Hello and good morning, everyone. Thanks very much, Francy, and also from my end, welcome to the conference call and our preliminary full year 2023 results. We very much appreciate your flexibility in joining our call on such short notice, knowing that this means getting up very early or in some cases, even in the middle of the night for you. The participants in today's call are our CEO, Bjørn Gulden, and our CFO, Harm Ohlmeyer. The purpose of this call is twofold. First, Bjørn will provide you with a brief overview of our preliminary full year 2023 results, and afterwards, Bjørn will share context around our published full year 2024 outlook and its underlying assumptions. L astly, of course, Bjørn and Harm will be happy to take your questions. Please understand that during today's call, we will not be able to comment on our Q4 performance beyond what has been published yesterday. We will be more than happy to discuss these elements during our regular conference call on March 13th. As always, I would also like to ask you to limit your initial questions to two during our Q&A session in order to allow as many people as possible to ask questions. Thanks very much in advance for sticking to those rules, and now, without any further ado, over to you, Bjørn. Thanks, Sebastian, and good morning, everybody. We start the presentation with a beautiful picture of our new Predator, which is launched in the last couple of weeks, doing extremely well on the pitch, and also in sell-through. So one of the future successes for us. The purpose of this call is to take you through the announcement, and we have five, six slides to explain the different components. We start, you know, with the top line, and you basically see that we have flat sales, currency neutral and reported -5%. If you then do the math, you see that only on currency translation, we lost almost EUR 1 billion in sales. If you then exclude YEEZY from the numbers, you will see that we were up around 2%, and then if you then take the Argentina devaluation, you will see that's another 1%. So if you put those two together, that had an impact then of about 3% on our top line. If you remember, our latest guidance was a low single-digit decline, currency neutral, and when we then ended flat, we all understand that Q4 was stronger than what we had expected. If you then look at the gross margin, I do actually believe, given the inventory we started with during the year, that we have done a very, very good job actually getting through that. As you can see, we're ending with a 47.5% gross margin, which is then 20 basis points better than what we actually had a year ago. I think we have been very good at actually managing our inventories. W hen we publish our numbers, you will see that we're very, very happy with where our inventory actually ended in the year. On the profit side, you see that we reached EUR 268 million, which of course is much less than we had in 2022, but we flagged that a long, long time ago a nd if you then look at the extraordinary impacts, we had another EUR 100 million - in Q4 because of the devaluation of the Argentine peso. If you remember our latest guidance, we said that we would lose EUR 100 million. So as you can see, there's a positive swing from that guidance to the year-end of EUR 368 million. We will try to explain that as we go through the slides. If you then look at the different guidance that we had during the year, this is my first year with the company, and I would like to take that through because that explains how we are guiding and why we did what we did. We started out in the beginning of the year saying that we expected a high single-digit decline, that our underlying business, taking YEEZY out, should be break even. A gain, we were coming from a Q4 the year before with a loss-making. Then we said we will have a reported loss because of the YEEZY inventory of a possible EUR 700 million. Then in the second guidance, we then said, now we only expect a mid-single-digit decline. The underlying business, still a break even, but because of the sell-off of YEEZY, we are now looking at a possible loss of EUR 450 million if you write off the leftover of the inventory. T hen the latest guidance were then from mid now to low single-digit decline. We had an improvement in our underlying business to a EUR 100 million profit. T hen again, because of the YEEZY development that we need, that should then give a reported EBIT around - EUR 100 million. W hen you then look at the actuals, the low single digit has then gone to a flattish. The operating profit, the underlying business has improved by another EUR 100 million, up to EUR 200 million. When we then tell you that we're not going to write off 268 million of inventory, that then turns into a EUR 268 million profit. So that has been the improvements during the quarters. If you take that into a slide to try to explain it, then again, we started with -EUR 700 million, then we sold off YEEZY. That generated a profit of EUR 150, and because we sold the inventory, we didn't have to write off 100 million inventories, so we then had a guidance of EUR 450. The same thing happened in the next phase, but here we also had an improvement of the underlying business of EUR 100. That's where we ended at the guidance of -EUR 100 million. Now on the actual, we have a EUR 268 million decision not to write off the leftover inventory, plus an improvement of the business of EUR 100 million a nd that gives you then the EUR 268 million. To sum that all up and you round, then you would see that that's an improvement from the beginning of the year to the end of the year of about EUR 1 billion in our bottom line. Again, not saying that this is great. The only thing I'm saying that 12 months ago, we had a YEEZY problem, that could have caused us to write off all the inventory. We sorted out half of that. We still have EUR 268 million left of the inventory, which we will now sell at least at cost. There's an upside to that, and I think the underlying business, we turned from being on a negative, downfall on the top line to actually now having a positive momentum towards the consumer and the retailer. So I think a lot of positive things have happened in the last 12 months. If we then look into the sales going forward, it's a little bit complicated, but we, we try to explain it. We ended the year with EUR 21.4 billion in sales. Of that, EUR 750 million was YEEZY. That means that you have an underlying sales of Adidas product of about EUR 20.6 billion. If you then say that that business should grow high single digit, remember we said that it will start flattish and be double digit at the end, then you will end, if you say the sales line is between 7% and 9%, you will end between EUR 22 billion and EUR 22.5 billion, top line. If we then add the YEEZY sales at cost, that's another EUR 250 million, then you do the math, you're at EUR 22.25 billion or EUR 22.75 billion, as a currency neutral sales, and that would be for the whole company, including YEEZY, then the mid-single digit growth, currency neutral. Although Adidas underlying business is high single digit, just so you understand the math. T hen, unfortunately, we have very, very negative FX impacts around the world currently. Of course, I can't name them because even I don't know them, but that's, of course, what is then going to give the pressure on the top line during the year a nd we will get back to that and explain it more in detail, and then I'm sure also Harm can explain it even more to you. But that is the picture we're looking at now. Now you have to remember that our goal in the last four months was to get rid of bad inventory, both in the trade and in our own books. It was to solve the Yeezy problem. It was to build the relationship with our retail partners and to get momentum towards the consumer. 12 months ago, we did not have the Terrace, we did not have the Campus, we did not have the Predator, we did not have the Anthony Edwards shoe. So I'm actually very happy with what we now see in the market, and that's why I think we're on the good way of actually reaching the things that we have promised you mid-term, meaning 2026. When you then look at the quarters, and of course, this is just a visual indication, we say that Q1 will be flattish. There might be some upside to that, and then we should have continuous improvement quarter- by- quarter. Why is it like this? Well, it's especially because the American market is lagging, I would say, 6-9 months behind the rest of the world, and that has to do with, of course, our performance when it gets to our inventories that are in the trade, and also, of course, deliver the fresh product into the trade, and get the buy-in of that at the same speed as we've gotten in all other markets. Therefore, we say, and we promise you that we will start flattish, improve every quarter, and then when we get to the end of the year, we should have a double-digit growth. Of course, as always, it could happen also quicker, but this is where we are, currently. If you then look at the gross margin, then FX, I think, and again, Harm will talk more about this, that just in the gross margin, there is about 200 basis points pressure on the gross margin because of currencies. If you look at freight, that looked very positive, I would say, until the Red Sea problem came up, and currently, there is a negative effect of that. But that negative effect will be smaller than the positive effect, but you should be aware of it, that currently the spot rates are actually exploding again. If you don't have a long-term contract or you ship more than your contract, there is an increased cost, because of that, and there is a delay currently of about three weeks, which of course causes some delivery issues again, especially to the European market. All other areas are actually positive, then it gets to the gross margin, and I think it's fair to say that we are planning and pretty certain about that we will have a very positive development in our gross margin, despite the 200 basis point negativity that we're getting because of the FX. When you then take the second half, and the picture is ballpark the same, and remember now we are comparing to H2 2023, but the picture is ballpark the same. If you then look at our guidance, then we are currently currency neutral, saying that we will have a mid-single-digit increase in our total company. That includes YEEZY, where you have to remember that we're currently planning with substantially less sales because we're only planning in this guidance to sell the EUR 268 million inventory at cost. There is an upside to that. If you take YEEZY out and you look at Adidas business, we should have high single-digit increase for the full year, and we should have double-digit increase at the back end of the year. The operating profit that this gives you is around EUR 500 million, of course, with an upside. But as you know, it is our clear goal to always start with what we can promise you and then build from that. The assumption that we have in this is, again, to repeat it, to sell the YEEZY at cost. That's around EUR 250 million, and currently without no operating profit contribution from that inventory. We talked about the FX headwind. That has, of course, a transitional effect when you convert sales in countries back again to euro, and then it has a direct impact on the gross margin, which we already talked about, around 200 basis points. Then important, we have not started any programs to optimize our cost structure. We have said that the most important thing for us is to be positive towards the consumer and positive towards the retailer. That means that we continue to overinvest in both marketing and sales, and as soon as we have, you know, a solid growth, in that area, which we think we will have in the second half, we will, of course, then also start to optimize and leverage on our cost base. But I hope you understand that we first focus on the front side to turn what you said was negative 12 months ago into positive, and then we optimize the back end of it. I think if you do it the other way around, you could be in danger of actually killing something that is going to be very, very good. So that was, what should I say? A simplified explanation of where we are. T hen with this second beautiful picture, this is the Anthony Edwards shoe, which is selling very well. I think it's the best-selling basketball shoe that we had for 10 years. Then I think we are ready, Harm, me, and Sebastian to take any questions that you have. Seb? Yeah, thanks very much, Bjørn and Francy. We're happy to take the questions now. Thank you very much. Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star and one. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. Our first question today is from Piral Dadhania from RBC. Please go ahead. Okay, thank you. Morning, everybody. So I have two. The first is on the midterm EBIT margin target of 10%, which I think you stated in your prepared remarks, you'll expect to deliver by 2026. Just based on what this, this year's 2024 guidance implies, that leaves a lot to do in the next two years. Could you just help us understand what the... what your expectations are in terms of the shape of or the acceleration in the margin progression in 2025 and 2026, and how confident you are that you can get there? T he second question, I guess, related to that, is just on cost optimization. One of your, appreciate the comments you just made around, you know, investing for growth in the near term and then perhaps optimizing in the future. Could you just clarify whether that means that you would, in the next two years or so, undergo a program of cost optimization like your nearest competitor has done? Do you view the overhead cost base as being too large in absolute terms, and you would look to reduce that to deliver that 10% margin? Thank you. I mean, first of all, I think we are full in line with our midterm target of getting to 10% EBIT. You have to remember that to get there, the most important thing is actually to connect with the consumer and the retailer. To be very honest with you, I think we are, after 12 months, actually ahead of what I expected on that. Part of that, I think, is luck. Part of that is that we've worked very, very hard. O n the lifestyle side, on the soccer side, I would say on the running side, partly at beginning of the basketball side, I feel very comfortable that we have the right tools to actually achieve that. I think also in marketing with our Originals campaign that we started last year, and on the performance side, where you see the weekend of Super Bowl and afterwards with our so-called Backyard campaign, you will see the new face of Adidas, as a total, both in lifestyle, Originals, and then also in performance. So I think on that side we are even ahead of schedule. When it gets to optimizing the cost side, you know, this is a difficult one because we think in total that we have the structure to leverage on. But then you know that when you start changing from a negative to a positive, we need to be careful that we don't start restructuring in the middle of that and then causing a negativity again. So we have chosen an overinvestment in the front end, in sales and marketing, and then working with the existing infrastructure. Currently, we know that's too big for the current sale, but as we then are getting, you know, the double-digit growth, which I'm 100% sure we will get, we will then, then start to optimize. I do not expect anywhere near the restructuring that you're mentioning from our competitor, but of course, we will optimize and improve things. So that's, that's, that's obvious. But you can or you should not expect us to come with those kind of numbers for restructuring. Thank you. The next question is from David Roux from Bank of America. Please go ahead. Morning, gents. Just, I've got one question on the margin and one on FX. With the puts and takes of the gross margin for the forthcoming year that you highlighted, do you still expect to achieve the 48.5%, which I think was flagged last year, has been a good indication for this year. T hen my second question is just on FX. I understand it's volatile, but as it stands today, do you expect a similar translational impact as we saw in 2023? Thank you. I'll leave the FX thing to Harm. On the margins, yes, I'm convinced that you will see a 48+ margin. Then I think I hand over to you, Harm. Yeah, Dave, real quick, just on the margin, I know I indicated I got quoted many, many, many times on the 48.5 as an early indication last year, but I can confirm today that this is not a wrong number. So it, you know, it's a good starting point, put it that way, without giving a guidance in detail yet, but it's still a good indicator. When it comes to the... And I probably want to add, when it comes to the first half and the second half, as Bjørn indicated on the slide, there's definitely, when we talk about 200 basis points, FX in the margin, that is not all in the first half. It's a combination of first half, second half, but it always depends on, you know, how you utilize the fall, winter 2024 products and some of that you sell already in June. So from a season point of view, it's different, but from a reporting point of view, you know, it could be the 200 basis points, could be, you know, 70%-80% of that is probably in the first half, a little bit in the second half. But as the chart indicated, it will be much more positive on the gross margin second half than the first half. When it comes to the FX overall, you ask whether it's the same significance as in 2023. It's probably less than that, but still significant. So you saw on the chart it was roughly 5 percentage points in 2023, and we believe, but we go on the forward rates for the end of June that we're using right now, it could be 3-4 percentage points in 2024. That's what we're assuming. O f course, it could be better, could be worse, but we are using the forward rate that we're looking at right now. Of course, there could be in some markets where we have inflation, you know, measures that we work with slight price increases to mitigate some of this a nd of course, that's what we are watching. We are, we're not forecasting ourselves, but it's, you know, take it from the 5% in 2023 to 3%-4% in 2024. Thank you very much. Next question is from Warwick Okines from BNP. Please go ahead. Morning, everyone. Actually, could I just start with a follow-up on to clarify and make sure I understood your comments on the currency on gross margin Harm. You said that some of the - 200 could actually fall in the second half. So are you saying that the year-on-year movement in currency through the gross margin could be negative in both halves? Well, it depends on when you sent the product really, right? W e should understand it's not just the U.S. dollar. I mean, it's an RMB, it's a yen. If you look at all these currencies, we always follow the U.S. dollar. That is predominantly in the first half, it will turn positive in the second half, but there are some smaller currencies as well that impact the second half. But again, you should first and foremost assume that the vast majority of that FX impact is in the first half and is to a minor degree in the second half. It also depends, you know, of course, we're hedging only roughly 80%, depending on the currency. Some currencies, we only hedge around 50%, when it's outside of the U.S. dollar. We believe the second half is accelerating, and if you keep accelerating in the second half, then of course, the FX impact, depending on where we are in spot rates, could be also positive, right? So everything that we are saying right now is conservative, and also what I said on the FX, on the translational impact, when I say 3%-4%, you know, we watch all the banks, and all the forecasts. They haven't been, you know, perfect in the last six months. So, we believe what we are having in there is a worst-case scenario. So that's really where we are. Understood. Thank you. T hen the second question is just on operating costs, and you talked about sort of overinvesting at the start of the turnaround. Could you just give us an indication of what you think the marketing cost as a percent of sales will be in the year ahead, please? Yeah, I think in this business, I think between 11% and 12% marketing cost is what you're looking at. T hen, you know, there might be overinvestment when there are events or big things that are happening. I mean, for us, I mean, we can live with the 12% marketing. I don't think we need to increase that. I think what is important is also the sales line, because we need to make sure that the good product pipeline we have on performance side, for example, in running, also have specialty distribution a nd we took a clear decision that we need, again, to be in front of the retailers and the consumer, and not believing that they will all buy digital. So there is quite some investment in the markets when it gets to actually doing that. Tech reps, especially sales force and, and a little bit, I call it the old-fashioned way of, again, connecting with the consumer. So we are overinvesting in that front end, compared to the growth currently, and are not, as I think I've said many times, trying to optimize things for a short-term profit, but laying the base so that we can reach the 10% EBIT midterm that we have promised you. I think this is important that everybody understands that in 12 months, you cannot turn the company around when it gets to getting heat with the consumer, getting, what should I say, credibility with the retailers, then optimizing margin and cost, that's an impossible task. So the priority again is to put Adidas where it deserves to be. That is being, you know, a good performance brand in the categories we choose, also be more local, relevant in local sports. It is to have brand heat in our classic original line and then, you know, capitalize on that in the commercial line, a nd all those things, I think we have improved on. At the same time, we have reduced the inventory substantially. We now have gone from a very negative order book to a positive order book. I also think that, you know, the atmosphere in the company and the agility and the speed in our organization have improved a nd we have done that without putting in any optimizing or saving programs, because those two things works against each other. So right now, we've been talking to the consumer and the retailer, not so much to you as investor. That comes later when we have the base that we can optimize to be more profitable. But again, we promised you a 10% EBIT margin in 2026, and that's like running a marathon. Now we have run 10K, and I think we're actually a little bit ahead of what should I say? Our form. But of course, in the numbers, you then need to trust and believe us that these components then gets there. I understand that. But I also hope you understand that for us to try to maximize our profitability, what should I say, quarter- by- quarter, or being very optimistic in our outlook to impress you would be the wrong strategy. So I hear you that you are maybe negative with the outlook, but don't forget, we started last year with EUR 750 million, showing you the worst case a nd I think you just have to accept that that's the way we are, and then we want to deliver what we promise you, and not put us under pressure to start to use, you know, adverbs and adjectives to be nice in a quarter, because I really don't think that that's what we need. So, amen. Very helpful. Thank, thanks very much, Bjørn. The next question comes from Aneesha Sherman from Bernstein. Please go ahead. Thank you. So Bjørn, a couple of quarters ago, you talked about retailer order books being soft for H1, in some cases, potentially creating stock outs. Can you give us an update on where you feel the demand-supply balance is for the first half? T hen in the second half, are the order books at the level that you want them to be, and are you expecting to hit your target ratio of about 65-35 wholesale to DTC this year? I would say that the supply and the order book for H1 even looks a little bit better than what I said a couple of months ago. I was afraid, you know, going into the beginning of the year that it might be negative, but it's actually already positive. The danger is, Harm, and the people has almost been too good when it gets to taking the inventory down. So with the delays, we having some delivery issues because of the Red Sea, which again, you know, it's not a huge problem, but it is a problem, because as you will see, that the inventory is very healthy. The order book are increasing everywhere, with the exception in the U.S., where we know, and you've probably seen also, that we changed management there two weeks ago, that we need another 6-9 months to clean up stuff. In all of the markets, I would say that we are a little bit ahead of the curve. W hen it gets to the second half, of course, the order book is only full for Q1, Q2, and the order book for Q3 is filling. That's the timeline. So there's no order book currently for Q4. But the indication and the reaction of the retailers and of course, the current sell-through, indicates that we should be in good shape also for the second half. When it gets to the split, between what should I say wholesale and retail, I mean, the 65/35 is not the target by itself. That's the result of what's happening a nd if it's 37 or 38 or 39, to be honest with you, I don't really care. What is important is that what we try to use the channel for. E-com for us is, A, to build the brand, and B, I would say optimize the margin, not necessarily maximizing sales, because that causes a lot of discount and a lot of performance marketing. In the concept stores, it's brand first, and then commercial, and in the factory outlet, it should be to clear product and then do as much profit as we can a nd that's what we're working on, on the retail side. On wholesale, it's of course to look good next to our competitors, make sure that our package is both from a financial point of view and from a product point of view, makes all retailers make good money with us, because if they make money with us, they will grow with us. So that's what we're working towards. O f course, many of the retailers did not have that feeling a year or two years ago, but we feel that that's changing a nd I do think if you're here with the retailers, you will hear that our sales and product organizations are very eager to build relationships and solve problems. I f you look at all the programs we had, you know, to solve all the bad inventory and replace with better inventory and how we chase the business where possible, I'm very, very proud of the way our sales and marketing and product team have done that. But again, of course, things takes time, and we started this process 12 months ago. We should not forget that, but everything we said, I think a quarter ago, I feel very confident about. Thank you. Next question is from Adam Cochrane from Deutsche Bank. Please go ahead. Morning, guys. A couple of questions on pricing, if I can. Firstly, on YEEZY, just to clarify, you're talking about selling it at cost, which is the EUR 268 million. I f you're selling at cost, is there any implied costs associated with selling it to get to the flat EBIT impact? I would have thought that if you're selling it at cost, that just covers the cost of goods sold, and there might be some selling costs associated with it. So just a sort of clarification on how the math works on that YEEZY part. T hen secondly, in terms of pricing discussions with your own brands or retail partners, how is the price environment looking? How are you thinking about average selling prices for 2024? Thanks. Well, on the YEEZY, what we have told you is that we had two successful drops. We then stopped at third drop last year because of the situation in Middle East and a lot of uncertainty. We now have done a review of the inventory, very, very thorough, and we have also checked with wholesalers and traders if we could sell it, you know, that wholesale way, and the answer was yes, so we could get rid of the inventory in a big bulk. We have felt that the best thing would be to try one more drop, which we are now currently working on, and then we will see how that works, and then we will make, you know, the easiest decisions as we go. There is always cost in selling, that is correct, and also forget that when we talk about the profitability of YEEZY that we report, that's the margin on it. There's a lot of costs hidden in our business, in IT, in digital, in sales, in logistics by doing it, but we don't report on that because the cost is hidden in the business. I wouldn't add any, what should I say, additional sales cost of this because it is in our, our, what should I say, cost line, anyway. Again, there's clearly an upside on the YEEZY thing, but I think also that you have to appreciate that we've gone from writing it off to now accepting that we're selling it. We have written off, I think it was EUR 12 million already, where we had damaged goods and broken sizes, so we are conservative on the way we look at it. Again, we will report on this. Every time we do something with YEEZY, we will tell you, so you can see that the upside, but the most conservative view now is just to cover the cost, which is then the EUR 268 million. When it gets to pricing, I think, right now our line is priced correctly when it gets to the retail price. You have to remember that, the market has been very, very discounted. We see currently that, many of our product is selling at full price. I mean, every success we have on the lifestyle side is taken out of discount, so that's very positive. We also have very good sell-through now, for example, on the Predator or the Anthony Edwards shoe in basketball. So we have performance leading products that are actually being sold without discount, which is great in this environment. T hen I think the feeling is, in the market, that our pricing is actually priced now locally okay, and there's not a lot of discussion on pricing. Again, I think we all know at the end, right now, the most decisive factor on price is the discount, and that is very different from product to product and market to market. I think it's fair to say there is still, in the total trade, not necessarily our product, but there's still a lot of inventory out ther a nd I would still say more in the U.S. than what you have in Europe, where at least our customers seems to be very clean on our inventory, which is very, very positive. Thanks. Next question is from Geoff Lowery from Redburn Atlantic. Please go ahead with your question. Yeah, morning, team. Two questions, please. Firstly, given things like FX and presumably freight are shaping up to be worse, at least near term, than you'd originally envisaged, what's going better that still allows you to think the 10% margin is the right one? In other words, what's filling that gap in your medium-term plan? T hen the second question is, in terms of the relationship with wholesalers, are you having to give them any sort of improved terms or more marketing support or similar to help sort of lubricate that improved relationship o r are you managing to do it on broadly existing terms, but with better product and better relationships? Thank you. Well, the second is clearly that, when it gets to the basic terms that we have in our relationship, we don't do anything. There's no necessity. What we have done over the last 12 months is, of course, to help where we have inventory. So when it gets to support for takebacks or support for discount, we have been more flexible than before. We have tried to act as a very good partner. O f course, that's been helpful. I think going forward, we will not have to give more terms or be more service-minded. I think we always max that. I think where the improvement is, and will be, is how do we work with the big retailers when it gets to go to market, both product and chase business, and activations? T hat is, again, accepting that the retailers around the world are sitting on a lot of competence that we can utilize, and together we are stronger than if we act individually. So I think it's more of an attitude. The danger of saying DTC is, of course, you get very introvert because you're saying that we go direct to the consumers, therefore, we know everything better. better. T hen you don't listen to the retailer. I think we're now trying to do the opposite, that say, okay, let's use the retailers to gain more competence locally in the different markets and the different categories, make sure that we look very good, compared to our competitors in that environment, and let's utilize then DTC to maximize, the things that we can do in DTC. It orbits from a brand side of view. We should in e-com look fantastic. We should show up as a sports and lifestyle brand at, at the best, but we should not try to optimize sales, because optimizing sales in e-com has two drugs. As I said, that's the discount and performance marketing, and that's what we need to avoid. On concept stores, if we have a Fifth Avenue store or we have one Champs-Élysées, that should represent the brand the best possible way, and it's more of a marketing tool than it is a commercial tool. As soon as we say a store is commercial, being a factory outlet or a normal store, we need to make sure that we do that like a real retailer, maximizing, you know, the contribution of that store. T hat's a culture that maybe has been lagging a little bit, that we're now trying to wake up again. When it gets to the FX and the freight thing, I just want to clarify that I just indicated to you that there is a shorter pickup on the freight, and that is because of the Red Sea. This is not something that we think will belong for a long time. You should just be aware of it, that there are currently three weeks delays on shipments because of that, because the ships cannot go through the shortest route. O f course, as always, the transportation companies are utilizing things to take up the rates. We have contracts that go through the summer, but if we need to ship more than the contract says, or we need to accelerate something, that has now a pretty high premium. This is not something that will have a huge impact on our margin. We just flagged it that you should be aware of it. A ll other things, in my opinion, are currently positive a nd you know what? The currency will also be turned, turned one day, you know. So, so negative thing will turn positive again, and we are 100% sure that with all the tools that we have, with the current setup we have, we can get to the 10% EBIT. You have to remember that we have an organization that has had a negative, what should I say, development on the top line, and we have not leveraged that organization, and we have had a lot of discount and clearance, the last couple of years. So w e see as an ongoing normal business, we see the 10% clearly there as our target if we deliver on what we already have. I don't know if you want to add, Harm, but I think that you can also add some, some, yeah, taste to that. Yeah, Geoff, probably one more argument, what's going better, and if you've... Of course, you follow us in detail. The last couple of years, we've not been able to grow the lifestyle business, and that has, you know, changed fundamentally in 2023, that we now start growing the lifestyle business. Y ou know very well that the lifestyle business carries a higher margin, and that is definitely an opportunity, that we, you know, capture already, but we continue to capture. So what you should follow is the growth of the lifestyle business and, you know, as the brand is picking up, we can easily say all boats are rising, but the apparel business is something that is coming. It's the next step as well. So lifestyle business growing again, you know, growing significantly with a better margin, and then the apparel business, you know, should come as well. These are things that are definitely going positive, but, definitely more positive than originally expected is the lifestyle business. Then you look at the market mix, where we always talk about the challenges in North America, and that is probably six months behind, but also making good progress in China and making tremendous progress in our home market in Europe. So these are things that are definitely going better than we originally expected. Great. Thanks very much. Next question is from Edouard Aubin, from Morgan Stanley. Please go ahead. Yeah, good morning, guys. So just two questions for me. The first one is, you know, the shortfall in terms of, you know, your guidance versus market expectation and the analysis you've run. If I listen to you this morning, essentially, it's essentially because of FX and kind of YEEZY being sold at cost. So it's not really a function of, you know, higher potential supply chain costs or even, you know, market dynamics, given that a number of, you know, your peers or retailers have talked about a more difficult start to the year in terms of discounting. So that's question number one. T hen beyond question number two, so you talked about, you know, kind of top line first, you know, kind of profits, you know, maybe later in terms of the focus. On your progress with wholesale, you know, when we do channel checks, we know the, the feedback from retailers is that, they are, they are obviously more happy to work with you because you're giving them better terms. Is that, you know, one of the reason why, you know, the, the cost might be a bit under, you know, slightly more elevated than anticipated? A gain, to break it down in terms of your progress with wholesale, you know, to what extent is it a function of, just a better relationship you have with these guys or, you know, the product pipeline? I know... I'm sure it's difficult to you to break it down, but just some color would be helpful. Thank you. Well, just to clarify, a relationship itself doesn't bring any business. The relationship opens the door to get better product on the shelf a nd of course, a better relationship is also, what should I say, positive for us in the sense that we're building products and activations that actually works. I'm actually convinced that the retailers around the world has competence that sometimes are better than us. So if you put the two competencies together, we build better packages. But this is not having dinner with people and being friends, and that's why we do more business. The business is far too, what should I say, serious for that. So I think the attitude of having retailers, partners in-house, working with our product and marketing people before we actually make decisions-... Have them have full overview of our innovation pipeline, and being a very, very good and consumer-oriented organization is the goal, and we do that both direct, but also working through the retailers. That is what relations is about. It's not about increasing terms. When you say they are happy because we increase terms, we haven't increased any terms. What we have done is that we have short-term solved problems. So if a retailer has taken programs for us that hasn't sold, we have given them help, either in markdown money or taking it back and get it to our own, what should I say, network. So it's more of an attitude, and helping each other, but that goes both ways. So I really feel that the relationship thing is a little bit more common sense, accepting the role of retailer around the world, and then finding ways on how we can build better programs together, and also give them full visibility of what we have. You'll be amazed how many retailers have been surprised when we actually show them the whole range and show them the pipeline instead of just showing them a little bit. So again, this is a wider thing than just being nice to each other. When it gets to the guidance being, you know, lower than your expectation, I think that has to do with many things. The effects, I'm not sure if you have that really in your models. Secondly, I mean, guiding on a profit of EBIT under these days, I don't know if you would have done that if you're sitting in my chair. T hirdly, I think it is very, very important that when we guide something, we can also deliver it with a good, what should I say, feeling. T hat's why I'm saying that we're trying to be, humble and down to earth, and then rather, what should I say, surprisingly positive than negative. The consumer sentiment around the world is, of course, not great. It's not like people are lining up everywhere to buy a product. But for us, it's almost like that doesn't matter because we feel that the share we have with the retailers and the way we have exploited opportunities that already hasn't been good, that's why we think we need to grow also when the sentiment is not positive. T hen, yes, there has been terrible weather in the U.S. the last two weeks, and of course, if there's snowstorm, we can't sell product, but these are all short-term things. I'm convinced that the potential of Adidas as an organization, as a brand, as a history, and everything we have, will deserve a higher market share with the retailers and also in the different categories, in the different markets, and that's our goal to then bring. If that goes from month to month to month, and it's measured, you know, in quarterly profits, I'm not sure if that's the right priority. I think I said 12 months ago, you should check, are we actually delivering top-line growth with our retail partners? Do you see activations that is actually, what should I say, confirming what we say? Do the retail partners agree that the sell-through is higher? T hat's the indication that we're building the base for growing, not necessarily if we promising you EUR 100 million more profit or not. We could easily have done a quick research and put costs below, and we could look good, very short, but I'm not sure that would have built the right attitude that we need for the next 24 months. So it's a more step-by-step approach. But again, I think all of us, if we were sitting 12 months ago knowing that now we have some of the hottest shoes in the market, we have the best soccer shoe that has ever been launched, we even have a basketball shoe that is doing well, I think we will all be saying, "Wow, we will take that." So we don't have the attitude that we are negative, even if our EBIT guidance is below what you have as your model. We think that with the consumer retail, we're actually a little bit ahead of what we thought 12 months ago. Thank you. Thanks, Ed. Francy, we have time for two more questions, please. Okay, then the next one is from Jürgen Kolb. Please, go ahead. Very much. Actually, just one question, all the others have already been asked. It's just a little bit of nitty-gritty, but, probably, Harm, could you share with us the, the hedge rate, where you hedged, throughout 2023 and then also in 2024, and how much of that exposure is already hedged? Thank you. Yeah, as you would expect, I don't give you the details on how we are being hedged, but I can give you some hint. We hedged very early in 2022 for 2023, when the dollar was still very attractive, so we had a good hedge rate in spring, summer 2023. That's why we have a significant impact in, you know, spring, summer 2024. But that's the one thing. But the second thing is, we normally hedge around 80% of the U.S. dollar for every season, and for other currencies, it's rather around 50%, depending on the market. So what you should, and that's probably the opportunity in the P&L as well, as we accelerate our growth, the 80% could become, you know, 75% or 70%, and then we are more to the, to the spot rates, how we buy products, right? But that's why, it's not easy to predict the gross margin, and that's why I repeat again, despite all the elements that we have on freight and, what we had in discounting and the FX, we are very optimistic to grow the gross margin in the first half and even more so in the second half. That's why I repeat my indication of 48.5% is not completely wrong, and you will hear more details then on March thirteenth. But that's pretty much where we are. Very good. Understood. M aybe one quick follow-up. Even though I understand the conflict in the Red Sea is not a major impact, but the EUR 500 million you're guiding for the full year, that obviously includes some assumption on this development of these freight rates, I assume. So you probably also have here a rather conservative and cautious view. Again, understood, you're saying it's a rather smaller issue, but it's already baked into that EUR 500 million thing? Yeah, it's definitely baked into that EUR 500 million thing. Of course, we don't know if this is now, you know, continuing for a year, and it depends on what the, you know, logistics companies are doing. Do they just, you know, deploy their, your vessels? Do they deploy all the containers? We believe they're able to do that, then it will be solved in a couple of months. I mean, if it gets worse from here and stays for two years, then it's a different picture, right? But right now, we believe we can handle it, and, what we have been there is, from what we know today, rather worst case scenario, and it's baked into the EUR 500 million. There would not be a reason this year that we come out and say, "Oh, we can't do the EUR 500 million because of the Red Sea." That's not an option. Got it. Thank you very much. The only thing, if I may add, is that a three-week delay wasn't planned, so when we certainly have product lines that is high in demand and higher than the supply, and you get a three-week delay, that is a hiccup. O f course, that is, in my opinion, actually worse than the higher rate right now, because there are shortage in certain of our lines, and of course, when you then get them three weeks delayed, that has an impact. The good thing, though, and don't tell anybody, we all have delays. So it's like, it's not that we're worse than anybody else, but the irony is that we actually have products right now that the sell-through is so good with certain retailers that we can't deliver it, you know? Of course, that is the biggest impact currently on the Red Sea. You know, surprise, surprise, if you then wanna air, air rates are currently up by, I think, 700%. So it's like you're being hit on all those kind of extra things. I think that has a more impact right now than the freight rate. But I'm sure other people will tell you the same. Yep. Thanks very much. Our last question for today is from Monique Pollard from Citi. Please go ahead. Hello. Morning, everyone. Just a couple from me. I just wondered if you were able to provide any regional color on Q4, you know, maybe particularly China, NAM, and obviously, you mentioned Europe doing very well. T hen secondly, Bjørn, obviously, you talked about doing double-digit million sales of the Terrace shoes in 2024. Just wondered if you could give us a sense of what the number was of the Terrace shoes sold in 2023, and whether you can give any more indication beyond the double-digit millions of where that could get to in 2024, and any indications on margin of that product. Obviously, Harm, you mentioned that, you know, lifestyle obviously carries a higher margin and that the Terrace is selling, you know, very much at full price. So any indications there would be useful. Yeah, Monique, this is Sebastian. Maybe quickly on your first question, I want to refer to what I said at the beginning, that unfortunately, we're not able to comment on anything beyond what has been published yesterday. So all the details around our inventory, and particularly the segmental development in the region, will be something that we will be able to discuss in our call on March 13th. Thanks for your understanding there. Understood. I was supposed to answer you, and he saw that, so he stopped me. I'm not legally always compliant. The only thing I can tell you is that currently on the Terrace thing, which is mainly, you know, Samba, Spezial, and Gazelle, it is still in a higher demand and supply, so that's still building. What is new is that Campus in certain retailers and certain markets are actually outselling Samba, and as you know, Campus is a wider, more skate-looking shoe, so it also then drifts more also to the male consumer, which is good for us. T hen we have extended the Terrace thing with the SL 72, which is running Terrace, so it's a running upper T-toe construction from 1972, that we are now playing as a fashion thing a nd that is now in limited distribution, doing very well, so that will be extended. There is no signs currently that the T-toe thing is slowing down, but the good thing is that, it's extending into the more skate look, which is, again, you know, the territory for, for us. The test for us is going to be, can we then extend, you know, this hype into the running lifestyle, where we used to be very strong with, you know, the NMDs and also the YEEZY product. T here we're using, the SL 72, Terrace running look, the classic look, then to a more progressive, what should I say, running lifestyle thing, where you will start to see seedings and limited lines, during 2024, with the idea of scaling in 2025. So there is a plan A, B, and C when it gets to the lifestyle side. In my opinion, a very, very strong, what should I say? Development, and with many avenues that we can go, and that's where, again, back to the issue, how do we work with the trade, where we have given full, what should I say? Transparency and we're using them and also our own channels to test. So I think on the lifestyle side, I think we feel very comfortable on the footwear side that we have the right, what should I say, product for the next 18-24 months. Yeah, I just want to add on the Terrace margin. I don't give you the details, of course, of the margin, but as a starting point, if you compare to other categories, it's a much more simpler product to begin with, because these are products that existed, you know, for 30- 40 years. So we know how to build them, we know how we optimize it to build them, so it's a better, you know, good margin to begin with. T hen secondly, if the sell-through is great, what it is right now, you have less discounting in your own channels, and, and then that's where you get an even better margin. So that's why I indicated the growth in lifestyle, especially on the Terrace products, as a, you know, positive mix in the overall gross margin picture. Understood. Very helpful. Thank you. Thanks very much, Monique. Thanks very much, Bjørn and Harm, and thanks very much, Francy, and of course, thanks very much to all of you. Ladies and gentlemen, this concludes our conference call today. If you have any open questions, as always, please feel free to reach out to Philipp or myself. We're happy to answer any questions that, you know, have been discussed today. As I mentioned before, you know, also in these discussions, we will not be able to comment on any other details around our 2023 numbers or the current trading before we're gonna do the full release on March 13th, which we're looking forward to connecting with you again. W ith that, I wanna wish you a good remainder of the day or, in some cases, a good night. All the best. Bye-bye. Take care.