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Original-Research: Westwing Group SE - from NuWays AG

09.05.2025 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQ

Group.

The issuer is solely responsible for the content of this research. The

result of this research does not constitute investment advice or an

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Classification of NuWays AG to Westwing Group SE

Company Name: Westwing Group SE

ISIN: DE000A2N4H07

Reason for the research: Update

Recommendation: BUY

from: 09.05.2025

Target price: EUR 18.00

Target price on sight of: 12 month

Last rating change:

Analyst: Henry Wendisch

Q1 according to plan: margins up, top line to follow

Flat top line as anticipated due to strategic assortment change. GMV went

down 5% yoy to EUR 119m and sales decreased by 1% yoy to EUR 108m (eNuW: 109m),

mainly due to WEW's strategy shift towards a more premium product

assortment. Here, WEW phases out lower margin items and thus also a certain

part of their customer group in exchange for a more premium product

offering, which becomes visible in (1) an 11pp yoy higher private label

share of 62%, (2) a decline in active customers by 6% yoy, (3) a subsequent

lower number of orders (-25% yoy) but also (4) in an expanding average

basket size (+28% yoy). This strategy shift started in H2'24 and the

subsequent effects seen above should therefore bottom out in H2'25e.

Moreover, this shift was more pronounced in WEW's International segment

(sales: -3.5% yoy), whereas the DACH segment showed sales growth of 1% yoy,

in line with market growth (Home & Living DACH: +2% yoy).

Margins up notably. Adj. EBITDA rose by 44% yoy to EUR 9.1m, a 2.7pp yoy

higher margin of 8.5%, thanks to interaction of several effects: (1) the

higher private label share drove up gross margin by 0.2pp yoy to 51.5%, a

stronger margin increase was counteracted by higher container costs, (2)

efficiency gains in fulfillment visible in a 0.9pp yoy lower fulfillment

ratio, (3) the phase out of last year's brand awareness and subsequent lower

marketing costs led to a 0.9pp yoy lower marketing ratio and (4) lower

overhead costs with G&A expense ratio down 1.4pp yoy.

Looking ahead, the product assortment change is seen to show similar

top-line effects in Q2 and partly still in Q3, thus making FY'25e a

transitional year. However, in FY'26e sales momentum is seen to pick up

again (eNuW: +10% yoy) driven by more active customers due to country

expansions (LUX, DK and SWE completed, 7 more to come) coupled with higher

average basket sizes thanks to the assortment change. Naturally, this should

come with positive operating leverage and efficiency gains, which should

drive margins and cash generation in FY'26e accordingly.

Against this backdrop, WEW's shares seem mispriced, in our view, trading at

17% FCFY'25e (28% '26e). The anticipated return to growth coupled with

further margin expansions in FY'26e could trigger a rerating soon.

Therefore, we confirm our BUY recommendation with an unchanged PT of EUR

18.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/32528.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschlu

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2133678 09.05.2025 CET/CEST

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