windeln.de se capital markets day 2018 · 2018-10-05 · • monthly success stories (introduced)...

windeln.de SE Capital Markets Day 2018

Munich, 4 October 2018

2

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Disclaimer

Overall Status windeln.de SEMatthias Peuckert and Dr. Nikolaus Weinberger

4

Introduction

Matthias Peuckert, CEO

• CEO of windeln.de since May 1, 2018

• Responsible for:

• All countries

• Category management

• Marketing

• Projects

• Supply Chain Management

• Logistics

• Operational Purchasing

• Customer Service

• Private Label

• Pricing

• 14+ years e-commerce experience:

• Consumables

• Media

• Consumer Electronics

• Digital Media

5

Restructuring – with the aim to become the leading

online retailer for young families

We want to be the leading online retailer for all families in Europe and China

DACH (22%)China (52%) Rest of Europe (26%)

• Extend channels/platforms -

ONGOING

• Extend assortment -

ONGOING

• Establish permanent bonded

warehouse -

WORK IN PROGRESS

• Improve customer experience -

ONGOING

Priorities 2018

• Reorganization -

DONE

• Review assortment -

ONGOING

• Strengthen direct traffic -

ONGOING

• One domain strategy

(windeln.de, windeln.ch) -

DONE

• Review assortment -

ONGOING

• Finalize integration Bebitus -

DONE

• Close pannolini.it -

DONE

• Divest Feedo -

DONE

windeln.de Group

One shop platform, one ERP system, shared services and management

Measures

• Become an efficient organization in terms of processes and costs

• Develop the right product mix to deliver on customer needs and on economics

• Invest internal resources to increase customer experience, e.g. shop search and pricing

• Clean up inventory

Region (Rev. share)

leaner

sustainable

profitable

6

We will implement our new strategy in two phases

• Shape the organization and

advance corporate culture

• Focus towards customers

• Reduce complexity

• Realize synergies

• Explore new adjacent growth

areas

• Increase share of specialties to

a maximum level

• Organic growth into further

markets

20182019/

20202022

Phase 1: transformation Phase 2: growth

7

2017 2018 2019

October 2017:

Integration of

Bebitus into

windeln.de SE

February 2018:

• DACH

reorganization

• Closing of

pannolini.it

May 2018:

Management

change in EU

organisations

Feburary 2018:

Announcement

of efficiency and

profitability

measures

x

April/May 2018:

• Idetify new

profitable

assortment

• Inventory

clean-up

July 2018:

One-domain

strategy

implemened in

DACH

August 2018:

• Feedo divestiture

closed

• All shops running

on same technical

infrastructure

We have accomplished a lot in phase 1 in 2018 already…

July-September

2018:

• Marketing

strategy

changed

• Focus on

direct traffic

March 2018:

Assortment deep

dive in all shops

Establishinh new

listing rules

Break-

even

8

Advance corporate culture – change DNA of windeln.de

Bring management, employees and customers closer together by…

Pushing internal communication channels

WRS #1: Be A Leader.

WRS #2: Learn from Your Mistakes.

WRS #3: Never Ever Give Up.

WRS #4: Be Results Focused.

WRS #5: Understand Change as a Chance.

WRS #6: Ignore the Naysayers.

WRS #7: Customer Is King.

WRS #8: Go and Break (Some) Rules.

WRS #9: Measure.

WRS #10: Be Passionate.

• Monthly success stories (introduced)

• ”Wrules of success“ (to be launched)

Implementing regular meetings

Accelerating decision making

More structured hiring process

• 360° meetings: employees inform employees

• Drinks after 5

• Senior Management reduced

• Empowerment of 2nd & 3rd mgmt. level

• Avoiding similar questions

• Along new Leadership Principles

• More streamlined process

9

Pillars of value creation

• Warehouse move

• Pricing

• Homogeneous infrastructure

• One-domain strategy

• Apps

• Content

• Promotions

• Search

• Extension customer lifecycle

• Private label 2.0

• Category extension

• New regions

• B2B initiatives

• Platform business

• Organizational efficiency

• Headcount reduction

• Build in-house vs. buy

• Manual vs. automated processes

Cost efficiency

Profitable growth

Operational excellence

Customer experience

10

Introduction

• Member of the mgmt. board of windeln.de since

May 2015

• Responsible for:

• Finance

• Payment & Fraud

• Controlling

• IT

• Legal & Compliance

• Corporate Communications

• HR

• Facility Management

• 15 years at Goldman Sachs Investment Banking in

Frankfurt, London and San Francisco

• Focus: Consumables, Retail and e-

commerce companies

• Doctoral degree and graduate degree in Business

Administration

Dr. Nikolaus Weinberger, CFO

11

Financial perspective on the company – focus on

contribution margin, SG&A and cash flow

Avg. Order Value

# Orders per Cust.

Non-Consumables

Gross Profit Margin

Contribution Margin

€ 90

2.2x

<50%

24.0%

(0.2)%

WDL group

Revenues € 23.1m

CN DE CH SP PT FR

€ 11.7m € 4.4m € 1.5m € 3.5m € 0.5m € 1.4m

Other SG&A € (5.8)m

Adj. EBIT€ (5.9)m

(24.9)%

Q2 2018

Cash Flow

(current)

~€ (4)m,

liquidity

€ ~13m

• Organizational structure

• Process optimization and automatization

• New channels

• Non-

consumablesFocus

Areas

• Product assortment review


• Customer acq. & retention


• Profitability

over growth

• Assortment

• Pricing




• Cost optimization / centralization

• Net working capital management

• Financing

Below

WDL group

average

Approx.

WDL group

average

Above

WDL group

average

Legend:

10% ~50% ~50% <50% >50% >50%

DACH – Stephan Bölte

14

Introduction

Stephan Bölte, Head of DACH

• 9 years of e-commerce experience in various industries,

such as Consumer Electronics, Musical Instruments,

Groceries incl. Baby Formula products and Pet products

• Head of DACH at windeln.de since October, 2018

• 4+ years of supply chain management

• 7+ years of vendor management incl. leading

negotiations on global level

• 3+ years in running multilayered business units

• Launch manager of the Amazon Pantry program in

Germany

• Ex-member of the bar raiser community at Amazon

• 1 year at Kare Design Supply Chain Management

15

DACH – attractive but competitive market

Source: Statista

Germany:

Population: ~82.7 million

Birth per 1000 capita: 8.6

E-commerce volume: € 63.7 billion

Online market baby and toys: € 2 billion

DACH

Online

Multi-

channel

Offline

Competitive landscape

Austria:




Online market baby and toys: € 407 million

Switzerland:




Online market baby and toys: € 174 million

16

2017 2018 2019

June 2017:

Swiss office

closed

May 2018:

Streamlining

organizational set-up:

• CEO change

• Category

Management

May/June 2018:

• Review of product

assortment

• Delisting +

• New listing rules

February 2018:

Announcement of

profitability and

efficiency

measures

July 2018:

One-domain strategy

implemented

kindertraum.ch; toys.ch

windeln.ch

Nakiki.de windeln.de

April 2017:

Process

optimization: shop

system migration

of all European

shops

November 2017:

Launch of

diapers and

wipes Darly

DACH - restructuring ongoing

August 2018:

Implementation of

Dynamic Pricing tool

17

Strategy – extending customer lifecycle

Supported by over 130,000 followers* on Facebook!

* Combined number for windeln.de and windeln.ch, as of September 24, 2018

18


#1: SELECTION



19

#1: SELECTION – focusing on the right products

Family Expansion

Curation

Private Label

Moving away from purely focusing on baby related products

Adding products for pregnant and post pregnant women

Extending the age of children to be addressed to 6 years

Increased focus on Contribution Margin profitable products

Reducing the current assortment from currently 50K products down to 40K by

De-listing low volume brands (focus on Fashion & Toys) to reduce complexity

De-listing of longtail low margin products

Significantly reducing number of private label brands from ~5 down to 2

Darly for all FMCG products

Max & Lilly for hardlines & fashion related products

Reducing count of products from ~1.3K to 500 in order to get better terms due to higher volumes

20

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

4 weeks avg. before launch 4 weeks avg. after launch Goal

Gross Profit Margin Development: New Pricing Tool implemented

New Pricing Tool: Up and running for DACH

Note: Gross Margin from Orders for DACH region.

*excl. CW38, due to a diapers promotion negatively diluting the gross profit margin % as funded via backend terms.

21

Closing the remaining Gross Profit Margin % gap

22

Inventory – cleaning up the DACH inventory

Note: Gross inventory value.

23


#2: MARKETING



24

#2: Marketing – spending wisely

Social Media

Laser Focus

Leverage Synergies

Focus on influencer marketing, e.g. daddychannel

Creating awareness for Nutrition category: fitmom.2018

„Familyblogs-Post der Woche“

Focus marketing only on Contribution Margin positive products

Evaluate customer lifetime value

Identify repeat drivers and move focus from a pure product level to basket level

Drive cooperations with comparison pages

Intensifying collaboration with Bebituts and our colleagues in Romania

Outsourcing of repeat tasks, e.g. creation of graphics to Romania

25


#3: INNOVATION



26

#3: Innovation – focus on the future

Pregnancy App

B2B Business/Marketplace Expansion

Storchenbox

Linking a unique user experience to the regular windeln.de store

Focusing on linking advise with conrete product recommendations

Running deals in the pregnancy app

Evaluating new marketplaces, e.g. Ebay & Amazon

Focus on CM2 positive products only

Leveraging traffic, especially during peak (Q4) when our paid marketing has no effect

App based tool incl. forecasting system for users

40% sold in less than 3 weeks

Great reviews (5 stars in average)

Increasing loyalty as customers show high repeat rates

27

The Pregnancy App - +350 reviews (4.7 stars)

„Tip top, dank Suchmaschine

schnell und übersichtliches

Shoppen!“

30. Juni – joana87 Zwillinge

„Schnelle, unkomplizierte

Handhabung! Ich bestell nur

noch über die App!

15. Juli – sassi_maus

„Top, teils sehr gute Angebote!

Sehr schnelle Lieferung!“

Vor 1 Jahr – hira72

„Toll Produkte und leicht zum

bestellen!“

25. Juni – Bibiiso

28

#3: Innovation – focus on the future

Pregnancy App

B2B Business/Marketplace Expansion

Storchenbox

Linking a unique user experience to the regular windeln.de store

Focusing on linking advise with conrete product recommendations

Running deals in the pregnancy app

Evaluating new marketplaces, e.g. Ebay & Amazon

Focus on CM2 positive products only

Leveraging traffic, especially during peak (Q4) when our paid marketing has no effect

App based tool incl. Forecasting system for users

40% sold in less than 3 weeks

Great reviews (5 stars in average)

Increasing loyalty as customers show high repeat rates

29

Storchenbox – creating loyal customers

We reached ~40K customers since the launch of the Storchenbox

30% sold already, inline with the planned sales

Coverage on Facebook and Instagram

Great customer reviews (5 stars in average)

The Storchenbox is generating customers we have not reached before

31

China – Julia-Caroline Schmidt

32

Introduction

Julia-Caroline Schmidt, Head of China

• 11 years of professional experience; focus on

FMCG

• Head of China Business at windeln.de since

July 2016

• 4+ years Brand and Business Unit Manager

August Storck KG, Singapore & China

• 4+ years Group Manager L‘Oréal Switzerland

• MSc in International Management

33

2018: windeln.de invests in expansion & growth projects

Market developments China: Series of one-off effects

2017 2018 2019

Q4 2017:

China market:

Build up of

excess supply of

milk powder

Q1 2019:

Projected go live of bonded

warehouse for

windeln.com.cn & other

platforms

Q3 2018:

Customer event in Germany

showcasing windeln &

Aptamil relaunch

June 2018:

Go live of

permanent bonded

warehouse for

Tmall Global

By Q2 2019:

Enlarge presence on leading

Chinese cross-border e-

commerce platforms

May – June, 2018:

Temporary customs problem

leading to the delay of

8000+ parcels for more than

four weeks impacting re-

purchasing rate

Tmall Global

Award 2018

Q1 2018:

Winning prestigious

Tmall Global Award

for the „Mother &

Baby“ category

34

Launch Alipay

payment method

中国

Customer service

in Vietnam

Web-Shop in

Chinese

Entrance in

Chinese market

Technology to

identify Chinese

Customers

Present in social

media

Direct Express

Delivery

Our Key Strength:

windeln.de - a trusted German retailer with localized

solutions

Offerings in the Chinese market

Shop on Tmall

Global

Launch China

UnionPay payment

method

Team China in

Munich (15 FTEs)

Office in Shanghai

Bonded warehouse

Server in China

Achievements

Tmall Global

Award 2018

Certification

agreement

Honored

@Alibaba’s 18th

birthday

Tmall Global

Award 2017

$

China App

35

Three types of Cross-Border E-Commerce consumers in

China: windeln.de‘s focus is on two key groups

• Haitao (to search overseas)

• Typical customers on windeln.de

web shop

• Key focus: Germany‘s reputation

& close supplier relationships

• Consumers buying on Chinese

platforms

• Focus on fast delivery and

attractive prices

• Prefer BWH delivery over

German warehouses

• Daigou (buying on behalf of)

• Needs a personal connection

and trust

Overseas shopper – only

trust in foreign shops

Overseas products but price

& delivery conscious

Overseas shopper – only

trust in individuals

36

Moving from a baby food centered portfolio to a wider

range of skincare, nutrition & luxury items

2017 Tmall Global Annual Consumers Report

37

Moving from a baby food centered portfolio to a wider

range of skincare, nutrition & luxury items

86%

11%

Category Mix 2017

Food & Feeding Other

77%

5%

1%3%

14%

Projected Category Mix 2019

Food&Feeding Drugstore/Beauty Fashion Nutrition Other

Category Evolution

38

5 lucky customers and Key Opinion Leaders spending a

week in Germany to explore windeln.de‘s world & partners

CEO LivestreamNaty eco diapers

Venta factory

Nuk workshop

Warehouse visit

Aptamil workshop

39Posts of last year’s KOL averaged around 50’000 views; KOL = Key Opinion Leader/ Influencer

* Weibo = largest Chinese micro blogging service

Visit of Chinese customers

to Germany: KOL “Kanhai”

updated daily our activities

on her official Weibo*

Overview of different

posts: (views// likes //

forwards // comments)

Naty: 3,8mio // 859 // 741

// 251

CEO interview: 3,58mio

// 739 // 555 // 184

Aptamil: 3,39mio // 680

// 616 // 167

Venta: 2,93mio // 1033 //

841 // 190

Nuk: 2,59mio // 842 //

725 // 176

Erdbär: 2,09mio // 716 //

562 // 171

Engaging millions of potential customers through

innovative cooperations with KOLs

40

Tmall Global and Kaola dominate the Chinese cross

border e-commerce universe

Tmall Global, 29.1%

Kaola, 22.6%

JD Global, 13.7%

VIP Global, 9.7%

Amazon Overseas, 5.9%

Little Redbook, 4.0%

Suning Global, 2.7%

Jumei Global, 1.9%

Fengqu (SF), 0.9%

Daling, 0.5%Others, 9.1%

2018 Q2 Cross-border e-commerce market share – B2C

Source: Analysis report. Data from GMV of China independent CBEC website and CBEC section of China e-commerce website (e.g. Tmall Global, JD Global), but

not including Overseas website CBEC to China and Non-enterprise CBEC. Besides, GMV of imported goods through general import is not stripped.

41

Solid development Net Revenues on Tmall

Aug16

Sep16

Okt16

Nov16

Dez16

Jan17

Feb17

Mar17

Apr17

May17

Jun17

Jul 17Aug17

Sep17

Oct17

Nov17

Dec17

Jan18

Feb18

Mar18

Apr18

May18

Jun18

Net Revs 80,81 106,5 141,9 828,4 436,5 321,9 254,2 796,1 490,3 588,5 944,6 997,4 840,4 704,3 375,6 3,157 1,248 1,058 622,4 696,6 789,7 556,6 1,197

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Comments:

• Go live on

permanent

bonded

warehouse in

June 2018

• Focus on

cash

conversion

cycle

• Change of

operating

partner July

2018

• Introduction

of new

categories

ongoing

42

Local warehouse delivery from China (open to Tmall Global store, starting 2019 also for China shop)

8-14

days

5-9

days

max 3

days

Flight to China

With bonded warehouses in mainland China shorten

delivery time to max. 3 days

43

Referral program & App catering to specific Chinese

demands

• New category tree for easy search

• In-app live chat with customer service

• Quick add to cart and easy product sharing

Referral Program: China App:

44

Growth opportunities beyond current setup

KOL= Key opinion leader/ spokes person

Windeln and me

• Successful

event with 5

guests visiting

Germany for

one week

including 2

KOLs*

• 2-3.8 million

views for each

KOL post

Fashionette

• Exciting cooperation

with fashion

powerhouse

fashionette to offer

luxury handbags to

Chinese customers

through web shop

• Test phase planned in

Q4

Aptamil Relaunch

• First recipe change for

the Aptamil range in 15

years!

• Improved formula and

new design

• Launch date:

September 19

with strong

marketing push

New regions

• Entering

opportunistically

new regions with

high birth rates for

selective products

• Evaluation phase

Bebitus – Erich Renfer

47

Introduction

Erich Renfer, Head of Bebitus

• Since July 2018 Head of Spain, Portugal and

France at windeln.de SE

• Since May 2016: Managing Director of windeln.ch,

Deputy Managing Director windeln.de

Topics at windeln.de SE:

• Integration of the Swiss operations in HQ

Munich

• Consolidation of DE & CH Channel

organizations to DACH-Team

• Migration Swiss shops to shop platform 2.0

• 6+ years of Digital Business and E-Commerce

experience

• Master of Science in Business Administration

48

Very attractive market environment but competitive in

multi-channel area

Ine.es, ine.pt, insee.fr, statista.com

Spain:


Birth per 1000 Capita: 8.4

E-Commerce volume: € 15 billion

E-Commerce volume baby and toys: € 600 million

Competitors

Portugal:



E-Commerce volume: € 2.7 billion

E-Commerce volume baby and toys: € 171 million

France:



E-Commerce volume: € 44.8 billion

E-Commerce volume baby and toys: € 1.6 billion

Online

Offline

Multi-

channel

49

Focus on contribution margin, SG&A and cash flow –

also at Bebitus

Avg. order value

# Orders per Cust.

Non-Consumables

Gross Profit Margin

Contribution Margin

€ 90

2.2x

<50%

24.0%

(0.2)%

WDL group

Revenues € 23.1m

CN DE CH SP PT FR

€ 11.7m € 4.4m € 1.5m € 3.5m € 0.5m € 1.4m


Adj. EBIT€ (5.9)m

(24.9)%

Q2 2018

Cash Flow

(Current)

~€ (4)m;

liquidity

€ 12m



• New channels

• non-

consumables

Focus

areas





• Profitability

over growth

• Pricing






• Financing

Below

WDL group

average

Approx.

WDL group

average

Above

WDL group

average

Legend:

10% ~50% ~50% <50% >50% >50%

50

Focus on contribution margin, SG&A and cash flow –

also at Bebitus

Below

WDL

group

average

Approx.

WDL

group

average

Above

WDL

group

average

Legend:

Avg. order value

# Orders per Cust.

Non-Consumables

Gross Profit Margin

Contribution Margin

Revenues

Q2 2018

Focus

areas

SP PT FR

€ 3.5m € 0.5m € 1.4m



• Customer acquisition & retention


<50% >50% >50%

51

2015 2016 2017 2018 2019

July 2015:

windeln.de

acquisiton of

Bebitus

October 2017:

Integration of Bebitus

2019

• New communication strategy

• Development of new and

profitable product portfolio

• Launch pregnancy App

2018:

• New Head of Bebitus

• Bebitus Strategy 2.0 and

organizational streamlining

• Reduction of Marketing-Budget

• Product portfolio restructuring

August 2015:

Launch of

bebitus.fr and

bebitus.pt

Bebitus timeline – transformation since integration of

Bebitus in October 2017

52

Significant improvements since beginning of the year

Profitability

• Promotion Blacklist for low contributors

• Delisting of loss leading categories & products

• Bundle-Strategy of products with a low contribution

margin

• Paid-Channel optimization based on contribution

margin after marketing expenses

Cost-efficiency

• Substantial reduction of SG&A costs of 40%

(Q1/2018 vs. Q3/2018)

• Finance, Operations, Product Data fully

centralized

• Cut of marketing expenses by approx. 40%

(Q1/2018 vs. Q3/2018)

• Inventory reduction of approx. EUR 950k within

the last 6 months

Process-efficiency

• Integration of standardized purchase and

listing process

• Implementation of a new campaign and

promotion framework

• Transparency on accountabilities

53

Changing and extending the life-cycle: from recurring to

become relevant in the early days of pregnancy

0

2

4

6

8

10

12

14

16

18

20

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strategy 1.0 Strategy 2.0

Non-Consumables

Consumables

Gross Margin from Orders in %

Recurring categories remain

important traffic drivers

• Shift to high margin products within

low margin categories

• Additional marketing funding of

suppliers

• Focus mainly in non-paid channels

Non-Consumables categories

driving profitable growth

• Investment in new strategic

categories

• Furniture (e.g. convertible cradles

& nursey, high chairs, safety)

• Gear (e.g. Bicycle trailers & bike

seats)

Extension of customer life-

cycle

• Launch of specific categories to

extend the customer life-cycle

from 3 years to 6 years.

• Fashion

• Toys (e.g. bike & tricycles,

outdoor, learning)

54

We are helping families from the early journey onwards: an

understanding sparring partner for every moment

• Reliable and competent

partner

• Expert in diapers & food

• Highly driven by

promotions in

consumables categories

• Entertaining but low quality

content

• Duplicated content and

product listings

• Short term promotion

• Focus in paid-channels

• No personalization

• Sparring partner of the

family

• Relevant products for the

whole family

• Vital community

• High-quality content

• State-of-the-Art landing

pages

• Advices and assistance

everywhere and anytime

• Distinction of category and

user needs

• Differentiation between

campaign- & promotion-

Management

• Clear non-paid strategy

• Personalized

Today

Fu

ture

Perception CommunicationContent & Guides

55

Sharing knowledge and experience across units and

functions: Strategic projects

Magazine & Pregnancy App Pricing-Tool Content & Graphics

Update on Selected Financial Topics

- Dr. Nikolaus Weinberger

58

Financial perspective on the company – focus on

contribution margin, SG&A and cash flow

Avg. Order Value

# Orders per Cust.

Non-Consumables

Gross Profit Margin

Contribution Margin

€ 90

2.2x

<50%

24.0%

(0.2)%

WDL group

Revenues € 23.1m

CN DE CH SP PT FR

€ 11.7m € 4.4m € 1.5m € 3.5m € 0.5m € 1.4m


Adj. EBIT€ (5.9)m

(24.9)%

Q2 2018

Cash Flow

(current)

~€ (4)m,

liquidity

€ ~13m



• New channels

• non-

consumablesFocus

Areas





• Profitability

over growth

• Assortment

• Pricing






• Financing

Below

WDL group

average

Approx.

WDL group

average

Above

WDL group

average

Legend:

10% ~50% ~50% <50% >50% >50%

59

SG&A expenses - significant decrease after lowering of

headcount

* Currently, 14 FTE employees are in parental leave or absent because of long-term illness

Adj. Selling, General & Administrative costs

7.2 7.1 6.97.7 7.7

8.67.9 8.1

6.5

5.8

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

In EUR million

• Reduction of senior management

/ mgmt. board

• Integration of Bebitus

• Divestiture of Feedo

• Outsourcing customer service

• Simplification of organizational

structure

• Build-up IT capabilities in Sibiu

Measures taken so far

446

387

219

Dec 16 Dec 17 Aug 18

Number of active Full Time Equivalent (FTE) Employees*

60

Net working capital – significant inventory reduction over

the last months

26.427.7

19.220.3

19.217.8

20.2

16.9

19.7

12.9

Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Inventory (EUR million)

Net Working Capital

(EUR million)

as % of LTM revenues

Days inventory (DIO)

Note: Net Working Capital (NWC) defined as inventories, prepayments, trade receivables, accrued advertising subsidies, vendors with credit balance minus trade payables and deferred revenues.

80 90 59 47 49 46 53 45

11.9 15.7 6.1 8.0 6.6 7.5 11.3 10.6

6.5% 8.3% 3.1% 4.2% 3.5% 3.9% 5.8% 5.7%

71

19.1

10.9%

Accrued advertising revenues +

vendors with credit balance

(EUR m)

1.5 2.7 2.8 3.0 2.1 2.6 2.6 3.9 7.2

Q3 c

losin

gon

go

ing

65

9.2

6.1%

1.8

61

Adj. EBIT and cash outflow by quarter – clear reduction

in cash outflow in 2018

1) Includes cash and cash equivalents, time deposits and restricted cash (excluding drawn financing).

2) Excluding inventory reduction of approx. EUR 8.6million related to closure of shopping club

Note: Excludes Feedo from Q1 2018 onwards.

Adjusted EBIT and Cash outflow1)

-6.5 -6.3-6.6

-7.4 -7.3

-5.8-5.4

-6.3

-5.2-5.9

-9.8

-11.6

-1.5

-10.0

-7.5

-6.3

-11.3

-4.9

-11.3

2.7

-4.1

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

Q1 '16 Q2 '16 Q3 '16 (2) Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18

Adj. EBIT Cash outflow

Closure of

Shopping

Club

EUR million

Net Liquidity1)

EUR 13m

30-Sep plus

EUR 0.4m

additional deferred

purchase

price

Feedo

Pre-stocking

bonded warehouse

& Bebitus plus cash

earn-out payments

Cash Flow

Higher

inventory

levels for

China BWH

and

outstanding

mktg.

rebates

suppliers

Cash Outflow 2016:

EUR -41.6m

Cash Outflow 2017:

EUR -30.0m

Cash Outflow Q1-Q3 2018:

EUR -12.7m

(incl. EUR 5.2m cap.

increase)

Q3 c

losin

g

62

Adj. EBIT break-even targeted for early 2019 – three

drivers

Adjusted

EBIT

break-even

SG&A

cost savings

European

business

China

business• Adj. EBIT

~ EUR (4)

million

• Cash

available

EUR 13

million

Further positive

impact from already

implemented cost

measures

New leadership,

Assortment review,

Category extension,

App, Pricing tool

IMF Product relaunch,

Referral program, Product

diversification

Early 2019Status Quo

Leavers until

break-even

Leavers

beyond

Continous

improvement in

organization and

processes

Assess B2B, Private

label 2.0, Central

warehouse

Bonded Warehouse,

Channel extension,

Assess new regions

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