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Original-Research: Westwing Group SE - from NuWays AG

02.10.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
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: 02.10.2025
Target price: EUR 20.00
Target price on sight of: 12 months
Last rating change:
Analyst: Henry Wendisch

Reaping the rewards of a successful transformation

We hosted WEW at our European MidCap Event in Paris. Next to the ongoing
business model transformation and capital allocation, these were the key
takeaways:

Country expansion with low-risk and high opportunities: Following the
successful blue-print of Portugal (profitable after only one year), WEW has
expanded to ten more countries YTD. In our view, the ongoing expansion
serves as a low-risk, high opportunity growth pillar for WEW: when starting
a new country, 1) no CAPEX and no large fixed costs and 2) only low-risk
marketing investments are incurred. Mind you, as WEW's social media presence
is the world's largest inspirational account in the home & living segment,
the customers in the new country often know the brand already.

Nevertheless, WEW will run brand awareness and targeted marketing campaigns
which will be steered flexibly via return on net spend targets. Therefore,
WEW could easily step away, should the expansion not go as planned. However,
we regard this as unlikely, given that the WEW collection is growing across
all countries, showing that the more global product assortments meets a
homogenous demand in Europe and that the business is repeatable in other
European countries. In 2026e, the expansion into the large UK market might
also be in the cards.

Offline stores to foster loyalty and brand awareness. Next to country
expansions, WEW is on track to open seven offline stores this year, as WEW's
products and the positioning as a premium brand, require physical
touchpoints. Moreover, this enhances a holistic brand and product experience
in its key regions (e.g. Munich, Hamburg, Paris, Berlin), ultimately
increasing brand loyalty. Also, on a standalone basis, the stores need to
earn money and are not mere marketing channels, which should ultimately
support and not weigh on the current margin expansion.

Return to growth around the corner. Following the start of the product
assortment change in Q3'24, Q3'25e should already benefit from a
bottoming-out effect. Mind you, the higher margin WEW collection GMV rose by
18% yoy in Q2'25e, whereas third party product GMV declined by 28% yoy. On
top of that effect, we expect a positive impact from country expansions, but
to a low extent in the next quarters. However, FY'26e and 27e should
experience more pronounced country expansion effects, leading to overall
high single-digit growth rates, expected by us. Naturally, this comes with
positive scale effects and operating leverage which ultimately increase
margins and cash generation further.

Despite the recent share price momentum, as the market seems to better
realize WEW's attractive risk-return profile, shares are still heavily
undervalued in our view. Trading at only 3.5x FY'26e adj. EBITDA seems
highly unjustified for a growing, margin expansive and cash generative
e-commerce business. Against this backdrop, we strongly confirm our BUY
recommendation with an unchanged PT of EUR 20.00, based on DCF.

You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=84757c2006051560693b50466a313300
For additional information visit our website:
https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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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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2207202 02.10.2025 CET/CEST

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