Westwing Group (WEW) Q4 2023 earnings summary

Executive summary

• FY 2023 topline stabilized at €481m GMV and €428.6m revenue; adjusted EBITDA reached €17.8m, with positive adjusted EBITDA in every quarter.

• Margin and cost improvements, a larger Westwing Collection share, and positive free cash flow supported the turnaround; year-end net cash was €82m with no debt.

Financial highlights

• FY revenue was €428.6m, down 0.5% YoY; reported operating result was -€8.4m and net loss was €12.4m, compared with €32.4m in FY 2022.

• Adjusted EBITDA rose to €17.8m from -€4.2m; adjusted EBITDA margin improved to 4.1% from -1.0%.

• Gross profit increased to €217.2m and adjusted gross margin rose to 50.7% from 48.1%; adjusted contribution margin improved to 28.6% from 25.3%.

• FY free cash flow was €30m, versus -€19m in FY 2022; the FY 2023 result was mainly driven by adjusted EBITDA and working-capital improvements.

Outlook and guidance

• FY 2024 revenue guidance is €415m–€445m, equivalent to -3% to +4% YoY; adjusted EBITDA guidance is €14m–€24m, or a 3%–5% margin.

• Free cash flow is expected to break even in FY 2024; €10m–€15m of complexity-reduction investment costs will be adjusted in P&L but fully affect cash.

• Year-to-date GMV growth was 6%; challenging macro conditions are expected to persist, and the global product offering transition in Italy and Spain may weigh on H2 topline.

• Longer-term targets are €600m–€800m revenue and a 10%–15% adjusted EBITDA margin, with strong cash flow; 2025 guidance remains to be determined.