EQS-News: In Q3 2024, Westwing continued to grow in a declining market and improved adjusted EBITDA margin year-over-year

In Q3 2024, Westwing continued to grow in a declining market and improved adjusted EBITDA margin year-over-year

• In Q3 2024, GMV grew by 2% and revenue by 3% year-over-year despite market headwinds and shifts in product assortment. In the DACH segment, topline grew 9 percentage points faster than market.
• Adjusted EBITDA amounted to EUR 4 million at 3.7% margin (+1.1 percentage points year-over-year), with improved contribution margin and continued investments into brand awareness.
• The Westwing Collection share increased by 10 percentage points year-over-year to 58% of Group GMV in Q3 2024.
• Westwing made good progress on its 3-step plan to unlock the Company's full value potential and rolled out the new technology platform to customers in four additional countries.
• Westwing confirms the financial guidance for 2024.

Munich, 7 November 2024 // Westwing Group SE (“Westwing” or “the Company”), Europe’s #1 in Beautiful Living e-commerce, announces its results for the third quarter of 2024.

Westwing continued to grow in a declining market, with Q3 2024 Gross Merchandise Volume (GMV) up 2% and revenue up 3% year-over-year. Revenue amounted to EUR 96 million. Growth was driven by a significant increase in average spend per order of 16% year-over-year to EUR 206 in Q3 2024 (Q3 2023: EUR 177). At the same time the number of orders decreased by 13% year-over-year. Both developments are in line with expectations and were primarily driven by the strategic switch to a mostly global and more premium product assortment. In addition, the number of active customers increased by 1% compared to the previous year’s third quarter. In the DACH segment, revenue grew by 4% year-over-year, while the German online furniture, lighting & decoration market declined by 5% according to data from Bundesverband E-Commerce und Versandhandel. Westwing’s revenue in Austria and Switzerland developed in line with Germany.

With regards to profitability, Westwing reported EUR 4 million adjusted EBITDA in Q3 2024 (Q3 2023: EUR 2 million), corresponding to an adjusted EBITDA margin of 3.7% (Q3 2023: 2.5%). The result was driven by continued expansion of the high margin Westwing Collection, efficiency gains in fulfilment, and investments into brand awareness in the DACH segment. The strategically important Westwing Collection reached an all-time high of 58% share of overall Group GMV in Q3 2024, an increase of 10 percentage points compared to previous year’s third quarter. The positive gross margin impact of the increased Westwing Collection share was partially offset by higher container costs and pressure on 3rd party market prices. Overall, the contribution margin increased by 3.4 percentage points year-over-year to 31.7%.

Westwing’s net working capital increased by EUR 6 million quarter-over-quarter driven by seasonal inventory build-up, but remained negative at EUR -5 million at the end of the quarter (end of Q3 2023: EUR -2 million). Q3 2024 free cash flow amounted to EUR -6 million and net cash stood at EUR 63 million at the end of the quarter (end of Q3 2023: EUR 69 million).

Westwing is making good progress on its 3-step plan to unlock the Company’s full value potential. The focus continues to lie on complexity reduction, premium brand positioning, OneWestwing commercial model, and Westwing Collection share increase.

• The migration from a proprietary technology ecosystem to a mostly Software-as-a-Service (SaaS) based platform, which comes with a new, more premium web design tailor made for design lovers, reached further important milestones. The new platform is now available to customers in six geographies: Portugal, the Netherlands, Spain, Belgium, France, and Italy. 

• Equally serving the goals of complexity reduction, premium brand positioning and OneWestwing commercial model, the switch to a mostly global and more premium product assortment and the related reorganisation are progressing well. The resulting topline impact remained in line with expectations and has been slowing down growth, most notably in the International segment.

• Westwing continued to strengthen its premium brand positioning in the third quarter with key strategic initiatives. The “Iconic Pieces” brand awareness campaign was launched in Germany and included out-of-home advertising across major German cities. Additionally, the Company announced an exclusive collaboration with the renowned brand MEISSEN, Europe’s oldest porcelain maker with an over 300-year tradition of fine craftsmanship. The collaboration showcases the blend of tradition and modern design.

Dr Andreas Hoerning, CEO of Westwing, commented: "I am very proud of the progress we are making. Westwing’s continued topline growth in a declining market underscores the strength of our commercial model. On top, we were able to increase our adjusted EBITDA margin while investing further into our design brand. This brings us another step closer to becoming Europe’s leading premium one-stop destination in Home & Living.”

Outlook 2024

The Company confirms its guidance for the full year 2024 as published in March 2024. The guidance for the full year 2024 indicates a revenue between EUR 415 million and EUR 445 million with a year-over-year growth rate of -3% to +4%.

Although the transition to a mostly global and more premium product assortment is expected to have a stronger negative topline impact in Q4 compared to previous quarters, a decline in revenue for the full year 2024 is unlikely by now. However, given the importance of the upcoming peak season and continued challenging market conditions, Q4 performance remains hard to predict.

The full year 2024 adjusted EBITDA guidance is confirmed in the range of EUR 14 million to EUR 24 million at an adjusted EBITDA margin in the range of +3% to +5%.
 

Webcast and Conference Call
Westwing's Q3 2024 earnings call will be broadcasted via live stream on 7 November 2024, starting at 10:00 AM (CEST) on the Company's investor relations website https://ir.westwing.com. The recording of the live stream will be available on the same site.

For more information, please visit the Westwing Investor Relations website: https://ir.westwing.com

About Westwing

Westwing, Europe’s #1 in Beautiful Living e-commerce, is now present in 12 European countries and has achieved a GMV (Gross Merchandise Volume) of EUR 481 million in 2023. As Europe’s premium one-stop destination for Design Lovers we offer a unique brand experience with a carefully curated assortment of our Westwing Collection and 3rd party design brands. The integrated platform combines Shop, Club-Sales, Stores, the B2B Service (Westwing Business) and our Westwing Design Service. Our team is working together on our shared purpose to “Excite people to create homes that unlock the full beauty of life”. Founded in 2011, Westwing is headquartered in Munich and went public on the Frankfurt Stock Exchange in October 2018.

Disclaimer

Certain statements in this communication may constitute forward-looking statements. These statements are based on assumptions that are believed to be reasonable at the time they are made, and are subject to significant risks and uncertainties. You should not rely on these forward-looking statements as predictions of future events and we undertake no obligation to update or revise these statements. Our actual results may differ materially and adversely from any forward-looking statements discussed in these statements due to a number of factors. These include, without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfilment centres, inaccurate personnel and capacity forecasts for fulfilment centres, hazardous materials/production conditions with regard to private labels, insufficient innovation capabilities, inadequate data security, insufficient market knowledge, strike risks and changes in competition levels.

Contact
Westwing Group SE
Investor Relations
E-Mail: ir@westwing.de