Earnings call transcript: Westwing Group Q3 2025 sees strong EBITDA growth

Westwing Group AG reported a robust performance for Q3 2025, with significant improvements in key financial metrics. The company’s adjusted EBITDA surged by 73% to €6 million, contributing to an 8.15% increase in its stock price, which closed at €12.60. Westwing’s strategic expansion and operational efficiencies have bolstered its market position, despite challenging conditions in the home and living sector.

Key Takeaways

• Adjusted EBITDA increased by 73% to €6 million.
• Gross margin improved by 2.2 percentage points.
• Westwing expanded into 10 new countries and opened 7 new physical stores.
• Stock price rose 8.15% following the earnings report.
• The company aims for double-digit free cash flow in 2025.

Company Performance

Westwing Group AG demonstrated resilience in Q3 2025, achieving a 5.4% year-over-year increase in GMV to €75 million. The company’s focus on operational efficiency and strategic market expansion has paid off, as evidenced by its improved adjusted EBITDA and gross margin. Despite a challenging market environment, Westwing continues to strengthen its position as a premium home and living destination in Europe.

Financial Highlights

• Revenue: Not specified in the call.
• Adjusted EBITDA: €6 million, up 73% year-over-year.
• Free cash flow: Positive at €10 million.
• Net cash position: €58 million.
• Gross margin: Increased by 2.2 percentage points.
• Contribution margin: Increased by 2.3 percentage points to 33.9%.

Market Reaction

Following the earnings announcement, Westwing’s stock price rose by 8.15%, closing at €12.60. This increase reflects investor confidence in the company’s financial health and strategic direction. The stock’s performance is particularly notable given its 52-week range, moving closer to its high of €13.40.

Outlook & Guidance

Looking ahead, Westwing is targeting the upper end of its adjusted EBITDA guidance for 2025, with expectations of high single to double-digit growth in 2026. The company plans to expand its presence across nearly all European countries and anticipates a return to significant growth in 2026.

Executive Commentary

Sebastian Vestrisch, CFO, stated, "We are well on track to deliver on our 2025 guidance," highlighting the company’s commitment to financial targets. CEO Andreas Hoehnning emphasized, "We are developing the super brand in design with high loyalty," underlining the strategic focus on brand strength and customer retention.

Risks and Challenges

• Market Saturation: The home and living sector remains competitive, with limited growth in consumer sentiment.
• Economic Conditions: Regional differences in market conditions could affect performance.
• Supply Chain: Potential disruptions could impact operational efficiency.
• Expansion Risks: Entering new markets involves inherent risks and uncertainties.
• Currency Fluctuations: Could affect financial results given Westwing’s international operations.

Q&A

During the earnings call, analysts inquired about the performance of new country expansions and the impact of physical stores on online sales. Management confirmed that the expansions are performing in line with expectations and that physical stores are positively influencing both online and offline sales channels.

Full transcript - Westwing Group AG (WEW) Q3 2025:

Conference Moderator: Good morning, ladies and gentlemen, and welcome to the Westwing Group SE Q3 twenty twenty five Earnings Call. At this time, all participants have been placed on a listen only mode. The floor will be opened for questions following the presentation. It is only possible to state questions orally 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 provide their full names and their company information in the registration process. Now, dear ladies and gentlemen, let me turn the floor over to your host, Andreas Hoehnning.

Andreas Hoehnning, CEO, Westwing Group SE: Good morning, everyone, and thank you for joining us for our earnings call on the 2025. My name is Andreas Hoehnning. I’m the CEO of Westwing. I’m hosting the call together with Sebastian Vestrisch, 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 Q3, we delivered growth and continued to improve profitability significantly. Our GMV increased by 5.4% year over year despite changes in product assortment. We improved our adjusted EBITDA by 73%, reaching EUR6 million at an adjusted EBITDA margin of 6.1.

This marks an increase of of 2.5 percentage points year over year. Free cash flow was positive at €10,000,000 in Q3, and we ended the third quarter with a net cash position of €58,000,000 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 own product brand, the Western Collection, grew 19% year over year, which resulted in an all time high group GMV share of 66. As part of our geographic expansion, we achieved our full year objective of launching 10 new countries, and we continued our store expansion with the opening of seven new stores this year.

The operational progress is fully in line with our targets. We confirm our financial guidance for 2025 and are currently expecting the adjusted EBITDA at the upper end of this guidance. We also confirm 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 started executing 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 to be able to scale with operating leverage from 2026 onwards. 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 strengthen 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 Westin Collection. The Westin 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 group GMV share of 66%.

This represented a total GMV of €75,000,000 in Q3. The 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’re 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, the size improvements in product assortment, we see offline store expansion as a lever for share gains in existing markets.

In 2025, we opened a total of seven offline stores. In Q3 alone, we successfully opened three standalone stores located in Munich, Berlin and Cologne, as well as two store in stores, one in Dusseldorf and one in Copenhagen. Before I share an update on our geographic expansion, let me show you some impressions of our newly opened stores. In Munich, we opened a so called warm up store. It is more than just a pop up.

It’s a preview of our first permanent Munich store coming next year in the heart of the city. Munich is especially meaningful to us as it’s where our journey began and where many of our central teams are based, enabling us to learn and refine the customer experience even faster. Next to Munich, we’re also very proud to now have a permanent standalone store in Berlin. It’s located on the iconic Kurfurstendamm bringing Westing to life in the heart of Westing’s Berlin’s Western City Center. On top, we opened our standalone store in Cologne, one of Germany’s busiest shopping cities.

Next to our standalone stores, we also opened two store in stores. One is located at Boininger Dusseldorf on the prestigious Koenigsallee. Following the successful pilot of our store in store concept in Stuttgart in 2024, we are proud to continue our partnership with Boininger, arguably Germany’s leading fashion and lifestyle department store chain. The other one is our very first store in store in Scandinavia at the iconic Illumsbullikus flagship store in Copenhagen. This opening marks a new milestone in our Nurex expansion following the successful launch of Westwing in Denmark, Sweden, Norway and Finland earlier this year.

By partnering with Illumsbullikus, a destination known for timeless elegance and Danish design culture, we are strengthening our presence in The Nordics and connecting with a design savvy audience in a uniquely meaningful way. Overall, offline stores help us to further strengthen brand presence, positioning and top line, providing a holistic shopping experience across the multi touch customer journey supports Westing’s market share gains. 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 and furniture are often very large and require many touch points for conversion. On the next slide, you can see impressions of the official opening of our Berlin store, where we welcomed over two fifty friends of the brand, key opinion leaders, press and content creators from the world of fashion, art, design and lifestyle.

The event generated strong positive press coverage and a high volume of social content, amplifying our brand visibility. 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 are happy to announce that we successfully opened 10 new countries this year reaching our full year objectives. 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. Translation supported by AI, 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. We do not plan to open any additional countries until year end as our focus is now fully on the most important season of the year in Home and Living.

To provide for a glimpse into our twenty twenty five country expansion, let me share some impressions of our Nordics launch event. At the August, we celebrated our Nordics launch with 200 guests, including brand partners and leading voices across fashion, design, art and lifestyle. From a styled steamboat experience to sculptural installations at the West Wing Villa, the event showcased our passion for timeless design and cultural connection. It generated extensive positive media coverage and inspired highly shareable social content across the region, achieving exceptional reach both online and offline. This milestone marks the start of our journey in Scandinavia, bringing beautiful living to even more homes.

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

Sebastian Vestrisch, CFO, Westwing Group SE: Thank you, Andreas, and good morning, everyone. I’m Sebastian Vestrich, the CFO of Westwing. Let me start with details on our top line. Our GMV increased by 5.4% year over year, while revenue was at plus 3.4% year over year despite the negative impact of the changes to our product assortment. I want to highlight here again what Andreas mentioned earlier in this call.

Our Western collection business continued to grow by 19% year over year. Now let me also briefly comment on Q3 top line development on segment level. The DACH segment saw a revenue decline of 2.1%, while the International segment’s revenue increased by 10.8%. There are two 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.

The assortment offered in the DACH segment remained unchanged until late twenty twenty four. And as a result, last year’s baseline for DACH is stronger than that of the International segment. Secondly, the International segment benefited from additional revenue generated by our geographic expansion with 10 new countries launched in the first nine months of 2025. Regarding top line outlook for Q4, we remain cautious as the performance depends largely on the month of November, including the upcoming Black Friday sales events. Now let me continue with an overview of our profitability development.

In Q3, we improved our adjusted EBITDA by €3,000,000 to €6,000,000 which represents an increase of 73% year over year. In order to show profitability development before D and A, we also included the EBIT development on an adjustment basis on the right side of the slide. It is also clearly positive at €3,000,000 and showed an even greater increase of €4,000,000 year over year. Excluding adjustments, Q3 showed a negative EBIT of minus €4,000,000 The adjustment mainly includes the negative impact of a higher fair value of employee stock option programs due to the significant share price increase in Q3. The impact amounted to minus €6,000,000 which was noncash effective.

It is important to highlight that we are actively reducing the number of outstanding stock options to reduce both dilution risk for our shareholders as well as negative P and L impact from potential further share price increases. Let us now take a look at our P and L margins. In the first nine months of 2025, we realized an adjusted EBITDA margin of 7%. This is a significant improvement of 2.6 percentage points compared to the previous year’s period in the absence of any scale effects. Let us now focus on the P and L 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 structure in Q3 in almost all areas, leading to a strong improvement in adjusted EBITDA margin by 2.5 percentage points year over year to 6.1%. Our gross margin improved by 2.2 percentage points year over year, mainly due to strong West Wing Collection share gains. The fulfillment ratio improved slightly by 0.1 percentage points year over year. The fulfillment ratio includes negative effects from expansion as we accept lower logistics line haul utilization from our central warehouse to the new countries in the beginning. This ensures short delivery times also for our customers in the new markets, but comes at higher cost per order.

With increasing scale, this negative effect will decrease. Overall, this net on increase in contribution margin of 2.3 percentage points to 33.9%, a really strong result for our third quarter. Our marketing ratio increased slightly by 0.3 percentage points year over year to minus 13.4%. The main reason for the increase is our investment into expansion. Our G and A ratio, which includes other result, improved by 2.3 percentage points to minus 17.9%, reflecting the positive effects from our 2024 complexity reduction measures.

This led to an adjusted EBIT margin of 2.6 in Q3, up 4.3 percentage points year over year. G and A decreased by 1.8 percentage points year over year, primarily driven by the full depreciation of legacy technology assets. Overall, as mentioned before, our Q3 adjusted EBITDA margin improved by 2.5 percentage points year over year to 6.1%. The adjustments made in Q3 were minor except for the higher fair value of our stock option programs following the significant share price increase, which I mentioned before. An overview of these adjustments as well as the unadjusted consolidated income statements can be found in the appendix to this presentation and in our Q3 financial report.

Let’s move on to profitability on segment level. In Q3, which is displayed on the right hand side of the slide, we saw a strong improvement in adjusted EBITDA margin in both segments. In the DACH segment, adjusted EBITDA margin improved by 3.6 percentage points year over year to 6%. In the International segment, we were able to improve our adjusted EBITDA margin by 1.2 percentage points year over year to 6.4%. The improvement in profitability reflects the successful implementation of our three step value creation plan across both segments.

Let’s also briefly look at our earnings per share development. What you can see on this slide is the last twelve months data since Q1 twenty twenty four. The dark green bars showing unadjusted earnings per share, the light green bars showing earnings per share on an adjusted basis. Adjustment includes changes in fair value of the aforementioned employee stock option programs as well as restructuring expenses. We’re happy to be able to show that the very positive development continued also in Q3 twenty twenty five.

The dent in the unadjusted earnings per share in Q3 stems again from the steep increase in Western’s share price in Q3. Let us now move from profitability to our balance sheet and take a look at our net working capital. By the end of Q3, net working capital stood at minus €1,000,000 which is €4,000,000 higher compared to Q3 twenty twenty four, but €7,000,000 lower versus the previous quarter. Compared to the previous year, we still had higher inventory, mostly driven by the newly introduced Western collection items that we already mentioned in previous calls. Compared to the previous quarter, we managed to reduce inventory levels slightly despite the typical seasonal inventory buildup towards the high season, and we improved trade payables as well as contract liabilities.

We expect net working capital to improve further in Q4 due to typical seasonal effects and the respective positive impact on cash flow. On the next slide, you can see CapEx and CapEx ratio for the first nine months as well as for the 2025 compared to the same period in 2024. CapEx remained broadly stable year over year in 2025, both for the first nine months and in Q3 specifically. However, when comparing 2025, 2024, we see a shift between investments into property, plant and equipment and intangible assets. While in 2025, we invested more into store openings, we were able to reduce CapEx for internally developed tech assets as we move to a SaaS based tech platform.

Let us now take a look at our net cash position. We are pleased to report a strong net cash position of €58,000,000 at the September, which is €8,000,000 more compared to the June. Overall, free cash flow was €10,000,000 in Q3. Taking lease payments of €3,000,000 into account, we had a positive free cash flow after lease payments of €8,000,000 in Q3. Our balance sheet remains strong with no debt other than the IFRS 16 lease obligations and IFRS two liabilities from cash settled stock option programs.

We remain 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 comment on the financial guidance for 2025, which we published at the March. Our performance in the third quarter and the first nine months of twenty twenty five 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 further towards the 2025. But as mentioned earlier, top line in Q4 depends largely on a successful November and the Black Friday sales event. In terms of profitability, we expect a typical seasonal peak in the upcoming fourth quarter. To summarize, we are well on track to deliver on our 2025 guidance in terms of revenue and profitability and also in terms of a clearly positive double digit free cash flow. Given the strong performance in the first nine months with an adjusted EBITDA margin of 7% so far, we currently expect to end the year at the upper end of the adjusted EBITDA guidance.

This brings me to our midterm 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 while continuously improving profitability. Significant growth means a high single to double digit growth rate, driven by our expansion initiatives and the anticipated easing of negative impacts from the product assortment changes. In terms of profitability, we expect scale effects as we grow as well as positive effects from our improved 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 will enable us to unlock the full value potential of Westgreen. I’m handing over to Andreas now to conclude our presentation with our investment highlights.

Andreas Hoehnning, CEO, Westwing Group SE: Thank you, Sebastian. Let me briefly recap the 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 midterm 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. Ladies and gentlemen, we will now move on to your questions. And we already have one person who wants to ask a question. This would be Volker Bossel from Baader Bank. Mr.

Bossel, please go ahead.

Volker Bossel, Analyst, Baader Bank: Yes. Hello. Good morning. Volker Bossel from Baader Bank speaking. So first of all, of course, great results and congratulations, especially that you are able to specify your guidance to the upper end in this challenging times, very an outstanding achievement.

Perfect. I would have three questions, if I may, starting with your still decline in orders and number of active customers year over year. So how do you see the momentum evolving? Do you see an improving momentum means is the worst triggered by the transformation process is behind you, so to say? I mean your outlook on the yes, forward looking about these two KPIs, please, would be the first question.

Second question is on your country expansion. Yes, great to hear that you achieved also here the upper end of your given guidance range, so to say, to 10, so 10 new countries. Can you already share initial developments in the new countries? I think Portugal is most advanced as it was the first country which you opened. How do you see the acquisition of new customers and incremental sales is progressing here or in other countries, perhaps U.

S. Have first thoughts already for us on that? And the third question would be on the new physical stores, which you opened. Do you see here an increased online activity, be it in click rates or be it in sales in the catchment areas of the stores? So do you have this granularity of data on hand to share, yes, if basically the stores do what they are supposed to do, meaning drive sales and, yes, brand retention?

Thanks.

Andreas Hoehnning, CEO, Westwing Group SE: Thank you, Volker, for your questions. And also, you for the congrats. We’re also pleased about the development of the EBITDA. So the first question is related to decline and in orders and number of customers. And your question was how this will be evolving, whether the West is already over.

So generally spoken, the decline in order and number of customers is expected to ease in the same way as the negative GMV effect from the change in product assortment is also expected to ease. And we did this in a phased approach. So first, we changed the product assortment quite heavily in especially in Italy and Spain, where we also closed offices and warehouses and went from a local very local assortment to a global assortment. And there, we saw a pretty steep decline in number of customers simply because the offering that we had there beforehand to customers was different to the one that we have today. And the churn in customers was quite significant.

This has already eased in those countries quite significantly. We’re actually happy with the development now. And then the subsequent development was that we also changed the product assortment in our larger markets Germany and also CEE, by the way, so DACH and CEE a bit later. And this effect we are seeing this year, this is also why we were so cautious with our guidance on top line this year. And at the moment, we are fully in line with that.

And it stems from exactly your point, the number of orders and number of customers, it is the same reason. You can also see that in the increase in average order value that we are reporting. Because there, you can see that with the shift from a more impulse buying and smaller products to more Western collection and more furniture, we see a strong growth in average order value And the decline of the number of orders and number of customers as it eased in Italy and Spain, it’s also easing in Germany or in DACH and in CE. So we can expect that the worst is over, as you say. And into next year, we actually expect a much, much lower effect of that, if even any.

I hope that answers your question, number one. Number two was on country expansion. You were asking about the development here. So as you rightly said, Portugal was the first one. And when we look now at the countries that we opened this year, so the 10 new countries, we, of course, compare the development of those to the one that we saw in Portugal in the first months and quarters.

And we’re actually very pleased with the development. It’s in line with what we saw in Portugal. We see new customer growth there. Everything that we report from there is obviously incremental. That’s beauty of opening new countries.

And our kind of the first results in terms of absolute numbers that we won’t share now, next year, I think we will give a bit more indication because it’s very early still. But when you look at the absolute numbers, we’re actually really happy with what we see in Sweden and Denmark, in Norway and in Croatia also despite Norway and Croatia actually being relatively small markets, but we see really nice developments there. We’ll give more updates throughout next year when the numbers become more meaningful because at the moment, though we are happy, the relation to our overall GMV is, of course, still very small. So that was your second question on country expansion. And the third one was on the physical locations on our stores.

And here you asked whether we see besides the top line that we make in the stores, whether we also see an increased online activity in the catchment areas, and that’s exactly the case. We don’t share any numbers on the online catchment area uplift. Also for the reason that we don’t have an AB test in place, what we do is we compare catchment areas with stores against the catchment areas without stores. And there, we can see a significant effect of the stores. But of course, it’s not 100% proof of this effect.

But for instance, when we have Hamburg and Stuttgart as the only stores in Germany, those two cash in areas were the best in the whole of Germany. The reason behind this is obviously, what you also pointed towards is that we have sales in the stores themselves. And then we also have the effect that is what we call also a marketing effect. So when people walk past our stores, it’s like a billboard that’s out there. Or even when they walk into the store and they have a look at products, they don’t necessarily decide straight away to convert to a buyer.

That often happens only after their visit to the store. We have found that, for instance, when customers decide to buy a sofa, there are roughly 30 touch points involved between the first very first one and the purchase in the end. So these are many, many online touch points and increasingly so also offline touch points. But this explains why we see this catchment area uplift in the cities where we have the stores. So it’s absolutely positive.

I can confirm what you said. Does that answer your three questions?

Volker Bossel, Analyst, Baader Bank: Yes. Thank you very much. And I would have a follow-up, more general remark on your Page 23, you give an indication on 26 already, very much appreciate. Thank you very much. On market, you have a stable or a flat arrow, so to say, or how to say.

I mean question is, for do you see any do you see no market tailwind but also no market headwind for next year? So what is your general assumption behind your 26% guidance in regards to what is the market providing?

Andreas Hoehnning, CEO, Westwing Group SE: Thanks, Volker. For question on market development, how we see that in 2026, I’m handing over to Sebastian.

Sebastian Vestrisch, CFO, Westwing Group SE: Yes. Volker, thanks for your question on our view on the overall market development. So we expect overall no tailwind from overall consumer sentiment and market growth. But of course, there will be regional differences. So there are some areas within Europe, for example, where I think the overall conditions are more promising compared to what we see, for example, in the DAC segment, where when you look at consumer sentiment indicators, there is no real improvement.

And that is why we remain cautious. And our outlook or ambition for 2026, as we already mentioned in earlier calls, is based on our strength and executing our three step value creation plan with the share gains in existing markets and the expansion to new countries. And so far, we feel very confident to achieve those targets based on the financial and operational progress that we achieved so far in 2025.

Volker Bossel, Analyst, Baader Bank: Yes, well understood. Thank you very much. All the best for the important fourth quarter. Thank you.

Conference Moderator: Thank you very much. Next question comes from Jose Antonio Perez Parada from NewWave AG. May we have your question please?

Jose Antonio Perez Parada, Analyst, NewWave AG: Thank you very much, guys. Congratulations again on the strong quarter. I would like to ask for I have a couple of questions, if that’s okay. I will just land them. The first of them is, if has anything changed regarding the capital allocation over the quarter or if there’s anything it’s important to know for the near future?

The second question will be that we already understand or we see that there will be no further geographic expansions in the rest of 2025. But could you give us any notion on the direction of the geographic expansion in 2026, maybe towards any region? That’s another one. And the third one is that you told us earlier that fulfillment ratio included some negative effects from expansion. So I would like to ask you again if you could please guide me through the underlying dynamic again.

Sebastian clearly mentioned something about the centralized distribution center in Poland, but I would like to grab the logic again. That would be it.

Andreas Hoehnning, CEO, Westwing Group SE: Thank you, Jose Antonio, for your questions. I’m going to hand over to Sebastian for other questions on the change to capital allocation and on the fulfillment ratio. And before I do that, I’ll just briefly comment on your question on expansion. So you were wondering what the expansion in 2026 might look like. We’re not going to share any specifics, but our general ambition is to be present in nearly all countries in Europe.

And this also includes Great Britain, but of course, Great Britain is a bit more complex because it’s not in the EU, and it also requires a bit more complex logistics setup. So we will likely expand also geographically in 2026, and we’ll share more details on that when the time is right to do it.

Jose Antonio Perez Parada, Analyst, NewWave AG: Clearly answers my questions. Thank you so much, Andreas.

Andreas Hoehnning, CEO, Westwing Group SE: Thank you, Jose Antonio. And I hand over to Sebastian for capital allocation and fulfillment.

Sebastian Vestrisch, CFO, Westwing Group SE: Okay. Yes. Thanks a lot for your question. Let me start with the fulfillment question related to our expansion countries. So line haul means the trucks that we sent from our central logistics center in Poland, for example, to Portugal.

And for new markets, we decided to already send those trucks even though they might not be fully utilized. So that means, of course, that the cost per item that we ship is higher, but this allows us to ensure better shipping times for our customers. So we accept the higher costs for better customer experience. As we scale those new countries, Portugal, Nordics, etcetera, of course, also then the utilization of those trucks improves, so the cost should go down. And this

Andreas Hoehnning, CEO, Westwing Group SE: is the effect that we briefly mentioned earlier. And that’s also the effect that we are seeing in Portugal because there we already have significant volumes. We also combine this with Spain. So in Portugal, actually see a very low logistics costs. And the same will happen to, for instance, the Nordics region because there we are also able to combine certain shipments.

Jose Antonio Perez Parada, Analyst, NewWave AG: Guys. You very much. Yes, it’s more than clear. It’s crystal clear.

Sebastian Vestrisch, CFO, Westwing Group SE: Okay. Then on your question on the capital allocation strategy and if anything changed over the quarter. So no, our capital allocation priorities remain disciplined and focused on long term value creation, of course. So in line with this approach, we have demonstrated our commitment to shareholder value already in the past when we performed some share buybacks. And we may consider further measures going forward, but this, of course, is subject to market conditions and also regulatory requirements.

So overall, no change to our capital allocation strategy.

Jose Antonio Perez Parada, Analyst, NewWave AG: Thank you very much, Sebastian. That will be it for on my side. And again, congratulations on the strong quarter and lots of success for the closing of the year and the upcoming holiday season.

Andreas Hoehnning, CEO, Westwing Group SE: Thank you so much, Jose.

Conference Moderator: Thank you very much. At the moment, there seem to be no further questions. There we go. Once again, Jose Antonio, please state your question.

Jose Antonio Perez Parada, Analyst, NewWave AG: Thank you very much. Just taking advantage of the final question. You already answered some of the question to Volka, but we understand the underlying dynamic of the customer and orders. However, if I could have a little bit more color on the underlying dynamics of customer number and number of orders, given that they decreased. For example, our expectation of number of customers was lower, and the expectation of orders was a little bit lower as well.

So how does it look like going forward or what can we expect?

Andreas Hoehnning, CEO, Westwing Group SE: Jose, thank you for your question. Let me better understand. So the you want to have you would like to have an outlook on the development of this in the future in more specifics. Is this what you would like to have?

Jose Antonio Perez Parada, Analyst, NewWave AG: Yes, that would be perfect. I fully understand the dynamic behind it, that we expect we are expecting less customers, less orders due to the less impulse buy from smaller ticket items. But how does it, in general, look like going forward? Or what can we expect in Yes.

Andreas Hoehnning, CEO, Westwing Group SE: So what we absolutely see for the future is that we will return to active customer growth and also to the growth of the number of orders. So this is absolutely the plan, not just from the expansion countries where we obviously see every customer that we gain there as a new customer, right? But also for the existing markets. So we have a clear commitment also to share gains in existing markets. And this, in the end, we cannot do without also active customer growth.

We believe that a better assortment, better marketing and last but not least, also our physical presence, for instance, in Germany, will drive this. And actually, we see the beginning of this. So the stores enable us also to convince our customers that we previously weren’t able to convince maybe because they required an offline step in their journey to actually then purchase with us. And as we came from nine offline stores, for instance, from sorry, two offline stores at the beginning of this year and are now at nine, you can imagine that the full year effect can only be seen next year and actually in the years to come because the store has a certain trajectory of the first three, four years of its existence. It needs to establish itself, if you like, in a city.

So this is actually one important reason why we believe that also in the existing geographies, we will be increasing the number of active customers. It’s a matter of time. We believe that next year, so we’re not going to give a guidance on this, but we believe that next year will look a lot more positive than this year due to the easing of the effect that you also mentioned beforehand and the growing effects from our expansion measures plus stores. So no specific, yes, we don’t have a specific forecast here, but you can expect that this significantly improves. And absolutely, our commitment is to going back to increasing number of active customers and orders.

Jose Antonio Perez Parada, Analyst, NewWave AG: Thank you very much. Yes, it’s super helpful.

Andreas Hoehnning, CEO, Westwing Group SE: Okay. Thanks for the question.

Conference Moderator: Thank you very much. Andreas and Sebastian are more than happy to answer your questions. I guess that is not the case. And for some final words, I would like to hand over back to the management.

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

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