Original-Research: Westwing Group SE (von NuWays AG)

Original-Research: Westwing Group SE - von NuWays AG

Einstufung von NuWays AG zu Westwing Group SE

Unternehmen: Westwing Group SE
ISIN: DE000A2N4H07

Anlass der Studie: Update
Empfehlung: Kaufen
seit: 08.05.2024
Kursziel: EUR 18.00
Kursziel auf Sicht von: 12 Monaten
Letzte Ratingänderung: 
Analyst: Mark Schüssler

Healthy Q1 results // FY24 guidance confirmed
Healthy Q1 results underpin that Westwing was able to continue the trend of
yoy GMV growth witnessed in recent quarters. Q1 sales increased by 6% yoy
to € 109m (eNuW: € 107.7m), showing an acceleration of growth versus Q4
(+2% yoy), driven by growth in active customers (+2% yoy to 1.28m) and
basket size (+9% yoy to € 185). International and DACH grew 3% and 8% yoy,
respectively, implying continued market share gains amid ongoing challenges
in the German online Home & Living market (-4% yoy).
At the same time, efficiency measures are bearing fruit. Adj. EBITDA
arrived in line with expectations at € 6m in Q1 (eNuW: € 6.5m),
representing a margin improvement of 0.8ppts yoy to 5.8%. This was carried
by a strong contribution margin expansion of +4ppts  yoy to 32%, a
favorable product mix (i.e. higher private label share, +5ppts yoy to 51%
of GMV in Q1), reduced fulfilment expenses (-2ppts yoy) as well as lower
G&A costs (-1ppts yoy) as a result of cost  savings (i.e. consolidation of
logistics and warehouses and streamlining the organization). Notably,
Westwing was able to translate the favorable adj. EBITDA development into
healthy FCF of € 4m in Q1, supported by net working capital of € -18m,
likely concluding the reduction of excess inventory built up during Covid.
Westwing confirmed its FY24 guidance and with sales expected to develop
within a range of -3% to 4% yoy to € 415445m (eNuW: € 442m). While the Q1
performance was overall satisfactory, management continues to expect H2'24
sales to be weighed down by a strategic adjustment of the product offering
in Spain and Italy (low to mid single-digit percentage impact) along with
ongoing challenges in the home & living market as consumers continue to
hold back on higher-value products such as furniture.
The adj. EBITDA outlook was reiterated at € 14m to € 24m implying a 3.1 to
5.8% margin (eNuW: € 23.7m  with a 5.4% margin). Considering € 6m  adj.
EBITDA in Q1, the bottom-line guidance looks achievable, in our view, while
FCF for the full year should likely be close to break-even (eNuW: € 0.3m)
due to one-off restructuring costs (i.e. complexity reduction, SaaS
transition) and normalizing inventory patterns.
Overall, Westwing has adapted successfully to the current transition period
towards a leaner and more scalable organizational setup. While visibility
on a return of consumer confidence remains low, Westwing’s mid-term
prospects continue to look bright driven by the structural shift towards
e-commerce and its unique positioning in the European home & living market.
We reiterate our BUY recommendationwith a PT of € 18.00, based on DCF, and
keep the stock on our Alpha List.

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Kontakt für Rückfragen
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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