Original-Research: Westwing Group SE - from NuWays AG 09.05.2025 / 09:00 CET / CEST Dissemination of a Research, transmitted by EQS News - a service of EQS Group.

Original-Research: Westwing Group SE - from NuWays AG

09.05.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to Westwing Group SE

     Company Name:                Westwing Group SE
     ISIN:                        DE000A2N4H07

     Reason for the research:     Update
     Recommendation:              BUY
     from:                        09.05.2025
     Target price:                EUR 18.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Q1 according to plan: margins up, top line to follow

Flat top line as anticipated due to strategic assortment change. GMV went
down 5% yoy to EUR 119m and sales decreased by 1% yoy to EUR 108m (eNuW: 109m),
mainly due to WEW's strategy shift towards a more premium product
assortment. Here, WEW phases out lower margin items and thus also a certain
part of their customer group in exchange for a more premium product
offering, which becomes visible in (1) an 11pp yoy higher private label
share of 62%, (2) a decline in active customers by 6% yoy, (3) a subsequent
lower number of orders (-25% yoy) but also (4) in an expanding average
basket size (+28% yoy). This strategy shift started in H2'24 and the
subsequent effects seen above should therefore bottom out in H2'25e.
Moreover, this shift was more pronounced in WEW's International segment
(sales: -3.5% yoy), whereas the DACH segment showed sales growth of 1% yoy,
in line with market growth (Home & Living DACH: +2% yoy).

Margins up notably. Adj. EBITDA rose by 44% yoy to EUR 9.1m, a 2.7pp yoy
higher margin of 8.5%, thanks to interaction of several effects: (1) the
higher private label share drove up gross margin by 0.2pp yoy to 51.5%, a
stronger margin increase was counteracted by higher container costs, (2)
efficiency gains in fulfillment visible in a 0.9pp yoy lower fulfillment
ratio, (3) the phase out of last year's brand awareness and subsequent lower
marketing costs led to a 0.9pp yoy lower marketing ratio and (4) lower
overhead costs with G&A expense ratio down 1.4pp yoy.

Looking ahead, the product assortment change is seen to show similar
top-line effects in Q2 and partly still in Q3, thus making FY'25e a
transitional year. However, in FY'26e sales momentum is seen to pick up
again (eNuW: +10% yoy) driven by more active customers due to country
expansions (LUX, DK and SWE completed, 7 more to come) coupled with higher
average basket sizes thanks to the assortment change. Naturally, this should
come with positive operating leverage and efficiency gains, which should
drive margins and cash generation in FY'26e accordingly.

Against this backdrop, WEW's shares seem mispriced, in our view, trading at
17% FCFY'25e (28% '26e). The anticipated return to growth coupled with
further margin expansions in FY'26e could trigger a rerating soon.
Therefore, we confirm our BUY recommendation with an unchanged PT of EUR
18.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/32528.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
++++++++++
Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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2133678 09.05.2025 CET/CEST