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home24 SE: home24 delivers significant growth and achieves key-milestones in Q1 2019

2019-05-28 08:00:02

DGAP-News: home24 SE / Key word(s): Quarterly / Interim Statement/Quarter Results

28.05.2019 / 08:00
The issuer is solely responsible for the content of this announcement.


home24 delivers significant growth and achieves key-milestones in Q1 2019

  • Strong increase in revenue to EUR 93 million in Q1 2019, representing 12% growth at constant currency and 10% growth including foreign currency effects compared with the very strong Q1 2018
  • Warehouse capacity in Europe will increase by c. 70% which has negative effect on profitability in Q1 2019 through ramp-up costs
  • Key-Milestones for Q1 2019 achieved, outlook for full financial year 2019 confirmed
  • Business in Brazil remains profitable in Q1 2019 based on adjusted EBITDA margin

Berlin, 28 May 2019 - home24 SE ("home24", the "Company") significantly increased its revenue in Q1 2019 by 12% at constant currency compared with the same quarter of the previous year to EUR 93 million. Even including foreign currency effects, the increase was a strong 10% over the same period last year. Both the number of active customers and incoming orders increased compared with Q1 2018. This development is particularly noteworthy in view of a very strong Q1 2018. Since then, customer demand in the entire furniture industry has been affected by a more challenging market environment. The adjusted EBITDA margin in Q1 2019 was -16% (previous year: -6%). This development is due to the ramp-up costs of investments initiated in the second half of 2018 to increase growth and efficiencies in the coming quarters. The business in Brazil achieved strong growth of 35% at constant currency in Q1 2019 compared with the same period of the previous year. As in the full year 2018, Brazil was profitable in the first three months of 2019 based on adjusted EBITDA margin.

Key-Milestones have been achieved

home24 has already successfully achieved important goals for this year, in which it had invested in the past few months. These include the opening of the logistics center in Halle (Saale) and the new mega outlet in Cologne. The new logistics center in Halle (Saale) will increase warehouse capacity in Europe by c. 70%, enabling orders to be processed even more quickly and cost-minimizing. Among other things, ABC-classification allowing to pick outgoing goods more efficiently, and a tugger train, will contribute to the achievement of this goal. The new mega outlet in Cologne is home24 group's largest outlet to date. Customers can purchase exhibits, photo samples and returns, which show little or no damage, with a discount of up to 80% compared to the regular online price of the products. The home24 group has strategically located its outlets regionally across the core market Germany, so that returns can be resold without long-haul transportation in the future. Although these investments had a negative impact on the results in Q1 2019 and will partly also be noticeable in Q2 2019, they will enable highly efficient logistics plus the realization of future growth as of the second half of the year 2019.

In Brazil, the local subsidiaries of home24 are tapping into an additional growth area by successfully expanding its omni channel model under the "BigLar" brand. This enables the Company to adapt to the characteristics of the local furniture market and to approach customers with low and medium income who have little online buying experience. The local subsidiaries of home24 will operate own showrooms and cooperate with partner stores in order to offer additional interior advice and the possibility to "look and feel" the furniture. Purchases in the stores will still be made at a web-terminal. In Q1 2019, revenue from "BigLar" contributed c. 5% to revenues in the region.

home24 continuously improves its marketing activities by focusing even more on automation. Through comprehensive data analysis, purchase recommendations can now be dedicated more specifically to audiences through different marketing channels, thus improving customer acquisition and retention.

"We have successfully completed several important investment projects and thus created the basis for continued growth and profitability improvements," says Marc Appelhoff, Co-CEO of home24. "The business in Brazil remains operationally profitable in the first three months of 2019, as in the full financial year 2018. We are determined to continue this path and aim to break even for the Group as a whole on the basis of adjusted EBITDA at the end of the year."

The old ERP system was successfully replaced by a highly scalable new ERP system in the past financial year. In 2018, this made it necessary to operate both systems for a period of time, which had a negative impact on results. The old ERP system has now been completely shut down.

Outlook

home24 confirms its outlook and expects revenue growth at constant currency in 2019 to reach or slightly exceed the 2018 growth rate. The Company also aims to break even at the end of the year on the basis of adjusted EBITDA.

 

About home24

home24 is the leading pure-play home & living e-commerce platform in Continental Europe and Brazil. With over 100.000 article numbers from more than 500 manufacturers, home24 offers a unique selection of large and small furniture pieces, garden furniture, mattresses and lighting. home24 is headquartered in Berlin and employs more than 1.000 people worldwide. The Company is active in seven European markets: Germany, France, Austria, the Netherlands, Switzerland, Belgium and Italy. home24 is also active in Brazil under the "Mobly" brand. In Europe, the Company delivers its products - regardless of size and weight - free of charge to the homes of its customers and also offers free returns. home24's product range consists of numerous brands, including a large number of private labels. home24 is listed on the Frankfurt Stock Exchange (ISIN DE000A14KEB5). For more information, please visit the Company's website at www.home24.com.


Media contact:
Viktoria Solms
viktoria.solms@home24.de
+49 162 244 07 65

Investor contact:
Philipp Steinhäuser
ir@home24.de
+49 30 201 634 728


Legal disclaimer:

This publication contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the Company's management. Forward-looking statements contain no guarantee for the occurrence of future results and developments and are associated with known and unknown risks and uncertainties. Due to various factors, actual future results, developments and events may differ materially from those described in these statements; neither the Company nor any other person accepts any responsibility whatsoever for the accuracy of the opinions or underlying assumptions contained in this publication. The Company assumes no obligation to update the forward-looking statements contained in this publication.



28.05.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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