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Original-Research: Westwing Group SE - from NuWays AG

07.11.2025 / 09:00 CET/CEST
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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: 07.11.2025
Target price: EUR 22.00
Target price on sight of: 12 months
Last rating change:
Analyst: Henry Wendisch / Antonio Perez

Q3 Review: topline and margin beat // PT increased to EUR 22

Yesterday, WEW released very strong Q3 figures, beating our topline and
margin estimates. In detail:

Return to topline growth powered by geographic expansion. As anticipated,
the shift in product assortment continued to weigh on GMV during Q3,
resulting in a 9% yoy decline in active customers to 1.16m (eNuW: 1.23m) and
a corresponding 14% drop in total orders to 460K (eNuW: 420k). This was
partially offset by a higher average basket size of EUR 252 (+22% yoy). Thus,
Q3 GMV landed at EUR 115m (+5.5% yoy), turning around the H1 decline (-4.2%
yoy). Accordingly, sales grew 3% yoy to EUR 99m. Regionally, DACH declined by
2% yoy to EUR 52m, as the product reassortment was launched later in the
region, whereas International took flight, climbing 11% yoy to EUR 47m as new
markets contributed significantly.

Westwing Collection share reaches new high. After posting a record 65% GMV
share of own products in Q2, WEW reached a new high of 66% (+8pp yoy), which
implies a 20% yoy growth in own products GMV and a 15% yoy decline in third
party products GMV. This is beneficial to gross margin, as the Westwing
Collection products carry structurally higher margins than third party
products. Consequently, gross profit in Q3 increased by 8% yoy to EUR 52m,
with an implied gross margin of 52.7% (+2.2pp yoy).

Top-line growth and gross margin fuel EBITDA upside. Driven by top-line
growth and gross margin expansion, contribution profit increased by 11% to EUR
33.6m (33.9% margin; +2.3pp yoy), which implies there were little efficiency
gains in fulfillment due to initially lower fulfillment efficiency in the
recently launched countries. G&A expense ratio increased 2pp yoy partly due
to increased SBPs (adjusted for a higher stock price). Notwithstanding these
factors, the company delivered an impressive adj. EBITDA growth of 74% yoy
to EUR 6.1m (6.2% margin; +2.5pp yoy).

Positive FCF driven by sound WC management. In Q3, WEW reported a positive
FCF of EUR 10m, mainly driven by a better cash conversion cycle (lower
receivables, higher payables) and a tight inventory management, thereby
avoiding the inventory buildup we had previously expected for the upcoming
holiday period. We still see positive FCF generation for Q4 (eNuW: EUR 23m,
thus EUR 17m for FY '25e) and remain confident that WEW could generate
double-digit FCF for FY Ž25, in line with managementŽs guidance.

On its way to reach the upper end of FY Ž25 guidance. In light of Q3
results, we have updated our FY Ž25 estimates to EUR 447m (0.5% yoy) in sales
and adj. EBITDA of EUR 34.8m (7.8% margin, +2.4pp yoy), which corresponds to
the upper end of the guidance, as management signaled after the results.

Overall, the turnaround plan continues to materialize, with earlier than
anticipated top-line growth coupled with key cost drivers trending in the
right direction. Despite the significant stock price hike after the results,
we still see ample room for meaningful re-rating, highlighted by still cheap
multiples (i.e. 4.5x EBITDA FY '26). Therefore, we reiterate our BUY rating,
keep WEW in our AlphaList and increase our PT of EUR 22.00, based on DCF.

You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=0892ab2171d9c54dc0ae019e9f0cf1f3
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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2225672 07.11.2025 CET/CEST

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