Original-Research: Westwing Group SE - from NuWays AG 05.12.2024 / 09:00 CET / CEST Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.

Original-Research: Westwing Group SE (von NuWays AG): BUY

Original-Research: Westwing Group SE - from NuWays AG

05.12.2024 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
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:                        05.12.2024
     Target price:                EUR 17.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Solid black week in the books, guidance well in reach; chg. est

Topic: During last weeks black week, which is a main driver of Q4 revenues,
WEW has performed in line with its own expectations, posing the upper half
of the sales guidance in reach. However, the still muted consumer sentiment
does seem to turn positive in the near-term. In detail:

After having spoken to the company, WEW is satisfied with its black week
performance which was 'in line with expectations'. Therefore, we keep our Q4
sales estimate (eNuW: EUR 125m sales; -5% yoy) unchanged. Mind you, the
decision of to change the product assortment in certain countries towards a
more global one, is the key reason behind the expected revenue decline in
Q4.

Accordingly, the FY'24e sales guidance range of EUR 415-445m (-3% to +4% yoy;
eNuW: EUR 435m, +1.5% yoy) should be reached in the upper half. This is
further supported by management's statement, that a revenue decline in
FY'24e is 'unlikely'. Due to the ongoing brand marketing campaign, we expect
the adj. EBITDA guidance of EUR 14-24m (3-5% margin) to be met at midpoint
(eNuW: EUR 18m).

Looking ahead, FY'25e will likely remain a year with muted consumer
sentiment. However, the company has shown to outperform the market
throughout 9M'24, mainly driven by a growing user base and increasing
average basket size. For FY'25e, we expect the trend of growth in users and
average basket size to continue, but at lower rates. Moreover, WEW plans to
expand into other European countries and to open physical stores in
important DACH cities (e.g. Munich, Berlin, Vienna), supporting sales as
soon as FY'25e, however with a full-year effect in FY'26e. On the other
hand, the product

assortment change should negatively affect sales growth from Q1-Q3'25e and
thus dampen the effects described above. In sum, we expect a 5% top line
growth in FY'25e, which would imply an adj. EBITDA of EUR 22.5m (+24% yoy)
thanks to a beneficial cost mix and a rising private label share driving up
gross margin.

In sum, WEW's management used the time of a depressed consumer sentiment
wisely and shaped WEW into a leaner and more scalable company, which bodes
well in case of a consumer rebound. Until then, WEW remains a profitable,
net cash and FCF positive company, serving as a downside protection and
providing an attractive risk-return profile, in our view. Hence, we
reiterate our BUY recommendation with new PT of EUR 17.00 (old: EUR 17.50),
based on DCF.

You can download the research here: http://www.more-ir.de/d/31491.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: [e-mail]
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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2044525 05.12.2024 CET/CEST