windeln.de SE — Investor Presentation 2019

Feb 1, 2019

February 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.

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Executive Summary

We have a significant growth opportunity in China and made good progress on the restructuring in Europe. In order to finance growth in China and to complete the turnaround in Europe we target a capital increase

China growth opportunity	We are one of the leading infant milk formula (IMF) e-commerce companies in the fast growing USD 129 billion Cross-border e-commerce (CBEC) market to China with our own shop and a flagship store on Tmall Global • Focus on segments with the highest online and CBEC penetration, size and growth: Baby products, beauty/cosmetics and personal care • Three fold strategy for the Chinese business: • Diversification of channels • Diversification of products • Exploring strategic partnerships
European restructuring	Good progress on restructuring the European shops since beginning of the year • Sold/closed unprofitable businesses in CEE and Italy (EUR -5 to -6-million EBIT contribution) • Reduced SG&A costs by 40% from EUR 8.8 million to EUR 5.3 million per quarter • Increased margins at European shops by 2 to 3% points since beginning of the year
Financials Q4 2018	Preliminary Q4 2018 financials • Revenues of EUR 26.6 million in Q4 (qoq +18%) and EUR 104.7 million in 2018 • Cash available of EUR 11.1 million as of December 31, 2018
Capital increase	Capital reduction and capital increase with subscription rights (resolved by Extraordinary General Meeting on Jan 9, 2019) • Subscription period expected to start in February 2019 • Use of proceeds to fund growth in China and to complete restructuring: • Projects China • Organic growth in additional markets • Improving marketing strategy • Further organizational and efficiency optimizations DACH

Actions to grow China

• Increase of cross-border e-commerce thresholds from RMB 2k to RMB 5k per order and RMB 26k on annual basis (up 30%): annual revenue potential EUR 10-15 million
• Bonded warehouse effect from lower shipping rates and faster shipping: annual revenue potential EUR 5 million in 2019
• Introduction of new categories beauty, nutrition, pharma, sports nutrition: annual revenue potential EUR 5-7 million (year one)
• New cooperations for beauty/luxury products: annual revenue potential EUR 10-20 million
• Recovery of milk formula from temporary effects in 2018: annual revenue potential EUR 15-20 million
• New platform business in : annual revenue potential EUR 5 million (year one)
• → Total revenue potential: EUR 50 million to EUR 72 million

Progress on shaping the organization, reducing complexity and realizing synergies

Preliminary financials for Q4 2018 show positive development

Capital increase

To fund the further progress of the company we plan to do a capital increase

• To fund the growth in China and to complete the European restructuring we did an ordinary capital reduction by way of reverse stock split and plan a capital increase with subscription rights

Use of proceeds	Growth in China • Second bonded warehouse • Channel/platform extension • Category extension • Collaborations German brands • Organic growth in additional markets	Complete Restructuring • Assortment optimization • Warehouse move • Strengthen direct traffic • Intensify social media marketing
Structure	• Capital increase with subscription rights • Up to EUR 9 million increase of share capital
Subscription period	• February 2019 • Trading admission of shares expected in Q2
Subscription price	tbd
Subscription ratio	tbd

China growth opportunities

Market opportunity

Our China opportunity: a USD 129 billion market growing at 30+% each year

Growth drivers China cross-border e-commerce (CBEC)

• ✓ Stable birth rates
• ✓ Rising spend per child

• ✓ Increasing online penetration

• ✓ Rising purchasing power

• ✓ Growing demand for German/European products
• ✓ User rate will grow from 200 million to 500 million in 3 years

Strong development in China CBEC retail sales

Source: Statista; eMarketer (China cross-border)

Categories

We focus on the categories with the highest penetration for CBEC….

Source: KantarConsulting

…and growth rates above 10%

Source: KantarConsulting

We have a strong expertise for CBEC to China

windeln.de shop in Chinese www.windeln.com.cn

windeln.de Flagship store on Tmall Global https://windelnde.tmall.hk/

European restructuring

Overview

We made good progress on the restructuring but are missing contribution from the China business

Management team to drive the improvements

CEO, Mgmt. Board

Drive China growth and European restructuring

Nick Weinberger Matthias Peuckert

CFO, Mgmt. Board

Secure financing, work on further cost efficiency projects

+ Broader Mgmt. Team

Focus for Europe in 2018: Increase margins, operational cost improvements and customers focus

Margin improvement (CM 2)

Focussing of marketing spent (DACH) New offerings for our customers

Use marketing spend efficiently and for profitable business

Reducing assortment complexity (SKUs DACH)

Pregnancy app, Storchenbox, new search, new categories

We generated siginficant revenue growth in Q4 2018; liquidity of EUR 11.1 million

Revenues in Q4 2018 on preliminary numbers amounted to EUR 26.2 million, which is an increase of +18% compared to the previous quarter.

Liquidity as of December 31, 2018, was EUR 11.1 million compared to EUR 12.8 million as of September 30, 2018. (EUR -1,7 million).

Thank you!

Appendix

Shareholder structure

Free Float*: 953,557 shares		Basic share data
(30.6%)	MCI Capital: 474,798 shares (15.2%)	WKN	WNDL19
Alceda Fund Management S.A.:		ISIN	DE000WNDL193
100,000 shares (3.2%)	DN Capital: 386,425 shares (12.4%)	Market place	Frankfurt Stock Exchange
Founders**: 128,409 shares (4.1%)	Acton Capital: 312,617 shares (10.0%)	Type of share	No-par value bearer shares
	Investor group Clemens Jakopitsch:	Initial listing	May 6, 2015
Schroders: 154,457 shares	223,364 shares	Designated Sponsor	Pareto Securities
(5.0%)	(7.2%)	Number of shares	3,113,647
DB Secondary Opportunities Fund II:	Goldman Sachs: 191,833 shares	as of January, 2019
188,183 shares (6.0%)	(6.2%)	Share capital	EUR 3,113,647

Supervisory Board members

Willi Schwerdtle (Chairman)	Dr. Hanna Eisinger (get2trade)
Dr. Christoph Braun (Acton Capital)	Tomasz Czechowicz (MCI Capital)
Dr. Edgar Carlos Lange (Lekkerland)	Clemens Jakopitsch (Behördenengineering Jakopitsch)

As of January 23, 2019

Disclaimer: The shareholder structure pictured above is based on the published voting rights announcements and company information. windeln.de SE assumes no responsibility for the correctness, completeness or currentness of the figures. Total number of shares: 3,113,647

Key performance indicators quarter over quarter

Excl. pannolini and Feedo	Q1 '18	Q2 '18	Q3 '18
Site Visits (in thousand) ¹ 4	12,255	9,127	9,907
Mobile Visit Share (in % of Site Visits) 2	72.3%	71.8%	70.3%
Mobile Orders (in % of Number of Orders) 3	53.3%	55.2%	55.1%
Active Customers (in thousand) 4	742	681	615
Number of Orders (in thousand) 5	330	283	244
Average Orders per Active Customer (in number of Orders) 6	2.0	2.2	2.1
Orders from Repeat Customers (in thousand) 7	302	233	192
Share of Repeat Customer Orders (in % of Number of Orders) 8	87.0%	74.9%	79.8%
Gross Order Intake (in kEUR) 9	29,774	25,514	21,916
Average Order Value (in EUR) 10	90.2	90.0	90.0
Returns (in % of Gross Revenues from orders) 11	3.4%	3.6%	4.3%

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 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 and mobile apps divided by the total number of Site Visits in the measurement period. We have excluded visits to our online magazine and until the end of 2016 we also excluded visits from China. We excluded 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. As we have started a customized website for our Chinese customers in December 2016 we include visits from China from Q1 2017 onwards. 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 and mobile apps divided by the total Number of Orders in the measurement period. We have included orders from China from Q1 2017 onwards. 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''. Cancelled orders are not included in the Number of Orders.
• 6) We define Average Orders per Active Customer as Number of Orders in the last twelve months divided by the number of Active Customers.
• 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 in the last twelve months.
• 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 Gross Revenues from Orders (until Q1 2017 in % of Net Merchandise Value)) as the returned amount in Euro divided by Gross Revenues from Orders in the measurement period. From Q2 2016 onwards including Bebitus and Feedo 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. As the Gross Revenues from Orders do not exclude returns and include all marketing rebates 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. Therefore, the calculation has been changed accordingly from Q2 2017 onwards.

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Income statement (continuing operations)

kEUR	9M 2018	Q3 2018
Revenues	78,549	22,178
Cost of sales	-60,167	-17,255
Gross profit	18,382	4,923
% margin	23.4%	22.2%
Selling and distribution expenses	-29,573	-7,936
Administrative expenses	-6,609	-2,318
Other operating income	773	294
Other operating expenses	-639	-183
EBIT	-17,666	-5,220
% margin	-22.5%	-23.5%
Financial result	-15	5
EBT	-17,681	-5,215
% margin	-22.5%	-23.5%
Income taxes	-16	-2
Profit or loss from continuing operations	-17,697	-5,217
% margin	-22.5%	-23.5%
Profit or loss from discontinued operations	-10,575	-713
Profit or loss for the period	-28,272	-5,930
EBIT	-17,666	-5,220
Share-based compensation	-323	64
Acquisition, integration and expansion costs	-	-
Reorganization	1,227	169
Intangible assets	-	-
Closure pannolini.it	771	57
Adjusted EBIT	-15,991	-4,930
% margin	-20.5%	-22.2%

EUR m % of Revenues	9M 2018	Q3 2018
Revenues	78.5	22.2
Gross profit1	23.8%	22.4%
Fulfilment costs2	(17.0)%	(15.8)%
Marketing costs3	(4.7)%	(4.8)%
Operating contr.	1.7	0.4
Operating contr.	2.1%	1.8%
Other SG&A 4	(17.7)	(5.3)
Other SG&A 4	(22.7)%	(24.0)%
Adj. EBIT 5	(16.0)	(4.9)
Adj. EBIT 5	(20.5)%	(22.2)%

* 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

Income statement (continuing operations)

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 shop´s 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 shop´s 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 shop´s 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 and income and expenses incurred in the shop pannolini.it until the shop´s closure. Furthermore, expenses for the integration of subsidiaries were adjusted in the comparative period.
• 5 Adjusted for expenses and income in connection with share-based compensation, reorganization measures and income and expenses of the closed shop pannolini.it. In the prior year comparative period, expenses for the integration of subsidiaries were adjusted.

Balance sheet and cash flow statement

Consolidated statement of financial position
kEUR	September 30, 2018
Total non-current assets	12,617
Inventories	9,573
Prepayments	19
Trade receivables	942
Miscellaneous other current assets1	5,739
Cash and cash equivalents	12,135
Total current assets	28,408
Total assets	41,025
Issued capital	31,136
Share premium	170,488
Accumulated loss	-171,699
Cumulated other comprehensive income	180
Total equity	30,105
Total non-current liabilities	522
Other provisions	137
Financial liabilities	51
Trade payables	5,456
Deferred revenue	1,840
Miscellaneous current liabilities2	2,914
Total current liabilities	10,398
Total equity & liabilities	41,025

Consolidated statement of cash flows

kEUR	9M 2018	Q3 2018
Net cash flows from/used in operating activities	-17,261	-3,477
Net cash flows from/used in investing activities	1,371	-16
Net cash flows from/used in financing activities	1,552	-38
Cash and cash equivalents at the beginning of the period	26,465	15,656
Net increase/decrease in cash and cash equivalents	-14,338	-3,531
Cash and cash equivalents at the end of the period	12,135	12,135

• 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