Märkte & Kurse

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Original-Research: Westwing Group SE - from NuWays AG

08.08.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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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:                        08.08.2025
     Target price:                EUR 20.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Q2 review: beating margin expectations

WEW released a strong set of Q2 results, in line with our sales and GMV
expectation but beating our margin expectation. In detail:

Q2's GMV arrived in line with expectations at EUR 110m (-4% yoy) as a direct
result of the assortment change towards a more premium, global and smaller
offering. This led to a continued decline in active customers by 9% to 1.17m
(eNuW: 1.21m), but was mitigated by a surging average basket size of EUR 260
(+31% yoy; eNuW: EUR 229). Unsurprisingly, the assortment change also comes
with a shift towards the own brand "Westwing Collection", which made up a
GMV share of 65% (+12pp yoy; eNuW: 63%) and implies a growth of 18% yoy,
whereas third party products GMV declined by 28% yoy.

Sales also declined by 6% yoy to EUR 100m (eNuW: EUR 101m) in Q2 in line with
our expectation. In particular, DACH saw a larger than expected decline by
9% to EUR 54m (eNuW: EUR 59m), following a strong comparable base (Q2'24 was not
yet impacted the assortment change) and a still muted consumer sentiment.
However the International segment already exceeded our expectation with
sales declining by only 2% yoy to EUR 45m (eNuW: EUR 42m), following first base
effects from the assortment change but more importantly first contributions
from recent country expansions (8 new countries executed in H1).

Thanks to a slighty better than expected Westwing Collection share but also
due to improved freight rates, the gross margin came in better than expected
at 52.6%, up 2pp yoy (eNuW: 51.2%), yielding a gross profit of EUR 52.4m (-2%
yoy). Furthermore, we underestimated the efficiency gains from the
centralized and consolidated logistics center in Poland, which led to
fulfilment expenses to fall by 11% yoy to EUR 19m (19.1% sales ratio, - 1pp
yoy). Consequently, the contribution profit came in ahead of expectations at
EUR 33.4m (eNuW: 32.4m) with the highest contribution margin ever recorded of
33.5% (+3.1pp yoy). To put this into perspective, this translates into a
contribution profit per order of EUR 79, which not only grew rapidly by 41%
yoy (15% qoq) but has nearly doubled since FY'23 (EUR 43 per order). A further
highlight was the reduced overhead as G&A expense declined by 20% yoy to EUR
17m (17.2% of sales, - 2.9pp yoy) on the back of reduced headcount and lower
write downs, leading to a steep jump in adj. EBITDA by 60% yoy to EUR 6.2m
(6.3% margin, +2.6pp yoy) ahead of expectations (eNuW: EUR 5.3m).

With a return to growth expected for FY26e, the visible margin levers should
translate into even stronger operating leverage. Consequently, we expect a
further adj. EBITDA margin improvement in FY'25e to 9% and rising FCFs
thanks to the sound cash conversion.

All this makes WEW an excellent pick despite muted consumer sentiment.
Trading at only 2.7x FY'26e EBITDA and offering an attractive FCFY'25e of
16%, we reiterate our BUY recommendation and keep WEW in our AlphaList with
increased PT of EUR 20.00 (old: EUR 18.00), based on DCF.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=a2651770117c60d6396a8312e45a6bdc
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
++++++++++
Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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2181328 08.08.2025 CET/CEST

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