Westwing profitably growing in FY 2018 fuelled by strong customer loyalty
- Revenue growth of 16% yoy and profitable at 1.2% Adj EBITDA margin, in line with guidance
- Very strong DACH segment with 36% growth yoy and 4% Adj EBITDA margin
- International segment progressing and gradually replicating successful DACH role model
- Challenges in Italy from historically wrong positioning; FY 2018 growth of 24% for Group ex Italy
- Own & Private Label share of Group Gross Merchandise Volume (GMV) increased to 18% in Q4 2018 versus 12% in Q4 2017 (+6 percentage points yoy)
Munich, March 15, 2019. Westwing, the leader in inspiration-based Home and Living eCommerce in Europe, has continued to grow profitably, thereby achieving the guidance set out for FY 2018. Revenue increased by 16% yoy to EUR 254m (FY 2017: EUR 220m) and Adj EBITDA margin improved to 1.2% (FY 2017: -1.8%), making 2018 the first full year that we have been Adj EBITDA profitable.
Westwing's profitable growth continues to be fuelled by high customer loyalty, with 81% of FY 2018 orders coming from repeat customers. In FY 2018, we grew our customer base to 934 thousand active customers (FY 2017: 838 thousand). Furthermore, we were able to increase our share of wallet with our customers, measured as average GMV per active customer in the last 12 months, from EUR 301 in FY 2017 to EUR 312 in FY 2018.
The successful DACH segment at 52% Group revenue share in FY 2018 proves the profitability and growth potential of our unique business model. In DACH, in addition to our daily themes, we have been running our permanent assortment already since 2015 and were able to increase the share of our Own & Private Label products to 24% of GMV in Q4 2018. Our efficient marketing model focused on organic (esp. social media) marketing is already in a fully established state and is driving strong growth. Given that we have our full business model in place in the DACH segment, we achieved 36% growth to EUR 133m in revenue and have been quite profitable with 4% Adj EBITDA margin in FY 2018. The DACH segment's strong performance serves as a blueprint for future profitable growth in our international markets.
In FY 2018, we made significant progress towards replicating the key elements of our business model in our International segment. The daily themes continue to form the foundation to drive customer engagement and loyalty. Our permanent assortment, WestwingNow, is live in already 6 of 8 international countries. In February 2019, WestwingNow launched in Spain. Furthermore, Own & Private Label share increased to 9% of GMV in Q4 2018 in the International segment. Lastly, the organic marketing team is also increasing the focus on the international markets, supported by a team ramp-up. These investments will further put the international markets on a trajectory to follow the DACH role model.
In addition to the unusually warm weather extending well into Q4 2018, which affected eCommerce in general, we have been seeing significant challenges in our Italian market. In Italy we faced double-digit negative growth due to wrong brand positioning in the past, which necessitated a rebranding in early 2018. A transformation program is under way with high focus.
Excluding Italy, Westwing revenue growth was 24% in FY 2018, confirming that both the DACH segment is an increasingly strong business, and that the International segment (excluding Italy at 7% revenue growth for FY 2018), has started to show results of the rollout of Westwing's full business model.
We ended the year with a strong net cash balance of EUR 108m, also due to proceeds from the IPO on October 9, 2018. We have a highly efficient cash profile with a roughly neutral working capital (NWC FY 2018: -2% of revenue) and an asset light business model (Capex FY 2018: 3% of revenue), something that distinguishes us positively from our peers, as we are using capital very efficiently to create long-term shareholder value.
Stefan Smalla, Founder and CEO of Westwing, said: "We are pleased with our profitable growth and achieving our guidance for FY 2018 with the high-growth and profitable DACH business, and our progress in our International markets. We will continue to focus on improving the world-class Westwing customer experience and reaffirm our commitment towards further profitable growth in 2019 and beyond."
For the full year 2019, we expect revenue growth and Adj EBITDA margin in line with 2018 levels, with revenue growth coming mostly in the second half of the year. Additionally, we guide for a continued best-in-class cash profile.
Westwing's annual report FY 2018 will be available on March 28, 2019. For more information, please visit the Westwing corporate website at: www.westwing.com
|Key performance indicators
|Own & Private Label share (in %) (as of Q4)
|GMV (in EUR m)
|Number of orders (in k)
|Average basket size (in EUR)
|Active customers (in k)
|Average orders per active customer LTM
|Average GMV per active customer LTM (in EUR)
|Mobile visit share (in %)
|Results of operations
|Revenue (in EUR m)
|Adj EBITDA (in EUR m)
|Adj EBITDA margin (in % of revenue)
Note: all numbers are preliminary and unaudited
Westwing is the leader in inspiration-based Home and Living eCommerce in Europe with EUR 254m of revenue in 2018. Through its 'shoppable magazine', Westwing inspires its loyal, mostly female customers with a curated product selection and combines that with gorgeous content. With unparalleled loyalty, Westwing is generating 85% of sales from customers who visit the company's sites and apps on average 100 times per year. Westwing's mission is: To inspire and make every home a beautiful home. The company was founded in 2011 and is headquartered in Munich. Westwing went public on the Frankfurt Stock Exchange in October 2018 and is active in eleven European countries.
All numbers are preliminary and unaudited.
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.
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