windeln.de publishes final financial results for full year and fourth quarter of 2020
Munich, March 25, 2021: windeln.de SE ("windeln.de", "Group" or "Company"; ISIN DE000WNDL201 and DE000WNDL128) today reported financial results for the full year (FY) and the fourth quarter (Q4) 2020. For the full year 2020, revenues increased by 8.4% to EUR 76.0 million (FY 2019: EUR 70.1 million). Adjusted (adj.) EBIT improved to EUR -8.6 million in 2020 (-11.3% as a percentage of revenues) compared to -10.3 million EUR for the full year 2019 (-14.7% as a percentage of revenues). In the fourth quarter of 2020, the Company achieved revenues of EUR 17.3 million, which corresponds to a decrease of -14.8% compared to the 4th quarter of the previous year (EUR 20.3 million) for its continued operations (i.e. excluding the Bebitus business which is reported as “discontinued operation”). Adjusted EBIT amounted to EUR -3.1 million in the 4th quarter of 2020 compared to EUR -1.0 million in the 4th quarter of 2019.
China, DACH and Bebitus revenues increased in 2020 compared to previous year; however, China fourth quarter revenues below target
Revenues for the full year 2020 in China amounted to EUR 56.0 million compared to EUR 51.3 million in FY 2019, which corresponds to an increase of +9.1%. China accounts for 74% of total revenues (FY 2019: 73%). In the 4th quarter of 2020, revenues of EUR 12.4 million were achieved in China, a decrease of -20.0% compared to the previous year (4th quarter of 2019: EUR 15.6 million). This development is mainly due to insufficient product availability in the fourth quarter which means that customer demand could not be fully met. The market in China has changed structurally and the platform business is becoming more attractive. For this reason, windeln.de launched a shop on the Chinese platform JD.com in December 2020 and started the WeChat mini program early 2021, which - along with the launch of windeln.de shops on further platforms - should contribute to revenue growth in 2021. In addition, the channel for duty paid deliveries from Germany to China was adjusted last year and re-launched in December 2020 after it had been inactive for several months due to new regulatory and technical requirements from Chinese customs.
In Europe (excluding Bebitus), revenues for 2020 amounted to EUR 20.0 million compared to EUR 18.8 million in the same period of the previous year, an increase of +6.5% with a strong focus on profitable revenues. Revenues in the 4th quarter of 2020 amounted to EUR 4.9 million. Compared to the same quarter of the previous year, this represents an increase of +2.4% (Q4 2019: EUR 4.8 million). Revenues in the DACH region account for 26% of Company revenues in FY 2020 (27% in FY 2019).
The reported consolidated revenues do not include the Bebitus business in Spain, Portugal and France, which is reported as discontinued operations due to the ongoing divestiture process. Bebitus revenues in 2020 amounted to EUR 12.6 million, which corresponds to a growth rate of +3.3% compared to the previous year (FY 2019: EUR 12.2 million). In the fourth quarter, revenues rose by +9.3% to EUR 2.9 million (Q4 2019: EUR 2.7 million).
Improved adjusted EBIT for the Company in the Full Year 2020 compared to 2019
On a full-year basis, the gross profit margin fell to 21.3% in FY 2020 from 25.6% in FY 2019 due to a higher share of revenues from business customers. The gross profit margin in the 4th quarter of 2020 was 17.4% (28.1% in the 4th quarter of 2019) as a result of numerous promotion events such as 11.11., 12.12. and the Black Week in China. Marketing costs amounted to EUR 2.6 million in FY 2020 (FY 2019 EUR 2.8 million) and EUR 0.9 million in Q4 2020 (5.4% of revenues) compared to EUR 0.7 million in the same quarter of the previous year (3.3% of revenues). Fulfillment costs fell to EUR 5.8 million on a full-year basis (FY 2019: EUR 9.3 million) due to the increased share of business customers. For the same reason, the fulfillment costs in Q4 2020 fell to EUR 1.5 million (8.5% of revenues) compared to EUR 2.0 million (10.1% of revenues) in the same quarter of the previous year. The move to the new warehouse is currently being implemented. After a transition period, the new warehouse will be fully operational in the first half of 2021 and will contribute to further cost savings in the long term.
For FY 2020, the operating contribution margin (gross profit less marketing and fulfillment costs) rose to EUR 7.8 million (10.2% of revenues) compared to EUR 5.9 million (8.4% of revenues) in FY 2019. In the fourth quarter of 2020, the operating contribution margin amounted to EUR 0.6 million (3.5% of revenues) after EUR 3.0 million in Q4 2019. The business in China made significant impact to this development. FY 2020 operating contribution margin in China rose to EUR 8.2 million (FY 2019: EUR 7.6 million) but fell to EUR 0.7 million in the fourth quarter of 2020 (EUR 3.6 million in Q4 2019) due to the lower gross margin. In the segment Europe (excluding Bebitus), the contribution margin improved to EUR -0.4 million in FY 2020 (FY 2019: EUR -1.7 million) and amounted to EUR -0.0 million in the 4th quarter of 2020 (-0.8% of revenues) which represents a strong improvement compared to the fourth quarter of the previous year to (-0.6 million EUR; -13.0% of revenues). The contribution margin for Bebitus rose to a positive EUR 0.3 million for the full year 2020 from EUR -0.1 million in 2019. In Q4 2020, the contribution margin for Bebitus improved to a positive 0.1 million EUR in the 4th quarter of 2020 of EUR -0.1 million in the previous year.
For the full year 2020, the Company's other revenues and administration costs amounted to EUR 16.4 million (FY 2019: EUR 16.2 million) due to the establishment of the local team in China. The other revenues and administration costs fell to EUR 3.7 million in the fourth quarter of 2020 compared to EUR 3.8 million in the third quarter of 2020. In 2020 on a full year basis, the Company's adj. EBIT improved to EUR -8.6 million (-11.3% of revenues) compared to EUR -10.3 million for 2019 (-14.7% of revenues). The Company's adj. EBIT fell in Q4 2020 to EUR -3.1 million (-17.9% margin) after EUR -1.0 million (-5.0% margin) in the same period of the previous year, which is a result of the development in China.
Cash inflow in Q4 2020 of EUR 3.1 million after capital increase; successful completion of further 10% capital increase in March 2021 with gross issue proceeds of EUR 1.4 million
In the 4th quarter of 2020, the inflow of funds amounted to EUR 3.1 million (including Bebitus), which is the result of the successful capital increase in October 2020. As of December 31, 2020, The Group’s total cash available was EUR 8.5 million. The net working capital including Bebitus amounted to EUR 2.2 million as of December 31, 2020 and thus decreased significantly compared to EUR 6.2 million on September 30, 2020 due to the sale of goods after promotion campaigns in Q4 2020, especially in China. The cash outflow from operating activities was significantly improved in FY 2020 (FY 2020: EUR -7.1 million; FY 2019: EUR -11.6 million). The reduction in net working capital and the improvement in the operative result for the period from EUR -14.6 million in FY 2019 to EUR -13.7 million in FY 2020 contributed to this.
In March 2021, the Company successfully completed another capital increase with existing investors. The placement of 1,098,207 new no-par value bearer shares with a pro rata amount in the share capital of EUR 1.00 each and dividend entitlement from January 1, 2020 ("New Shares") resulted in gross issue proceeds of EUR 1,427,669.10 based on the subscription price of EUR 1.30 per New Share. The current cash level amounts to approximately EUR 5 million (including gross issue proceeds) mainly due the built up of inventory to support the growth of the Chinese business.
Positive outlook for 2021 with very strong revenue growth and improved profitability
The Company expects very strong sales growth and a very significant improvement in the operating contribution margin for the financial year 2021. Adjusted EBIT as a percentage of revenues should also improve strongly in 2021. The Group plans to reduce the cash outflow from operating activities to a mid-single-digit million range in the 2021 financial year.
Matthias Peuckert, CEO of windeln.de, comments: “We were able to increase revenues in 2020 by 8% compared to the previous year. However, the increase was less pronounced than targeted, as the end customer business in China fell short of our expectations in the fourth quarter. Our European business
continued to develop positively in the fourth quarter, especially with regard to margin development. With the recently implemented 10% capital increase, we have secured further funds to support our growth and profitability projects for 2021. This development is to be continued and will gradually lead us to adjusted EBIT break-even for the 2022 financial year, which we will continue to strive for with full commitment."
Changes in the Management Board of windeln.de
After six years with the Company Dr. Nikolaus Weinberger, member of the Management Board and CFO of windeln.de SE, will leave the Company on March 31, 2021 at his own request and by mutual agreement in order to take on new professional challenges. The duties of Dr. Weinberger will be taken over by Matthias Peuckert, Chairman of the Management Board, in addition to his existing duties. Mr. Peuckert's contract was extended for a further three years until April 30, 2024.
Clemens Jakopitsch, Chairman of the Supervisory Board of windeln.de SE: “Since starting at windeln.de in 2015, Dr. Weinberger significantly shaped our Company. Among other things, his achievements include working on the new strategic direction of the Company, the execution of several financing transactions and the implementation of numerous efficiency measures to improve the cost structure of the Company. He thereby has lined up the Company on its future path to success. The entire Supervisory Board thanks Dr. Weinberger for his successful and committed work for windeln.de SE and wishes him all the best for his personal and professional future. The Supervisory Board is also very pleased that continuity is maintained with the extension of Mr. Peuckert's contract and looks forward to further productive cooperation."