• Second quarter of 2017 reflects strategic focus on international growth, improvement of profitability in Germany and implementation of operational measures
• Revenues of EUR 54.6 million in Q2 (H1: EUR 106.5 million), a 21.6% increase compared to same period of the previous year (H1: +15.8%)
• Growth driver China business (revenues +42.6% in Q2 compared to same period of previous year) and business in European countries outside of DACH region (+28.8%)
• Higher adjusted EBIT margin of -10.5% in Q2 compared to same period of previous year (-13.9%) and first quarter of 2017 (-14.0%)
• Negative operating cash flow of EUR -6.0 million in second quarter after EUR -7.1 million in first quarter of 2017

Munich, August 9, 2017: windeln.de SE, one of the leading online retailers for baby and toddler products in Europe and for customers in China, generated EUR 54.6 million in revenues in the second quarter of 2017. This represents a 21.6% increase compared to the same period of the previous year (Q2 2016: EUR 44.9 million). At the same time, the company managed to improve its profitability on the basis of the adjusted EBIT margin. For the second quarter of 2017, this was -10.5% after -13.9% in the same period of the previous year.

China and European countries record strong growth, continued earnings focus in DACH region

Revenues in China amounted to EUR 27.3 million in the second quarter of 2017, an increase of 42.6% compared to the same period of the previous year (Q2 2016: EUR 19.1 million). After regulatory changes had led to a temporary decline in revenues in the second quarter of 2016, the Chinese business is posting continuous growth again.
In the second quarter of 2017, revenues in other European countries continued to show similar growth as in previous quarters, with a revenue contribution of EUR 16.4 million and thus growth of 28.8% compared to the previous year (Q2 2016: EUR 12.7 million). The main driver of this positive development is the increasing online market penetration in these markets.
In the DACH region, revenues decreased by -16.1% in the second quarter of 2017 compared to the same period of the previous year and amounted to EUR 11.0 million. This can be attributed to the focus on margin-oriented marketing measures and deliberate lowering of marketing expenses.
“Business in the rest of Europe continues to develop very positively, therefore windeln.de increasingly is based on several strong pillars. We also managed to hire Mark Henkel, founder of the online payment company Paymill and prior to that a McKinsey employee, in July to focus more strongly on profitability of the German business,” said Konstantin Urban, co-founder and member of the Management Board of the windeln.de.

Improved adjusted EBIT margin

The adjusted EBIT margin in the second quarter of 2017 was -10.5% after -14.0% in the first quarter of 2017 and -13.9% in the same quarter of last year.
Compared to the first half of 2016 and the first quarter of 2017, the marketing and fulfillment costs were both lower. The important figure for managing the company, operating contribution margin (the difference between gross profit and expenses for marketing and fulfillment), developed positively and stood at 6.4% in relation to Group revenues in the second quarter of 2017 (Q2 2016: 3.4%). The share of other sales and administrative expenses in revenues amounted to 16.9% in the second quarter (Q2 2016: 17.3%). Here, windeln.de recorded a temporary increase in costs compared to the first quarter 2017 with 15.8% in relation to group revenues due to the expenses incurred with the integration of Bebitus and other measures to improve operational efficiency.
“Sustainably profitable development remains our top priority. For this reason, we are currently forging ahead with the integration of Bebitus and our plans to move our main warehouse from Berlin to Eastern Europe,” noted Alexander Brand, co-founder and member of the Management Board of windeln.de.
Adjusted EBIT in the German Shop segment, which comprises the activities in China and the German market, was 3.1% in the second quarter of 2017, significantly higher than in the previous year (Q2 2016: 0.3%) and also in the first quarter of 2017 (Q1 2017: -3.3%). The strong Chinese business and the focus on profitability in the German-speaking region, which had already begun in the first quarter of 2017, contributed to this.
Adjusted EBIT in the International Shops segment, which includes the activities in other European countries (Feedo, Bebitus, pannolini.it and windeln.ch), showed a margin of -15.5% in the second quarter of 2017 and was thus significantly higher than in the previous year (Q2 2016: -22.2%).

Reduced cash outflow

On June 30, 2017, net working capital was approximately EUR 4.3 million after approx. EUR 6.7 million as of the reporting date, March 31, 2017. This improvement can be attributed to a reduction in inventories as well as a higher level of liabilities from deliveries and services. At EUR -6.0 million, operating cash flow was lower than in the first quarter (EUR -7.1 million). At the end of the first half of 2017, liquidity (including time deposits and restricted cash) of the windeln.de Group amounted to approximately EUR 42 million.
“The development in the second quarter shows that we are on the right track to achieving break-even on the basis of adjusted EBIT in the course of the year 2019. The steps that we have taken so far to improve the cost and margin positions are gradually proving to be effective. Further measures are being implemented,” explains CFO and member of the Management Board Dr. Nikolaus Weinberger.

The half year report and earnings presentation for analysts and investors are available on the windeln.de Investor Relations website (https://corporate.windeln.de/en/interim-reports).