3%
Financial result	-2,910	2,138	-2,404	-665
EBT	-30,409	-9,585	-13,632	-3,165
% margin	-17.0%	-9.5%	-22.6%	-9.2%
Income taxes	5	-242	1,600	-160
Profit or loss for the period	-30,404	-9,827	-12,032	-3,325
% margin	-17.0%	-9.7%	-20.0%	-9.7%
EBIT	-27,499	-11,723	-11,228	-2,499
Share-based compensation	10,727	3,419	4,850	920
Acquisition, integration and expansion costs	1.951	-	694	-
IPO related expenses	-430	217	7	217
Corporate reorganisation	112	-	112	-

Adjusted EBIT1 -15,139 -8,087 -5,565 -1,362 % margin -8.5% -8.0% -9.2% -4.0%

1 Adjusted to exclude cash settled share-based compensation expenses resulting from virtual stock option programs (VSOP), IPO related expenses, acquisition and integration costs as well as costs for reorganization and restructurings under corporate law.

Balance sheet and cash flow statement

Consolidated statement of financial position
In €k	Dec 2014	Dez 2015
Total non-current assets	4,523	34,086
Inventories	10,754	27,099
Prepayments	285	1,670
Trade receivables	1,725	2,469
Miscellaneous other current assets1	5,927	5,457
Cash and cash equivalents	33,830	88,678
Total current assets	52,521	125,373
Total assets	57,044	159,459
Issued capital	163	25,746
Share premium	68,911	154,046
Accumulated loss	-34,488	-64,892
Cumulated other comprehensive income	35	-22
Total equity	34,621	114,878
Total non-current liabilities	6,813	10,208
Other provisions	1,246	2,221
Financial liabilities	1,532	41
Trade payables	8,830	18,137
Deferred revenue	1,986	4,352
Miscellaneous current liabilities2	2,017	9,622
Total current liabilities	15,610	34,373
Total equity & liabilities	57,044	159,459

Consolidated statement of cash flows
In €k	2015	2014
Net cash flows from/used in operating activities	-22,244	-6,064
Net cash flows from/used in investing activities	-16,271	-1,234
Net cash flows from/used in financing activities	93,356	40,861
Cash and cash equivalents at the beginning of the period	33,830	267
Net increase/decrease in cash and cash equivalents	54,841	33,563
Cash and cash equivalents at the end of the period	88,678	33,830

1 Miscellaneous other current assets include income tax receivables, current other financial assets and current other non-financial assets.

2 Miscellaneous other current liabilities include income tax payables, current other financial liabilities and current other non-financial liabilities.

Selected business segment and geographic data

	Business segments					Geographic region
In €k	2015	2014	Q4 2015	Q4 2014
Revenues	178,602	101,324	60,290	34,201
German Shop	140,255	88,768	43,082	29,815
International Shops	20,739	3,776	11,971	1,376
Shopping Clubs	17,608	8,780	5,238	3,013
Adj. EBIT1,2	-15,139	-8,087	-5,565	-1,362
German Shop Adj. EBIT contribution	5,630	1,916	1,777	1,530
International Shops Adj. EBIT contribution	-5,392	-1,660	-2,747	-212
Shopping Clubs Adj. EBIT contribution	-5,810	-2,601	-1,640	-870

In €k	2015	2014	15/14	Q4 15/146
Revenues	178,602	101,324	+76%	+76%
DACH3	71,791	44,040	+63%	+53%
China4	91,147	55,666	+64%	+52%
Rest of Europe5	15,664	1,618	+868%	+724%

1 Adjusted to exclude cash settled share-based compensation expenses resulting from virtual stock option programs (VSOP) and IPO related expenses, acquisition and integration costs as well as costs for reorganization and restructurings under corporate law.

2 Adjusted EBIT at the Group level does not correspond to the sum of the Adjusted EBIT Contributions of the "German Shop", "International Shops" and "Shopping Clubs" business segments because (a) certain income/expenses relating to shared services are managed and contracted on a central basis and not allocated to the business segments and (b) effects resulting from intersegment transactions are eliminated at the Group level.

3 Our "DACH" geographic region consists of that part of our business that generates product and services revenues from customers ordering for delivery to Germany, Austria and Switzerland.

4 Our "China" geographic region consists of that part of our business that generates product and services revenues from customers ordering for delivery to China.

5 Our "Other/rest of Europe" geographic region consists of that part of our business that generates product and services revenues from customers ordering for delivery to countries other than Germany, Austria, Switzerland and China.

6 Growth rates Q4 2014 to Q4 2015 based on net merchandise value (same calculation methodology as in 2015)