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home24 SE: home24 shows strong growth in Q1 2020 and in parallel increases the adjusted EBITDA margin by 13 percentage points compared to the previous year

2020-05-12 07:40:02

DGAP-News: home24 SE / Key word(s): Quarterly / Interim Statement/Quarter Results
12.05.2020 / 07:40
The issuer is solely responsible for the content of this announcement.

home24 shows strong growth in Q1 2020 and in parallel increases
the adjusted EBITDA margin by 13 percentage points compared to
the previous year

  • Currency-adjusted revenue growth in Q1 2020 of 14% to EUR 103 million compared to Q1 2019, despite 10% reduction in marketing expenses.
  • Significant improvement of the adjusted EBITDA margin of 13 percentage points in Q1 2020, with adjusted EBITDA margin of -3% compared to -16% in Q1 2019.
  • Positive cash flow from operating activities in Q1 2020 for the second quarter in a row - cash position of EUR 43 million at the end of March 2020.
  • One-time effects and measures related to the COVID-19 pandemic impacted Q1 2020: e.g. supply chain restrictions, closure of retail stores in Europe and Brazil and volatility in customer demand at the beginning of the lock-down period.
  • Online order intake benefits from an increase in demand: accelerated year-over-year growth in April of 88% in Europe and 39% in Brazil. Q2 2020 is expected to be profitable on the adjusted EBITDA basis.
Berlin, 12 May 2020 - In Q1 2020, home24 SE ("home24", the "Company") generated group revenues of EUR 103 million (previous year: EUR 93 million), despite reducing marketing spend by 10%. This represents a currency-adjusted increase of 14%. Currency effects reduced the revenue growth in Euro terms to about 10% compared to the Q1 2019. Despite noticeable adverse effects caused by the COVID-19 outbreak, revenues in Europe increased by more than 11% to EUR 79 million (previous year: EUR 71 million) in Q1 2020. In Brazil, the strong growth of the past few quarters continued, at currency-adjusted revenue growth of 21% in Q1 2020. Since the Brazilian currency depreciated significantly compared to the prior-year period, the growth rate, taking into account foreign currency effects, reduced to only 6% in Euro terms, corresponding to approximately EUR 24 million (previous year: EUR 22 million).

The COVID-19 pandemic poses a severe challenge for our society and economy and thus also for home24. Initially, the crisis only impacted the home24's procurement network and supply chains in Europe, Brazil and Asia. In the wake of government intervention, the impact extended to a temporary higher volatility in consumer demand and a temporary closure of the physical retail stores in March. To date, home24 has been able to reopen its stores at least to a limited extent, with the exception of the stores in Brazil that remain closed.

Despite the challenging environment home24 demonstrated a significant improvement in profitability compared to prior-year: The adjusted EBITDA margin increased by 13 percentage points in Q1 2020 to -3%. The strong improvement in profitability is driven by post IPO investments paying-off, especially investments into the warehouse and platform setup, more efficient fulfilment and marketing as well as operational economies of scale. For Q2 2020 home24 expects to be profitable on the basis of adjusted EBITDA again.

Notably, the cash flow from operating activities remained positive in Q1 2020, so the Company's cash position remained broadly stable. At the end of March 2020, the cash balance of home24 amounted to EUR 43 million (compared with EUR 46 million at the end of 2019).

Strong order intake in April driven by the online demand

In Q1 2020, home24 significantly increased the number of active customers and incoming orders compared to Q1 2019. The pandemic-related effects on procurement processes and supply chains in Europe, Brazil and Asia are still noticeable to date, but home24 is well positioned to compensate the impact with its global and diversified supply base. Thus, the customer can still tap into a broad and curated assortment of private label products and third-party brands. Consequently, the Company can take full benefit of the development that customers spend more time in their homes. This is reflected in the order intake since the start of the lock-down in March: in April order intake grew by 88% in Europe and 39% in Brazil compared with last year's level. Accordingly, the temporary closures of the retail stores have been significantly overcompensated.

"The unique home24 business model is perfectly suited to meet the current customer needs in these tough times. We are very proud of our team that helps customers realize their dream homes even in times of crisis and get to know home24 as an inspiring and reliable partner. At the same time, we take all necessary precautions to ensure the safety of our customers, employees and society. Since mid-March, this has enabled us to realize a significant increase in online order volume, which grew by 88% year-over-year in Europe in April. This development will positively affect both our growth and profitability in the second quarter of 2020, even though our retail stores had to close temporarily. However, the temporary increased high online demand is no guarantee for further positive effects in the future.", says Marc Appelhoff, CEO of home24. Against this background, the Company confirms the guidance published on April 7.

home24 still sees a substantial catch-up potential for the online home & living market and expects a continuing shift in customer demand from offline to online, primarily in light of the fact that people currently prefer to order for their homes from home. "We currently see an increasing number of new customers that are ordering at home24 for the first time. By providing them a positive and inspiring shopping experience, we expect that the online furniture shopping will retain its relevance also after the crisis, leading to a sustained increase of the online penetration in the home & living market.", says Appelhoff.

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About home24

home24 is a leading pure-play home & living e-commerce platform in Continental Europe and Brazil. With over 100,000 articles sourced from more than 500 manufacturers, home24 offers a unique selection of large and small furniture pieces, garden furniture, mattresses and lighting. This curated, broad assortment offers a significant value-for-money value proposition to customers. home24 is headquartered in Berlin and employs more than 1,500 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:
Anne Gaida
anne.gaida@home24.de
+49 30 201 632 941 6

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.



12.05.2020 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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