Q2/21 HY1/21 Press Release German
- H1 2021 Revenue EUR 33.3 million (33% decrease compared to EUR 50.0 million in H1 2020)
- Adjusted EBIT –EUR –8.1 million (-24.5 % adjusted EBIT margin) compared to EUR –3.8 million (-7.7 % adjusted EBIT margin) in H1 2020
- Capital increases successfully carried out in Q1 and Q3 2021 to improve the financial position
- Forecast for 2021 adjusted
- Warehouse relocation successfully completed; Future logistics savings can be realized
Munich, August 12, 2021: windeln.de SE ("windeln.de", "Group" or "Company"; ISIN DE000WNDL201) today publishes the financial results for the first half of (H1) 2021. The company generated sales of EUR 33.3 million, which corresponds to a decrease of 33 % compared to the first half of the previous year (EUR 50.0 million). Adjusted EBIT amounted to EUR -8.1 million in the first half of 2021 (H1 2020: EUR -3.8 million). The Bebitus business has not yet been sold as of June 30, 2021, but it is still intended to sell the Southern European business. The business to be divested may no longer be classified as a discontinued operation in accordance with IFRS 5 after the end of June 30, 2021, the figures for the past year have been adjusted accordingly and include the Bebitus business.
Sales decline in the target markets of Europe and China due to necessary warehouse relocation and delivery restrictions
In China, sales of EUR 20.5 million were generated in the first half of 2021, which corresponds to a decrease of 39% compared to the previous year (H1 2020: EUR 33.4 million).
The significant decline in sales is mainly attributable to the unusually high sales revenues in the previous reporting period from the sale of hygiene products to corporate customers (EUR 7.0 million in sales revenues in H1 2020, compared to EUR 765 thousand in H1 2021) as well as the VAT refunds for the China business for previous years (EUR 3.6 million) accounted for in 2020. In addition, the temporary supply restrictions due to the relocation of the main warehouse and a low level of inventory in the Chinese warehouses contributed significantly to the decline in sales. Taking these special effects into account, the decline in sales is in the low double-digit percentage range.
Sales in Europe amounted to EUR 12.8 million in the first half of 2021. Compared to the same period of the previous year, this represents a decrease of 23 % (1. Half-year 2020: EUR 16.7 million).
In Europe, too, the decline in sales was significantly influenced by the relocation of the main warehouse, which led to lower availability of individual products in the months of March to May 2021. In the previous reporting period, there was also a strong increase in orders due to the COVID-19 pandemic, which did not continue in the first half of 2021.
Reduced sales volume in China has a negative impact on earnings
The gross profit margin decreased to EUR 5.3 million in the first half of 2021 (H1 2020: EUR 11.4 million). In the second quarter of 2020, the gross profit margin was EUR 7.0 million compared to EUR 2.4 million in the second quarter of 2021. Marketing costs recorded a slight increase from 3.1% of sales in the first half of 2020 to 4.5% in the current year. The necessary warehouse relocation and the resulting increased costs due to double warehouse management, combined with the reduced sales volume in the reporting period, are reflected in the fulfillment costs. These fell disproportionately to the decline in sales by 27% to EUR 2.9 million (H1 2020: EUR 3.9 million) and thus represent a slightly higher share as a percentage of sales revenues in the first half of 2021 of 8.7% (H1 2020: 7.9%), which is also due to an increased share of the end customer business in total sales compared to the previous year. The significantly reduced sales volume ultimately also leads to an operating contribution margin at Group level as a whole of EUR 446 thousand, which thus corresponded to 1.3% of sales in the first half of 2021. In the previous reporting period, an operating contribution margin of EUR 6.5 million (13.1% of total sales) was recorded. In China, the contribution margin recorded a significant decline from EUR 6.6 million in the first half of 2020 to EUR 886 thousand in the reporting period. This development is accompanied by the significant decline in sales in the China segment and is also reflected in Europe during the reporting period – here the operating contribution margin also developed negatively from EUR –75 thousand in the first half of 2020 to EUR –440 thousand in the first half of 2021. Adjusted other selling and administrative expenses represented 25.8% of sales in the first half of the year (H1 2020: 20.7%) and thus amounted to EUR 8.6 million (H1 2020: EUR 10.4 million). The percentage increase in adjusted other selling and administrative expenses is mainly attributable to the declining sales volume in the reporting period. The Group's reported EBIT declined in the first half of 2021 to EUR –8.1 million (-24.5% margin) compared to EUR –3.8 million (-7.7% margin) in the first half of 2020. In the second quarter of 2021, EBIT amounted to EUR –4.1 million (Q2 2020: EUR -472 thousand).
Negative result for the period dominates the course of the first half of the year
In the first half of the year, a cash outflow of EUR –7.3 million was recorded, which was mainly influenced by the negative result for the period. Net working capital decreased by EUR 788 thousand to EUR 1.4 million in the first half of 2021 (December 31, 2020: EUR 2.2 million; 30 June 2020: EUR 10.1 million). The main reason for this is a decline in inventories and advance payments made. The target of breaking even on the basis of adjusted EBIT in 2022 is still considered realistic. In order to break even on the basis of adjusted EBIT 2022, additional liquidity is required to finance the build-up of inventories.
Adjusted forecast for 2021
Due to the significant decline in sales in the first half of the year, the Management Board is partially adjusting the forecast made in the 2020 Annual Report. The Management Board forecasts to make up for some of the revenue losses in the second half of the year and expects slight growth for the full year 2021. The forecast slight increase in the average order value will be corrected due to the higher proportion of direct deliveries from local Chinese warehouses. From now on, a slight decline is expected for the year as a whole. Furthermore, contrary to what was originally forecast, a significant deterioration in the contribution margin compared to the previous year is to be expected due to the decline in sales in the China segment, so that the contribution margin as a percentage of total sales revenues will also deteriorate noticeably for 2021. The decline in sales in the China segment also affects the original forecast of the strong improvement in adjusted EBIT as a percentage of sales, so that a significant deterioration is expected for the second half of the year. The cash outflow should be significantly reduced overall in 2021, but due to the low net working capital as of June 30, 2021, a significantly higher cash outflow for the full year 2021 in the double-digit million range is forecast. The main focus will continue to be on achieving company-wide liquidity assurance and profitability. The partially adjusted forecast therefore has no effect on the Management Board's expectations of achieving break-even on the basis of adjusted EBIT in 2022, provided that additional liquidity is required to finance the build-up of inventories.
Successful capital increases in Q1 and Q3
In March 2021, a capital increase of EUR 1.1 million was successfully carried out. On June 15, 2021, a further increase in the share capital was resolved. The capital increase of EUR 4.5 million was entered in the commercial register on 13 July 2021 and is therefore not yet visible in the balance sheet as of 30 June 2021. The newly raised capital serves to secure the liquidity of the windeln.de and to implement further measures to reduce costs and increase efficiency. Matthias Peuckert, CEO of windeln.de states: "After some special effects that had a positive impact on sales in the first half of 2020, the limited delivery capacity due to the conversion of the central warehouse in Europe was compounded by the elimination of these special effects. However, the strategy and our expectations for further business development remain unchanged. We are confident that we will achieve sustainable and profitable growth in the long term. We were able to secure the Group's liquidity primarily through the successful capital increases and thus seize the strategic opportunities of market growth in China and the expansion of new distribution channels, so that we expect a significant increase in sales in the second half of the year." Nikolaus Weinberger, former CFO of windeln.de left the company on March 31, 2021. From now on, his duties will be taken over by Matthias Peuckert. The Management Board and Supervisory Board of windeln.de SE would like to express their sincere thanks for the cooperation so far and wish him all the best.
Selected key figures for the second quarter and first half of 2021 including comparative periods
|H1 2021||H1 2020||Q2 2021||Q2 2020|
|Turnover (in EUR million)||33,3||50,0||16,0||32,6|
|Operating contribution margin (in EUR million)||0,4||6,5||-0,1||5,0|
|in % of turnover||1,3 %||13,1 %||-1,1 %||15,4 %|
|adjusted EBIT (in EUR million)||-8,1||-3,8||-4,1||-0,5|
|in % of turnover||-24,5 %||-7,7 %||-25,4 %||-1,4 %|