Buy
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Original-Research: Westwing Group SE - from NuWays AG
Classification of NuWays AG to Westwing Group SE
Trading update confirms guidance reach at upper end; chg. est Topic: WEW released a FY'24 trading update which points towards a sales and adj. EBITDA guidance reach at the upper end for both despite a muted consumer sentiment. In detail: FY'24 GMV was reported up 3.3% yoy at € 497m (eNuW: € 486m) which should have been the result of a continuation of a growing avg. basket size (eNuW: +11% yoy) and a return in growth of active customers (eNuW: +2% yoy), but dampened by a decline in number of orders (eNuW: - 7% yoy). As sales develop mostly proportionate to GMV, this would imply FY'24 sales of € 443m (eNuW old: € 435m), which stands at the top-end of the € 415-445m guidance range. Consequently, WEW also specified its adj. EBITDA guidance towards the upper end of the € 14-24m range (eNuW old: € 18m, eNuW new: € 20m, 4.5% adj. EBITDA margin). Here, we also expect the positive trend of an improving cost mix visible in Q1-Q3'24 to have positively affected profitability in Q4. The main driver should have been the improved gross margin (eNuW: +0.8% yoy) thanks to a higher private label share of 55% in FY'24 (58% in Q4'24). Also positively, WEW reported a positive FCF of € 9m for FY'24e (eNuW old: € 2m), which implies a Q4'24 FCF of € 20m which should stem from a large inventory reduction. Consequently, the strong net cash position stood at € 69m (eNuW old: € 58m), despite the € 10m share buyback program executed in Nov'24. Outlook 2025: Thanks to a still ongoing muted consumer sentiment, we do not expect a major demand swingback for WEW. Consequently, sales is seen to grow by 3.4% yoy to € 458m in FY'25e. For profitability, we expect a 0.4pp yoy margin improvement to an adj. EBITDA of € 23m, carried by a rising contribution margin as a further rising private label share should support a stronger gross margin (eNuW: +0.8pp yoy). In sum a solid release, showing that WEW maintained profitable growth with positive FCFs despite a muted consumer sentiment, assortment changes, restructuring expenses and the SaaS platform transformation. Against this backdrop, we reiterate our BUY recommendation with unchanged PT of € 17.00, based on DCF. You can download the research here: http://www.more-ir.de/d/31683.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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