windeln.de publishes H1 2018 results: progress on restructuring, softer market environment in China

• H1 revenues EUR 56.4 million (Q2 2018: EUR 23.5 million) and H1 2018 adjusted EBIT EUR -11.1 million (Q2 2018: EUR -5.9 million); lower revenues driven by soft demand in China
• Good progress on Group restructuring with margin improvement at European shops, reduction of SG&A expenses and sale of Feedo
• Net working capital and liquidity position improved compared to previous quarter; total cash available of EUR 17.1 million as of June 30, 2018
• Target to reach adjusted EBIT break-even early 2019 confirmed

Munich, August 9, 2018: windeln.de SE (“windeln.de” or “Group”), one of the leading online retailers for baby, toddler and children´s products in Europe and to customers in China, generated revenues of EUR 56.4 million in the first half (H1) of 2018 (H1 2017: EUR 94.9 million). Revenues of the second quarter (Q2) 2018 amounted to EUR 23.5 million (Q2 2017: EUR 48.3 million). Adjusted EBIT was EUR -11.1 million in H1 2018 (H1 2017: EUR -11.5 million) and EUR -5.9 million in Q2 2018 (Q2 2017: EUR -5.0 million).

Revenue development in H1/Q2 2018 impacted by softer market environment in China as well as ongoing efficiency and profitability measures for European business

To reach adjusted EBIT break-even early 2019, windeln.de decided to implement several efficiency and profitability measures in February this year. This included streamlining the international business and focusing all European shops on margin improvement as well as lowering overhead costs. The Group has done significant progress on these measures - at the expense of lower revenues. Revenues in the DACH region (Germany, Austria and Switzerland) amounted to EUR 12.6 million in H1 2018 (H1 2017: EUR 24.3 million) and EUR 5.3 million in Q2 (Q2 2017: EUR 11.0 million). DACH accounts for approxim

Improvement on product margins and cost structure*

On a year on year comparison, product margins for all European shops increased due to the continued optimization of assortment and product pricing. For the Group however, gross profit margin as % of revenues at 24.4% in H1 2018 and 24.0% in Q2 2018 was lower than in the previous year (H1 2017: 25.4% and Q2 2017: 26.8%). Reasons were customer cancellations and refunds in China due to temporary increased customs controls and aggressive price promotions in DACH region to lower inventory levels.
As a result of the implemented restructuring measures, the Group shows significant improvement

Total cash available improved in Q2 2018 due to net working capital management; lower future negative cash flow due to Feedo divestiture

Due to the focus on managing inventory efficiently, net working capital at EUR 9.2 million as of June 30, 2018 was significantly lower than at the end of the previous quarter (March 31, 2018: EUR 19.1 million). As a result, the Group’s total cash available** with EUR 17.1 million as of June 30 improved by EUR 2.7 million during the last quarter (March 31, 2018: EUR 14.4 million). On July 20, 2018, windeln.de announced the signing of a divestiture agreement for its Eastern European subsidiary Feedo which had high negative operating results and cash flows for the past years and was not inte

* Adjusted numbers.
** Includes cash, time deposits and restricted cash minus money market loans.

H1 2018H1 2017Q2 2018Q2 2017
Revenues (EUR million)56.494.923.548.3
China29.150.911.627.3
DACH12.624.35.311.0
Other European Countries14.719.76.610.1
Operating Contribution (EUR million)1.34.8-0.13.7
in % of revenues2.3%5.1%-0.2%7.6%
Adjusted EBIT (EUR million)-11.1-11.5-5.9-5.0
in % of revenues-19.8%-12.1%-24.9%-10.3%
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