Online European furniture business Westwing has reported a decline in full year sales as well as a loss.
According to its full year results for 2022, total sales fell 18% to €431m from €522m in 2021. The downturn in revenues was driven by a “challenging market environment with declining consumer confidence across all segments”, the company said.
When compared to pre-pandemic 2019, annual revenue growth was at 17%, highlighting the lasting e-Commerce adoption within the Home & Living market.
With regards to profitability, Westwing reported an Adjusted EBITDA loss of €4m, significantly down from its profit of €40m the previous year. “Profitability was affected by the decrease in revenue leading to significant lower scale in fulfilment and across G&A. In response to the lower topline, Westwing acted decisively and implemented measures that reduced its cost base across marketing, G&A, and CAPEX,” the company said.
The business added that online market growth slowed down when offline sales came back after Covid-19 related restrictions ended. “We had not anticipated this development, and had planned instead for additional growth, which was also reflected in a higher cost base. As a results, we had to adjust our business in the course of the year.”
Westwing ended 2022 with a “very healthy” net cash position of €76m. As for the final quarter of the year, Q4 sales declined 14% to €128 but did return to Adjusted EBITDA profitability at €4.3m, although still down on a comparative period from €10.5m.
Looking ahead, Westwing said its focus for 2023 will be to return to full year Adjusted EBITDA profitability and profitable revenue growth in the second half of 2023. Sales are expected to be around €390m to €440m (-9% to +2% year-over-year growth) and Adjusted EBITDA of €4m to €13m (+1% to +3% adjusted EBITDA margin).
Dr. Andreas Hoerning, CEO of Westwing, commented: “In 2022, we faced a very difficult macro environment with low consumer demand across our markets, while we had set up the company anticipating a much larger scale. We acted decisively facing these challenges, with measures to protect contribution margins, reduce our cost base and adjust our marketing investments to the new environment. At the same time, we made significant progress on our strategic agenda and sustainability efforts, setting us up for future success.”