Westwing’s Q2 2023 results mark third profitable quarter in a row

Westwing’s Q2 2023 results mark third profitable quarter in a row

• Topline stabilized in the second quarter of 2023 despite a very challenging market environment; Q2 2023 GMV at EUR 109 million on the same level as in the previous year; Active Customers remained stable as well at 1.3 million vs Q1 2023
• Successful expansion of share of wallet with customers: GMV per Active Customer increased by 8% year-over-year to EUR 376 in Q2 2023
• Westwing reported the third profitable quarter in a row: Adjusted EBITDA at EUR 4 million and 4.4% Adjusted EBITDA margin in Q2 2023 (EUR +7 million vs previous year)
• The strategically important share of the Westwing Collection further increased by 8 percentage points year-over-year to 46% of Group GMV in Q2 2023
• Westwing expects to return to sustainable growth in the second half of 2023 and therefore confirms the full year guidance; Westwing currently expects to achieve revenue and Adjusted EBITDA in the upper half of this guidance

Munich, August 10, 2023 // Westwing, Europe‘s No.1 in Beautiful Living e-Commerce, announces its results for the second quarter of 2023.

Despite a challenging market environment, Westwing successfully stabilized its topline and reported a steady Gross Merchandise Volume (GMV) of EUR 109 million in the second quarter of 2023 (Q2 2022: EUR 109 million). Moreover, the number of active customers remained stable at 1.3 million compared to the first quarter of 2023. 

The stabilization of the topline was also driven by a continued increase in the share of wallet with customers. Based on the unique love brand strategy of Westwing and a strong focus on an exciting Westwing Collection and Shop offering, GMV per Active Customer (based on last twelve months) increased significantly by 8% year-over-year to EUR 376 in the second quarter of 2023 (Q2 2022: EUR 349).

Revenue in the second quarter of 2023 developed in line with GMV and amounted to EUR 102 million with a slight decrease of -1% year-over-year (Q2 2023: EUR 103 million). Compared to the second quarter of 2019, revenue in the second quarter of 2023 was up by 75%.

In terms of profitability, Westwing reported its third profitable quarter in a row. The company reported an Adjusted EBITDA of EUR 4 million at 4.4% Adjusted EBITDA margin in the second quarter of 2023 (Q2 2022: EUR -2 million), representing a substantial increase of EUR 7 million compared to the previous year. In line with the second quarter of 2023, the first half of 2023 was also profitable with an Adjusted EBITDA of EUR 10 million and 4.6% Adjusted EBITDA margin (H1 2022: EUR -4 million). The improvement in profitability was accomplished through substantially better unit economics and the successful implementation of cost saving initiatives across G&A, Marketing, and CAPEX. The improvement in unit economics was driven by a positive development of the high-margin Westwing Collection and continued efficiency gains in fulfilment. In terms of cost savings, the measures that Westwing initiated last year were successfully completed in the first half of 2023, while a high cost discipline will be maintained in the future. 

Based on operating profits and successful net working capital management, Free Cash Flow also improved significantly in the second quarter of 2023 compared to the previous year. Westwing maintained a negative net working capital position of EUR -5 million per end of the second quarter of 2023, which is an improvement of EUR 29 million year-over-year. The strong improvement of net working capital was especially driven through a consistent reduction of overstock over the past 12 months. Overall, Westwing reported a break-even Free Cash Flow for the second quarter of 2023 (Q2 2022: EUR -13 million), which represents an increase of EUR 13 million compared to the previous year. The first half of 2023 was clearly Free Cash Flow positive at EUR 10 million (H1 2022: EUR -30 million). Furthermore, Westwing maintained its strong cash position of EUR 76 million as of June 30, 2023.

The company’s strategic priority of rapidly building up the Westwing Collection to a target of 50% of overall Group GMV through further assortment expansion and greater visibility across all channels also continues to develop very positively. The Westwing Collection share continued to increase by 8 percentage points year-over-year to 46% of Group GMV in the second quarter of 2023.

“We are pleased to report our third profitable quarter in a row, especially considering the challenging market conditions." says CEO Andreas Hoerning. "Our strong focus on profitability and operational efficiency has yielded positive results, and we are now fully prepared to embark on the next profitable growth phase of Westwing."

Outlook 2023

Based on recent results and the expected return to growth in the second half of 2023, the company confirms the full year guidance 2023 that was published in March 2023. Currently the management expects to achieve revenue and Adj. EBITDA in the upper half of the guidance. The full year guidance 2023 indicates a revenue between EUR 390 million and EUR 440 million (with a year-over-year growth rate of -9% to +2%) and an Adjusted EBITDA between EUR +4 million and EUR +13 million (at an Adjusted EBITDA margin in the range of +1% to +3%) for the fiscal year 2023.

Webcast and Conference Call

Westwing's Q2 2023 earnings call will be broadcasted via live stream on August 10, 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.

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