publishes results for 9M/Q3 2018: Progress in restructuring, cost structure improved

• Nine-month turnover of EUR 78.5 million; Q3 sales of EUR 22.2 million impacted by weaker summer months; Revenue increase expected for Q4 due to sales promotions and Christmas season
• Further progress in restructuring with margin improvements in European shops and reduction of the cost base in Q3; adjusted EBIT in the nine-month period -EUR -16.0 million (Q3 2018: EUR -4.9 million) •
Improved net working capital compared to the previous quarter; Cash burn of EUR -4.1 million in Q3, available liquidity of EUR 13.0 million as of September 30, 2018

Munich, November 8, 2018: SE ("" or "Group"), one of the leading online retailers for family products in Europe and for customers in China, generated sales of EUR 78.5 million in the first nine months (9M) of 2018 (9M 2017: EUR 142.1 million). Revenue in the third quarter (Q3) of 2018 amounted to EUR 22.2 million compared to EUR 23.5 million in the second quarter of 2018 (Q3 2017: EUR 47.2 million). Adjusted EBIT amounted to EUR -16.0 million in 9M 2018 (9M 2017: EUR -16.0 million) and EUR -4.9 million in Q3 2018 compared to EUR -5.9 million in Q2 2018 (Q3 2017: EUR -4.5 million). In February of this year, the Group adopted efficiency and profitability measures that provide for the streamlining of international business and the focus of all European businesses on margin improvements and the reduction of administrative costs. has made good progress in the course of business so far in 2018 as part of these measures and in this context accepts a lower but more sustainable sales base for the time being.

Sales development in Q3 2018 reflects lower sales activity in the summer months

Sales in the DACH region (Germany, Austria and Switzerland) amounted to EUR 18.3 million in 9M 2018 (9M 2017: EUR 34.2 million) and EUR 5.7 million in Q3 2018 (Q3 2017: EUR 9.9 million). Compared to EUR 5.3 million in Q2 2018, this corresponds to an increase despite the typically weaker summer months. The DACH region accounted for about 23% of Group sales in 9M 2018.
The rest of Europe (RoE), mainly the countries Spain, Portugal and France, which are covered by the Bebitus Shops, contributed to about 25% of Group sales or EUR 19.4 million (9M 2017: EUR 30.3 million) in 9M 2018. RoE generated sales of EUR 4.7 million in Q3 2018 compared to EUR 6.6 million in Q2 2018, as the focus remained on improving product margins (Q3 2017: EUR 10.6 million).
After the difficult Chinese market environment in Q2 with severe tariff delays, participated less in promotions on Tmall in the third quarter until the Group was able to guarantee a smooth customer experience again. In China, sales in 9M 2018 were thus EUR 40.9 million (9M 2017: EUR 77.7 million) and at EUR 11.8 million in Q3 2018 only slightly higher than in Q2 2018 (Q3 2017: EUR 26.8 million). This corresponds to around 52% of Group sales in 9M 2018. The Group expects a significant increase in sales in Q4 due to important sales promotions in China ("11.11." and "12.12.").

Improvement of product margins and cost structure (1) was able to further increase the product margins for the European shops by further optimizing the product range and product prices. At Group level, however, the gross profit margin (in % of sales) of 23.4% in 9M 2018 and 22.2% in Q3 2018 was below the previous year's level (9M 2017: 25.5% and Q3 2017: 25.7%) due to price promotions in the DACH region (e.B. introduction of top deal offers) to reduce inventories.
Fulfillment costs of EUR 13.3 million in 9M 2018 and EUR 3.5 million in Q3 were lower than in the previous year (9M 2017: EUR 21.0 million and Q3 2017: EUR 6.7 million), but higher in relation to sales due to the lower volume. Due to the focus of marketing expenses, marketing costs of EUR 3.6 million in 9M 2018 or 4.7% of sales and EUR 1.1 million or 4.8% in Q3 2018 were below the previous year (9M 2017: EUR 7.0 million or 4.9% of sales; Q3 2017: EUR 2.1 million or 4.4%). As a part of the restructuring measures initiated, the Group has significantly improved its cost structure. Other selling and administrative expenses (A&A expenses) are significantly lower than in the previous year and amount to EUR 17.7 million in 9M 2018 (9M 2017: EUR 24.2 million) and EUR 5.3 million in Q3 2018 (Q3 2017: EUR 7.9 million). This is again lower than in Q2 2018 (EUR 5.8 million). The main reason is the lower number of employees: since the beginning of the year, has reduced its headcount from 387 active full-time equivalents (FTEs) to 218 FTEs as of September 30, 2018.
Reported EBIT improved to EUR -17.7 million in 9M 2018 after EUR -24.4 million in the same period of the previous year. Reported EBIT in Q3 2018 amounted to EUR -5.2 million after EUR -5.4 million in Q2 2018 and EUR -7.3 million in Q3 2017. Adjusted EBIT amounted to EUR -16.0 million in 9M 2018 after EUR 16.0 million in the same period of the previous year. In Q3 2018, adjusted EBIT improved to EUR -4.9 million compared to EUR -5.9 million in Q2 2018 and EUR -4.5 million in Q3 2017 (EUR -5.4 million including Feedo and Pannolini). The Group's goal of breaking even on the basis of adjusted EBIT at the beginning of 2019 requires a recovery in the Chinese business, additional progress in improving margins in European stores and a further reduction in F&A expenses.

Net working capital improved and cash burn reduced

Due to the focus on efficient inventory management, net working capital as of September 30, 2018 was significantly lower at EUR 6.8 million than at the end of the previous quarters (June 30, 2018: EUR 9.2 million and March 31, 2018: EUR 19.1 million). The Group's available cash and cash equivalents (2) amounted to EUR 13.0 million as of September 30, 2018. The change in the liquidity position amounted to EUR -4.1 million in the third quarter.
CEO Matthias Peuckert: "We continue to pursue our restructuring path on the basis of profitable sales. In recent months, we have managed to build a more efficient organization. After the current stabilization phase, we are striving for sustainable and profitable growth in the future. The market environment in China has been challenging, but we are working hard to expand our Chinese business."

(1) Adjusted figures
(2) Includes cash and term deposits

9M 2018 9M 2017 Q3 2018 Q3 2017
Revenue (million euros) 78,5 142,1 22,2 47,2
China 40,9 77,7 11,8 26,8
ROOF 18,3 34,2 5,7 9,9
Other Europe 19,3 30,3 4,7 10,6
Contribution margin (million euros) 1,7 8,2 0,4 3,4
in % of turnover 2,1% 5,8% 1,8% 7,1%
Adjusted EBIT (EUR million) -16,0 -16,0 -4,9 -4,5
in % of turnover -20,5% -11,3% -22,2% -9,6%