Westwing : Half-year report H1|2021

H A L F - Y E A R R E P O R T

2021

WESTWING AT A GL ANCE

Q 2 2021 H I G H L I G H T S

• Revenue at EUR 131.7m with 18.6 % growth
• Contribution margin at 29.0 % (Q2 2020: 28.7 %)
• Adjusted EBITDA margin of 8.1 % (Q2 2020: 13.2 %) - decrease driven by growth investments into technology, Westwing Collection and marketing
• Strong cash balance of EUR 122.1m as of June 30, 2021

K E Y F I G U R E S ( U N A U D I T E D )
								Change								Change
			H1 2021		H1 2020				Q2 2021		Q2 2020
Results of operations
Revenue (in EUR m)			270.1			178.6		51.2 %			131.7			111.1		18.6 %
Adjusted EBITDA (in EUR m)			30.3			13.5		16.8			10.7			14.7		- 4.0
Adjusted EBITDA margin (in % of revenue)			11.2 %		7.6 %		3.7pp			8.1 %		13.2 %		- 5.1pp
Financial position
Free cash flow (in EUR m)			20.5			16.3	4.2			6.8			22.7		- 15.9
Cash and cash equivalents (in EUR m, as of reporting date)		122.1			86.2	35.9
Other performance indicators
Westwing Collection share (in %)			32 %			23 %		9pp			32 %			22 %		10pp
GMV (in EUR m)			302			214		41.3 %			139			128		7.9 %
Number of orders (in k)			2,290			1,727		32.6 %			1,022			1,051		- 2.8 %
Average basket size (in EUR)			132			124		6.6 %			135			122		11.0 %
Active customers (in k)		1,730			1,178		46.9 %
Average orders per active customer
in the preceding 12 months		2.7			2.6		2.2 %
Average GMV per active customer
in the preceding 12 months (in EUR)			341			325		4.9 %
Mobile visit share (in %)			79 %		78 %		1pp			80 %		79 %		1pp
Other
Full-time equivalent employees (as of reporting date)		1,853			1,382		34.1 %

1

REPORT ON ECONOMIC POSITION

1 .1 FINANCIAL PERFORMANCE OF THE GROUP 1

The condensed income statement for the second quarter of 2021 shows revenue of EUR 131.7m with a growth of 18.6 % compared to the same quarter of the previous year (Q2 2020: EUR 111.1m). GMV grew at 7.9 % year-over-year. While the number of orders slightly decreased by 2.8 % to 1.0m (Q2 2020: 1.1m), the average basket size increased by 11.0 % to EUR 135 (Q2 2020: EUR 122). The number of active customers who made at least one order in the last twelve months was up by 46.9 % to 1.7m (Q2 2020: 1.2m). Customer loyalty remained very strong with 81 % of orders coming from repeat customers.

Both segments showed good revenue growth in the second quarter 2021. The DACH segment grew by 25.0 % and the International segment grew by 11.1 % compared to the second quarter of 2020.

Corresponding to the lower growth in revenue, driven by investments into technology, Westwing Collection and marketing, the Adjusted EBITDA margin decreased by 5.1 percentage points to 8.1 % in the second quarter of 2021 (Q2 2020: 13.2 %).

Unchanged to the previous quarters most of our employees in administrative functions worked from home and all warehouse workers and photo studio employees followed strict health procedures due to COVID-19 during the second quarter of 2021. In June 2021, Westwing started to offer vaccination of its employees at all sites.

Meanwhile accustomed to the situation, we continued to run our business and operations smoothly, despite some disruptions in the global supply chains, especially from China and India. Because of increasing demand and limited supply for shipments from Asia, we also see container rates surging. While we can pass on most of the cost increases to our product prices, we still expect a negative short-term impact on our contribution margins. We continue to constantly monitor the situation in order to react fast to challenges caused by COVID-19.

Overall, we continue to see strong results and we continue to focus on profitable growth going forward.

1 Figures in this section are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment expenses, Marketing expenses as well as in General and administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years and (iii) income/expenses for the restructuring of the French business. We calculate "Adjusted EBITDA" by adjusting EBITDA for these items.

3	WESTWING GROUP AG HALF-YEAR REPORT 2021

C O N D E N S E D F I R S T H A L F 2021 C O N S O L I D AT E D I N C O M E S TAT E M E N T O N A DJ U S T E D B A S I S 2 ( U N A U D I T E D )

EUR m			H1 2021		In % of			H1 2020		In % of
							revenue							revenue
Revenue			270.1				100.0 %			178.6				100.0 %
Cost of sales			- 134.8			- 49.9 %			- 93.1			- 52.1 %
Gross profit			135.3				50.1 %			85.5				47.9 %
Fulfilment expenses			- 53.8			- 19.9 %			- 37.3			- 20.9 %
Contribution profit			81.5				30.2 %			48.2				27.0 %
Marketing expenses			- 22.8			- 8.5 %			- 12.4			- 6.9 %
General and administrative expenses			- 35.0			- 13.0 %			- 27.1			- 15.2 %
Other operating expenses			- 0.9			- 0.3 %			- 1.3			- 0.7 %
Other operating income			1.6				0.6 %			1.0				0.6 %
Depreciation, amortization and impairments			6.0				2.2 %			5.0				2.8 %
Adjusted EBITDA		30.3				11.2 %		13.5				7.6 %
C O N D E N S E D S E C O N D Q UA R T E R 2021 C O N S O L I D AT E D I N C O M E S TAT E M E N T O N A DJ U S T E D B A S I S 2 (U N AU D I T E D )
EUR m						In % of						In % of
		Q2 2021				Q2 2020
							revenue							revenue
Revenue			131.7				100.0 %			111.1				100.0 %
Cost of sales			- 66.5			- 50.5 %			- 57.1			- 51.4 %
Gross profit			65.2				49.5 %			54.0				48.6 %
Fulfilment expenses			- 27.0			- 20.5 %			- 22.1			- 19.9 %
Contribution profit			38.2				29.0 %			31.8				28.7 %
Marketing expenses			- 12.6			- 9.6 %			- 5.9			- 5.4 %
General and administrative expenses			- 18.5			- 14.0 %			- 13.7			- 12.3 %
Other operating expenses			- 0.6			- 0.5 %			- 0.6			- 0.6 %
Other operating income			1.2				0.9 %			0.5				0.5 %
Depreciation, amortization and impairments			3.0				2.3 %			2.6				2.3 %
Adjusted EBITDA		10.7				8.1 %		14.7				13.2 %

Revenue

Our revenue increased by 18.6 % from EUR 111.1m in the previous-year period to EUR 131.7m in the second quarter of 2021.

In the first half of 2021, revenue amounted to EUR 270.1m, an increase by EUR 91.5m or 51.2 % compared to the same period of the previous year (H1 2020: EUR 178.6m).

2 Figures are presented on an adjusted basis, i.e. excluding (i) share-based compensation (in Fulfilment expenses, Marketing expenses as well as in General and administrative expenses) and (ii) expenses for a tax claim provision against a divested entity regarding previous years and (iii) income/expenses for the restructuring of the French business. We calculate "Adjusted EBITDA" by adjusting EBITDA for these items.

4	WESTWING GROUP AG HALF-YEAR REPORT 2021

Contribution Margin

Our gross margin increased slightly from 48.6 % in the second quarter of the previous year to 49.5 % in the second quarter of 2021. With 20.5 % our fulfilment cost ratio remained around the previous year's level (Q2 2020: 19.9 %).

As a result, our contribution margin only slightly changed from 28.7 % in the previous-year period to 29.0 % in the second quarter of 2021. For the first six months of 2021, the contribution margin was 30.2 %, while it amounted to 27.0 % in the first half of 2020.

Compared to the second quarter of 2020 our Westwing Collection share improved by 10 percentage points to 32 %, caused by an expanded product portfolio with a higher share of furniture and overall better availability.

Marketing Expenses

Based on our approach to invest into the current market momentum, marketing expenses increased to EUR 12.6m (9.6 % of revenue) in the second quarter of 2021 compared to EUR 5.9m or 5.4 % of revenue in the previous-year period.

In the first half of 2021 marketing expenses amounted to EUR 22.8m or 8.5 % of revenue, while they were at EUR 12.4m or 6.9 % of revenue in the same period 2020.

General and Administrative Expenses

In percent of revenue, general and administrative expenses were slightly up by 1.7 percentage points to 14.0 % in the second quarter of 2021 compared to the same period of the previous year (Q2 2020: 12.3 % of revenue). This development is primarily driven by higher investments into personnel. In absolute terms, general and administrative expenses increased by EUR 4.8m to EUR 18.5m in the second quarter of 2021 (Q2 2020: EUR 13.7m). Westwing will continue to invest into long-term growth, especially into technology and our Westwing Collection team to expand the Westwing Collection into more product categories with higher-margin products.

In the first half of 2021 general and administration expenses were EUR 35.0m (H1 2020: EUR 27.1m), corresponding to 13.0 %

of revenue (H1 2020: 15.2 %).

Adjusted EBITDA

The Group's Adjusted EBITDA decreased by EUR 4.0m to EUR 10.7m compared to the previous-year period (Q2 2020: EUR 14.7m) given our increased investments in technology, Westwing Collection and marketing as discussed above. Our Adjusted EBITDA margin decreased by 5.1 percentage points accordingly, from 13.2 % in the second quarter of 2020 to 8.1 % in the same period of 2021.

Next to share-based compensation expenses, Westwing adjusted its EBITDA for a non-operating tax claim for previous years from a divested entity amounting to EUR 1.0m in the second quarter of 2021. Due to its non-recurring nature, related expenses are excluded from our Adjusted EBITDA.

Adjusted EBITDA for the first six months of the year increased toEUR 30.3m (H1 2020: EUR 13.5m) which corresponds to an

Adjusted EBITDA margin of 11.2 % (H1 2020: 7.6 %).

5	WESTWING GROUP AG HALF-YEAR REPORT 2021