windeln.de SE — Earnings Release 2016

Nov 15, 2016

News Details

Corporate | 15 November 2016 09:29

windeln.de SE: windeln.de successfully implements strategic and operational measures in the third quarter (news with additional features)

DGAP-News: windeln.de SE / Key word(s): Quarterly / Interim Statement

2016-11-15 / 09:29
The issuer is solely responsible for the content of this announcement.

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windeln.de successfully implements strategic and operational measures in
the third quarter
- Revenues growth of 30% in first nine months of the year, despite
delisting of brands
- German Shop off to a good start in fourth quarter, with nakiki relaunch
and Tmall campaigns
- Strongly improved operating cash flow due to reduction of inventories
- Good progress in implementing measures announced late July

Munich, Germany, November 15, 2016. In the first nine months of 2016,
windeln.de SE, Europe's leading online retailer for baby and children's
products, realized revenues growth of 30% on the previous year, with
revenues of EUR 137.6 million for its continuing operations (i.e.,
excluding the discontinued Shopping Clubs segment).
The Company's International Shops segment, which comprises its activities
in European countries other than Germany (feedo, bebitus, pannolini and
windeln.ch), already accounted for 31% of revenues in the third quarter and
has more than quadrupled its revenues over the course of the year to date.
With revenues of EUR 97.3 million, the German Shop matched the previous
year's revenues despite the Company's delisting of brands with lower
revenues contribution to reduce operational complexity. The business with
Chinese customers handled through windeln.de's German Shop picked up
considerably in the third quarter, following a temporary dip in revenues in
the second quarter due to regulatory changes. The China region has also
achieved slightly positive growth over the first nine months of the year.
The shop, which windeln.de launched on Alibaba's Tmall Global platform
early August, has provided a first positive contribution to this trend.
"The third quarter shows that we are on the right track to grow our
revenues with significantly more cost-efficient structures and a focus on
the brands generating the strongest revenues," says Alexander Brand,
co-founder and board member of windeln.de. "We also got off to a good start
in the fourth quarter: nakiki's ready-to-ship business and our Tmall Global
shop are providing a positive contribution to the higher order intake in
our German Shop segment." On "11/11", a key shopping date in China, Tmall
order intake amounted to approx. EUR 0.9 million.
Implementation of strategic and operational measures influences short-term
financial performance
The Company's financial performance in the third quarter was affected by
temporary factors resulting from the focusing of its business model as well
as the measures implemented to improve profitability (STAR project). The
delisting of almost 400 brands triggered a temporary decline in revenues
and a correspondingly lower gross profit margin due to the sell off of
products. A reduced price level in China further affected the third
quarter. Over the first nine months of the year, the gross profit margin
for continuing activities nonetheless increased by 41.0% to EUR 38.3
million, which corresponds to an improved gross profit margin of 27.8%
(previous year: 25.6%) for the first nine months of the year.
The adjusted EBIT figure of EUR -19.3 million (previous year: EUR -5.4
million) for continuing operations primarily reflects the costs of
international expansion and the temporarily lower revenues for the
Company's business in China. Moreover, in the third quarter the relaunch of
nakiki, the STAR measures and the setup of the Company's Tmall Global shop
in China resulted in increased costs. The adjusted EBIT margin amounted to
-14.1% and was thus close to the figure for the first six months of the
year.
Beyond the scope of the Company's continuing operations, the exit of its
Shopping Clubs business in the third quarter entailed high one-time
expenses for the Company besides the loss of revenues. "At around EUR 1.5
million, the costs incurred to date in connection with the exit of the
shopping club business are in line with our expectations," says CFO Dr.
Nikolaus Weinberger. In addition, the write-down of nakiki's inventories
had a negative impact of approx. EUR 1 million. Weinberger: "From 2017
onwards, we will already see positive effects of the more cost-efficient
processes being implemented."
Due to the decrease in inventories and the associated strong improvement in
working capital, the Company's third-quarter operating cash flow was almost
balanced at EUR -0.8 million, while its free cash flow amounted to EUR -1.6
million. As of September 30, 2016, windeln.de thus has total liquidity of
approx. EUR 80 million, which consists of cash and cash equivalents of EUR
66 million and a borrowing base financing facility up to EUR 14 million.
Order intake in October for the German business via windeln.de's shop was
very strong, at +26% over the previous month. "We are confident that we
will benefit from the measures taken that are intended to increase customer
loyalty, the favorite children's brands that are now available permanently
at nakiki and the acceptance of our Chinese Tmall shop," says Konstantin
Urban, co-founder and board member of windeln.de.
Based on the numbers for the third quarter and the positive fourth-quarter
trend to date, windeln.de expects revenues of between EUR 190 and 200
million, a gross profit margin of approx. 27% and an adjusted EBIT margin
of -12% to -14% for the fiscal year 2016 as a whole. For 2017, windeln.de
expects continuing growth and improved profitability as a result of the
successful implementation of these measures.

Corporate Communication
Judith Buchholz
Phone: +49 (89) 41 61 71 52 75
E-mail: presse@windeln.de

About windeln.de
windeln.de is one of the leading pure online retailers for baby, toddler
and children's products with a presence in ten European countries,
including Germany, Austria, Switzerland, the Czech Republic and Spain. The
Company also operates a successful e-commerce business with products for
babies and toddlers for customers in China. windeln.de offers approximately
50,000 products and around 350 brands sold via the German Shop windeln.de
(including nakiki.de) and the international shops windeln.ch, pannolini.it,
feedo and bebitus. The product portfolio includes everything from diapers,
baby food, children's furniture, toys, clothes and strollers to child car
seats. windeln.de was founded in October 2010 and currently has more than
500 employees in Germany and abroad. The Company has been listed in the
Prime Standard of the Frankfurt Stock Exchange since May 6, 2015. For more
information, go to http://corporate.windeln.de.
windeln.de shops: www.windeln.de, www.nakiki.de, www.windeln.ch,
www.kindertraum.ch, www.toys.ch, www.pannolini.it, www.feedo.cz,
www.feedo.sk, www.feedo.pl, www.bebitus.es, www.bebitus.pt, www.bebitus.fr

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Additional features:

Document: http://n.eqs.com/c/fncls.ssp?u=LITUKCANJC
Document title: windeln.de SE 9months/Q3 2016

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2016-11-15 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: windeln.de SE
Hofmannstr.51
81379 Munich
Germany
Phone: 089 / 416 17 15-0
Fax: 089 / 416 17 15-11
E-mail: investor.relations@windeln.de
Internet: www.windeln.de
ISIN: DE000WNDL110
WKN: WNDL11
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Munich,
Stuttgart, Tradegate Exchange

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