Westwing reported positive Adjusted EBITDA and Free Cash Flow for the fourth quarter 2022

Westwing reported positive Adjusted EBITDA and Free Cash Flow for the fourth quarter 2022

• Westwing reported a positive Adjusted EBITDA of EUR 4m and a positive Free Cash Flow of EUR 12m for the fourth quarter 2022
• Despite a challenging market environment, Westwing delivered against its updated guidance for FY 2022
• Westwing ended the year 2022 with a strong Net Cash position of EUR 76m
• 2023 focus is to return to full year Adjusted EBITDA profitability and profitable revenue growth in the second half of 2023
• FY 2023 guidance: 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, March 30, 2023 // Westwing, Europe‘s No.1 in Beautiful Home & Living e-Commerce, announces its audited results for the fourth quarter 2022 and the 2022 fiscal year.

Driven by a clear focus on protecting unit economics and strong cost discipline, Westwing returned to adjusted EBITDA profitability in the fourth quarter of 2022 and generated EUR 4m of Adjusted EBITDA (Q4 2021: EUR 10m) at revenues of EUR 128m, a decline of -14% year-over-year (Q4 2021: EUR 149m). Furthermore, based on the fourth quarter profitability in combination with decisive working capital management, Westwing reported a positive Free Cash Flow of EUR 12m in the fourth quarter 2022 (Q4 2021: EUR 3m).

Westwing delivered on its updated FY 2022 guidance with group revenues of EUR 431m, a decline of 18% year-over-year (FY 2021: EUR 522m). Topline in FY 2022 was driven by a challenging market environment with declining consumer confidence across all segments. Yet, Westwing remains, despite this challenging market environment, significantly larger compared to pre-pandemic size of 2019. The compound annual revenue growth vs. 2019 was at 17%, highlighting the lasting e-Commerce adoption within the Home & Living market. With regards to profitability, Westwing reported a loss of
EUR -4m Adjusted EBITDA in FY 2022 (FY 2021: EUR 40m), corresponding to an Adjusted EBITDA margin of -1%. Profitability was affected by the decrease in revenue leading to significant lower scale in fulfilment and across G&A. In response to the lower topline, Westwing acted decisively and implemented measures that reduced its cost base across Marketing, G&A, and CAPEX. Westwing ended the FY 2022 with a very healthy Net Cash position of EUR 76m. The high-margin Westwing Collection continued its upward trajectory, adding 7 percentage points to 41% of overall Group Gross Merchandise Value (GMV) share in FY 2022 (FY 2021: 34%); well on track to reach the +50% strategic target share of Group GMV. 

“In 2022, we faced a very difficult macro environment with low consumer demand across our markets, while we had set up the company anticipating a much larger scale. We acted decisively facing these challenges, with measures to protect contribution margins, reduce our cost base and adjust our marketing investments to the new environment. At the same time, we made significant progress on our strategic agenda and sustainability efforts, setting us up for future success”, said Dr. Andreas Hoerning, CEO of Westwing.

Outlook 2023
In terms of outlook for 2023, reflecting the currently lowered consumer sentiment and uncertainty for the remainder of the year, Westwing forecasts FY 2023 revenue between EUR 390m and
EUR 440m with a year-over-year growth rate of -9% to +2%. Growth rates for the second half of 2023 are expected to be higher than the first half and Westwing expects to return to positive growth rates in the second half of 2023.
Based on the notable cost reductions, initiated in the second half of 2022 as well as the continuous focus on improving unit economics, Westwing forecasts an Adjusted EBITDA between EUR +4m and EUR +13m at an adjusted EBITDA margin in the range of +1% to +3%. 

Webcast and Conference Call
Westwing's FY 2022 earnings call will be broadcasted via live stream on March 30, 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 of revenue in 2022 across 11 countries. Founded on the idea of an exclusive online concept store, our integrated platform combines Shop, Club Sales, offline store, external channels and Westwing Studio — with the Westwing Collection at the heart of our commercial model. 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