Westwing reports positive Adjusted EBITDA and Free Cash Flow for the first quarter 2023

Westwing reports positive Adjusted EBITDA and Free Cash Flow for the first quarter 2023

• Turnaround on profitability: Westwing generated a positive Adjusted EBITDA of EUR 5m at 4.9% Adjusted EBITDA margin in the first quarter of 2023, an improvement of EUR 7m on Adjusted EBITDA versus the previous year
• Westwing is delivering on its cost saving targets across Marketing, G&A, and CapEx: Costs in the first quarter of 2023 were already down by EUR 29m on an annualized basis versus the committed EUR 30m of gross savings (compared to the Q1 2022 baseline)
• The Company returned to negative net working capital at EUR -5m per end of the first quarter 2023, a reduction of EUR -30m versus the peak end of the second quarter 2022
• Westwing's Free Cash Flow improved by EUR +27m vs the first quarter of 2022, resulting in a positive Free Cash Flow of EUR 10m in the first quarter of 2023
• FY 2023 guidance confirmed: Revenue of EUR 390m to EUR 440m (-9% to +2% year-over-year growth) and Adjusted EBITDA of EUR +4 to +13m (+1% to +3% Adjusted EBITDA margin)

Munich, May 11, 2023 // Westwing, Europe’s No.1 in Beautiful Living e-Commerce, announces its results for the first quarter of 2023.

Westwing reported a revenue of EUR 103m in the first quarter of 2023 (Q1 2022: EUR 111m), down 7% year-over-year due to baseline effects from the previous year and continued low consumer sentiment. Despite the currently challenging market environment, Westwing’s revenues remained significantly higher compared to 2019. Overall, revenue in the first quarter of 2023 was up by 67% versus the first quarter of 2019, showcasing the difference in scale the Company gained over the past years. 

In terms of profitability, Westwing continues its successful turnaround. Westwing generated a positive Adjusted EBITDA of EUR 5m at 4.9% Adjusted EBITDA margin in the first quarter of 2023 (Q1 2022:  EUR -2m), an improvement of EUR 7m versus previous year driven by strong unit economics and the successful implementation of cost saving measures. 

The strong unit economics were heavily supported by the continued expansion of the high margin Westwing Collection in the first quarter of 2023. The Westwing Collection reached an all-time high of 46% of overall Group GMV in the first quarter of 2023, an increase of 9 percentage points compared to the previous year. 

The cost savings were achieved through a successful implementation of headcount reduction, operational efficiencies, and prioritized investments across Marketing, G&A, and CapEx. Overall, costs were already down by EUR 29m on an annualized basis versus the committed EUR 30m of gross savings (compared to the Q1 2022 baseline).

Moreover, Free Cash Flow improved significantly by EUR 27m versus the previous year, amounting to EUR 10m in the first quarter of 2023 (Q1 2022: EUR -17m). Next to operating profits, the Free Cash Flow increase was also driven by a further improvement of net working capital. Westwing returned to a negative net working capital of EUR -5m in the first quarter of 2023 (Q1 2022: EUR 16m), which is a reduction of EUR 30m versus the peak of Q2 2022. 

“I am very proud of the progress we made in the first quarter of 2023, especially given the continued challenging market environment. We’re delivering as promised on significant cost saving targets and are confident about the structural return to full year profitability”, says CEO Andreas Hoerning. “At the same time, we continue to improve customer experience across channels and countries to drive future growth.”

Outlook 2023

Westwing confirms its outlook for FY 2023 published in March 2023. The Company expects revenues of EUR 390m to 440m at -9% to +2% year over year growth and a return to positive growth rate in the second half of 2023. Adjusted EBITDA is expected at EUR +4m to +13m at +1% to +3% Adjusted EBITDA margin.

Webcast and Conference Call
Westwing's Q1 2023 earnings call will be broadcasted via live stream on May 11, 2023 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 thereafter at this site.

Westwing's Annual General Meeting is scheduled for May 16, 2023. 

For further information, please visit Westwing's investor relations website at https://ir.westwing.com.

About Westwing

Westwing is Europe‘s No.1 in Beautiful Living e-Commerce with EUR 431 million in revenue in 2022 across 11 countries. The premium one-stop-shop for Design Lovers is offering a unique brand experience with a curated assortment of the Westwing Collection and the best design brands. The integrated platform combines Shop, Club Sales, offline store, B2B services and Westwing Studio. The team consists of 1,900 professionals working together towards a 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 the Company undertakes no obligation to update or revise these statements. The Company’s actual results may differ materially and adversely from any forward-looking statements discussed in this press release due to a number of factors, including without limitation, risks from macroeconomic developments, external fraud, inefficient processes at fulfilment centres, inaccurate personnel and capacity forecasts for fulfilment centres, hazardous material / conditions in production with regard to private labels, lack of innovation capabilities, inadequate data security, lack of market knowledge, risk of strike and changes in competition levels.

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