Home24 presentation Building the online destination for Home & Living March 2021
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home24 presentation Building the online destination for Home & Living March 2021 0
Our mission: to be the online destination for Home & Living
1
Thinking of customers in Home & Living offline retail today –
does this look familiar to you?
2
3
Our challenge is to change the Home & Living shopping
experience for mass market consumers
We want to empower people to create happy homes...
...by offering great value ...in a convenient and inspirational
products people love... shopping experience
Broad but relevant, curated assortment Fast, reliable and flexible delivery times, paired
empowering customers to choose from a wide with convenient payment methods and services
range of styles, materials and prices
Effective & friendly customer service support and
transparent communication whenever needed
Exclusive assortment only available at home24,
combined with a broad selection of relevant
third party products Opportunities to get a touch and feel for the
product offering online, but also in showrooms
With a great value for money and product Personalized relevant content that inspires and
$ consults, helping to make a complex purchase
quality aspiration, creating happy homes, and a
clear commitment to sustainability decisions easier (ref. no strong consumer brands)
3
Management board combines deep experience and
entrepreneurial mindset
Marc Appelhoff Brigitte Wittekind Philipp Steinhäuser
CEO COO CFO
11 years with home24 6 years with home24 7 years with home24
4
We are already a leading pure-play Home & Living e-commerce
platform in continental Europe and Brazil
#1
In continental
Europe
#1
In Brazil
Positive
€492m >44% c.€350 46% First order Adj. EBITDA
FY 2020 Management summary
Order intake growth accelerated to 58% in Q4 2020, raising FY 2020 growth to 46% YoY.
QTD trading with continued strong momentum in order intake of +73% YoY
(EU: +80% YoY, LatAm: +48% YoY, all in CC).
Q4 revenue growth of 50% brings FY 2020 to 42% and thus upper end of guidance range
(in CC, last upgraded Nov 11th). Q4 adj. EBITDA at 3% or EUR 5m, leading to FY adj.
EBITDA of 3% or EUR 16m (significant improvement of 11pp or EUR 44m YoY).
Financial year 2020 cash flow positive, also excluding capital increase of EUR 46m. Cash
and cash equivalents at the end of 2020 at EUR 103m (pre Mobly IPO).
Public listing of our Brazilian business Mobly on February 5, to make growth financing
more independent from home24. Gross proceeds of c. EUR 121m to Mobly, and EUR
24m to home24. Pricing of BRL 21 per share at c. 4x LTM Q3 2020 Sales (in BRL).
Post capital measures, both EU and LatAm segments of home24 have more than EUR
100m funds available to invest in accelerated growth, having reached core profitability in
2020.
home24 anticipates revenue growth of +20% and +40% (in CC) in 2021 and an adjusted EBITDA
margin of 0% and +2%. The outlook considers a strong first quarter as well as the strong PY
comparison and the possibility of increased volatility in consumer demand from Q2 onwards.
All 2021 figures preliminary and unaudited 6
1
Huge and uniquely
attractive Home & Living
market opportunity with
high barriers to entry
7
Huge addressable market with low online penetration
Global
Home & Living market1 >€560bn
home24 footprint2
Home & Living market >€120bn
home24 footprint2
Online Home & Living market >€10bn
€0.45bn3
Source: Euromonitor International.
(~4-5% mkt. share)
1. Home & Living market defined as Euromonitor Passport: Home and Garden categories “homewares” and “home furnishings” (EUR using 2019 fixed exchange rates). 8
2. home24 markets consist of Germany, France, Italy, the Netherlands, Belgium, Austria, Switzerland and Brazil.
3. home24 revenue Oct 2019 - Sep 2020
Demographics, changes in consumer habits and technology
boost online penetration with potential proven in the US and UK
Online penetration by industry in home24 markets1 Home & Living online penetration by geography
Traditional toys
30% and games 30%
Consumer
electronics
4x 2x
Penetration Upside Penetration Upside
20% Consumer 20%
appliance
Fashion
10% 10%
Home & Living Home & Living
0% Early days Acceleration Growth 0% Early days Acceleration Growth
Source: Euromonitor International; Management Estimates 9
1. Consists of home24’s target markets Germany, France, Italy, the Netherlands, Austria, Belgium, Switzerland and Brazil.Home & Living has some category specific challenges which we
have mastered, creating significant barriers to entry
Products with high basket size / AOV and without established
I consumer brands in mass market
Identify and source relevant assortment in a market with no
II brands and abundant product variety
Inventory management: make bulky and high value items available
III at short delivery times and still remain working capital neutral
has cracked
the code
IV Scalable online demand largely in short tail generic search
without brands
V Extremely complex logistics and delivery for multi-component and
heavy/bulky products
102
A leading pure-play
online platform in
continental Europe
and Brazil
11Home & Living challenge I:
• Products with high basket size / AOV and without established consumer brands in mass market
Low value High value
High brand trust low brand trust
12There are no strong consumer brands in Home & Living
SOFA
?
13Market ripe for disruption due to highly fragmented supplier
landscape and retail landscape
Fragmented supplier landscape1 Fragmented retail landscape2
c. 97% 72%
of all suppliers have of the market
limited market highly fragmented
power with no
strong brands
28%
3% c.1%
Companies with Companies with Companies with Top 5 Rest of the market
revenue < €10m revenue of €10m – €100m revenue > €100m
Huge private label opportunity International market leader IKEA only has 15% share3
Negotiation power lies with the Market beyond top 5 is extremely
strongest retail platform fragmented with mostly local / regional players
No strong online presence even by offline market
Opportunity to build a leading platform brand
leaders
Source: PwC – “PwC Marktstudie Möbelbranche 2019”; Euromonitor International.
1. Germany only.
2. 2019 revenues in home24 markets converted to EUR using 2019 exchange rates; refers to Euromonitor “homewares and home furnishings stores” segment by brand shares. 14
3. Blended share across home24 markets.We have built a leading pure-play online Home & Living
brand in Germany
Brand awareness1
Source: Survey by DCMN Insights. National representative sample (n=1003) for DE, ages 18-69, 50% women, 50% men in Q4 2020.
1. Proportion of interviewed people aware of those brands, aided.
2. Price comparison website. 15home24’s leading online approach is supported by offline
activities providing a unique shopping experience to customers
Online Offline
Go-to-destination AR feature to various Increase brand awareness Europe: 10 showrooms an
products and engagement outlets
Mobile first approach with
best-in-class app Search by image Improve conversion of LatAm: 11 retail stores
online sales (megastores, Mobly ZIP an
Broad, curated product AI-based product outlets)
offering recommendation engine Focus on consultation in
showrooms Conceptually profit center
Distinguished product Interactive VR mood pictures within first quarters
information Touch and feel for larger
baskets, esp. private label
offering
163
Unique home24
business model
driving superior
economics and
customer proposition
17Home & Living challenges II and III:
• Identify and source relevant assortment in a market with no brands and abundant product variety
• Inventory management: make bulky and high value items available at short delivery times and
still remain working capital neutral
18home24 solves these challenges by combining non-inventory
3rd party model with vertically integrated private label model
Model
3rd party products Private label
Assortment Broad assortment Attractive bestsellers
focus (high conversion, mostly long tail) (high margin)
Sourcing & Mostly non-inventory and Vertically integrated,
fulfilment drop-shipped Big data to mostly held on stock
identify
• Broad but curated assortment bestsellers • Superior gross margin & pricing
• No inventory risk • Minimal inventory risk
Benefits
• Negative working capital • Direct sourcing focus
• Rich data on customer preferences • Very short delivery times
• c.50% of sales • c.50% of sales
Economics
• c.75% of SKUs • c.25% of SKUs
194
Scalable first order
profitable customer
acquisition
20Home & Living challenge IV: scalable online demand largely in
short tail generic search without brands
\ Strong brands –
multiple specific
search terms
No brands –
few generic
search terms
21First order profitability driven by unique home24 model
• Large relevant assortment More impressions & higher
• Short delivery times conversion
• Attractive consumer prices
• c.50% private label share
+
• High AOV Superior contribution margin
• Low returns
+
• Automated proprietary
Efficient customer acquisition
marketing engine
=
First order profitability
225
Scalable end-to-end
automated and
vertically
integrated value
chain
23Home & Living challenge V:
• Extremely complex supply chain management for multi-component and heavy/bulky products
○ Supplier challenges: fragmented supplier network, mostly SME
○ Warehousing: lack of format patterns, labor intense 2MH
○ Transportation challenges: less advanced networks in large and oversized products
24We invest heavily to create an end-to-end process optimized
and automated fulfilment platform
Integrated end-to-end automated
platform
Automated
End-to-end
Sourcing Warehousing Delivery
• 1000+ supplier network, • 7 own operated • Self-managed inbound /
500+ in EU and LatAm each warehouses for own mid-mile logistics
• Flexible crossdock, dropship inventory and crossdock • Network of 3rd party last
and own inventory model • >200,000 sqm of gross mile providers managed
• Curated supplier selection WH capacity with by home24 Scalable
expansion headroom • Asset light own last mile
• ERP integration to drive
transparency and tracking • Customized for parcel delivery in Brazil (40% of
and bulky items volume) for faster
• On the ground quality delivery with higher
control • Automated data driven 25
reordering reliability6
Best-in-class
technology platform
empowering
data-driven decision
making and
automation
26
25We collect vast volumes of data on a daily basis to drive
superior decisions across the value chain
Input Customer data Assortment data Fulfilment data 3rd party data
Order history Browsing Available Crawling of competitor price &
Supplier Availability Stock levels delivery times
carriers
Google 360 Marketing
Demographics Session
analytics costs
data Product Delivery
Pricing Item location
Decision time Reviews features mode Industry X-Device
lag fairs/events session
Design trends ! Risk scoring
Accurate Audience Optimise
Identify & fill Optimise Automated
Sorting Curation marketing optimised warehouse
white spaces availability re-stocking
contribution acquisition utilization
Predict & Develop Personalised Optimise
marketing Live delivery Minimise
stock superior Search Personalisation suggestions/
channel on information delivery time
bestsellers private label offers
daily basis
Output Assortment Webshop Marketing & CRM Fulfilment
27Long story short - home24 understands and solves the key
points for consumers
Consumer Pain Points home24 Delivers
Broad and relevant assortment covering all price points,
Discovering the right product styles, tastes in the mass market through a diversified
suppliers base
State of the art online user experience paired with unique
Poor shopping experience go-to-market approach incl. showrooms, fabric samples,
spare parts, print catalogue etc.
Better value for money through more than 50% private
Finding good quality products at fair prices
label share. 3rd party products with low price guarantee
Free delivery and free returns in EU, decentralized logistics
Prohibitive shipping costs footprint fulfilled by own specialized last mile delivery (esp.
LatAm)
Hybrid model combining various delivery modes with
Long and unreliable delivery times majority of sales from warehouse. Inventory with full
control of the value chain
287
Financials &
Outlook
29
27We have built the best-in-class platform to drive profitable
growth
Q2‘2018 – Q1‘2019 Q2‘2019 – Q4‘2019 2020 -
POST-IPO INVESTMENTS & PATH TO PROFITABLE
CHALLENGING MARKET PROFITABILITY GROWTH
FY 2018:
85%+ p.a. FY
4%+2019:
yoy FY 2020:
13%+ yoy
2011-2016
+18% YoY revenue +20%2015-2016
YoY revenue 2016-2017
+42% YoY revenue
growth1 growth1 growth1
-13% adj. EBITDA Q4 adj. EBITDA +3% adj. EBITDA
Margin break even margin
2015 2016 2017
Long term key investments into Continuously balancing
Investments pay off in terms
logistics, brand, return growth and profitability
of profitability and growth
clearance, ERP system etc.
Demand accelerated by
Gain of market shares in All milestones achieved to consumer behaviour during
challenging market conditions reach goal of break-even the COVID pandemic
30
1. Based on constant currency using previous year BRL/EUR FX rates.Strong revenue growth and positive adj. EBITDA
demonstrate structural profitability of home24
Revenue Group in EURm, Revenue Growth in CC YoY in %, Adj. EBITDA in EURm, Adj. EBITDA margin in %
31Outlook
■ Home24 has laid the foundation of further growth with the capital increase and
the Mobly IPO. With EUR >100m funds dedicated to both EU and LatAm, we will
step up deliberate investments into Working Capital, customer acquisition and
Capex.
■ While we see our terminal margin profile of low double digit adj. EBITDA
margins confirmed by recent profitability improvements (>10pp YoY FY 2020),
we believe the market opportunity is attractive to accelerate growth and take
market share.
■ QTD trading with continued strong momentum in order intake (+73% YoY
Group, +80% YoY EU, +48% YoY LatAm, all in CC). Yet, uncertainty around
COVID-19 pandemic prevails both on demand and supply side.
■ Backed by the active customer base of >2.2 million and the ability to step up
marketing expenses having reached core break-even, we are in a good position
to deliver significant IFRS growth in 2021 despite strong YoY comparables.
■ home24 anticipates revenue growth of +20% and +40% (in CC) in 2021 and an
adjusted EBITDA margin of 0% and +2%. The outlook considers a strong first
quarter as well as the strong PY comparison and the possibility of increased
volatility in consumer demand from Q2 onwards.
32home24 has multi-dimensional drivers for sustainable
long-term growth
Structural Market Platform Market
growth + penetration + development + expansion
Expand into
Accelerate Enhance Introduce new Enhance Adopt new
Benefit from new
through further product categories e.g. shopping technologies to
increasing geographies
roll-out of offering in to drive journey to foster
online and capitalize
“go-to-market” existing purchase increase brand competitive
penetration on high market
approach categories frequency loyalty advantage
fragmentation
33home24 remains uniquely positioned to exploit the vast Home
& Living opportunity, even more than before the COVID pandemic
Market Customer value
Huge market opportunity
proposition
characterized by low online Best value offering and most
penetration with huge catch- relevant selection brought to
up potential, accelerated by life in a customer centric go-to-
consumer behaviour during
market approach
the COVID pandemic
Value chain Data & Technology
Scalable and automated value Pioneering technologies
chain that delivers improve shopping experience
sustainable scale effects and empower
data-driven decisions
348
Latest
Financial Update
35
33Q4 2020 order intake growth accelerated to 58%,
bringing FY 2020 growth to 46% (all CC)
GOV in EURm, Active customers and Total gross orders in k, Average order value in EUR
▪ home24 further accelerates
growth at 58% YoY GOV in Q4
2020.
▪ Milestone of +2m active
customers surpassed with
now 2.2m active customers.
▪ Further FX impact due to
decrease in BRL/EUR weighing
on real currency basket size
and growth rate.
36Q4 revenue growth of +50% (in CC) brings FY with +42% at
upper end of latest guidance, despite significant spillover to Q1 in EU
Revenue in EURm and Growth YoY in %
▪ Both segments broadly
contributed in a similar way to
FY growth of +42% in CC.
▪ In Europe, spillover of Q4
order intake into Q1 or even
Q2 revenue due to significantly
longer delivery times (GOV
growth: +66%, IFRS growth:
+53%).
▪ In LatAm, stronger revenue
realization due to strong sales
campaigns focusing on
available warehouse stock
(GOV growth: +35%, IFRS
growth: +43%, all CC).
37Q4 adj. EBITDA at 3% or EUR 5m, leading to FY adj. EBITDA
of EUR 15m, an improvement of EUR 44m compared to prior year
Adj. EBITDA in EURm and in % of Revenue
▪ Another strong quarter with
adj. EBITDA margin of 3%.
▪ Strong >40% FY revenue
growth paired with 11pp adj.
EBITDA margin improvement
led to EUR 44m profitability
increase.
▪ Improvements in all P&L line
items:
○ -2pp COGS
○ -2pp Fulfillment Expenses
○ -3pp Marketing Expenses
○ -4pp SG&A
▪ Q4 20 in LatAm influenced by
tax contingencies of ~EUR1m
related to a recent tax ruling.
38Cash and cash equivalents ended 2020 at above EUR 100m.
FY 2020 cash flow positive also excl. capital increase of EUR 46m
Cash flow FY 2020 in EURm
▪ Positive operating cash flow
in all quarters 2020, with total
+EUR 32m in 2020, solid basis
for continuously improved
cash position.
▪ Due to the 10% capital
increase executed in Dec cash
level of more than EUR 100m.
▪ Cash inflows from Working
Capital esp. in Europe
significantly increased due to
low stock levels. This is
expected
1 to partly reverse in
2021, once delivery times
decrease again and growth
trajectory stabilizes.
39
1 Including e.g. changes in provisions, changes in other assets/liabilities, finance costs, taxes and FX effectsProfit and loss statement - Group
In EURm and in % of Revenue
1
2
2
40
1 Including impairment losses on financial assetsOur mission: to be the online destination for Home & Living ▪ Huge and uniquely attractive Home & Living market opportunity of >EUR 120 billion ▪ Markets characterized by low online penetration of
Investor Contact Media Contact Philipp Steinhäuser Anne Gaida CFO Senior Communications Manager home24 SE home24 SE Greifswalder Str. 212/213 Greifswalder Str. 212/213 10405 Berlin 10405 Berlin E-Mail: ir@home24.de E-Mail: anne.gaida@home24.de Phone: +49 30 201 634 728 Phone: +49 30 201 632 9416
KPI definitions
KPI Definition
Defined as the aggregated gross order value of the orders placed in the respective period,
Gross order value
including VAT and without factoring in cancellations and returns as well as subsequent
[in EUR]
discounts and vouchers
Number of active Defined as the number of customers that have placed at least one non-canceled order in the
customers [#] 12 months prior to the respective date, without factoring in returns
Defined as the number of orders placed in the relevant period, regardless of cancellations
Total gross orders
or returns
Defined as the aggregated gross order value of the orders placed in the respective period,
Average order value
including VAT, divided by the number of orders, without factoring in cancellations and
[in EUR]
returns as well as subsequent discounts and vouchers
Growth at constant
Defined as growth using constant BRL/EUR exchange rates from the previous year
currency (CC)
EBITDA defined as the sum of operating result (EBIT) and depreciation and amortization.
Adjusted EBITDA Adjusted for share-based compensation expenses and costs incurred in connection with the
[in EUR] listing of existing shares and other one-off expenses, mainly service fees for legal and other
consulting services associated with the IPO
43Disclaimer
This presentation has been prepared by home24 SE (the “Company“). All material contained in this document and the information presented is for
information purposes only and does not purport to be a full or complete description of the Company and its affiliated entities. This presentation must
not be relied on for any purpose.
This presentation contains forward-looking statements. These statements are based on the current views, expectations, assumptions and
information of the management of the Company. Forward-looking statements should not be construed as a promise of future results and
developments and involve known and unknown risks and uncertainties. Various factors could cause actual future results, performance or events to
differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy
of the opinions expressed in this presentation or the underlying assumptions. The Company does not assume any obligations to update any forward-
looking statements.
This presentation contains certain financial measures that are not calculated in accordance with IFRS and are therefore considered “non-IFRS
financial measures”. The management of the Company believes that these non-IFRS financial measures used by the Company, when considered in
conjunction with, but not in lieu of, other measures that are computed in accordance with IFRS, enhance an understanding of the Company’s results
of operations, financial position and cash flows. A number of these non-IFRS financial measures are also commonly used by securities analysts, credit
rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which the
Company competes. These non-IFRS financial measures should not be considered in isolation as a measure of the Company’s profitability or liquidity,
and should be considered in addition to, rather than as a substitute for, income data or cash flow data prepared in accordance with IFRS. In
particular, there are material limitations associated with the use of non-IFRS financial measures, including the limitations inherent in determination
of each of the relevant adjustments. The non-IFRS financial measures used by the Company may differ from, and not be comparable to, similarly-
titled measures used by other companies.
Certain numerical data, financial information and market data, including percentages, in this presentation have been rounded according to
established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the
respective tables and charts.
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