Q2 2024 Westwing Group SE Earnings Call Transcript
Key Points
- Westwing Group SE (XTER:WEW) achieved a 5% increase in GMV and a 4% increase in revenue year-over-year despite a challenging market.
- The company reported an adjusted EBITDA of EUR4 million, representing 4% of revenue, driven by improved contribution margins and sustained investments in brand awareness.
- Westwing Collection's share of group GMV reached an all-time high of 53% in Q2 2024, supporting both top line and profitability.
- Successful launch of a new SaaS-based technology platform in Portugal and the Netherlands, which will be rolled out to other countries.
- Strong progress in sustainability initiatives, with 60% of Westwing Collection products featuring the We Care label and 76% of packaging materials based on recycled content.
- Free cash flow for Q2 2024 was negative at minus EUR7 million, impacted by timing of payments and seasonal inventory effects.
- The switch to a mostly global product assortment in Italy and Spain led to a short to midterm detrimental top line impact, with some existing customers lost.
- The company's marketing ratio increased by 3.2 percentage points year-over-year, driven by continued investment in brand awareness, which impacted profitability.
- The transition to a SaaS-based technology platform resulted in temporarily higher depreciation and amortization (D&A) costs, affecting G&A expenses.
- Net working capital increased quarter-over-quarter, negatively impacting free cash flow by minus EUR8 million in Q2 2024.
Good morning, everyone, and thank you for joining us for our earnings call on the second quarter of 2024. My name is Andreas Hoerning. I'm the CEO of Westwing. I'm hosting the call together with Sebastian Westrich, our CFO.
Looking at today's agenda, I will begin by providing key updates on the business, followed by Sebastian, who will be presenting the details of Westwing's financial performance. After our investment highlight summary, we will be happy to take your questions.
Let's take a look at Westwing's current states and the key achievements in a good second quarter of 2024. We were able to increase our GMV by 5% and our revenue by 4% year-over-year in a still very challenging market.
Adjusted EBITDA amounted to EUR4 million or 4% of revenue. This result was driven by an improved contribution margin and sustained investments in brand awareness. Our free cash flow of the second quarter amounted to minus EUR7 million. It was negative due to timing of payments and seasonal inventory effects. Our net cash position
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