windeln.de SE — Investor Presentation 2019

Nov 1, 2019

windeln.de SE Fall 2019

Disclaimer

This document and its related communication ("Presentation") have been issued by windeln.de SE and its subsidiaries ( "Company") and do not constitute or form part of and should not be construed as any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company in the U.S.A. or in any other country, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. Nothing in this Presentation constitutes tax, legal or accounting advice; investors and prospective investors should seek such advice from their own advisors. Third parties whose data is cited herein are neither registered broker-dealers nor financial advisors and the use of any market research data does not constitute financial advice or recommendations. Securities may not be offered or sold in the U.S.A. absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended; neither this Presentation nor any copy of it may be taken or transmitted or distributed, directly or indirectly, to the U.S.A., its territories or possessions or to any US person.

This Presentation has been carefully prepared. However, no reliance may be placed for any purposes whatsoever on the information contained herein or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the Company or its directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. This Presentation is subject to amendment, revision and updating. Certain statements and opinions in this Presentation are forward-looking, which reflect the Company's or its management's expectations about future events. Forward-looking statements involve many risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied herein or could adversely affect the outcome and financial effects of the plans and events described herein and may include (without limitation): macroeconomic conditions; behavior of suppliers, competitors and other market participants; inadequate performance with regard to integration of acquired businesses, anticipated cost savings and productivity gains, management of fulfillment centers, hazardous material/ conditions in private label production or within the supply chain, data security or market knowledge; external fraud; actions of government regulators or administrators; strike; or other factors described in the "risk" section of the Company's annual report. Forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forwardlooking statements.

This Presentation may include supplemental financial measures that are or may be non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation or as alternatives to measures of the Company's net assets and financial positions or results of operations as presented in accordance with IFRS in its consolidated financial statements. Other companies that report or describe similarly titled financial measures may calculate them differently.

By attending, reviewing, accepting or consulting this Presentation you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice.

Company Overview

We are one of the leading online retailers for baby, children and family products in Europe and China

We have a strong expertise selling products cross border e-commerce (CBEC) to Chinese customers

…in the highly attractive Chinese CBEC market for European (esp. German) products

EUR 576 billion	USD 121.6 billion	15.2 million
Chinese e-commerce volume 2018	Chinese CBEC volume 2018	Births in China in 2018

Investment highlights

Company strategy

Growth strategy in China to expand the online business and build a hybrid business

Use of good supplier relationships in Europe and well-known brand name "windeln.de" in China

Serve platforms that also offer products offline; broaden customer base in tier 2 & 3 cities in China

Cooperation with Langtao supports distribution strategy, improves marketing activities and increases efficiency

Areas of cooperation	Description	Status
China platforms (e.g TMall)	• Online marketing & Social Media marketing • Brand strategy • Sale promotion measures • Communication with platforms
China Shop (windeln.com.cn)	• Online marketing &Social Media marketing • Brand strategy • Sale promotion measures • Visual design	Expected December 2019
Customer service for China	• Customer service for all online sales channels	Q1 2020
New distribution channels	• Sale promotion measures • Logistics optimization	In implementation

DACH and Rest of Europe strategy focused on developing into the leading online retailer for familiy products

Several projects to increase profitability and revenues

• New Head of Marketing starting Dec 1, 2019
• Pricing tool Omnia to increase profitability
• IT Shop outsourcing ongoing
• Central warehouse move in H1 2020

• Focus on sales events, e.g. Black Friday and Cyber Week

• Focus on sales events in Q4 (Singles Day 11.11., Black Friday, etc.)

• Bonded warehouse II (Done)
• New distribution channels: WeChat Mini program
• VAT refund

Recent financials

China revenues weaker due to implementation of strategic cooperation and delayed opening of bonded warehouse

• Bonded warehouse II delay
• Changed customs requirements that required technical implementation
• Go-live 4th November 2019
• Implementation of strategic cooperation with Langtao
• Contract signed in August
• TMall and Chinese webshop
• Large sales event in Q4
• Singles' Day (11.11.)
• Black Friday
• Pink week

DACH region back to growth again

• +5% revenue growth quarter over quarter (Q3 2019 compared to Q2 2019)
• Large sales events in Q4
• Black Friday, Cyber Monday, Pink Week
• Christmas
• Further clean up of inventory in advance of central warehouse move in H1 2020

Rest of Europe Revenues

Bebitus stabilized after focus on increasing product margins at the expense of revenues for the past quarters

• +2% revenue growth quarter over quarter (Q3 2019 compared to Q2 2019)
• Large sales events in Q4
• Black Friday, Cyber Monday, Pink week
• Christmas

Quarter by quarter

Improvements regarding profitability, operating contribution, costs and cash flow over time

Group Profitability

Our 9M/Q3 2019 financials are improved in terms of gross profit, cost structure and profitability

EUR million % of revenues	Q3 2018	Q3 2019
Revenues	22.2	18.5
Gross profit1	22.2%	21.7%
Fulfilment costs2	(15.8)%	(13.7)%
Marketing costs3	(4.8)%	(4.4)%
Operating contr.	0.4	0.7
Operating contr.	1.8%	3.6%
Other SG&A4	(5.3)	(5.4)
Other SG&A4	(24.0)%	(29.1)%
Adj. EBIT5	(4.9)	(4.7)
Adj. EBIT5	(22.2)%	(25.5)%
Total Liquidity	12.8	9.7

9M 2018	9M 2019
78.6	59.4
23.8%	24.0%
(17.0)%	(14.5)%
(4.7)%	(4.7)%
1.7	2.8
2.1%	4.7%
(17.7)	(14.8)
(22.7)%	(25.0)%
(16.0)	(12.0)
(20.5)%	(20.2)%
12.8	9.7

Adj. EBIT improved yoy Lower for 9 months in total; on avg. below 5 million Euros per quarter Contribution margin improved yoy Development Revenues in Q3 lower due to China Q3 margin lower due to lower China contribution In line with expectation; Langtao cooperation started Higher share of orders fulfilled from TMall through BWH

Cash out in Q3 of EUR 2.4 million

Cash Flow

Inventory levels at similar level as previous quarters but overall net working capital lower

Note: Net Working Capital (NWC) defined as inventories, prepayments, trade receivables, accrued advertising subsidies, vendors with credit balance, net VAT assets/liabilities minus trade payables and deferred revenues.

Continuing operations presented (excl. Feedo Group).

Net cash out of EUR 2.4 million in Q3 2019

Target to reach adj. EBIT break-even early 2020 but further improvement in Q4 2019 necessary

Capital increase in the high single-digit million Euro amount planned to strengthen liquidity and finance growth in China

Steps	Description	Status/Timeline*
Resolutions at	Reduction of share capital by way of reverse share split at ratio 10 : 3	EGM resolutions passed but pending shareholder actions that the company currently deals with
Extraordinary General Meeting	Capital increase
(EGM)	Creation of new Authorized Capital
Capital decrease	Registration of capital reduction in commercial register	Not yet
and reverse share split	Technical implementation of consolidation of shares from 9,963,670 no-par value bearer shares to 2,989,101 shares	After registration in commercial register
	Subscription period (two weeks)	After registration
Capital increase	Registration of the implementation of the Capital Increase with the commercial register and settlement	Shortly after end of subscription period

Thank you

Appendix

Shareholder structure and supervisory board

Shareholder structure

Supervisory Board members

Willi Schwerdtle (Chairman)

Weijian Miao (Deputy Chairman) (Summit Asset Management)

Dr. Edgar Carlos Lange (Lekkerland)

Xiao Jing Yu (Russell Reynolds Associates)

Tomasz Czechowicz (MCI Capital)

Clemens Jakopitsch (Behördenengineering Jakopitsch)

Basic share data

WKN	WNDL19
ISIN	DE000WNDL193
Market place	Frankfurt Stock Exchange
Type of share	No-par value bearer shares
Initial listing	May 6, 2015
Designated Sponsor	Pareto Securities
Number of shares as of August, 2019	9,963,670
Share capital	EUR 9,963,670

Key performance indicators quarter over quarter

Excl. pannolini and Feedo	Q1 '18	Q2 '18	Q3 '18	Q4'18	Q1' 19	Q2 ' 19	Q3' 19
Site Visits (in thousand) ¹ 4	12,255	9,127	9,907	10,073	10.485	10,075	9,710
Mobile Visit Share (in % of Site Visits) 2	72.3%	71.8%	70.3%	75,3%	78.8%	73.6%	76.9%
Mobile Orders (in % of Number of Orders) 3	53.3%	55.2%	55.1%	58,7%	61.3%	60.4%	62.7%
Active Customers (in thousand) 4	742	681	615	544	493	455	438
Number of Orders (in thousand) 5	330	283	244	258	201	179	187
Average Orders per Active Customer (in number of Orders) 6	2.0	2.2	2.1	2,1	2.0	2.2	1.9
Orders from Repeat Customers (in thousand) 7	302	233	192	195	145	131	133
Share of Repeat Customer Orders (in % of Number of Orders) 7	87.1%	74.9%	79.8%	82.6%	74.2%	73.0%	72.0%
Gross Order Intake (in kEUR) 8	29,774	25,514	21,916	23,655	17.821	16.376	16,210
Average Order Value (in EUR) 9	90.17	90.01	89.96	91.84	88.81	91.69	86.72
Returns (in % of Gross Revenues from orders) 10	3.4%	3.6%	4.3%	3.1%	3.4%	2.6%	2.9%

Appendix

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Income statement (continuing operations)

kEUR	9M 2018	9M 2019	Q3 2018	Q3 2019
Revenues	78,549	59,365	22,178	18,456
Cost of sales	-60,167	-45,141	-17,255	-14,458
Gross profit	18,382	14,224	4,923	3,998
% margin	23.4%	24.0%	22.2%	21.7%
Selling and distribution expenses	-29,573	-20,475	-7,936	-6,235
Administrative expenses	-6,609	-6,289	-2,318	-2,220
Other operating income	773	573	294	260
Other operating expenses	-639	-107	-183	-49
EBIT	-17,666	-12,074	-5,220	-4,246
% margin	-22.5%	-20.3%	-23.5%	-23.0%
Financial result	-15	-59	5	-17
EBT	-17,681	-12,133	-5,215	-4,263
% margin	-22.5%	-20.4%	-23.5%	-23.1%
Income taxes	-16	-7	-2	-4
Profit or loss from continuing operations	-17,697	-12,140	-5,217	-4,267
% margin	-22.5%	-20.4%	-23.5%	-23.1%
Profit or loss from discontinued operations	-10,575	49	-713	-
Profit or loss for the period	-28,272	-12,091	-5,930	-4,267
EBIT	-17,666	-12,074	-5,220	-4,246
Share-based compensation	-323	27	64	-509
Acquisition, integration and expansion costs	-	48	-	48
Reorganization	1,227	-14	169	-
Closure pannolini.it	771	-	57	-
Adjusted EBIT	-15,991	-12,013	-4,930	-4,707
% margin	-20.5%	-20.2%	-22.2%	-25.5%

* Restated for presentation of discontinued operations in connection with the planned divestiture of Feedo Group, and restated for the effects of the first application of IFRS 9

Balance sheet and cash flow statement

Consolidated statement of financial position

kEUR	September 30, 2019	December 31, 2018
Total non-current assets	4,578	5,345
Inventories	8,014	6,820
Prepayments	71	-
Trade receivables	1,629	1,417
Miscellaneous other current assets1	4,600	5,254
Cash and cash equivalents	9,683	11,136
Total current assets	23,997	24,627
Total assets	28,575	29,972
Issued capital	9,964	31,136
Share premium	173,006	170,391
Accumulated loss	-165,188	-181,119
Cumulated other comprehensive income	214	186
Total equity	17,996	20,594
Total non-current liabilities	86	38
Other provisions	139	235
Financial liabilities	621	39
Trade payables	4,064	4,573
Deferred revenue	2,233	1,581
Miscellaneous current liabilities2	3,436	2,912
Total current liabilities	10,493	9,340
Total equity & liabilities	28,575	29,972

Consolidated statement of cash flows
kEUR	9M 2018	9M 2019	Q3 2018	Q3 2019
Net cash flows from/used in operating activities	-17,261	-10,680	-3,477	-2,065
Net cash flows from/used in investing activities	1,371	357	-16	-76
Net cash flows from/used in financing activities	1,552	8,866	-38	-253
Cash and cash equivalents at the beginning of the period	26,465	11,136	15,656	12,079
Net increase/decrease in cash and cash equivalents	-14,338	-1,457	-3,531	-2,394
Cash and cash equivalents at the end of the period	12,135	9,683	12,135	9,683

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

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

3 Restated for the effects of the first application of IFRS 9

4 Restated for presentation of short-term time deposits

Definitions of key performance indicators

• 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 offered products, the effectiveness of our marketing campaigns and the popularity of our online shops. Measured by Google Analytics.
• 2) We define mobile visit share (as % of site visits) as the number of visits via mobile devices (smartphones and tablets) to our mobile optimized websites and mobile apps divided by the total number of site visits in the measurement period. Site visits of our online magazine are excluded. Additionally, we excluded visits from China until end of 2016, 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. Therefore, only few Chinese customers ordered via their mobile devices. Due to the launch of our website in Chinese language in December 2016, site visits from China are included since Q1 2017. Measured by Google Analytics.
• 3) We define mobile orders (as % of number of orders) as the number of orders via mobile devices to our mobile optimized websites and mobile apps divided by the total number of orders in the measurement period. Since Q1 2017, orders from China are included. Measured by Google Analytics.
• 4) We define active customers as the number of unique customers placing at least one order in one of our shops 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''. Cancellations are deducted from the number of orders.
• 6) We define average orders per active customer as number of orders divided by the number of active customers in the last 12 months.
• 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. The share of repeat customer orders represents the number of orders from repeat customers in the last twelve months divided by the number of orders in the last twelve months.
• 8) 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.
• 9) We define average order value as gross order intake divided by the number of orders in the measurement period..
• 10) We define returns (as % of gross revenues from orders) as the returned amount in Euro divided by gross revenues from orders in the measurement period. Since Q2 2016 including Bebitus returns. Gross revenues from orders are defined as the total aggregated Euro amount spent by our customers minus cancellations but irrespective of returns. The Euro amount does not include value added tax. Until Q1 2017 returns were calculated in relation to the net merchandise value. As the gross revenues from orders do not exclude returns and include all marketing rebates/discounts, it is more reasonable to use this KPI for the return rate calculation than the net merchandise value. The change of the calculation logic has no material impact on the reported return rate. The new calculation method is applied from Q2 2017 onwards.

Footnotes to page 17

Note: Adjusted continuing operations shown (i.e. excluding discontinued operation Feedo Group).

• 1 The adjustments of gross profit relate to income expenses of the shop pannolini.it until the shops closure, and expenses for share-based compensation.
• 2 Fulfilment costs consist of logistics and warehouse rental expenses which are recognized within selling and distribution expenses in the consolidated statement of profit and loss. Fulfilment expenses incurred in the shop pannolini.it are adjusted until the shops closure. In 2017, costs related to the closure of the Swiss location and income from the release of provisions for onerous contracts are adjusted.
• 3 Marketing costs mainly consist of advertising expenses, including search engine marketing, online display and other marketing channel expenses, as well as costs for the marketing tools of the Group. Marketing expenses incurred in the shop pannolini.it are adjusted until the shops closure.
• 4 Other selling, general and administration expenses (other SG&A expenses) consist of selling and distribution expenses, excluding marketing costs and fulfilment costs, and administrative expenses as well as other operating income and expenses. Adjusted SG&A expenses exclude expenses from share-based compensation, reorganization measures, impairments of intangible assets and income and expenses incurred in the shop pannolini.it until the shops closure. Furthermore, expenses for the integration of subsidiaries were adjusted in 2017.
• 5 Adjusted for expenses and income in connection with share-based compensation, reorganization measures, impairments of intangible assets and income and expenses of the closed shop pannolini.it. In 2017, expenses for the integration of subsidiaries were adjusted.