windeln.de initiates efficiency and profitability measures in context of upcoming CEO change and targets break-even early 2019 already
• Measures have been initiated to (i) streamline the organization and reduce costs at headquarters in Germany, and (ii) align international activities with regions with short- and medium-term profitability potential; Break even target planned for the beginning of 2019
• Capital increase of up to 2.6 million shares excluding subscription rights from authorized capital, subscribed by existing shareholders, new investor group and all members of the management including founders and Matthias Peuckert • Date of entry of the
designated CEO Matthias Peuckert on May 1, 2018, successor of the founders and co-CEOs Alexander Brand and Konstantin Urban
• Preliminary figures 2017: sales EUR 211 million to 213 million, adjusted EBIT EUR -26 million to -24 million (-13% to -11% margin) and net liquidity of EUR 25.7 million; Publication of the figures for the 2017 financial year on 14 March 2018
Munich, February 6, 2018: windeln.de (WKN WNDL11/ ISIN DE000WNDL110), one of the leading online retailers of baby and toddler products in Europe and for customers in China, has made a detailed assessment of its business areas as part of the upcoming management change and initiated several measures to increase efficiency and reduce costs. Based on the financial figures for 2017, the planned savings amount to approximately EUR 10 million and are largely directly effective. One-off direct restructuring costs amount to around EUR 1.5 million and will be recognised in the 2018 financial year. The active headcount of the windeln.de Group is expected to be reduced from 387 full-time equivalents (FTE) (including Feedo) as of 31 December 2017 to around 250 (-35%) (excluding Feedo) by the end of 2018. These measures increase the efficiency of the organization and thus enable profitable and sustainable growth to be achieved in the medium term. Break even based on adjusted EBIT is already planned for the beginning of 2019.
Reorganization and reduction of costs at the headquarters in Germany
At the German headquarters, the workforce in all sales and administrative areas will be reduced and certain departments will be reorganized. In addition, the product range of currently 52,000 products will be further optimized to increase margins. Meanwhile, marketing spending in Germany is being reduced. Overall, cost savings in other selling and administrative expenses of EUR 4 to 5 million are planned.
Focus on international business
windeln.de concentrates its international business on the German-speaking countries (DACH), Spain, Portugal, France and China in order to reduce complexity in the Group and increase profitability. In this context, the management decided:
(i) to consider the sale of the independent business "Feedo", which is present in the Czech Republic, Slovakia and Poland. Feedo generated sales of EUR 24 million in 2017 (+27% year-on-year) and had 86 FTE employees as of December 31, 2017;
(ii) The closure of the Italian Online Store, local Italian office and warehouse;
(iii) Increasing the profitability of the Southern European business "Bebitus" in Spain, Portugal and France by optimizing the product range and streamlining the organization after the integration, which was completed in October last year.
As a result of these three measures, management expects annual cost savings of EUR 5 to 6 million based on the 2017 financial figures.
Due to the reorganization in Germany and abroad, the management decided to temporarily postpone the planned relocation of the central warehouse to Eastern Europe.
Capital increase of up to 2.6 million shares
In connection with the aforementioned efficiency-enhancing measures and the further development of the business, the Executive Board and Supervisory Board today resolved to increase the Company's share capital from the authorized capital against cash contributions from EUR 28,472,420.00 by up to EUR 2,628,323.00 (equivalent to approximately 10% of the share capital at the time of authorization) to EUR 31,100,743 by issuing up to 2,628,323 new ordinary shares (the "New Shares"). The subscription rights of the shareholders of the company were excluded. The new shares are entitled to dividends from 1 January 2018. The capital increase will be attended by existing shareholders, a new group of investors around entrepreneur Clemens Jakopitsch and all members of the company's Management Board, including the founders and designated CEO Matthias Peuckert. The final placement volume, the placement price and the proceeds from the capital increase will be announced this evening.
Willi Schwerdtle, Chairman of the Supervisory Board of windeln.de SE, "The Supervisory Board of windeln.de SE supports the new management team with Matthias Peuckert as designated CEO, Jürgen Vedie as COO and Nikolaus Weinberger as CFO in implementing the announced measures to increase efficiency and profitability. It is a strong sign from existing and new investors, the management team and the founders to support the company in the capital increase. We expect the organization to be more cost-effective and flexible to achieve profitable and sustainable growth in 2019."
Preliminary financial figures for the fourth quarter and fiscal year 2017
Preliminary financial figures for 2017 amount to EUR 211 million to 213 million in sales (+8% to +10% growth compared to the previous year), adjusted EBIT of EUR -26 million to -24 million (-13% to -11% margin) and cash and cash equivalents at the end of the year of EUR 29.2 million (EUR 25.7 million net excluding a credit line drawn down in the amount of EUR 3.5 million). Sales in the fourth quarter amounted to EUR 52 million to 53 million and -10% to -8% lower than in the prior-year quarter due to the ongoing profitability orientation in Germany and temporary integration effects at Bebitus. Adjusted EBIT amounted to EUR -7 million to -6 million (-13% to -11% margin) and net liquidity changed by EUR 4.9 million in the fourth quarter of 2017 and thus improved compared to the same period of the previous year.