windeln.de publishes preliminary numbers for Q4 2019 and financial year 2019 as well as outlook for 2020/21; break-even target on basis of adj. EBIT changed to Q1 2021
• Preliminary revenues of EUR 22.9 to 23.1 million in Q4 2019; revenue increase compared to Q3 2019 due to sales events and Christmas sales; preliminary revenues of EUR 82.3 to 82.5 million in FY 2019
• Preliminary adj. EBIT from EUR -1.9 to -1.6 million (-8.3% to -6.9% margin) in Q4 2019; positive effect from VAT correction of EUR 1.7 million; preliminary adj. EBIT of EUR -13.9 to -13.6 million (-16.9% to -16.5% margin) in FY 2019
• Total cash available of EUR 8.4 million as of December 31, 2019; lower cash burn of EUR 1.3 million in Q4 2019 due to better operating result, VAT correction and lower net working capital
• Significant double-digit sales growth and significant improvement in adj. EBIT expected for 2020; break-even on the basis of adj. EBIT targeted for Q1 2021
• Subscription period for capital increase from January 23, 2020 until February 5, 2020; commitment agreements of EUR 2.75 million including commitments from Bodyguard and Holland at Home
Munich, January 22, 2020: windeln.de SE ("windeln.de", “Group” or "Company"; ISIN DE000WNDL201) publishes preliminary financial numbers, before final evaluation of trade receivables and inventories, for the fourth quarter (Q4) 2019, the financial year (FY) 2019 as well as an outlook for FY 2020 and 2021.
Revenue growth due to Christmas season and sales events in Q4 2019
Based on preliminary financial numbers, the Group generated revenues of EUR 22.9 to 23.1 million in Q4 2019. This corresponds to growth of 24.1% to 25.2% compared to the third quarter (Q3) 2019 (EUR 18.5 million), which results in particular from the Christmas business and successful sales events in China and in the DACH-region (Germany, Austria, Switzerland). In FY 2019, the Group generated revenues of EUR 82.3 to 82.5 million (FY 2018: EUR 104.8 million) based on preliminary financials. The business in China grew in Q4 2019 but was below the Group's original targets. The reasons for this were, among others, the later opening of the second bonded warehouse in China, setting up a marketing cooperation with the Langtao company, and a lower purchasing volume for liquidity reasons.
Improved adj. EBIT and lower cash burn in Q4 2019; positive impact of VAT correction for China business
Based on preliminary numbers, the Group generated an adjusted (adj.) EBIT of EUR -1.9 to -1.6 million in Q4 2019, which corresponds to an adj. EBIT margin of -8.3% to -6.9%. According to preliminary numbers, in FY 2019 windeln.de achieved an adj. EBIT of EUR -13.9 to -13.6 million (-16.9% to -16.5% adj. EBIT margin). This is a significant improvement compared to the previous quarter (Q3 2019: EUR -4.7 million and -25.5% adj. EBIT margin) due to better operational performance and the recorded Value Added Tax (VAT) correction of EUR 1.7 million (adj. EBIT effect EUR 1.4 million) related to deliveries by windeln.de to Chinese customers via so-called freight forwarders in the previous years.
The Group's total cash available as of December 31, 2019 was EUR 8.4 million. The change in total cash available amounted to EUR -1.3 million in Q4 2019. This is a significant improvement compared to the previous quarter and can be attributed to better operating performance, lower net working capital as of December 31, 2019 and the receipt of payment from the VAT correction of EUR 0.9 million. For the current year 2020, the Group expects further inflows from the VAT correction of at least EUR 2.1 million, i.e. a total of at least EUR 3 million.
Cooperation with Bodyguard and Holland at Home with focus on the Chinese market in 2020
windeln.de has signed term sheets for business cooperations with the companies bodyguardpharm GmbH ("Bodyguard") and Holland at Home B.V. ("Holland at Home"). Both companies have also committed themselves to purchase shares as part of the upcoming capital increase with subscription rights through binding commitments agreements.
Bodyguard (www.bodyguardapotheke.com) is a German online pharmacy with a strong cross-border e-commerce business to China (https://www.ba.de/). A significant advantage of the future cooperation for windeln.de is the procurement of medical and pharmaceutical products (OTC) from Bodyguard, especially for the Chinese market. The market for medical and pharmaceutical products (OTC) in China is estimated at EUR 17.9 billion in 2020. The product range of windeln.de and Bodyguard is complementary and the same target customer group, young families, are addressed. Through the cooperation with Bodyguard, windeln.de intends to generate additional revenues in the low double-digit million-euro range in 2020.
Holland at Home (www.holland-at-home.com/en/) is a Dutch online supermarket that uses, in addition to its own online shop for China (https://cn.holland-at-home.com), more than 25 sales channels, such as Hipac, Pinduoduo International, Little Red Book & Dingxiangmama, to China. The biggest advantage of the cooperation for windeln.de is the use of sales channels of Holland at Home. In addition, windeln.de has access to high-quality nutritional supplements through “House of Nutrition” (www.houseofnutrition.de), an affiliate of Holland at Home. The Group intends to achieve additional revenues in the low double-digit million-euro range in 2020 from the cooperation with Holland at Home.
Significant revenue growth and improvement in adj. EBIT expected for 2020; break-even on the basis of adj. EBIT targeted for Q1 2021
For 2020, windeln.de expects to achieve significant double-digit revenue growth and a significant improvement of adjusted EBIT. This shall be achieved in particular through the cooperations with Bodyguard and Holland at Home as well as other efficiency projects such as the move of the warehouse in Germany and the outsourcing of the IT shop system. Due to lower than targeted revenues for the Chinese market in 2019 and the associated lower starting point for 2020, windeln.de's goal of reaching break-even at the beginning of 2020 on the basis of adjusted EBIT changed to Q1 2021. windeln.de will announce the final financial results for Q4 and FY 2019 and further details on the outlook for 2020/21 with the publication of the consolidated financial statements on March 18, 2020.
Subscription rights period from January 23, 2020 to February 5, 2020
In the next two weeks, windeln.de will carry out a capital increase with subscription rights, in which the Company's share capital will be increased from currently EUR 2,989,101.00 by up to EUR 5,171,144.00 to up to EUR 8,160,245.00 by issuing up to 5,171,144 new shares. The subscription price was set at EUR 1.20 per share, so that the maximum gross proceeds of the capital measure will amount to up to 6,205,372.80 Euro. With the gross issue proceeds, windeln.de intends to strengthen the Company's liquidity position in order to cover the Company's still negative cash-flow until reaching break-even on the basis of adjusted EBIT, to finance the build-up of net working capital necessary for growth in China and to realize important projects such as outsourcing the IT shop platform and the move of the central warehouse in Germany. So far, windeln.de has already received commitment agreements for investments in the course of the capital increase of a total of EUR 2.75 million.
Matthias Peuckert, CEO, and Dr. Nikolaus Weinberger, CFO of windeln.de: “In 2019, we made good progress in reducing our cost base and net working capital. From a liquidity point of view, we are pleased that we have received an initial VAT refund related to the China business from previous years and that further amounts will follow. On the revenue side, we had higher revenue targets for 2019, but we are confident that in 2020 we will grow based on the cooperations with Bodyguard and Holland at Home in China reaching break-even on the basis of adjusted EBIT in the first quarter of 2021. The current capital increase is an important element in achieving our goals.“
Select key figures for the fourth quarter 2019 and financial year 2019 (preliminary numbers)
|Q4 2019||Q3 2019||Q4 2018||2019||2018|
|Revenues (EUR million)||22.9 to 23.1||18.5||26.3||82.3 to 82.5||104.8|
|Adjusted EBIT (EUR million)||-1.9 to -1.6||-4.7||-2.5||-13.9 to -13.6||-18.5|
|in % of revenues||-8.3 to -6.9%||-25.5%||-9.7%||-16.9 to -16.5%||-17.8%|
|Total cash available (at the end of the period)||8.4||9.7||11.1||8.4||11.1|