Hello, everybody, and welcome to the Fashionette AG conference call for half -year one results. I'm here with my dear Thomas Buhl, the COO and CTO of the company, with Oliver, Head of Finance, and with Armin Blohmann, who has his first day, and actually his first hour right now as our Head of Investor Relations. Welcome, everybody, and welcome on board, Armin. I'm standing today, CEO since July now, and I give a quick update, also my first impressions in the course of the presentation. What are the highlights? It was a tough half -year one. I think that's for sure, for the industry, for everybody in Europe. We could grow. We grew net revenue by 5% on a pro forma basis, 50% on a consolidated view. We have a record active customer base of more than one million over the last 12 months. A great milestone we're very proud of. We improved marketing efficiency in Q2, and we improved operating cash flow. We're now at EUR 9.6 million available liquidity, which will be obviously important to fund future growth. We are also reconfirming our guidance for the year. That's quickly the highlights. Before we go into the details and financials, let me just a recap for my first couple of weeks. Some of you asked me to do that. What are my first impressions? In general, I can say I can confirm some of the assumptions I had before I joined, and that's a good message. I didn't find any scary stuff. The market is attractive. We are in a great niche. We are in the premium and luxury segment with high average order values. We still see a lot of growth potential in there as this market is moving more and more online. Looking at the operations, after really dozens and I think it's actually hundreds of meetings, I can confirm a robust foundation, backed by strong operational fundamentals. I think we have a great tech stack. We have great proprietary technology. We have an amazing business intelligence team, so we can support data-driven decision-making in a way that companies of our size normally can't. This is something that really is an astonishing base, I think, that Thomas and Daniel have built here, and that will allow us to make a sequence of good decisions over time, driven by machines or by people, and that drives business success. Super happy about that base. Same about the team, which is already customer-centric and works backwards from the customers, very passionate about the brand and about our customers. That's great to see. There's not a big cultural shift we have to do there. There's just some refinement enhancements and more training we can do with the team. The base there is also strong. The base is also strong on brand. We have strong brand awareness for our shopping platforms in their respective locales, but also we're building more and more well-known own fashion brands and all of that brands drive loyalty, obviously. All of that is a good base to grow from. Our customers, well, let me start with the customers. They're just the best customers in the world, I have to say that. We are, you know, we have one million hardworking women now that reward their hard work by, you know, getting the accessories they need and the premium design accessories they need to complement their outfits there. They really deserve it. They're very demanding and they are loyal if we meet those demands. Very proud to serve those customers. Just, you know, in the recent weeks looked at the cohorts, and it's just awesome to see over the last years what loyalty we drive when we acquire those customers and deliver well on the promises that we give those customers. Very proud to serve those. It doesn't mean there's no work to do. Obviously, that's not the case. I hope I can add some value. There is opportunities. First, integration of Brandfield. Brandfield we acquired last year. As many of you know, it's a huge opportunity and an integration like that is not finished in a couple of months. We're just now starting the next phase of really leveraging the complementary skills that we have in the companies to drive further growth. That's starting right now. Resilience. I mean, it is a tough environment, and it might even get tougher, right? We need to put ourselves in a position to have a profitable growth no matter what the headwinds. We run a very tight ship, and doing that without breaking opportunities for long-term growth, that's a non-trivial task, and I'm happy to add value there. Obviously, find opportunities for expansion, smart opportunities in selection, in geographies, in partnerships, in technology. Especially in a situation where there's a tough environment out there, where some people are struggling, that's, those might be our opportunities. There is work to do, but the core message would be that, this is not a fundamentally broken business. I'm not here to tell you that, you know, everything that's bad is, you know, has been made before me and I can now fix everything. That this is really a solid business that Thomas and Daniel have built, and there's still great opportunity and it's an honor for me to help reap those opportunities. Okay, let's get into the numbers. Yeah, a tough first half -year it was. I mean, who would have imagined we'd have a war in Europe when we would be sitting here 12 months ago. Obviously it did have an impact on us. Of course, it affected us, but still, we were growing. We grew 5% in the first half -year on a pro forma basis. Maybe let me quickly reiterate that we're looking at pro forma numbers here, which is numbers that assume in the year-on-year comparison that we would have Brandfield for the full period, right? That allows apples-to-apples comparisons. The numbers we do report and have to report also and that you find in our official documents obviously have the consolidated view that drives growth rates then about 50% and stuff like that. It's just for you to get enough context and understand what's going on on the operations side. For this presentation, we focus on the pro forma. On a pro forma level, we grew 5%. In Q2 we grew 2.4%. We started very strong in the year, and then the crisis came, and it really hit. It specifically hit the Netherlands and Benelux in terms of our demand. We see some fading of the impact right now. We're actually growing very strongly right now, and we see some of that impact going away. We do see the locales differently affected. DACH was growing 3% in Q2. The other segment, which is everything that's not DACH and Benelux, grew 27% all like on a much, much lower base, obviously mostly driven by U.K., Italy, Sweden and France. What's going on in the Netherlands, our view is that the Netherlands business is in the core of the Brandfield business, and that has a somewhat lower average order value. Therefore it's not exactly the same customer segment, which is great and complementary, but we see that customer segment to obviously be a little more affected and also in their buying decisions by the crisis, and therefore demand being more affected there than in our higher value cohorts. This is what we're seeing. We actually saw that for both quarters. If we just look at demand, we can say demand actually was solid with 11% in Q2 growth in the number of orders. Also growth on the Brandfield side in Q2, net of half -year one, we grew 7.7% on orders and also average order value increased at 2.1%. If we break that down and look at, for example, Brandfield, we see an impact that also drives Brandfield AOV increase by some of the synergies we have. I think that's worth pointing out. We have a handbags business now that's much better where we use expertise and capabilities from Fashionette to support Brandfield growth. We do see that impact also then in a mix effect that drives higher average order values. I think that's also benefit worth pointing out. Then customer base. We celebrate one million active customers now, and we see double-digit growth in active customers both in Fashionette and in Brandfield, with 16% Fashionette and 14.5% at Brandfield, for the period. New customers were mostly flat. We actually also saw a decline there. It's also worth pointing out in Brandfield, for the full half -year. That, you know, grew again, and we could turn that around so that in Q2, also new customers, the number of new customers that we acquired is also now higher than in the last period of the previous year. Marketing costs. I think that's a topic you've heard us talk about in the previous quarters. Our thesis is that we gain in marketing efficiency and improve our marketing quality on a per customer, per order level over time. That is as we get more data, as we can do more loyalty management, so customer relationship management with a growing customer base, and as we get more efficient and more effective driven by data to acquire customers. That is a story that we see true where we have been doing it for some time for Fashionette. We, however, see a mixed bag in terms of the overall effect because we actually saw customer acquisition costs increase somewhat with Brandfield. in Q2, we improved it for the overall company, but for the overall half -year, you see a slight increase in customer acquisition costs, obviously driven by the environment and by the headwinds we are facing. But in those numbers is I think an interesting nugget, which is the efficiency gains in customer acquisition at Fashionette, where we really decreased the cost of acquisition from EUR 54 - EUR 50.5 in half -year one, which is, I think a strong gain, and that's obviously very margin -ffective as we drive those efficiencies. We will look into having similar efficiencies over the long run with Brandfield and also with some of those headwinds waning. The table on financial KPIs. One thing that actually closes the gap when you look at the very solid growth on the order side and the AOV growth, then, how does it not translate directly into net revenues with the same percentage growth ratios? Obviously there's returns. We do see, you know, return rates increasing substantially versus 2021. We also saw that to continue in Q2. However, that is not a doom loop. There is an end to this. We actually see return rates leveling at some of the pre-COVID rates on a category level. The outlier is not this year, it's rather the COVID times. I think this is what we have to look at. This is just, you know, back to normal now. We do see some small mix effects, with you know, increase in some categories that have high return rates like sunglasses or shoes, but that's not the quarter. The quarter is really just you know, customer behavior moving back to pre-COVID rates. Moving to gross margin, obviously we do see the impact of the tough competitive environment online and offline, I have to point out. If you look at offline stores, it's astonishing what you see in terms of voucher and discount activities there. There seem to be some problems out there with folks being heavy in inventory. In some cases, we have to match those prices to not lose customer trust. That definitely is something that puts pressure on the gross margin. We don't think it's the new normal, but frankly, we don't think this is something that necessarily goes away over time this year. We will see some pressure there. We also have some ways to react though. Distribution costs. On a percentage basis, obviously, we also see a measurable increase, obviously, with the number of orders needed to drive the same net revenue. However, I wanna point out that on a cost per order, we actually flat and actually improved the center despite all the external headwinds on cost. I think that shows that our model and how we distribute is very solid and sound. It's just that we need more orders for the same revenue. That leads to a profit contribution in H1 of 27.5%, with the mentioned improved marketing cost ratio, and a slightly improved G&A ratio. That's mostly increased because of investments in tech at Brandfield, but also into people, not into more people, but into the quality of people by training, and the quality of people hiring and recruiting. That adds up to the adjusted EBITDA margin of 4.7%, which obviously is a big chunk down from the last period last year. But obviously, seeing the headwinds, we're very proud that we can grow like that in a profitable way in spite of that crisis. Obviously, we have to look at cash, and that's, you know, that cash is king anyway. It's especially so when there's headwinds and when there's a challenging external environment. We're very confident with available liquidity of EUR 9.6 million. We actually also saw improvement in working capital and the small operating cash flow, EUR 3.6 million, actually, as we do optimize working capital. There is a seasonal effect, reminding everybody again, you probably heard that from Daniel in previous presentations over and over again. We are a seasonal business, so we do invest in inventory in the first quarters and there's a seasonality to cash flow because of that. Then you're positive on the operating cash flow on, after Q4, right? When you have the high sales peaks. This is how it is, and that's very natural. Within that seasonality, obviously, you can still perform good or not so good, and then you can operate well. I think we did operate well, coming in slightly heavy on the inventory, but working on that and improving that substantially, and with our working capital facility that by the end of the period was 12.2%, actually increased by now even. We are very, very confident and very happy with our liquidity position. That improved also. Obviously, we're paying back some of the debt from our Brandfield acquisition, that's always also affecting cash flow, but also we're making good progress there, and that improving to 17.2%. That leads us to the outlook. We stay with our outlook. Outlook is unchanged. As a reminder, we wanna grow net revenues by 16%-21%. After what you've heard today, yes, that's an acceleration versus H1. We actually see that acceleration already happening right now. That is required, and that's and I've been good with that. Also, profitability between EUR 5 million and EUR 7.5 million for the full -year. Again, it's a challenging external environment. There is an impact on customer sentiment that is very clear. We see our customers and demand side from our customers to be greatly recovering from that. Obviously, there's a risk and that things might change in the long run. With netting all of that out, we're very confident to remain with our outlook. It's important that when you look at the impact on trading that, you see that's reflecting our H1 numbers. You know, the immediate weeks after the start of the war were really the worst. This is what really, you know, basically affected the H1 most. Even a couple weeks after the start of the war, we saw demand coming back. It was somewhat short-lived impact. That together with you know you know our management of cost and continued strict working capital management makes us very confident for this full -year. Remaining with the strategy to drive selection, to drive technology improvements, optimize our geographic mix, I think we will do the right thing to deliver long-term shareholder value. Also, even with the headwinds, create profitable growth that you know is great for us and for shareholders. I wanna talk in more detail about that. We'll be at the fall conferences. Armin was here again, our own. Welcome again. Myself will be in Frankfurt next week. We'll be at the Berenberg conference, and then after the Q3 results, we'll also be in Paris, I think with us. Feel free to meet us there. Looking forward to meeting you in person, and talk more about the business. We'll be able to discuss even more after more than a couple of weeks on the job there. Looking forward to see that. Thanks until now, and then let's open up for Q&A. Thank you. If you would like to ask a question, please press star one on your telephone keypad. Please ensure the mute function on your phone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question over the phone. We'll take the first question from Christian Salis from H&A. Please go ahead. Hey, good morning, everyone. Thanks, Georg, for the very good presentation and also the very good Q2 results. I've got a couple of questions. The first one is on the customer behavior. Have you seen any shifts there during the second quarter? For instance, the average order value went down quite a bit in Q2, also compared to Q1. Could this be an indication already for some down trading by customers? Yeah, any color here would be very helpful on the consumer behavior. Secondly, on the full -year guidance. To reach the organic growth guidance of 16%-21%, this basically, as you already highlighted, implies a strong acceleration in H2 versus Q1. I understand that you have an easy comparable base in Q3. Still, I think also in Q4, this implies some 20% organic growth or something like that. Could you please share with us your assumptions and expectations, particularly regarding Q4? What makes you that confident that you can really accelerate the growth also in Q4 on a nominal comparable rate? The third question is on the return rate. This has increased by four percentage points to 41 in Q2. You just mentioned this should level out at some point. Could you maybe provide an indication where it should level out, where it has been before COVID? Is the 41% already level, yeah, which we could also expect in the coming quarters? The fourth question. Yeah. Could you please maybe provide a comment on current trading? You already said you're seeing an acceleration. I think that should be well expected given the profit warning last year. Maybe could you also talk about the relative performance compared to two years ago? Maybe that would be helpful. Also, final question, please, on cash flow. Yeah, congrats to the cash generation in Q2. I think this was quite a concern after the Q1 results, and that's great to see. What should we expect in Q3? I think Q2 and Q3 or Q3 another another seasonally weaker quarter in terms of cash generation. What should we expect in terms of inventories? Should we expect further further decrease in inventories quarter of 2023 or rather a ramp up ahead of the Q4? What should we also expect in terms of operating cash flow in Q3? Thank you. Thank you, Tim. That's six questions. I'm gonna go through them. We have quickly but diligently. Customer behavior and AOV dropped. We don't see any demand patterns that would indicate a further reluctance of customers to buy or to buy cheaper items. We do see some mixed effects sometimes. There might be a mix between Brandfield and Fashionette, and these things that drive those swings, but we don't see a customer demand-driven impact there. That's why also we are confident. If you know if it stays the way we see now, that's how we look at it, and then we're confident in growth. What we see now, and that also comes to your current trading question, is growth that allows us to hit this goal. Of course, we can net out last year's operational issues. We still tracking that. The customers seem to be willing. Our customers seem to be willing to complement their style and to complement themselves with designer accessories, pretty much just like as if nothing had happened. What you see is the competitive environment, obviously, that pressure on gross margins and all these things, right? That's obviously a question how that will obviously. We can't, you know, talk on decisions that other competitors are making. We do see actually demand that makes us very positive. That's it on the customer behavior and on the trading. How can we be so confident? I mean, that also goes into that. We see that the demand is there. We see that the market segment provides for those opportunities. We think we have the operational capability, the data that allows the right decisions to keep gaining market share. That's also something that happens in crises, is that if you're a good operator, there's equity there. Yes, we have to increase, obviously growth rate versus having one, and we're doing that, and that's our plan. Then question three was on the return rate. Yeah. Yeah, we obviously leveling out. Some of the group of people are getting more and more crazy and unsure if they really want stuff or different buying behavior is new. We think it's not new buying behavior. It's when we look at where we see those rates now, we don't expect them to keep increasing, but to stay at level at the before COVID time. Yeah. Just the pure seasonality, we're showing that in Q3, we will again increase inventory, right? We have stuff that we already bought. We're, you know, we have to, as you know, we're in the fashion business. We order long-term in advance, and we have an ambitious build -up inventory. Obviously, when you do that smartly, that's just, you know, the way the business goes. We expect to increase inventories in Q3 versus where they were in Q2, obviously. Obviously, inventories do come down in Q4, and that's where the cash is released. This will not be different now. We will not be completely different now. I think the way we manage it, we can be very confident that we do that well, and we also expect the demand there, and we have also. It's all very high -volume, high -value products, right? It's designer products that don't age so quickly. You know, we have chosen a segment that keeps value for a long time. We have a lot of opportunity also to free up cash when we want by selling off more inventory more quickly. The second question it's really just the seasonality. Q3, we're building up some more inventory. Q4, we'll be selling it off. Current trading, please. Yeah, current trading. You know, obviously, current trading is a way that makes us confidence to meet our goals, as I mentioned. No concerns there. Excellent. Thank you very much. Thank you so much, Christian. Next. As a reminder to ask a question, please press star one. We'll take the next question from Catharina Claes from Berenberg. Yes, thank you very much. Good morning, everyone. I was wondering if you think that H2, that you're optimistic about it, and that you already see a further recovery. I'm just thinking or trying to understand what are your thoughts specifically on Q4, and then probably then also starting into 2023. I mean, especially in Germany, but also other markets in Europe, I think it looks pretty much like consumers will be hit with further strong increases in basic living costs, be that heating, or energy, or whatsoever, towards the wintertime. Are you not afraid that this might impact your customers? I mean, understand that obviously, premium customers typically reacted later to a recession than more lower price point customers, which we've also seen during the global financial crisis. I guess my question is generally what do you think about that situation? What are your thoughts heading into 2023, at the moment? Thank you. Thank you. We talked about Q4, so obviously it's a tough environment. Don't get me wrong. It's just that, I mean, there couldn't probably be an accumulation of worse messages that our customers have gotten so far than they have gotten by now, right? There is, I mean, everything that, you know, the most horrific scenarios for Q4 are out there, and people have them in mind. We don't see that affecting demand in a way that makes us lose confidence here. We see some of that reflected too. We also see that the shift to online is actually supported by crises. When people Especially when budgets are tight, then people might rethink if they wanna, you know, if they don't wanna look for options online where they maybe can save some money or where they have the feeling that it's they get better value for money. It might not have mattered so far, but it might matter now. You're not only losing customers through crisis like that that don't buy anymore, but you also gain some that come into your that were core that wasn't buying with you, but they are now discovering your offering. If we have the best value for money there, that's just an opportunity. It's not just, doesn't only go one way, so it's also an opportunity, and that's how we look at it. And that said, I mean, as a disclaimer, crazy things might happen, right? So that's, you know, there's, if there's new impacts coming that we don't know of yet, right? If there's something big happening, of course, you know, it might change, you know, trajectories in either direction. That's how it is. But we don't see that right now. And that's why we're confident there. And we don't talk about 2023 right now. Obviously, we wanna enter 2023 with a very good inventory position and with a lot of new customers that we've acquired in 2022, that's for sure. We don't discuss 2023 as of now. Okay, thank you very much. Maybe two last questions from my side. One was, what exactly were the EBITDA adjustments? I think I've read somewhere that something was related to inventory. The next question would be, what's the growth strategy going forward? Have you already made up your mind or are you thinking about that yet or is that a bit too early still? I'm just thinking obviously the strategy so far was to increase the assortment and also grow via M&A. Can we talk about that, or when will you at the moment think to publish something along that? Thanks. Yeah. The adjustments mostly that's the step-up inventory, right? Which is more like an accounting thing through the acquisition of Brandfield. It's you know and taking the Brandfield inventory into the Fashionette group inventory. There are just different ways how to value that inventory, obviously, as it's now part of the group inventory, and that's an impact of EUR 723K. Then there's share-based payment, which is just you know also accounting for the old options program of the board. That's the core impacts that we make adjustments for because they really are completely non-operational and are basically accounting numbers. The other question on my case for the growth strategy going forward. I'm not committing before my first 100 days. I'm not gonna do big strategy adjustment announcements here on the conference call. I think in general, what I wanted to point out is that this is not a broken ship, right? This is a very solid ship that has you know delivered on the operational improvements on the strategy of driving selection, expansion and geographic expansion and investing into technology. I think that has built a very resilient and strong foundation and happy to continue working on that. Of course, you know, we comment on long-term growth strategy and give a little more detail and flesh out remarks on and it's fair to be very interested in that. That's not what we're doing today. Okay, thanks. Thanks so much. Again, as a reminder to ask a question, please press star one on your telephone keypad. There are currently no further questions on the phone, but again, it's star one. There are currently no further questions on the phone. I'd like to hand the call back over to your hosts. Well then, thank you, everybody. Thanks for listening in. Thanks for supporting this company. You know, it is tough times, but tough times are also opportunities. We have a very good base, I think, Q2 has shown what we can do in spite of those headwinds. We're gonna run a tight ship, we're gonna be resilient, but we'll also grow. And again, thanks for being on the road with us, and maybe meeting you at some of the conferences. Thank you, and see you next time. Goodbye.