DGAP-News: Westwing Group AG
/ Key word(s): Change in Forecast
Westwing returned to double-digit growth in Q3 2019 and continues increased marketing investments
Munich, September 25, 2019. After having returned to over 10% GMV growth in the third quarter of 2019, Westwing decided to continue increased marketing investments and, in return, accepts lower short-term profitability in order to accelerate its growth as the leading brand and platform in inspirational Home and Living eCommerce in Europe in the long term.
"We believe that it is the right time to continue our marketing investments as we will benefit from fourth-quarter seasonality and lay solid ground for future growth in 2020 and beyond", said Stefan Smalla, Founder & CEO of Westwing. "We have seen strong returns from the intensified marketing in the third quarter, as our over 10% GMV growth demonstrates. In return, we will accept lower short-term profitability for this year to set ourselves up well for a strong 2020 based on our unique business model, customer loyalty, improved marketing strategy and strong cash balance."
The latest GMV growth rate of above 10% in the third quarter is both significantly stronger than the increase of 1% reported for the first half of 2019 as well as stronger than the growth of 10% in the third quarter of 2018. Growth has been improved both in the DACH segment at above 15% and in the International segment which has returned to growth.
Considering the momentum and based on strong marketing efficiency, Westwing will continue higher marketing investments throughout the fourth quarter at the upper end of the company's strategic marketing range of 6-9%. Westwing believes that higher marketing investments in preparation for the seasonally strongest quarter will be beneficial for the mid- and long-term results of the company, both in terms of growth and profitability.
As a result of the increased marketing investments Westwing is adjusting its profitability guidance for 2019. Westwing now expects Adjusted EBITDA margin at around -3.5% within a range of one percentage point (previously: lower end of -1% to +1%). It expects Free Cash Flow to not exceed outflows of EUR -29 million (previously: no lower than EUR -25 million). As announced with the publication of the results for the first half of the year, Westwing expects to end the year 2019 at the lower end of the updated guidance of 6-12% of revenue growth. While Adjusted EBITDA for the third quarter of 2019 is expected on similar levels as in the first half of the year, Westwing expects a positive Adjusted EBITDA and more than 10% revenue growth for the fourth quarter of 2019.
Westwing has improved its operating performance, mainly through cost improvements in its new logistics center in Poland, strong increases of the share of high-margin Own and Private Label products, and improved operations in the International segment.
Westwing will report its financial figures for the third quarter on November 7, 2019.
25.09.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||Westwing Group AG|
|Moosacher Straße 88|
|Phone:||+49 89 550 544 377|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||880193|
|End of News||DGAP News Service|