windeln.de SE — Investor Presentation 2020

Nov 1, 2020

windeln.de SE Company Presentation

November 2020

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.

Investment Highlights

windeln.de is one of the leading online retailers for baby, children and family products in Europe and China

Our offering to our customers

social media interaction

Vision

Our vision

Become the leading e-tailer for young families in the German-speaking region with strong cross-border e-commerce to China…

…building on educational and emotional content guiding parents through this exciting and lifechanging experience of having a family.

We operate a total of 7 online shops in Europe and in China

Strong management board

Matthias Peuckert

Responsible for Marketing, Category Management (DACH, Bebitus and China), IT, Pricing, Private Label and Product Data

Responsible for New Business China, based in Beijing

Sean Wei Dr. Nikolaus Weinberger

Responsible for Finance & Controlling, Accounting, Corporate Communications, Legal, HR and Facility Management

China

The Chinese market is highly attractive; we focus on the categories with the highest penetration of CBEC to China

China is world's largest retail market with \$5 trillion expected for 2020

China's online retail sales \$737 billion in H1 2020, +7.3% yoy

100 million additional ecommerce users H1 2020 Projection up to 300M

Strong development in China Cross Border Ecommerce (CBEC) retail sales (import)

windeln.de targets the most popular product categories in China CBEC

Share of total market 2019

Cosmetics & Beauty	41%
Personal care	38%
Nutrition & health care	35%
Food & Beverage	32%
Mom & Baby products	23%

Source: Ecommerce Research Center of China, 2020E company estimates https://www.chinadaily.com.cn/a/202007/16/WS5f0fca86a310834817259e76.html iiMedia Research

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

We operate in China through several channels to fulfill demand in the best way possible

	From China to Germany
Chinese Webshop	Tmall	B2B	Import
✓ Large assortment for baby, toddler and family ✓ Customer choose between duty paid or duty free ✓ Shipping from Germany or from bonded warehouse in mainland China	✓ Top-selling products ✓ Stocking from Germany via ship to bonded warehouse in mainland China ✓ Sale to customer from there	✓ Sale of products from warehouse in Germany to business customers in China ✓ Air freight	✓ Sale of hygiene articles soured from China to business customers in Europe

China

We have an excellent logistics network and internal knowhow to fulfill demand for CBEC products to China

Direct delivery to the Tmall Global warehouse near Frankfurt/German

2 local bonded warehouses in mainland China for our shops windeln.com.cn and Tmall Global

China Business

We therefore put a strong focus on our attractive Chinese business, which accounts for a large share of revenues

Significant revenue growth...

Our addressable market in Europe is also growing, supported by Covid-19

Strategy for DACH focused on developing into the leading online retailer for family products

Restructuring

Since 2018 several efficiency and profitability measures were executed

Ongoing projects to further improve business and financials

Ongoing projects	Topic	Update
Outsourcing of IT Shop Platform	Outsourcing of self-developed IT shop platform to external provider to lower maintenance costs and have better flexibility	• First outsourced shop is live (TMall), outsourcing of other shops ongoing • Completion of relocation of WDL Shop IT development from Munich to Sibiu, Romania.
Outsourcing of Product Information Management (PIM)	Outsourcing from self-developed platform to external provider to lower maintenance costs and have better flexibility	• Go live this quarter (Q4) 2020
German Warehouse Move	Contract with new warehouse service provider to reduce costs, improve process and packaging quality and shorten delivery times to customers	• Contract signed • Warehouse move planned for spring 2021
New Channels in China	Expand number of sales channels in China to increase operating contribution	• Launch of channels being worked on
Office move Munich	Move of office location in Munich to lower rental costs	• Office move completed

Revenue development Q3 and 9M 2020

Financials improved in Q3 and 9M year over year

EUR million % of revenues	9 Months				Q3
(excl. Bebitus)	9M 2019	9M 2020		Q3 2019	Q3 2020
Revenues	49.8	58.8		15.4	15.0
Gross profit1	24.6%	22.4%		21.8%
Fulfilment costs2	(14.5)%	(7.4)%		(13.6)%
Marketing costs3	(4.3)%	(2.8)%		(4.0)%
Operating contr.	2.9	7.2		0.6	0.8
Operating contr.	5.8%	12.2%		4.1%	5.5%
Other SG&A4	(12.2)	(12.6)		(4.5)	(3.8)
Other SG&A4	(24.4)%	(21.5)%		(29.2)%
Adj. EBIT5	(9.3)	(5.5)		(3.9)	(3.0)
Adj. EBIT5	(18.6)%	(9.3)%		(25.0)%
Total cash avail.	9.7	5.5		9.7	5.5

Q3 2019	Q3 2020
15.4	15.0
21.8%	17.1%
(13.6)%	(8.2)%
(4.0)%	(3.4)%
0.6	0.8
4.1%	5.5%
(4.5)	(3.8)
(29.2)%	(25.4)%
(3.9)	(3.0)
(25.0)%	(19.9)%

Comments on Q3/9M

Lower China revenues than targeted in Q3; growth on 9 months basis Gross profit lower due to lower China contribution and higher B2B revenues share High share of B2B revenues; higher share of BWH deliveries; lower rental costs in European warehouse

High share of B2B revenues; slower ramp up of marketing in China after transition from LangTao

Effects above; improvement from European (DACH) business in absolute and relative terms

Higher wage costs due to build up of team in China; for 9 months offsetting effects of income from share based compensation (+EUR 0.9m) and expenses due to VAT refund (-EUR 1.0m)

Effects above; improved year over year (positive impact 9 months from China VAT refund of approx. EUR 2.8 million)

Before proceeds from capital increase (gross issue proceeds EUR 3.4 million)

Only few reconciliation items from reported EBIT to adjusted EBIT

		9 months		Q3
EUR million % of revenues	9M 2019	9M 2020	Q3 2019	Q3 2020	Comments
Reported EBIT	(9.4)	(4.6)	(3.4)	(3.1)
Reported EBIT	(18.8)%	(7.9)%	(22.1)%	(20.5)%
Effects of deconsolidation	0.0	0.2	0.0	-
Share-based compensation	0.0	(0.9)	(0.5)	0.1	Income due restricted stock units (RSUs) being cash settled
Costs of reorganization	(0.0)	-	-	-
Costs of warehouse move	-	0.3	-	-	Write-down of EUR 250' due to insolvency of logistics provider
Adjusted EBIT	(9.3)	(5.5)	(3.9)	(3.0)
Adjusted EBIT	(18.6)%	(9.3)%	(25.0)%	(19.9)%

Segments

Q3 and 9M segment development shows improvement in European business and attractive margins for China

		9 Months		Q3
	EUR million % of revenues	9M 2019	9M 2020	Q3 2019	Q3 2020	Comments on Q3
	Europe (DACH)	14.1	15.2	4.6	4.8
Revenues	China	35.8	43.6	10.8	10.2	• Europe (DACH) revenues increase for Q3 and 9 months yoy
(EUR m)	excl. VAT refund	35.8	39.7	10.8	9.9	• China revenues higher for 9 months yoy but flat in Q3 yoy
	Total Continued	49.8	58.8	15.4	15.0
	Europe (DACH)	(1.1)	(0.3)	(0.3)	(0.1)
	Europe (DACH)	(7.8)%	(2.1)%	(7.3)%	(1.6)%
Operating	China	4.0	7.5	1.0	0.9	• Europe (DACH) margin
Contribution (EUR m; % of revenues)	China	11.1%	17.2%	9.1%	8.8%	improvement for Q3 and 9 months in absolute and relative
	excl. VAT refund	4.0	3.7	1.0	0.6	terms • China higher for 9 months yoy but slightly down in Q3 yoy
	Total Continued	2.9	7.2	0.6	0.8
	Total Continued	5.8%	12.2%	4.1%	5.5%

Positive development of Bebitus in Q3 and 9M

	9 Months			Q3
EUR million % of revenues	9M 2019	9M 2020	Q3 2019	Q3 2020	Comments
Revenues (EUR)	9.5	9.7	3.0	3.4	• Revenues increased in Q3 and 9 months yoy
Contribution Margin (EUR)	(0.1)	0.3	0.0	0.1	• Operating contribution margin improved in Q3 and 9 months yoy
Contribution Margin (%)	(0.7)%	2.6%	0.7%	XX 2.3%
Adj. EBIT (EUR)*	(2.7)	(2.0)	(0.8)	(0.6)	• Adj. EBIT improved in Q3 and 9 months yoy in absolute and relative terms
Adj. EBIT(%)	(28.6)%	(21.0)%	(27.9)%	(19.0)%

Inventory and net working capital lowered in Q3

19.7 12.9 9.6 6.8 7.9 7.7 8.0 7.3 8.1 12.0 9.8 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 In EUR million Net Working Capital (EUR million) as % of LTM revenues Days inventory (DIO) 71 19.1 10.9% Accrued advertising revenues + vendors with credit balance (EUR million) 7.2 65 9.2 6.1% 1.8 51 6.8 5.5% 1.7 33 5.9 5.6% 1.8 45 7.2 7.8% 1.4 51 6.3 7.4% 1.2 46 8.1 9.1% 1.7 40 5.4 6.6% 1.9 57 4.1 5.2% 1.1 Inventory 44 10.1 11.0% 1.3 59 6.2 6.8% 0.9

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.

Numbers including Bebitus; without remeasurement according to IFRS 5

Liquidity

Liquidity position strengthened through successful completion of capital increase in October

Capital increase

Successful capital increase to fund progress of the Company

Full year outlook 2020

	9 months 2020	Comment related to Q4 2020	Latest 2020 Full year Target
Revenue (cont. bus.)	• EUR 58.8m (+18% yoy) • EUR 54.9m excl. VAT refund (+11% yoy)	Stronger 4th • quarter due to sales events in China and Europe	• Double-digit increase yoy (unchanged)
Adj. EBIT (cont. bus.)	• EUR -5.5m (-9.3% margin)	• Highly dependent on China revenues • Higher cost base with team in China	• Moderate improvement yoy (unchanged)
VAT refund	• EUR 3.8m revenues • EUR 2.8m EBIT impact	• Targeted refunds for 2020 fully achieved	• No significant further refunds (unchanged)
Net Working Capital	• EUR 6.2m (30th June: EUR 10.1m)	• Sell down of products in Q4 but purchase of goods for Q1 2021	• No update (capital increase done)
Chg. in Cash/ Cash	• EUR -2.9m • Cash EUR 5.5m as of 30- September (EUR 8.2m currently)	• Funding of net working capital for Q1 2021	• No update (capital increase done)

Adjusted EBIT break-even target remains; outlook for 2021 to be provided based on full year 2020 results.

Appendix

Current Shareholder Structure

As of November 2020

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: 10,982,073 Free Float (<3%): 20.9%

Basic share data

WKN	WNDL20 / WNDL12
ISIN	DE000WNDL201 DE000WNDL128
Market place	Frankfurt Stock Exchange / Stuttgart Stock Exchange
Type of share	No-par value bearer shares
Initial listing	May 6, 2015
Designated Sponsor	Pareto Securities
Number of shares	10,982,073

Supervisory Board members

Clemens Jakopitsch (Chairman)
Tomasz Czechowicz
Weijian Miao
Joanne Yush
Irene Tang
Maurice Reimer

Key performance indicators quarter over quarter from continuing operations (excl. Bebitus)

KPIs

Excl. pannolini, Feedo and Bebitus	Q2 '18	Q3 '18	Q4'18	Q1' 19	Q2 ' 19	Q3' 19	Q4'19	Q1'20	Q2'20	Q3'20
Site Visits (in thousand) ¹ 4	9,411	7,681	9,869	6,787	6,157	6,672	6,130	4,299	4,670	5,572
Mobile Visit Share (in % of Site Visits) 2	82.7%	74.7%	83.5%	80.1%	80.8%	74.2%	86.3%	84.1%	82.8%	89.2%
Mobile Orders (in % of Number of Orders) 3	56.6%	55.2%	60.9%	61.2%	59.9%	61.7%	59.0%	59.5%	63.3%	64.9
Active Customers (in thousand) 4	334	329	305	355	334	329	305	299	297	282
Number of Orders (in thousand) 5	203	176	209	150	138	146	138	124	113	106
Average Orders per Active Customer (in number of Orders) 6	2.2	2.1	2.1	2.1	2.2	2.0	2.1	1.8	1.8	1.7
Orders from Repeat Customers (in thousand) 7	233	192	195	110	102	105	101	85	74	69
Share of Repeat Customer Orders (in % of Number of Orders) 7	74.91%	79.76%	82.56%	74.82%	73.84%	72.59%	72.08%	70.96%	68.91%	67.62%
Gross Order Intake (in kEUR) 8	18,049	15,696	18,703	13,399	12,899	12,561	13,346	11,597	9,899	8,677
Average Order Value (in EUR) 9	88.73	89.01	89.55	89.59	93.78	86.10	96.79	93.38	87.55	82.23
Returns (in % of Gross Revenues from orders) 10	3.9%	4.3%	3.2%	3.4%	2.5%	2.9%	2.2%	4.6%	1.6%	2.5%

KPIs

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. Visits to our online magazine are included until mid of Q3 2020. 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 (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 rebatesdiscounts, 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 12

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

• 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.
• 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 other SG&A expenses exclude expenses from share-based compensation, reorganization measures, acquisitions, the warehouse move, impairments of purchased intangible assets (if applicable in the reporting period) and income and expenses incurred in the shop pannolini.it until the shop's closure.
• 5 Adjusted for expenses and income in connection with share-based compensation, reorganization measures, acquisitions, the warehouse move, impairments of purchased intangible assets (if applicable in the reporting period) and income and expenses of the closed shop pannolini.it.

Income statement Q3 2020

kEUR	9M 2019R	9M 2020	Q3 2019R	Q3 2020
Revenues	49,835	58,752	15,418	15,009
Cost of sales	-37,582	-45,574	-12,058	-12,437
Gross profit	12,583	13,178	3,360	2,572
% margin	24.6%	22.4%	21.8%	17.1%
Selling and distribution expenses	-16,289	-14,261	-4,924	-4,128
Administrative expenses	-5,778	-4,075	-2,054	-1,608
Other operating income	566	715	255	117
Other operating expenses	-104	-203	-47	-30
EBIT	-9,352	-4,646	-3,410	-3,077
% margin	-18.8%	-7.9%	-22.1%	20.5%
Financial result	-54	-39	-16	-17
EBT	-9,406	-4,685	-3,426	-3,094
% margin	-18.9%	-8.0%	-22.2%	20.6%
Income taxes	-7	-4	-4	1
Profit or loss from continuing operations	-9,413	-4,689	-3,430	-3,095
% margin	-18.9%	-8.0%	-22.2%	20.6%
Profit or loss after taxes from discontinued operations	-2,678	-4,052	-837	-604
Profit or loss for the period	-12,091	-8,741	-4,267	-3,699

EBIT	-9,352	-4,646	-3,410	-3,077
Effects of deconsolidation	48	-207	48
Share-based compensation	27	-864	-498	88
Reorganization	-14	-	-	-
Costs of warehouse move	-	250	-	-
Adjusted EBIT	-9,291	-5,467	-3,860	-2,989
% margin	-18.6%	-9.3%	-25.0%	-19.9%

Balance sheet September 30, 3020

kEUR	September 30, 2019	September 30, 2020	kEUR	September 30, 2019	September 30, 2020
Intangible assets	3,684	2,153
Fixed assets	729	1,468	Issued capital	9,964	8,160
Other financial assets	7	116	Share premium	173,006	172,278
Other non-financial assets	156	128	Accumulated loss	-165,188	-169,475
Deferred tax assets	2	4	Cumulated other comprehensive income	214	-9
Total non-current assets	4,578	3,869	Total equity	17,996	10,954
Inventories	8,014	7,798	Total non-current liabilities	86	2,192
Prepayments	71	91	Other provisions	139	154
Trade receivables	1,629	608	Financial liabilities	621	512
Miscellaneous other current assets1	4,600	3,029	Trade payables	4,064	4,053
Cash and cash equivalents	9,683	5,476	Deferred revenue	2,233	2,029
Total current assets	23,997	17,002	Miscellaneous current liabilities2	3,436	2,819
Assets held for sale	-	1,842	Total current liabilities	10,493	9,567
Total assets	28,575	22,713	Total equity & liabilities	28,575	22,713

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.

Cash flow statement Q3 2020

kEUR	Q3 2019R	Q3 2020
Net cash flows from/used in operating activities	-2,065	-199
Net cash flows from/used in investing activities	-76	-134
Net cash flows from/used in financing activities	-253	-182
Cash and cash equivalents at the beginning of the period	12,079	5,996
Net increase/decrease in cash and cash equivalents	-2,396	-520
Cash and cash equivalents at the end of the period	9,683	5,476