Earnings call transcript: Westwing Group Q2 2025 sees stock rise on positive outlook

Westwing Group AG (market cap: €225.24M) reported its Q2 2025 earnings with a notable improvement in its adjusted EBITDA and a positive net result, despite a slight decline in GMV. The company’s stock saw a 3.74% increase in pre-market trading, reflecting investor optimism about its future growth prospects, particularly in the European market. According to InvestingPro data, the stock has delivered an impressive 30.52% return over the past six months and is currently trading near its 52-week high.

Key Takeaways

• Adjusted EBITDA improved by 61% to €6 million.
• Positive net result of €2 million for the quarter.
• Stock price increased by 3.74% in pre-market trading.
• Expansion into eight new European countries.
• Positive sales growth expected in the second half of 2025.

Company Performance

Westwing Group AG reported a mixed performance for Q2 2025. While the company experienced a 3.6% decline in GMV year-over-year, it achieved significant improvements in profitability metrics. The adjusted EBITDA rose by 61%, and the company posted a positive net result of €2 million. These results indicate a successful cost management strategy and operational efficiency.

Financial Highlights

• Revenue: Not specified in the provided data.
• Adjusted EBITDA: €6 million, up 61% year-over-year.
• Net result: Positive €2 million.
• Gross margin: Increased by 2.1 percentage points.
• Contribution margin: Increased by 2.9 percentage points to 33.5%.

Outlook & Guidance

Westwing Group anticipates a return to high single to double-digit growth in 2026, with a positive sales trajectory expected in the latter half of 2025. The company is targeting a double-digit positive free cash flow for 2025 and aims for a revenue guidance of -4% to +2%. These projections are supported by the company’s strategic expansion and product innovation efforts. InvestingPro analysis reveals that analysts maintain a strong buy consensus, with additional insights and detailed valuation metrics available to subscribers.

Executive Commentary

• Sebastian Bettrich, CFO, expressed confidence in meeting the 2025 guidance, stating, "We are well on track to deliver on our 2025 guidance in terms of revenue and profitability."
• CEO Andreas Hoehrning highlighted the company’s branding efforts, saying, "We are developing the super brand in design, with high loyalty and true potential to grow further."
• Bettrich also noted, "We expect that in the second half of the year, we should get into a positive territory."

Risks and Challenges

• Market Saturation: The home and living e-commerce market in Germany showed weakness in Q2.
• Geographic Expansion Costs: Costs associated with entering new markets, particularly marketing expenses.
• Customer Base Decline: Changes in product assortment affecting customer retention.
• Economic Conditions: Potential macroeconomic pressures affecting consumer spending.

Q&A

During the earnings call, analysts raised questions about the decline in the customer base, which the company attributed to changes in its premium product assortment. The management also addressed geographic expansion costs, primarily driven by marketing expenses, and highlighted improvements in the Italian and Spanish markets. For investors seeking deeper insights, InvestingPro offers comprehensive financial health scores, 12+ additional ProTips, and detailed valuation metrics in its Pro Research Report, helping you make more informed investment decisions.

Full transcript - Westwing Group AG (WEW) Q2 2025:

Conference Moderator: Morning, ladies and gentlemen, and a warm welcome to the Westwing Group SE H1 twenty twenty five Earnings Call. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Please note that it is only possible to state questions verbally in the conference call, so please dial in if you wish to raise a question. Please keep in mind that we can only accept questions from participants who provided their full names and their company information within the registration process.

Now, dear ladies and gentlemen, let me turn the floor over to your host, Andreas Hoehrning.

Andreas Hoehrning, CEO, Westwing Group SE: Good morning, everyone, and thank you for joining us for our earnings call on the 2025. My name is Andreas Hernning. I’m the CEO of Westwing. I’m hosting the call together with Sebastian Bettrich, our CFO. Looking at today’s agenda, I will begin by providing key updates on our business for the 2025, after which Sebastian will share the details of Westwing’s financial performance.

After our investment highlight summary, we will be happy to take your questions. Let’s take a look at the current state of Westwing. In Q2, we continued to improve profitability significantly despite a negative top line that developed in line with our expectations. Our GMV declined by 3.6% year over year due to a more premium and smaller product assortment according to our strategy. We do, however, see a positive development in current trading.

June GMV grew slightly and this upward trend is strengthening. Hence, we continue to expect a positive 2025. Despite negative scale effects, we improved our adjusted EBITDA by 61% to €6,000,000 at an EBITDA margin of 6.3%. This marks an increase of 2.6 percentage points year over year. Free cash flow was negative at minus €5,000,000 in Q2 and we ended the second quarter with a net cash position of €50,000,000 For the full year 2025, we expect free cash flow to be double digit positive.

Strategically, we are well on track with the implementation of our three step value creation plan. Our private label product brand, The Western Collection, grew 19% year over year, which resulted in an all time high GMV share of 65%. As part of our geographic expansion, we already launched eight new countries this year and we continued our store expansion with the recent opening of two stand alone stores, one in Munich and one in Berlin. The operational progress is fully in line with our targets and we can also confirm our financial guidance for 2025, as well as our ambition for 2026, which is the return to a high single to double digit growth at further improved profitability. As always, let’s have a look at our three step value creation plan, which we initiated in 2022.

In terms of levers, we successfully completed the first two phases: the turnaround and strategy update phase and the building of a scalable platform phase. 2025 marks a transition year for us, where we are focusing on the key growth levers of the third phase in order to be able to scale with operating leverage. As in the last earnings call, let me now briefly guide you through our progress across the key levers of the third phase of our plan, beginning with the latest developments of the Western collection, then moving on to how we are strengthening our market share in existing geographies, pushing the premium positioning of our brand, and finally, the progress we’ve made in terms of international expansion. So, starting with The Collection. The Western Collection is our gorgeous, sustainable private label product brand, and we continue to be very pleased with its performance.

It again delivered strong growth of 19% year over year, resulting in an all time high GMV share of 65. This strong development supports our top line as well as profitability, since the products are very desirable and they allow us to achieve a higher contribution margin compared to third party products. As we build Europe’s premium one stop destination for home and living, we are creating a unique product assortment for design lovers, consisting of our own brand Western Collection and the best third party design brands. We still have significant room for improvement on both sides. As outlined in our last earnings call, besides improvements in product assortment, we see offline store expansion as a lever for share gains in existing markets.

For 2025, we are well on track to open seven offline stores. In our last earnings call, we told you that in April we opened a store in store at the prestigious department store Pranzan in Paris. This marks our first store expansion outside of Germany. Since then, we successfully opened two more stand alone stores located in Munich and Berlin. Looking ahead, we will open a stand alone store in Cologne and a store in store each in Dusseldorf and Copenhagen in the current 2025.

Before I share an update on our geographic expansion, let me show you some impressions of our new standalone stores in Munich and Berlin. In Munich, which you see on the left, we opened the doors to our Westwing warm up store. This is more than just a pop up. It’s a warm up for what’s to come. That is our first permanent Westwing store in Munich, set to open next year in the heart of the city.

In the meantime, our warm up store already offers design lovers the chance to experience our brand and products in real life. Munich plays a key role for us as a brand, not only because of its strong demographics and retail relevance, but also because the Western journey started here. As many of our central teams are located in Munich, we generate customer experience learnings even faster than before. On top, we are also very proud to now have a permanent standalone store in Berlin. You can see some impressions on the right hand side of the slide.

It is located on the iconic Kurfurstendamm, bringing Westwing to life in the heart of Berlin. Overall, offline stores help us to further strengthen brand presence and positioning. And by providing a holistic shopping experience across the multi touch customer journey, Western will also gain market share. In home and living, many customers combine online and offline experiences in their journey, especially for large furniture purchases. The latter mostly for the touch and feel, and simply because basket sizes in furniture are often very large and require many touch points for conversion.

Next topic. In order to further increase our premium brand positioning, we launched an exclusive collaboration with the visionary artist and designer Harry Nourias, who is the creative director and founder of Crosby Studios based in Paris. The public was able to discover this exclusive collection at a showroom in Paris for two weeks in June, and we received an impressive media response on the collaboration. On the next slide, you can see some impressions of our showroom. The exclusive collection combines Harry Nourif’s experimental design approach with Westwing’s curated aesthetic and passion for inspiring design led living.

It features a curated selection of pieces across furniture, textiles, decor and tabletop that is available as a limited edition to our customers. Overall, this collaboration reflects our broader goal of creating emotionally resonant experiences and redefining what beautiful living means today and tomorrow. Let’s move on from gaining market share in existing geographies and increasing our premium brand positioning to entering new markets. At the beginning of the year, we announced our plan to open five to 10 new countries in 2025. We’ve already expanded to eight new countries so far: Luxembourg, Denmark, Sweden, Croatia, Finland, Slovenia, and very recently Norway and Hungary.

At the moment, we are preparing for two more country launches this year, Romania and Greece. As outlined in our last earnings call, geographic expansion allows us to offer our existing global product assortment to customers in the corresponding market segment for design lovers in other countries. This means selling more of the same products. All continental European countries follow the same logic with low marginal costs of serving them: translations supported by artificial intelligence, onboarding of last mile delivery providers, local influencer marketing, and performance marketing with attractive returns within a few months. Therefore, in the midterm, we aim to be present in approximately all European countries.

I now hand over to Sebastian for details on our financial performance.

Sebastian Bettrich, CFO, Westwing Group SE: Thank you Andreas and good morning everyone. I am Sebastian Metrich, the CFO of Westwing. Let me start with details on our top line. Our GMV declined 4% year over year, while revenue was at minus 6% year over year, with the changes to our product assortment being the key driver for this development. The difference in GMV and revenue development is due to a sales event at the June, which meant that some orders were delivered in July and therefore were not recognized as revenue in Q2.

As Andreas mentioned in the beginning, we see a positive development in current trading and June GMV grew slightly and this upward trend strengthened in July. This underpins our confidence that top line performance will improve in the second half of the year. Now let me also briefly comment on Q2 top line development on segment level. DAS segment saw a revenue decline of 9%, the international segment’s revenue declined by 2%. There are three major reasons for this difference in top line development.

Firstly, we began introducing a largely global and more premium product assortment and related restructuring of our local business functions in the international segment as early as Q2 twenty twenty four, while the DAC segment remained unchanged during that period. As a result, last year’s baseline for DAC is stronger than that of the international segment, which is one reason for the difference in year over year development. Secondly, the international segment benefited from additional revenue generated by our geographic expansion with six new countries launched in the 2025. And thirdly, overall market demand in the DAS segment seemed to be weaker than in the international segment, especially in April and May. Now let me continue with an overview of our profitability development.

In Q2, we improved our adjusted EBITDA by €2,000,000 to €6,000,000 which represents an increase of 61%. To show profitability development on an unadjusted basis after D and A, we also included the EBIT development on the right side of the slide. It is also clearly positive at €2,000,000 and showed an even greater increase of €5,000,000 year over year. The higher increase compared to adjusted EBITDA is primarily driven by lower D and A expenses as all technology assets have been fully depreciated with the successful go live of our SaaS based tech platform at the 2024, and we were also able to reduce lease payments. Let us now take a look at our P and margins and focus on the development in the 2025, which you can see here on the right hand side.

I am pleased to report that we improved our P and L margin structure in almost all areas, leading to a strong improvement in adjusted EBITDA margin by 2.6 percentage points year over year to 6.3%. Our gross margin improved by 2.1 percentage points year over year, mainly due to strong Westwing collection share gains. The fulfillment ratio improved by 0.9 percentage points year over year, leading to an increase in contribution margin of 2.9 percentage points in Q2 to 33.5%, a really strong result. Regarding contribution margin, I would like to highlight that the corresponding contribution profit per order continued to increase significantly by 40% year over year. Our marketing ratio increased by 0.6 percentage points year over year to minus 13.2%.

Reasons for the increase include investments into country expansion as well as brand and store investments. Our G and A ratio, which also includes other results, improved by 1.5 percentage points to minus 18%, reflecting the positive effects from our twenty twenty four complexity reduction measures. This led to an adjusted EBIT margin of 2.3% in Q2, up 3.8 percentage points year over year. GNA decreased by 1.2 percentage points year over year, primarily driven by the full depreciation of legacy tech assets, which I mentioned on the previous slide. Overall, our Q2 adjusted EBITDA margin improved by 2.6 percentage points year over year to 6.3%.

I want to highlight that we realized these improvements despite the decline in revenue, which means that we overcompensated for negative scale effects. While our adjusted EBITDA is our main profitability KPI, I also want to mention our net result. With a positive net result of €2,000,000 in the second quarter and now three positive quarters in a row, we are proving that our company is turning to real profitability. As expected, the adjustments made in Q2 were minor. An overview of these adjustments, well as the unadjusted consolidated income statements, can be found in the appendix to this presentation and in our financial half year report.

Let’s move on to profitability on segment level. In Q2, which is displayed on the right side of the slide, we saw a strong improvement in adjusted EBITDA margin in both segments. In the DAS segment, adjusted EBITDA margin improved by 2.1 percentage points year over year to 6.5%. The international segment improved its adjusted EBITDA margin by 3.6 percentage points year over year to 6.1. The improvement in profitability reflects the successful implementation of our three step value creation plan across both segments.

Those of you who listened to our last earnings call or saw our Q1 twenty twenty five results presentation might remember our chart that showed the positive development of our adjusted EBITDA margin since 2022, with an improvement of 10 percentage points since we started our three step value creation plan. Today, I would like to highlight another metric that clearly shows the tangible and very positive outcome of our business transformation. This is the development of earnings per share on a last first month basis. We show earnings per share both on an adjusted and unadjusted basis. Adjustments include the reported adjustments of restructuring expenses as well as impact from share based payment obligations.

The chart shows a clearly positive trend since Q2 twenty twenty four. In Q2 twenty twenty five, we were able to report for the first time outside of peak COVID times positive earnings per share on an unadjusted last twelve month basis. In addition to three consecutive quarters of positive net results, the impact of our substantial share buyback at the 2024 is also clearly visible. As a remark, the average number of shares in circulation, which is displayed on this slide, is the number of issued shares minus our treasury shares. We believe this is the strongest testament to the success of our strategy and its implementation so far.

We promised we would solve for profitability first and at the same time build the foundation for significant growth and further margin increase in the third phase of our value creation plan. That’s exactly what we are delivering. Let us now move from profitability to our balance sheet and take a look at our net working capital. By the end of Q2, net working capital was at €5,000,000 The year over year increase was mainly driven by the reduction in trade payables following the inventory increase, especially for new product launches during the first half of the year that we already mentioned in our last earnings call. Inventory is expected to decline towards the end of the year, positively impacting both net working capital and cash flow.

As a result, we anticipate net working capital to return to a negative territory in the 2025. On the next slide, you see CapEx and CapEx ratio for the first half of the year compared to the same period in 2024. CapEx year over year remained flat at €4,000,000 However, when comparing the 2025 with the 2024, we see a shift between investments into property, plant and equipment and intangible assets. This is mainly due to the fact that we were investing in several new stores in the 2025, with only one store opening in the same period of 2024. At the same time, we were able to reduce CapEx for internally developed tech assets as we move to our SaaS based tech platform.

With CapEx of €4,000,000 in the 2025, which equals a CapEx ratio of two percent of revenue, we kept CapEx at a very healthy level. Let us now take a look at our net cash position. In terms of net cash, we are pleased to report a strong net cash balance sheet position of €50,000,000 at the June, which is €7,000,000 less compared to the March. Overall, free cash flow was at minus €5,000,000 in Q2, with approximately €2,000,000 related to the exercise of employee stock options and an impact of minus €8,000,000 from changes in net working capital, which I mentioned earlier. With the lease payments of €3,000,000 we had a negative free cash flow after lease payments of minus €7,000,000 Our balance sheet remains strong with no debt other than the IFRS 16 lease obligations.

As Andreas mentioned earlier, we are confident to enable double digit free cash flow for the full year 2025, driven by both profitability and net working capital. Given our seasonality, Q4 is expected to be the strongest quarter. On the next slide, I’ll comment on the financial guidance for 2025, which we published at the March. Our performance in the second quarter and 2025 in terms of both revenue and profitability is fully in line with our guidance. In terms of top line, we had, as expected, headwinds from our changes in the product assortment.

These negative effects are expected to ease towards the 2025. We already saw a slight growth in June and this upward trend strengthened in July. In terms of profitability, we expect a typical seasonal development in 2025 with peaks in Q1 and Q4. Please also keep in mind that the first half of the year has seen only minor ramp up costs for expansion. Related ramp up costs will increase as we open additional stores and scale up the new countries in the second half.

To summarize, we are well on track to deliver on our twenty twenty five guidance in terms of revenue and profitability and also in terms of a clearly positive double digit free cash flow. This brings me to our mid term outlook, which was shared for the first time in our full year 2024 earnings call. I want to highlight again that our ambition is to return to significant growth in 2026 by continuously improving profitability. Significant growth means a high single to double digit growth rate, driven by expansion initiatives and the anticipated easing of negative impacts from the product assortment changes towards the 2025. In terms of profitability, we expect scale effects as we grow, as well as positive effects from our improving product assortment.

We remain focused on executing our three step value creation plan with a clear goal of driving sustained improvements in profitability and cash flow. Combined with our return to meaningful growth, this positions us to unlock the full value potential of Westwing. With that, I’m handing over to Andreas to conclude our presentation with our investment highlights.

Andreas Hoehrning, CEO, Westwing Group SE: Thank you, Sebastien. Let me briefly recap our investment highlights. First, we have a unique, relevant customer value proposition through the specific assortment and the way we serve our customers. Second, the market potential is huge, especially in our existing geographies, but also beyond. Third, we are developing the super brand in design, with high loyalty and true potential to grow further.

Fourth, we have high and increasing margins as well as operating leverage while we scale. Fifth, we have a great balance sheet with a strong cash position and no debt, strong net working capital and low CapEx. All of this will lead us in the mid term to 10% plus adjusted EBITDA with a continued strong cash conversion. Sebastian and I are now happy to take your questions.

Conference Moderator: Thank you very much. Dear ladies and gentlemen, if you are dialed into the conference call, There are a couple of questions incoming already. The first question is from Volker Bosse of Baader Bank. One moment, please. Over to you.

Please go ahead.

Volker Bosse, Analyst, Baader Bank: Yes. Hello, good morning, everybody. It’s Volker speaking from Baader Bank. Yes, first, congratulations to the great earnings improvements. However, my question is more on the sales trend.

I mean, in DACH region as well as in active customers, there was even a sharper decline in second quarter than first quarter, although the German online market was quite healthy up according to BEVH figures. So could you explain why there I mean, you guided for a decline in sales and customers, but why there was even an acceleration in decline in Q2 versus Q1? That would be my first question. And the second question, you had some openings already. I mean Munich is still too early, but Leipzig Stuttgart, you are some weeks, some months live now.

Are there any initial learnings from the store openings which influences your openings, which are to come? And third question would be on current trading. You said something about July and that makes you positive on the second half. Perhaps for clarification, what drives your confidence to improve sales in the second half? And what did you say on July again, please?

Andreas Hoehrning, CEO, Westwing Group SE: Thank you, Volker, for your questions, and thank you for your feedback on the performance. Sebastian will be taking your questions on the sales and in that and customer active customers as well as on the current trading. And before I hand over to him, let me briefly comment on your question on store openings because you were asking about the learnings from the recent store openings. So the learnings, to be honest, so far are simply that customers actually really enjoy this additional offering that we provide to them, because interacting with our brand physically in the stores, experiencing the product, This is something that we continue to see that it delights our customers. In terms of numbers, it is too early at this point in time to to really comment on this.

The openings of this year, they actually they will provide over the next, say, six to twelve to eighteen months for real learnings for us, and it’s on a slightly it’s on a higher scale than what we had beforehand with only Hamburg and Stuttgart. So over the next six to twelve to eighteen months, we will really generate learnings from this, and we will also repair report on the learnings in our earnings calls as we have them, and then we share them with you.

Volker Bosse, Analyst, Baader Bank: Sorry to follow-up on that. Mean, you said customers are delighted. Why you say so? I mean, do you see there is more website traffic than in the catchment area I mean, do you have this granularity to track, so to say, the awareness success of customers in the area?

Or why you say so? I mean, just please.

Andreas Hoehrning, CEO, Westwing Group SE: Yeah. So, yes, we also so we track all sorts of numbers on on store sales. So we obviously, the ones that are placed in the store that we generate directly there, also the ones that are generated via scanning of QR codes. And what we also do is we we track the sales in the catchment area. On the very short term, let’s say, on a few weeks, it is very difficult to really single out the effect of a store opening in a catchment area because there’s so many other effects.

For instance, the weather has a very strong effect on on sales, online sales. We saw this over the past few weeks. We actually had bad weather in Germany, and and now it’s improving. And you can see these things in online sales, so it’s very difficult to single this out on a kind of a basis of a few weeks. What we what we have seen in the past and continue to see is a general uplift in catchment area for the cities where we actually have stores.

So Hamburg and Stuttgart, this was has been since the since the beginning has been prominent, and that’s why this is an additional source of confidence for us that stores make sense and that customers actually react very positively to that. So that’s the brand effect, if you like, of the stores. On the new ones, it’s too early to tell also on that, but we will report on it as soon as the numbers show that we actually have meaningful results there.

Volker Bosse, Analyst, Baader Bank: Mhmm. Thank you.

Andreas Hoehrning, CEO, Westwing Group SE: With that, I’m handing over to Sebastian for Dachshund and current trading.

Sebastian Bettrich, CFO, Westwing Group SE: Hi, Volker. Thanks for your questions. The first on the sales trends in Dachshund and overall customer active customer development. So maybe first starting with the past active customer development, the trend that we see here is due to the same reasons that we shared during the last earnings call. As we started to change our product assortment last year, moving to a mostly global, more premium, also smaller product assortment, we do not target certain customer groups anymore.

This is why the number of active customers declines, and as we rolled out the changes in the assortment starting in Q2 twenty twenty four with the city of Spain and later moving on to CE, and then also making changes to the remaining countries, you see this trend continuing so far. And this, of course, also has then or leads to the negative implications on top line that we are also commenting on our calls. Now a look on the DAF segment. As I mentioned already during the earnings call, the baseline 2024 for DAF, was quite strong as we did not have any changes, to the product assortment, back then. While While the international segment already faced some, changes, and we also restructured our local business in Italy and Spain at that time.

So baseline for that segment in q two is is, is stronger compared to international. And your comment on the overall market development, ecommerce market development in Germany, actually, we don’t really see this. We see that competitors also report actually negative revenue development for the German market in home and living, we know that market searches in Germany have declined significantly in q two, so it’s also a clear sign that at least the home and living sector did not pick up in q two. So that’s why we actually expect that weaker consumer sentiment had also additional negative impact on our SaaS segment’s performance in q two year over year. So this would be my answer to your first question, Volker.

This do you have any additional questions on this? Otherwise, I would continue with the current trading.

Volker Bosse, Analyst, Baader Bank: No. Please go on to current trading. Thank you very much.

Sebastian Bettrich, CFO, Westwing Group SE: And with regard to the question on current trading and what makes us confident, so as mentioned, we see an upward trend since June. So July also was growing, and we expect that towards the end of the year, the negative impact from our changes in the assortment will ease, so growth year over year becomes easier. And Andreas reported on our expansion measures, both meaning check ins in existing markets, but also then the expansion to new geographies. And the impact of our expansion measures will become bigger in the second half of the year. So overall, we expect that with our strategy, and this will be a recovery of top line in the second half.

Volker Bosse, Analyst, Baader Bank: Recovery of top line of second half means the minus is getting smaller, so to say? Or do you expect it to turn into positive sales growth territories again?

Sebastian Bettrich, CFO, Westwing Group SE: Can you say so? We expect that in the second half of the year, we should get into a positive territory. Our guidance is minus four to plus two, so we do not expect at the moment a super, super strong second half of the year. And so we are in line with our guidance, and we expect that this, yeah, will lead to positive development in the second half.

Volker Bosse, Analyst, Baader Bank: Okay. Understood. Very well. Thank you very much, and all the best. Thanks.

Andreas Hoehrning, CEO, Westwing Group SE: Thank you, Volkan.

Conference Moderator: Thank you very much. The next question is from Henri Bendisch of Nuways. Over to you.

Henri Bendisch, Analyst, Nuways: Hi. This is Henri from Nuways, and thanks for taking my question. And first of all, congrats on the very strong margin improvement. It’s nice to see sort of that if you even with declining sales, operating leverage can still be pursued or performed. This is quite an astonishing thing to see here.

But this brings me directly to my question regarding maybe more on a global level, your free cash flow. You say you’re enabling double digit positive free cash flow for this year. And with growth kicking in next year, we have operating leverage more and then also very high or probably higher positive free cash flows in 2026. But this brings us to a sort of sweet and sour situation because I kind of find it hard to find options for you to what to do with the free cash flow. So in my view, yes, debt repayment is not an issue, obviously.

The buyback, you are at 10% old shares. Cannot You do buyback dividends. I don’t see this coming as well, giving the negative retained earnings still. And CapEx is not something that is in your business model, something you need to do. So what maybe how can we think of what you’re going to do with free cash flows in the future if you are now returning to free cash flows on a higher level?

Andreas Hoehrning, CEO, Westwing Group SE: Thank you, Henry. Thanks for the feedback. Handing over to Sebastian for your question on free cash flow in the future and what to do with it.

Sebastian Bettrich, CFO, Westwing Group SE: Hi, Henry. Thanks for your question. It’s, of course, an important question and, of course, also an important topic for us. It’s a bit early to comment already on this, but, of course, we are have to also come up with a good strategy for capital allocation going forward. So, we will comment on this later in time.

Andreas Hoehrning, CEO, Westwing Group SE: Okay. Thanks.

Henri Bendisch, Analyst, Nuways: That’s finished already from my side. I think operational wise, it’s all clear.

Andreas Hoehrning, CEO, Westwing Group SE: Thank you, Henry.

Conference Moderator: Thank you very much. At the moment, there are no further questions in the queue. So last call. Please press 9 and star if you wish to raise a question. Couple more moments.

There’s a question from Benedict Olesch of Avert Art. Over to you, Benedict.

Benedict Olesch, Analyst, Avert Art: Yes. Hello. Also from my side, very nice results. Thank you so much. Maybe you can also expand on the geographic expansion a little bit more.

Where do you see the cost increases coming from, in the second half of the year? And what are you seeing at the moment from these expansions? I mean, it’s already a little bit early, but do you have any recognitions from these expansions into new markets that you’re seeing? Thank you.

Andreas Hoehrning, CEO, Westwing Group SE: Thanks a lot, Benedikt. Thanks for the feedback. Handing over to Sebastian.

Sebastian Bettrich, CFO, Westwing Group SE: Hi, Benedikt. Thanks for your question. So with regard to the cost related to our geographic expansion, the main cost relates to marketing expenses, as we always said, that we will have a very lean approach to country expansion. That means marketing expenses will be the main driver. And as you enter a market, typically, marketing efficiency is lower compared to mature markets as you have to build up a customer base there, and that’s the main cost related to to market expansion.

Then there’s some minor costs related to it in other areas, but marketing is the most important cost associated with this. And in terms of first results, we are really happy so far with the development, both in terms of the operational setup and the speed in which we are able to enter new markets. So it’s really we are now in August, and we have brought eight countries live this year. I think this is really a great achievement of our team here at Westwing. And also the first indications from the top line development of new countries also in line with our expectations promising, so we think that we are very well on track with our geographic expansion.

Benedict Olesch, Analyst, Avert Art: Okay. Thank you very much.

Andreas Hoehrning, CEO, Westwing Group SE: Thanks, Benedict.

Conference Moderator: Thank you. Next, we have a follow-up from Fokker Bosse of Beider Bank. Please, Fokker, over to you.

Volker Bosse, Analyst, Baader Bank: Hello. It’s Fokker from Baader Bank. Again, as we have some time, obviously, I would come up with another question on your decent international portfolio. I mean you are shy to break out single countries. However, are there any highlights, lowlights worth to mention?

And especially Italy and Spain, where you have where you run through a quite sharp restructuring with shutting down headquarters, streamlining assortments. Has the negative effect of this restructuring bottomed out or annualized? How do you see sales trend after you have done these all these measures, which, of course, not helped the international business in the past? But yes, how is it going in the moment? Thanks.

Andreas Hoehrning, CEO, Westwing Group SE: Yeah. Thank you, Volker, for the question. Very relevant one, and, obviously, this is something that that we we needed to plan and understand in order to also come up with the top line expectation of first half versus versus second half of this year. Specifically, on Italy and Spain, which you are asking about, So we do see that, station has much improved, and it is actually so so so the changes that we made to a global assortment, the restructuring of the of the countries, also the offices and warehouses, this took place place mainly in q two last year. So that’s why when we now look at a year over year basis on the results in Italy and Spain, it actually turned around kind of over the last one, two months, especially in Italy where we actually see promising results now.

And this is clearly the the the the bottoming out or ending of the baseline effect from this restructuring and the move to a global product assortment. In Spain, we also see this to a bit lesser extent because assortment and positioning in Spain was was a bit stronger even than in Italy. So that’s why in Spain, we don’t see the full recovery yet, but it’s the same trajectory or the same the same Does that answer your question, Volga?

Volker Bosse, Analyst, Baader Bank: Yeah. Absolutely. That’s encouraging signs. Perfect. Thank you.

Andreas Hoehrning, CEO, Westwing Group SE: Indeed. Indeed. Yeah. Thank you.

Conference Moderator: Thank you very much. As there are no more questions in the queue, I’m handing the floor back over to Andreas Heine.

Andreas Hoehrning, CEO, Westwing Group SE: Yeah. Thank you. As we haven’t received any additional questions, we are ending today’s earnings call. Thank you for joining, and

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