Hi, and welcome to this Bang & Olufsen conference call for Q1 2023. For the first part of this call, all participants will be in a listen-only mode. Afterwards, there'll be a question- and- answer session. To ask a question, please press five star on your telephone keypad. This call is being recorded. Today, I'm pleased to present Kristian Teär and CFO Nikolaj Wendelboe. Speakers, please begin. Hello, everyone, and thank you for joining the call. With me today, as always, I have my CFO, Nikolaj Wendelboe, but I have also invited our Head of Strategy, Malene Brinkland Hansen. I will begin with the financial highlights for our first quarter, followed by an update on how we are progressing on our strategic priorities. I will also share some insights about our market and structural drivers to shed more light on our strategic direction. Nikolaj will take us through the financials in more detail, and I will conclude the presentation part before opening up for questions. So if we move to the first slide. We are pleased with our performance in Q1. Despite the continued macroeconomic challenges, we reported a revenue growth of 5% in local currencies. EMEA grew 28% in local currencies, while Americas continued to progress with 13% growth in local currencies. In APAC, revenue declined by 16% in local currencies, mainly due to China declining by the same value. We achieved a gross margin of 52.6%, which was significantly above last year's level of 36.6%. In the last three years, we have absorbed more than DKK 450 million in extraordinary component and logistic costs. The normalization of our global supply chain has contributed to the improved margin. In addition, the quarter was positively affected by a change in product mix towards higher margin products. The price increases that we have implemented since last year also supported the improvements. Our EBIT margin improved by 16.7 percentage points and was positive 2.6%. This was driven by the improved gross margin. We also improved our free cash flow by DKK 20 million compared to last year, which was -DKK 61 million. Please turn to the next slide. We continue to see robust consumer demand in most markets, with like-for-like sell-out growing by 8%, which is higher than our revenue growth of 5%. Sell-out for our company-owned stores grew by 1%, while our online channels, eTail and e-commerce, grew by 5% and 53%, respectively. The monobrand network declined by 5% and multibrand declined by 3%. Consumers focusing on travel during the summer affected demand in EMEA, and sell-out declined by 3%. We did, however, see significant differences in demand across markets. The decline was primarily driven by our Northern European markets. Our company-owned stores delivered sell-out growth of 1%, and the online channel grew by 10%. The Flexible Living category showed good growth, whereas Staged and On-the-go category declined in the period. Overall, demand in EMEA picked up at the end of the quarter. Sell-out in Americas grew by 5%, mainly driven by our own eTail channel and company-owned stores. In terms of product categories, our Flexible Living category had strong growth in the quarter. The Staged category was on par, whereas the On-the-go declined in the period. In APAC, we saw solid growth of 29%, albeit coming from a low level due to restrictions and regional lockdowns last year. This also illustrates the imbalance we have in consumer demand versus reported revenue, as some retail partners still have excess inventory from the replenishment last year. If you look at our product categories, Flexible Living across regions - the Flexible Living grew across regions, while growth in On-the-go was driven by APAC. The decline in the Staged category was driven by EMEA and APAC, while sell-out was on par in the Americas. Please move to the next slide. In January, we presented our sharpened strategic direction. With our Luxury Timeless Technology proposition, we want to strengthen and focus our position in the luxury market. That is a much more attractive place for us to be, and we want to move away from the mainstream consumer electronics industry. We want to leverage our heritage and build on the exclusivity and quality that B&O has been known for since 1925 and become a culture-relevant love brand. We have a unique monobrand network and service setup. We will use that to deliver a true luxury experience to our customers before, during, and after sales, and we're working to optimize our channel network to reflect that. We will leverage our design and engineering capabilities to create beautiful and modular products based on our proprietary software technology platforms. This will, among other things, enable us to build long-lasting products and extend their lifetime through service, repair, and technology upgrades. That also ensures a high resale value, which we know is key value driver for many customers. With our craftsmanship capabilities, we will create bespoke and limited edition products to satisfy the growing consumer demand. We will also elevate the customer experience in our products by continuing to improve quality and push the boundaries of audio technology with next-generation audio. We will leverage our exclusive limited offerings to increase pricing, create scarcity, and improving our margins and profitability further. Furthermore, we see that our company-owned stores are delivering gross margins significantly above group level. We have categorized our competitive landscape... Need to change slides. We have categorized our competitive landscapes into four segments: technology and personal electronics conglomerates, mass and premium audio market providers, audio specialists, and luxury audio and TV. It's clear from our competitor analysis that no other brand in the market is better positioned to lead in luxury audio and TV than us. Our Luxury Timeless Technology proposition and execution... We'll secure a growing position in the market. In addition, we have underlying structural drivers that supports our execution. The insights are based on Boston Consulting Group analysis, which was finalized during July 2023. If we move to the next slide. As mentioned, we have made fundamental choices to strengthen our position as a luxury brand in the audio and TV market. The combined luxury audio and TV market had an estimated retail value of EUR 19 billion in 2022. We currently hold an estimated 4% market share. The mass and premium segments of the global audio and TV market combined are larger in size, with a market value of EUR 173 billion in 2022, but a projected CAGR of 1%. While the luxury audio and TV market has 16% projected CAGR towards 2028, which provides an attractive growth opportunity for us. This will double the luxury segment's penetration of the total market. The positive outlook for the luxury audio and TV market is further strengthened by the expected growth in the luxury sector in general. Personal luxury items, such as watches, jewelry, and bags, are expected to grow 6%-8% in the period 2023-2026. Experiential luxury is projected to grow by 8%-10% in the period. To sum up, if we move to the next slide, we see an overall positive luxury market dynamic in the years to come. The projected growth in the overall luxury market of +10% CAGR in 2022 to 2028 is expected to be led by Gen Zs and millennials, and the number of high-net-worth individuals is expected to grow as much as 10% per year. We have identified these segments as our key target audiences. In addition, we are tapping into several industry trends. The preference for personalized designs in homes, where audio and TV solutions are becoming a part of the decoration, will increase over the coming years. We also see a growing preference for electronic products with a clearer, sustainable profile, made in a responsible way, and a growing interest in digital advancements related to audio and TV solutions. All of these features are part of our key differentiators and underpin our strategic direction. With that, I would like to go to our strategic highlights for the quarter. So we move to the next slide, please. We made progress with our strategic initiatives in the quarter, and I will highlight some of our achievements across our five shifts. To build brand awareness and target younger consumers, we launched our campaign, See yourself in sound. The campaign included customer interaction through Spotify to generate automated, personalized avatars, and the campaign gained global reach. Our marketing and brand efforts also helped us increase the number of customers registered in our app, as well as the number of customers owning more than two products in quarter one. In the U.S., we announced our new partnership with LG Electronics on the large size LG MAGNIT Micro LED screen, intended for taking our home cinema offerings to new heights. With this partnership, we're offering a 136-inch screen with our Beolab 90 speakers for a complete home cinema system to luxury customers. We also announced a Cradle to Cradle certification of our Beosound Emerge Wi-Fi speaker. The Cradle to Cradle certified product standard is one of the world's most trusted, science-based frameworks for designing and manufacturing responsible and circular products. This is a validation of our work to build products that last and are made in a responsible way. This also supports a higher lifetime value for our products because they can be serviced, upgraded, and repaired. This, in turn, also contributes to a higher resale value for our products, which is important for many customers. We have also strengthened our portfolio. We announced Beolab 8, our first outdoor speaker, Beosound Bollard. Both will be available for sale in quarter two. Beoplay EX is now also certified for Microsoft Teams, expanding our offering for hybrid workers. A key launch was the product collaboration with Ferrari. This collection not only drives revenue, but also brand awareness and traffic to our website and stores. We continued to optimize our channel network. This meant that we discontinued some of our partners, especially in the U.S., where we closed more than 700 multibrand doors during the quarter. We're executing our Win City concept in London, Paris, and New York. Q1 sell-out growth in London landed at 1%. Throughout the quarter, our Bicester Village store was challenged by staff shortages and limited stock availability, and that had an impact on our performance in London. While our Win London execution continued to drive positive results, our Q1 performance in Paris was more differentiated. With a sell-out index of 68, Paris monobrand had relatively low performance, mainly due to a high comparable with a large sale within the Staged category last year. However, our COCO and e-com channels delivered double-digit sell-out growth. In New York, our sell-out growth grew 13%. We hosted various events in our company-owned stores to bring musical experiences to specially invited guests and to activate our Scuderia Ferrari sponsorship with an exclusive race-watching event. Finally, we continued our growth trajectory for our adjacent businesses. Besides the collection with Ferrari that I already mentioned, we expanded our business. We will deliver a luxury sound system to all Acura car models in the coming years. With that, I would like to hand over to you, Nikolaj. Thank you, Kristian. Now please turn to page 13. Before I go into details, let me add some comments on China. As we had expected, the economic recovery in China is slow, despite the positive indications we saw in the spring. The economic growth will most likely be slower going forward, and we do not expect improvement in consumer spending before the second half of our fiscal year. Generally, we see a fragmentation in the market in China. The monobrand customers are showing less sensitivity towards economic slowdown than the customers in the online channels, which are leading the online platforms towards a price focus, which we generally try to avoid supporting. Please turn to the next page. Reported revenue in Q1 was DKK 619 million and grew by 1.2% compared to last year, or 5% in local currencies. The increase in reported revenue was related to product sales, which increased by 4.3%, or 8% in local currencies. I will go more into details on the next slide. Overall, revenue grew across channels, except the multibrand channel, which declined by 37%. As part of our work to improve the luxury experience, we are more selective when it comes to where consumers experience our products and brand. In Q1, this meant discontinuing more multibrand stores and less volume in the multibrand channel overall, which affected all regions. Our brand partnering and other activities declined by 16.1% against last year, corresponding to a 13% decline in local currencies. License fee revenue declined by 3%. This was mainly due to declining income from HP. Revenue from the automotive industry had solid growth in the period, supported by a good order backlog and easing of supply chains for car components. Revenue from co-branded products declined year-on-year. This was mainly related to a high comparable last year due to the ramp-up of the Bang & Olufsen Cisco 980 headsets. Please turn to the next page. Looking at the regions, EMEA grew 26.7%, or 28% in local currencies to DKK 303 million, and double-digit growth in all channels except for multibrand. Revenue was positively impacted by replenishment by retail partners, and the monobrand channel grew 36%. At the end of the quarter, we implemented price increases on selected products in the portfolio, and we saw retail partners replenishing inventory and executing project sales. This was primarily within the Staged category. We expect that the price increases have pulled some demand forward from Q2. As part of the strategic transformation, the number of multibrand stores in EMEA has been reduced by 204 stores since Q1 of last year. In addition, the number of monobrand stores was reduced by 23 year-on-year. This was mainly due to a quality assessment of the monobrand network and partners, where 40 stores were identified to be closed in 2022, 2023. Total online sales in EMEA, that is own e-commerce and eTail, grew by 13% year-on-year. Revenue in Americas grew by 6.4%, or 13% in local currencies to DKK 67 million, mainly driven by growth in our company-owned stores and our CI channel due to our partnership with Origin Acoustics. Revenue from the multibrand channel grew despite ending the partnership with T-Mobile. That reduced the number of stores by more than 700 stores during the quarter. Revenue in APAC was DKK 172 million, corresponding to a 16% decline in local currencies. Revenue from our Chinese market declined 26%, or 16% in local currencies, and accounted for approximately 54% of total revenue in APAC. We are making changes to the distribution, which is affecting performance in the short term. In addition, some of our retail partners still have excess inventory from replenishment last year. Lastly, the overall economic recovery in China is slow. Those factors combined contributed to the decline in our APAC region. The efforts to change the eTail network and multibrand setups in APAC meant that both channels declined in the period. Also, last year, multibrand saw high comparables. Excluding partners with high inventory levels, our monobrand channels saw growth in the period, reflecting the mentioned lower sensitivity in consumer behavior in that channel. All three regions generated growth within the stage category, and EMEA and Americas saw growth in Flexible Living, supported by our portable speaker, A5, launched in Q4. On-the-go category had negative growth in all regions. This should be seen in the light of the launch of Beoplay EX in Q1 of last year. Please turn to page 16. Gross margin increased to 52.6% from 36.6% in Q1 of last year, and 51.4% in Q4. The normalization of component and logistic costs has significantly lifted the margin level since Q3 last year. In Q1 of last year, extraordinary costs adversely impacted margin by approximately 11 percentage points. The normalization also contributed to an EBIT margin before special items of positive 2.6%, against negative 14.1% in Q1 of last year. Please turn to the next page. If we look at some of the underlying drivers in the gross margin, our gross margin for product sales increased by 18.8 percentage points to 47.6%. Besides normalized supply chain costs, we delivered an improved gross margin across product categories, supported by price increases implemented in last year. In addition, a change in product mix towards higher-margin products favorably impacted the quarter. The gross margin from brand, brand partnering and other activities was 87.8%, up from 82.1% in Q1 of last year. The increase in gross margin was mainly related to the change in mix, as the category included a lower proportion of product revenue from a brand collaboration with Cisco. Lastly, I want to comment on a smaller change in cost allocation between our product business and our Alu business, residing in the brand partnering and other segment. Due to a higher cost allocation to our aluminum production, the gross margin in brand partnering and other activities decreased by approximately 5 percentage points, and product sales increased by approximately 1 percentage points, depending on the mix and seasonality. Comparable figures have been updated. Please turn to the next page. Total capacity cost was DKK 309 million, and on par with Q1 of last year. In the quarter, we received final adjustment of COVID-19 compensation packages, which reduced our capacity cost with DKK 12 million. Development cost was DKK 63 million, against DKK 69 million last year. Lower incurred costs due to COVID-19 compensation packages were partly offset by a lower capitalization compared to last year. Distribution and marketing costs increased by DKK 10 million to DKK 250 million, DKK 15 million. The increase was mainly related to more sales and marketing activities and full-year effect of the resources added since Q1 of last year. The marketing cost ratio was 11.6%, compared to 9.8% in Q1 last year. Administrative expenses declined 4 million to DKK 31 million. This was driven by the mentioned COVID-19 compensation packages and general cost savings. Finally, we had no special items in the quarter. Please turn to the next page. Net working capital increased to DKK 311 million during the quarter as a result of lower trade payables. We continued to improve our inventory level, and inventory decreased by DKK 21 million compared to year-end. In addition, no components purchased on the spot market remained on inventory, which contributed to a healthier inventory composition. Trade receivables decreased in the quarter, and sales with extended credits was 1%, compared to 6% in both Q4 and Q1 last year. Trade payables was at DKK 403 million, compared to DKK 565 million at year-end. This was driven by lower production activities in the quarter and inventory management. Compared to last year, net working capital decreased by DKK 14 million. We continue the work on improving our working capital. The net working capital ratio to revenue was 11.3% in Q1 and on par with Q1 of last year. As you can see, the components of the net working capital are different year-on-year due to the work with reducing inventories. Please turn to the next page. Free Cash Flow improved DKK 20 million and was -DKK 61 million, compared to -DKK 81 million last year. The development since last year was driven by the improved EBITDA, offset by an expected higher net working capital level compared to Q4. The capital expenditures were DKK 42 million, which was DKK 16 million below Q1 of last year. Investments were primarily within intangible assets and related to new products and platforms. Finally, capital resources, consisting of available liquidity and available drawing right on our revolving credit facility, stood at DKK 310 million, down DKK 74 million from Q4. This was mainly due to the negative Free Cash Flow. Our available liquidity was DKK 150 million at the end of the quarter, consisting of cash and securities, offset by repo transactions. With that, I would like to hand the word back to Kristian. Thank you, Nikolaj. So if we please turn page. All in all, our Q1 result was in line with expectations, and we maintain our outlook for the year. Our main assumptions are listed here and also in our financial report, and they are unchanged compared to when we published the outlook in July. We don't expect to see improved market conditions in China before second half of the fiscal year. Our product launches are on track, and we have disclosed two our product launches, namely Beolab 8 and Beosound Bollard, that will be available in quarter two. In quarter two of last year, we launched the Beosound Theatre with great success. We expect good demand from our Beolab 8, but bear in mind that our Beosound Theatre was launched earlier in the quarter last year. All things considered, we expect the growth to be back end loaded for the year, and we expect to maintain a gross margin level of around 50%. Please move to the next page. So to recap, we are satisfied with our performance in quarter one. We significantly improved our gross margin, and we delivered profitable growth of 5% in the quarter. We saw a robust demand for our products in most markets. Our customer base continued to grow, and we saw higher repeat purchases. Despite the ongoing macroeconomic headwinds, we delivered growth in both EMEA and the Americas. APAC is still challenged by the developments in the Chinese market, and that adversely impacted our performance in the region. We strengthened our Luxury Timeless Technology proposition in quarter one. We have expanded our Win City concept to New York with good results for the first reported quarter, and we strengthened our portfolio and brand visibility with products and campaigns, and we expect Paris to come back on track. Due to the current market conditions, we will continue to be prudent with our investments and cost levels, and therefore, the transition will happen a bit slower. However, we remain confident in the direction, and our insights confirms that this is the most attractive market opportunity for us. Finally, as I just said, we maintain our outlook for the year. With that, we are opening up for questions. We'll now start the question- and- answer session. If you do wish to ask a question, please press five star on your telephone keypad. I'll be brief. Brief pause while the questions are being registered. The first question will be from the line of Poul Jessen from Danske Bank. Please go ahead. Your line will now be unmuted. Yes, thank you. Thanks for taking the questions. I would like to start with the strategy, where you came up with more insight into, to market potential. Two questions on that. One is execution, and taking that also to the final comment you just made on transformation and the pace of that. A market of, let's say, DKK 140 billion, which you are, you are aiming for. Do you feel h ow do you feel on executing on that versus, as I hear you talk about being bootstrapped, on financial resources? Can you actually, you know, grab the market opportunity that you see, or how do you look at that? The second part is that if you see a market of about EUR 140 billion today, and you have revenue of EUR 2 billion, who are taking the other EUR 138 billion? Because there are not that many luxury companies in this space. Is it people just not buying luxury products in general, or how should we look at it? Thank you, Poul. I start, and I'll probably pass on to Malene as well for more details into the numbers on that you mentioned. But we believe we have a plan that we can execute on to transition towards luxury, timeless technology. We have mentioned the five shifts that we want to do. We want to create more brand awareness, we are doing that, together with Ferrari, together with See yourself in sound. So activities are ongoing. Should we have more funds, we would obviously do more there, because that is one of the areas where we believe we can generate more sales, so the brand awareness piece. We have a very strong product portfolio. We probably have the best product portfolio we have had ever, but we also have high ambitions on the product portfolio, and we want to develop more things for the product portfolio that are obviously then as well paced in the right pace based on what revenue and what EBIT we can make. We also have a distribution network that we are working with and that we want to upgrade, and we want to improve, and we have met with our 200 EMEA partners just recently, and I think they're also excited about the strategy. But if there's a lot of learnings and upgrades that we need to do also in the distribution network. Win City, we have covered before. We are doing now three cities, but we know 13 cities that we have in the pipeline that we want to go to. And we know that to fully execute on our plan, we have some 30 cities in the world. So we have a plan to execute towards executing on all of these things. But we are pacing ourselves in order to make sure that we take into consideration the macroeconomic headwinds and obviously the money that we have, and try to avoid spending money before we are sure that we are earning money. So I believe we will get there anyway, but it's more better to be prudent at this point in time. On the size of the market, I'll pass over to Malene, who will share with you how we see that total opportunity. Malene, please. Thank you, and thank you for the question. So to answer it correctly, I will have to take a step back and explain how we size the market. So the methodology behind, which is based on setting a price threshold. So the luxury audio and TV market has been defined on the basis of price threshold. And within the audio category and the TV category, respectively, we have sub-categorized the market. And that means that for each subcategory, such as soundbar, hi-fi speakers, wireless speakers, portable speakers, true wireless and headphones, we have different price points that has been confirmed as, as being categorized as luxury price points. And within each of these categories, we see a different competitive space. So that means, to answer your question, who will be taking the large or the other share of the market? That would be a mix of competitors, ranging from Apple, having a, a high price, proposition in the true wireless category, to Bowers & Wilkins having a, a high price proposition in the wireless speaker category, as an example. What we do see, however, and where we feel confident, that is that we come out when we've done this very extensive bottom-up competitor mapping and market sizing exercise. What we see is that we are the only true luxury player or audio and TV player, so we are the only player in the market with a full portfolio above these price points and with a value proposition that would, that would entertain and that would be relevant for a luxury audience. Whereas the other competitors have more dispersed value propositions, speaking to a much larger audience or diversified audience, I would say. Follow-up. How you see today the DKK 19 billion in luxury, is that defined as people buying products which is seen as luxury today, or is it seen as a potential market where people should be buying luxury and given, you know, income or net worth or whatever? So historically- I think, is it people buying a Samsung TV, and then we would say, "They should have been buying a B&O or a Loewe or whatever?" Or is it people buying luxury TVs overall today? The historical market, so up until today, is based on sales. So what has been sold and in terms of high-priced products. So products ranging across the different categories above the certain thresholds. So the units bought, that's how the market has been sized. So based on revenue figures from the various companies. Okay. Thank you. Then, going back to more near-term performance. Given the very strong sell-in you've had in August to the channel due to the price change from first of September, how should we look at, for instance, the second quarter here? Should we see that as sell-in coming down or, and therefore more matching a sell-out number minus channel inventory? How should we look at the very near term with this very strong channel mix change? Maybe I start, and then I'll pass over to Nikolaj. We know that we have depleted inventory with many of our partners in quarter three and quarter four that was not replenished. So I think there is one factor that is just normal replenishing to have the right stock levels. Then there might be, and I think there is an effect as well of placing orders earlier before price increases kicking in. And then we have a third component, which is project sales that we have had. We're obviously monitoring this very closely as we now move into quarter two, and I think it's too early to really say how much is the effect from Q1 that is going to affect, if at all, Q2. But I'll pass on to Nikolaj as well. Yes, thanks, Poul. For Q2, I think thinking about the comparables also from last year, we should be cautious about how we think about growth. First of all, we still have a market in China that is challenged. Consumer sentiment is low. They're spending less money, sort of on a general note. And we actually, last year in Q2, as you can also see, I think on slide 15, that APAC had a pretty good quarter still, because we're still selling in and replenishing a lot of the partners in China last year. So that's a very hard comparable to beat in China from last year, and with consumer sentiment, it doesn't make it easier. Then last year, in Q2, we also launched Beosound Theatre in the beginning of the quarter. And that was a product at high price and high volume, which contributed quite well to the quarter last year. And the launches that we have in Q2 of this year will not have an impact of the same magnitude. So there are some elements that are countering growth perspective for the second quarter, compared to what we believe is the perspective for the full year and the second half of the year. Okay. And the inventories after this strong sell-in, in general, if you take Europe, do you see them as above normal for start of the Q2, or was it just a catch-up on having potentially lower inventories in the recent quarters due to liquidity? Yes, exactly. On China, it's a catch-up? Yeah, and in here, we see it as a catch-up. And we also seen that our partners have executed a lot of project sales. The sell-out has also followed up in August. So inventory levels are higher, but they are not higher than normal. Okay. And China, when do you expect inventories to be down to a normal level where they have to start purchasing again? We expect it to be in the second half of the year. That's our expectation. Okay. Yeah. All right. I'll step back. Thank you. Thank you, Poul. The next question will be from the line of Niels Leth from Carnegie. Please go ahead. Your line will now be unmuted. Good morning, and thank you for taking my questions. Also starting on your strategy plan. You mentioned briefly in the beginning of your strategy session, your ambitions as to improving the sustainable profile of your products. Is it realistic to expect that service and repair in a medium to longer term perspective could become a meaningful revenue stream for your company? And then, as more like a financial type of question, as regards to this strategy or market analysis that you're providing, has there been any kind of one-off cost in the quarter related to the creation of this strategy report? So those were my two first questions. Thank you. Thank you, Niels. The short answer on your first one is yes, we expect to make revenue from services and repair going forward. And that is also one of the things that we would like to invest in, depending on the availability of the funds. But to have a circular ecosystem where our customers enjoy the long lifetime and the beautiful designs of our products, that's why they have been designed that way. And will also justify the value of the products, because they can be repaired, they can be upgraded, they can be serviced, and they can also change shape. If you look at Beolab 8, for instance, it's also modularly built, and you can change colors on it, you can change front panels on it, you can upgrade it with, with new technology if need be, which is the same for theater. So we have a plan, in, in the plan is to monetize also services and software. But we'll have to come back when we can execute on that plan. But that's, the, the answer on that one. And then on the one of costs, I pass over to, to Nikolaj. Yeah. There is some, of course, included in, in, under admin cost in, in the PNL, but it's not a major cost. So, it's not something that we have mentioned or specifically called out. I think I would like to say on the service part, that this is already a business and has been for years. It's also part of why our inventory levels, when you look at the overall inventory level, we have spare parts inventory that is quite significant because we're turning that into revenue. And we think that's a business that we can also improve in the future. So it's part of our circular and longevity approach to be able to repair products, and sometimes we can charge for it as well. And also to become a meaningful revenue stream. Yeah, but I mean, it's not a revenue stream that we call out as a segment, right? It's part of the product revenue right now. But it's not insignificant as a total number. It is a meaningful revenue stream already. Great. When it comes to store closures, you implemented quite a few of them in this quarter. Should we expect additional store closures in the coming quarters? And how will this affect revenue growth in the next few quarters? Thank you. We try to provide these luxury experiences. Obviously, monobrand channel and our direct to consumer channels are the primary channels that we want to create this experience in. We are helping them and supporting them to improve and upgrade as we speak. I said we had the European monobrand partners, 200 of them, with us two weeks ago, and they are excited about this strategy. It also puts requirements on them in terms of service levels, in terms of inventory, in terms of how they execute. Many of them will make it, but some of them will not make it. I think in that network, we will see a few more closures. Where I think it will be a bigger effect is on the multibrand, where we will continue to be in multibrand, but we will be there with a limited assortment, and we will also be very cautious on being part of deals or campaigns that are price-driven. Of course, we do not decide pricing. They decide that on their own, but we have much less interest in participating in this type of one-off volume deals. We try to build up experiences, and we can do that with multibrand and certain multibrands and the lifestyle multibrands. We have exited during this quarter as well some of the multibrand stores that would not be able to provide the customer experience. So we focus more on the margin and the gross margin and making sure that the customer experience is maintained than just absolute growth on top line. Nikolaj, you want to add anything? No. So, just restate what I said earlier, that in APAC, we're also changing distribution, and that of course also is sort of impacting the short-term growth potential there. When it comes to the APAC distribution changes, will this affect the coming three quarters as well? Yeah. In general, it will, because we are dialing down on multibrand and to some extent also on eTail. Multibrand, especially, we are dialing down on because we want to have the right execution from a consumer perspective in the stores, eTail, we are dialing down on at a slower pace, because eTail is a big channel in China and it's hard to be a consumer-facing product without doing eTail. As I said, due to the economic development in China, consumers are generally refraining from spending as much time on the eTail platforms as they used to. That is leading to price sort of wars between the platforms and that we are not entertaining, and at least trying to avoid to entertain. So it will have an impact also in the longer term. But on the other hand, we wanna dial more up on monobrand and our branded channels also in China. Great! And then just lastly, on your gross margin, should we expect the gross margin level of fiscal Q1 to be sustainable for the remainder of this year? Yes. So in that level-ish, around the 50% mark is what we expect. Whether it is going to be as high as above 52%, as we've seen this year or this quarter, is hard to say, but around 50% is our target for the year, and we believe we're heading in the right direction. Great. Thanks. I'll jump back in the queue. Thank you, Niels. As a reminder, please press five star to ask a question. The next question will be a follow-up from the line of Poul. Your line will now be unmuted. Thank you. I have a few financial questions. You saw the R&D on the last term then DKK 63 million; it has been trending downwards. Is that just a coincidence or are you actually scaling down on the R&D activities? And then back to the admin, and you also mentioned COVID-related, I guess it's compensation of DKK 12 million. Is that s hould we see a rebasing of the admin cost or the cost lines in the coming quarters as this comes to an end? I start generally on the R&D question, and then Nikolaj will jump in with the other questions. But then product development and R&D is core in what we're doing, and we have, over the last couple of years, strengthened the whole engineering department with significant resource. We will continue to do that on the software side. So that's a key investment area for us in order to build a product portfolio. Yeah, so on R&D- So this is the level going forward? I think we would like to have more, if we can, sustain it from a P&L point of view and cost point of view. The level is a bit on the low side here, due to compensation packages on Corona, Poul, because the comp- Okay The cost compensation is actually distributed to the right places in the P&L. So there is, I think, in R&D, a major part of the compensation, probably DKK 8 million is hitting that. So you could add that in and say then it's DKK 71 million, more like for like. And then, of course, this is report development cost and not incurred, so capitalizations always plays a role in, and that's always depending on the products we're executing on and where we are in the product life cycle, sort of, and where we are spending most of the resources. So incurred development cost is actually not that different from last year. Okay. Yeah, and so- Also back to admin. Yeah, exactly. So, the Corona packages and admin is only DKK 2 million. So, it's a nd then, of course, then back to the question on was there any items related to market study we've done, and that's then it sort of washes out. So the level is around these 30+ million on admin cost that we see going a little bit up and down from quarter to quarter. Okay. I have three more questions. One is on London, where you have 1% growth in the quarter, and then you mentioned Bicester. With lack of availability of products, that surprises me, given that the inventory and the activities in general, if you didn't have the products in place. What's the performance in London if you try to do an underlying estimate with things being normal? Is that still 20% + or something? Yeah, it's double-digit growth. If we take out Bicester Village that we are seeing in London, all the other COCO stores are growing and our monobrand partners are growing as well. And also e-com is growing in London. So, it is a Bicester Village challenge on both retail staff and shortage of products. And it's not like we don't have products, but it is a outlet village, Bicester Village, so it's more end-of-life products and secondhand products that we are selling in the village. And we have had less of those because we cleaned up a lot on these product types in the past. Even though you might have one product that you have in end of life, I mean, it's not like you, you can't sell only one product in the store, right? You need a variety, and that has been a little bit of a challenge, so that's something we are, we are working on. So that explains it, but it's one quarter and we feel very confident that the Win City execution and the Win City plans is the path for us going forward. Because we had one store in London that didn't perform, it doesn't really lead us to change any strategy around that. And if I just may add this- Okay, and a follow-up. Sorry, Poul, go ahead. A follow-up on Niels question about the service and the upgrade of products. Isn't it fair to assume that given that it's just within the recent years that you've come up with these longevity products, that we should be some five, six years out in the future before people come back and ask for a new Wi-Fi module or whatever? Good question. Not, of course, all products from the past are going to be upgradable and serviceable. Many are, but there are certainly products that are not. You're absolutely right when it comes to the new ones. We don't expect them to come in, kind of tomorrow. What we do believe is that we can monetize software in a different way than we have done so far, and accessorize the products in a different way than we have done so far. Like I said, and alluded to, they were built up in a modular way with the possibility of changing panels and making it also, from that point of view, more a fashion item, where you can have different fabrics and different woods, et cetera. You can actually change with your interior design in a more flexible way and do that yourself. So that's what we are building the new products for as well, and we haven't seen all of that just yet. Also, for the Bicester Village, if I just may take the opportunity. Bicester Village is a village where they certainly do outlet sales, but they also do full price sales, which is unique for that one. They also want to be a luxury shopping destination, and to copy a lot of things that are happening in the luxury industry. In our case, it has been a good place where we deplete products that are end of life, like Nikolaj said. But we also sell full price product there, and I think it's obviously good news if we don't have inventory to deplete there, because that means that we have sold it in other places. Okay. Then on the U.S. with the T-Mobile, where you leave their stores, I don't think it's that long ago that you signed up with T-Mobile. I was just wondering, isn't it too volatile in the process on how to go to market with partners are in the U.S. market? I think signing up and then leaving- It doesn't- In the past you had, Best Buy and so on as well. I think it's a fair question. We need the geographical footprint in the U.S., generally speaking, and before we had the Luxury Timeless Technology strategy, and before we had validated that one and started executing, that's why we entered with T-Mobile, because we believed we could reach out to many of their customers with particularly our entry products. As you know, with the Explores or with accessories to phones. It doesn't mean we have completely ended our relation with T-Mobile, but we believe this channel is less of an interest for us than the CI channel that we've been working with. To expand the monobrand network is more interesting for us and the other lifestyle stores in the U.S. I think we can also say we didn't get the results that we wanted from T-Mobile, really. That's another reason why it makes sense to reduce the number of stores. Okay. And I know it's current quarter, do I have anything to add to how the Ferrari collection has been received by the market? It has been super well received. The sales numbers are good, very encouraging. Some of them are difficult to get hold of in many different countries and markets, so we are encouraged, inspired by that. Also, all the events that we are doing and have been doing, and will do with Ferrari, has been super well received by our monobrand partners, also by the different Ferrari dealerships, where we bring customers to our either their event at their premises or at our events. It's also interesting to see, except for them selling, of course, the fantastic Ferrari collection, we also attract them, which is no surprise, but to buy Harmony TVs and Beolab 50s and Beolab 28s or Theatres, because they get a reintroduction or a new introduction to the brand. So we are very encouraged by that collaboration, both from the collaboration portfolio point of view, but also from the event point of views that we are doing. Okay, and the final one from me, that's more on the legal side of patents. There's been this case between Google and Sonos about speakers. And first Sonos won, and then just a few days ago, the patent was cancelled by a court in the U.S. Is this impacting you in any way, or has it impacted you in the past? Now, it's apparently better, but they can do a Chromecast coming back to multiple setups. I will want to refrain from commenting that as much as possible, but we haven't seen any impact from that to date, and we believe we are in a good place. Okay. Thank you. That was all for me. Thank you, Poul. As there are no more questions, I will hand it back to the speakers for any closing remarks. Okay. Thank you very much, everybody, for listening and tuning in, and, if you have any further questions, please don't hesitate to reach out to our IR department, and we wish you a lovely day. Thank you.