^Original-Research: Westwing Group SE - from NuWays AG08.11.2024 / 09:01 CET/CESTDissemination of a Research, transmitted by EQS News - a service of EQSGroup AG.The issuer is solely responsible for the content of this research. Theresult of this research does not constitute investment advice or aninvitation to conclude certain stock exchange transactions.---------------------------------------------------------------------------Classification of NuWays AG to Westwing Group SE Company Name: Westwing Group SE ISIN: DE000A2N4H07 Reason for the research: Update Recommendation: Buy from: 08.11.2024 Target price: EUR 17.50 Target price on sight of: 12 months Last rating change: Analyst: Henry WendischQ3 review: benefitting change in mix; chg. est.Topic: Westwing released solid Q3 results yesterday, which were slightlyabove our sales estimates, but in line at adj. EBITDA. Overall, the productand cost mix both showed improvements, positioning WEW well for theimportant Q4 ahead and beyond. In detail:Q3 sales increased by 3% yoy to EUR 96m (eNuW: EUR 90m), driven by growth inactive customers (+1% yoy to 1.28m) and a surging basket size (+16% yoy to EUR206), which offset the trend of declining number of orders (-13% yoy). DACHgrew 4%, implying continued market share gains amid ongoing challenges inthe German online Home & Living market (-5% yoy in DACH; +9ppoutperformance), whereas International (+2% yoy) was burdened by the switchin product assortment in the short-term.Adj. EBITDA grew by 46% yoy to EUR 4m (eNuW: EUR 4.1m; 9M: EUR 13.7m, +15% yoy),thanks to an improved cost mix. Next to a rising gross margin (+0.7pp,thanks to the ongoing rise of the Westwing collection share by 10pp to 58%),the larger lever was a decrease in the fulfilment cost ratio by 2.7pp. Inreturn, WEW spent 20% yoy more in brand marketing (especially in DACH), toprepare for the seasonally important Q4. Within the segments, DACH's adj.EBITDA of EUR 1.3m (2.4% margin) was burdened by the aforementioned marketingcampaign, whereas International expanded EBITDA to EUR 2.4m (5.2% margin),mainly driven by the strong increase of the Westwing collection share.FCF came in at EUR -6m in Q3 and was burdened by the seasonal inventory rampup (EUR +6m qoq WC effect in Q3). Per 9M, FCF thus stood at EUR -9m, containingalready some EUR 5m of the EUR 10-12m one-off cash effective SaaS tech-platformrestructuring. As management guides for FCF break even in FY'24e, thisimplies a positive FCF of EUR 9m (eNuW: EUR 10m; EUR 14-16m FCF excl. one-offs),on the back of positive WC reversals, but also due to a better cost mix.The fact that WEW was able to show growth despite an ongoing market decline,ultimately increasing market share, while also turning to a leaner costbase, shows that management is on track to prepare the company fordisproportionate growth and operating leverage should consumer sentimentpick up again. Moreover, the more than healthy balance sheet (net cashexplains 45% of market cap) provides the basis for further countryexpansions. Therefore, we reiterate our BUY recommendation with an unchangedPT of EUR 17.50, based on DCF. - analyst change -You can download the research here: http://www.more-ir.de/d/31235.pdfFor additional information visit our website: www.nuways-ag.com/researchContact for questions:NuWays AG - Equity ResearchWeb: www.nuways-ag.comEmail: research@nuways-ag.comLinkedIn: https://www.linkedin.com/company/nuwaysagAdresse: Mittelweg 16-17, 20148 Hamburg, Germany++++++++++Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschlussbestimmter Börsengeschäfte.Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim obenanalysierten Unternehmen befinden sich in der vollständigen Analyse.++++++++++---------------------------------------------------------------------------The EQS Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Archive at www.eqs-news.com---------------------------------------------------------------------------2025461 08.11.2024 CET/CEST°