Windeln de : publishes full year and fourth quarter 2019 financial results; divestiture of Bebitus to be explored; change in management board related to Chinese business

• Revenues of EUR 23.0 million in Q4 2019; +24.5% revenue increase compared to Q3 2019 due to strong sales events in China; revenues of EUR 82.3 million in FY 2019
• Adj. EBIT EUR -1.8 (-7.8% margin) in Q4 2019; positive effect from VAT correction of EUR 1.7 million; adj. EBIT EUR -13.8 (-16.8% margin) in FY 2019
• Total cash available EUR 8.4 million as of Dec 31, 2019; lower cash burn of EUR 1.3 million in Q4 2019 due to better operating result, VAT correction and lower net working capital
• Successful completion of capital increase in February 2020; gross issue proceeds of EUR 6.2 million
• Significant double-digit revenue growth and significant improvement in adj. EBIT expected for 2020; break-even on the basis of adj. EBIT targeted for Q1 2021
• Divestiture of Bebitus shops to be explored to support adj. EBIT break-even target
• Sean (Xiaowei) Wei appointed to Management Board responsible for new business China
Munich, March 18, 2020: windeln.de SE ('windeln.de', 'Group' or 'Company'; ISIN DE000WNDL201 and ISIN DE000WNDL219) publishes its final financial results for the full year (FY) 2019 and fourth quarter (Q4) after having published its preliminary results on January 22, 2020. The Group generated revenues of EUR 23.0 million in Q4 2019. This corresponds to growth of 24.5% compared to the third quarter (Q3) 2019 (EUR 18.5 million) due to strong sales events in the last quarter of 2019 in China. In FY 2019, the Group generated revenues of EUR 82.3 million (FY 2018: EUR 104.8 million). Adjusted (adj.) EBIT amounted to EUR -13.8 million in FY 2019 (FY 2018: EUR -18.5 million) and EUR -1.8 million in Q4 2019 (Q4 2018: EUR -2.5 million), which is a result of the continued focus on margin and cost reductions in Europe. Overall, business in China in 2019 remained below the Group's expectations.

Revenue growth in China due to sales events in Q4 2019; stable revenues in Europe

Revenues of the China business in FY 2019 amounted to EUR 51.3 million (2018: EUR 56.7 million). In Q4 2019, the business in China grew 45.8% to EUR 15.6 million compared to Q3 2019 (EUR 10.7 million) but was below the Group's original targets. The reasons for this were, among others, the later opening of the second bonded warehouse in China, setting up a marketing cooperation with the Langtao company, and a lower purchasing volume for liquidity reasons. Revenues in China accounted for 62% of Group revenues in 2019.
Revenues in the DACH region (Germany, Austria and Switzerland) amounted to EUR 17.9 million in FY 2019 (FY 2018: EUR 24.2 million) and EUR 4.5 million in Q4 2019 after EUR 4.5 million in the previous quarter (Q4 2018: EUR 5.9 million). In the DACH region, revenues were further decreased in favour of improved margins. Revenues in the DACH region accounted for 22% of Group revenues in 2019.
Similar to the DACH region, the Rest of Europe (RoE; Spain, Portugal and France) covered by the Bebitus shops, was affected by the ongoing focus on improving margins and profitability of the business. RoE generated revenues of EUR 13.2 million in FY 2019 (FY 2018: EUR 23.9 million) and EUR 2.9 million in Q4 2019 (Q4 2018: EUR 4.5 million). RoE revenues accounted for 16% of Group revenues in 2019.

Improved adj. EBIT and lower cash burn in Q4 2019; positive impact of VAT correction for China business

The Group generated an adj. EBIT of EUR -1.8 million in Q4 2019, which corresponds to an adj. EBIT margin of -7.8%. In FY 2019, windeln.de achieved an adj. EBIT of EUR -13.8 million (-16.8% adj. EBIT margin). This is a significant improvement compared to the previous quarter (Q3 2019: EUR -4.7 million and -25.5% adj. EBIT margin) due to better operational performance and the recorded Value Added Tax (VAT) correction of EUR 1.7 million (adj. EBIT effect EUR 1.4 million) related to deliveries by windeln.de to Chinese customers via so-called freight forwarders in the previous years.
The Group's total cash available as of December 31, 2019 was EUR 8.4 million (EUR 12.0 million as of March 16, 2020 reflecting the capital increase). The change in total cash available amounted to EUR -1.3 million in Q4 2019. This is a significant improvement compared to the previous quarter and can be attributed to better operating performance, lower net working capital as of December 31, 2019 and the receipt of payment from the VAT correction of EUR 0.9 million. For the current year 2020, the Group received VAT corrections of EUR 0.7 million and expects further cash inflows from the VAT correction of at least EUR 1.4 million.

Completion of subscription rights capital increase in February 2020 with gross issue proceeds of EUR 6.2 million; cooperation with Bodyguard and Holland at Home

windeln.de has completed its subscription rights capital increase in February 2020 with gross issue proceeds of EUR 6.2 million. The proceeds shall be used to strengthen the Group's liquidity position in order to cover negative cash flows until reaching break-even on basis of adj. EBIT in Q1 2021, as well as to invest in efficiency and growth projects. In order to generate additional revenues from the Chinese business in 2020, the Company has recently signed two term sheets to cooperate with the two companies Holland at Home B.V. ('Holland at Home') and bodyguardpharm GmbH ('Bodyguard'). With Holland at Home, windeln.de plans to expand its activities to various other important sales channels in China in the coming months and through the cooperation with Bodyguard to expand the product range for its Chinese customers with health- and drugstore items. With the opened second Bonded Warehouse in November 2019, windeln.de has developed an efficient set-up for those further growth aspirations.

Significant revenue growth and improvement in adj. EBIT expected for 2020; break-even on the basis of adj. EBIT targeted for Q1 2021; potential divestiture of Bebitus Shops to be explored

For 2020, windeln.de expects to achieve significant double-digit revenue growth and a significant improvement of adjusted EBIT. This shall be achieved among others through the cooperations with Bodyguard and Holland at Home as well as other efficiency projects such as the move of the warehouse in Germany and the outsourcing of the IT shop system. Due to lower than targeted revenues for the Chinese market in 2019 and the associated lower starting point for 2020, windeln.de's goal of reaching break-even at the beginning of 2020 on the basis of adjusted EBIT changed to Q1 2021. To support that target windeln.de also explores the potential divestiture of its Southern European business Bebitus.
Matthias Peuckert, CEO, and Dr. Nikolaus Weinberger, CFO of windeln.de comment on FY 2019: 'In 2019, we made good progress in increasing margins and reducing our cost base. For 2020, we initiated several measures that will take effect in 2020 and improve our business in China and Europe. Backed with the proceeds of the recent capital increase, we are confident to be reaching break-even on the basis of adjusted EBIT in the first quarter of 2021.'

Sean (Xiaowei) Wei appointed to Management Board

The Supervisory Board of the Company appointed Mr. Xiaowei (Sean) Wei as member to the Management Board of the Company. In his function, Mr. Wei is responsible for new business in China, driving further growth projects in the Company's attractive and important Chinese market. Mr. Wei has many years of experience in e-commerce in China and has been appointed for 3 years.
Chairman of the Supervisory Board Willi Schwerdtle comments on the appointment Sean Wei as management board member: 'With Mr. Wei's appointment, we have gained a very experienced manager with pronounced Chinese expertise as an additional member to the Management Board. With his knowledge in scaling e-commerce businesses in China, Mr. Wei will be further strengthening the important Chinese business and accelerate windeln.de's growth in China in the next few years. We wish him all the best for his future work in our Company.'