windeln.de announces preliminary financials for 2020 with 8.6% revenues growth and modest adj. EBIT improvement year over year; adj. EBIT break-even target updated to full year 2022; further cost measures to be executed
• Preliminary revenues of EUR 76.1 million for continued operations in 2020 which equals +8.6% growth year over year (slightly below double-digit revenue growth target)
• 2020 target of modest adj. EBIT improvement year over year reached based on preliminary financials
• Adj. EBIT break-even target early 2021 cannot not be reached as growth in China takes longer; adj. EBIT break-even targeted for full year 2022
• Further cost-efficiency measures to be implemented in 2021
• Cash and cash equivalents EUR 8.5 million as of December 31, 2020
Munich, February 01, 2021: Based on preliminary financials for 2020 windeln.de SE (“windeln.de”, “Group” or “Company”; ISIN DE000WNDL201 and DE000WNDL128) revenues for continued operations for 2020 grew from EUR 70.1 million in 2019 to EUR 76.1 million in 2020. This equals +8.6% revenues growth year over year and is therefore lower than the targeted double-digit growth. Based on preliminary financials, the Company’s revenues in China grew from EUR 51.3 million in 2019 to EUR 56.0 million in 2020 (+9.2% growth year over year). Growth has been lower than targeted given that market conditions in China - also in the 4th quarter 2020 - were less favorable than expected and building up new distribution channels takes more time. In addition, the process for duty-paid deliveries from Germany to China had to be redesigned and rolled out in December 2020, after it was inactive for several months due to new regulatory and technical requirements from Chinese customs. Throughout the last year, windeln.de built up a local team in China which is crucial for the further success of our Chinese business as it contributes more than 70% of the Company’s revenues. windeln.de successfully opened a new online shop on the Chinese market platform “JD.com” in December 2020. On January 29, 2021 the Company also announced the appointment of Chris Reitermann as member of the supervisory board who is a very experienced manager/CEO in Chinese E-Commerce. Financial performance in China in January this year has been promising and the Company expects significant revenue growth for the full year 2021.
Based on preliminary financials, Group's adj. EBIT (i.e. EBIT adjusted for non-recurring/extraordinary expenses and income if applicable in the reporting period) has improved modestly in 2020 compared to 2019 which is in line with the announced target communicated earlier.
The Group's cash and cash equivalents were EUR 8.5 million as of December 31, 2020. The Company continues to explore further financing options including further financing in/from China.
As the execution of growth plans in China takes more time, the target of adj. EBIT break-even early 2021 cannot be reached. The Company has ambitious growth plans and now targets to reach adj. EBIT break-even on Group level in the full year 2022. This will be supported by measures that improve the Company’s cost base and that will be completed this year:
(i) Central warehouse move: The Company will move its central warehouse in Germany from Großbeeren to Halle in the first half year of 2021. The warehouse move was originally planned at the beginning of last year but could not be done due to the insolvency of a logistics partner as a result of the outbreak of the Corona pandemic. After a new tender process, Radial GmbH (“Radial”), a 100% subsidiary of the Belgian Post, was chosen as new logistics partner. The contract with Radial was signed in November 2020 and starts in 2021 and has a term of four years. Costs for the warehouse move including costs for the temporary parallel operation for two warehouse locations amount to approx. EUR 600 thousand (one-time). The Company expects total savings of approx. EUR 750 thousand (annually) from the warehouse move.
(ii) IT shop and PIM outsourcing: The Company is in the process of outsourcing its self-developed IT shop platform to Spryker and has completed the outsourcing of its Product Information Management System (PIM) to InRiver to reduce IT expenses, to increase system reliability and to enable changes in a faster and more efficient way. The implementation for windeln.de’s Tmall shop was already successfully finalized August last year. The migration of the German, Swiss and Chinese shops will be completed this year. Estimated costs for the IT shop outsourcing including internal project expenses amount to approx. EUR 800 thousand (one-time) in 2021. Total cost savings related to the shop and PIM outsourcing amount to approx. EUR 500 to 750 thousand (annually) once all channels are migrated.
(iii) Personnel and non-personnel cost savings: The Company has significantly reduced its overall workforce during the last years from more than 400 active employees (full time equivalents, FTEs) beginning of 2018 to less than 200 FTEs end of 2020 despite the significant team build-up in Rumania and China during the same time period. Other (non-personnel) costs have also been reduced, e.g. through the office move in Munich in August 2020 or the reduction in supervisory board compensation in 2020. The Company continues to reduce its personnel and non-personnel costs further in 2021.
Management board members Matthias Peuckert, Sean Wei and Dr. Nikolaus Weinberger comment: „The year 2020 was unique in many aspects and has presented quite some challenges for our Company. We know that we still have to provide the proof of bringing this company to profitability. We are convinced though to reach that goal and benefit from long-term and sustainable revenue growth going forward.”