Good morning, everyone. Welcome to today's ASOS analysts call. My name is Seb, and I'll be the operator of your call today. If you wish to ask a question during the Q&A session, please press star one on your telephone keypad. If you'd like to withdraw your question, please press star two. I'll now hand the floor over to José Antonio Ramos, CEO, to begin the call. Please go ahead when you're ready. Good morning, and welcome, and thank you everyone for joining us at such a short notice this morning. I'm here with Dave Murray, our CFO, and Michelle Wilson, our Chief of Staff and Strategy. You'll have seen we have put out several announcements this morning. It's been a pretty busy start to the financial year here at ASOS. Firstly, we have announced a new joint venture with Heartland, acquiring a 75% stake in Topshop and Topman. Secondly, we have launched our refinancing of our convertible bonds and have amended and extended our Bantry Bay facility. And thirdly, we have provided a trading update alongside these announcements. I want to quickly walk you through each of these announcements before leaving plenty of time for your questions at the end. Let's start with the joint venture. We are excited to enter a joint venture with Heartland, who will be acquiring a 75% stake in Topshop and Topman for GBP 135 million, representing a total valuation of GBP 180 million. ASOS Holdings Limited will hold the remaining 25% stake, in which our existing partner, Nordstrom, will continue to hold a minority interest. We really believe this new joint venture is a win-win for our business, our shareholders, our customers, and our ASOSers. Strategically, it builds upon the great work of our Topshop and Topman teams. We're leveraging on our new partner's expertise to grow the brand, the brand's reach through new channels and financially, the new structure allows ASOS to monetize value today, demonstrating disciplined capital allocation while retaining a stake in the brand's future potential. The joint venture is the result of a competitive process, which speaks to the strength of the brands and the hard work we've been doing, laying the foundations for their success. Now, the next stage of that work begins. We'll continue to operate and focus on our areas of strength, designing the best product and providing a destination for style through asos.com, as well as through the relaunch of topshop.com. This is where we have a right to win, and in Heartland, we have an incredible partner alongside us on our journey, a partner with whom we already have a strong working relationship, and importantly, who has the complementary expertise and resources to unlock new opportunities, both online and offline, and bring customers globally the best that Topshop and Topman have to offer. Next, I want to touch on our refinancing. Today, we have announced a refinancing of our convertible bonds. We have launched an offering of approximately GBP 250 million of convertible bonds due September 2028, and a concurrent partial repurchase of the outstanding GBP 500 million of convertible bonds due April 2026. We have also amended and extended our Bantry Bay facility to May 2027, with the option of a 12-month extension. As part of this, we have switched GBP 50 million of the term loan to our revolving facility, effectively reducing our blended interest rate. The net proceeds from our new joint venture, alongside with the new convertible offering and cash on our balance sheet, are being used to fund the concurrent convertible repurchase. The goal of this is to reduce our net debt position, while also proactively extending the maturity profile of our debt and additional flexibility to our balance sheet. We believe this improved financial flexibility will help accelerate our core back to fashion strategy. Finally, I want to touch briefly on our trading update. We have continued to make good progress on our back to fashion strategy, focusing on bringing the best fashion and the most inspirational experiences to our twenty-something fashion-loving customers, while laying the foundations for sustainably profitable growth. For fiscal year twenty-four, we expected Adjusted EBITDA. We expect, not expected, sorry, Adjusted EBITDA at the top end of consensus estimates. Sales slightly below the bottom end of our guidance range, and all other guidance as set as fiscal year twenty-five... twenty-three, sorry, year end, remains unchanged, subject to the impact of the transaction. We intend to provide a full update on our strategy and final guidance as part of our full year results in the coming months. During H2, we continue to progress on our Back to Fashion strategic priorities and making ASOS faster, more agile, and more profitable. Three highlights, I want to call out are Test and React, Partner Fulfills, and returns. For Test and React, our program for improving our speed to market, which brings product from design to site in less than three weeks, we're on track to hit our target of circa 10% of our own brand sales by the end of fiscal year twenty-four. For Partner Fulfills, our flexible fulfillment model, we have exceeded our fiscal year twenty-four target. Our Partner Fulfills now accounts for more than 4% of our gross merchandise values across approximately 100 brands. This is important as it brings our customers an even greater breadth and depth of products. And we have continued reducing our cost to serve using AI technology, personalization, and improved imagery to improve our customer experience and reduce our total and underlying returns rate year on year. I appreciate we have covered a lot of ground there. I'll now open it up to questions. Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. First question today comes from John Stevenson at Peel Hunt. Please go ahead. Hi, good morning, everyone. Can we start on trading, please? I guess the implication of guidance this morning is that, you know, you're still in double digit declines, double digit declines, sorry, through the second half of the year. Can you give some sort of clarity behind the second half momentum and maybe some color on the key territories, please? Hold on, I'm writing it down, otherwise I will forget, John. Okay. And if, while you're writing, in that case, can I just a follow on, just in terms of financing, I appreciate everything's sort of moving around, depending on the level of the repurchase this morning, but what's the sort of target net debt position for the business? Yeah, I'll take the first one. Hi, Dave, thanks for the question, John. Just with regards to the second half, I suppose when we gave our update the half year, we did guide to the -5% to -15%. We are slightly outside of that, so you can expect that it will be in the area that you referenced for the second half as well, broadly consistent with the first. But there's a point that we've called out in relation to just where we are on, like, the consensus estimate with regards to EBITDA. Our focus through the second half, through Back to Fashion, has been on making sure that we drive the right sales. And then, but we've been making decisions to drive profitability rather than just purely going after the sales number. From a geography perspective- Yeah, happy to put some color here, John. So let me just elaborate on what Dave was saying. Our intention for fiscal year twenty-four was always a year where we really focus on the transformation of ASOS and making sure that we have this foundation for sustainable, profitable sales. So we've, I mean, we've been really focused on this balance between sales and profitability, and the fact that our profitability comes at the top end of the range, it's really rewarding to see that what we have done, it pays back. So in terms of geographies, what we have seen during the course of the year is, obviously, I mean, this is a very volatile market, so things change fast. But we are very, very, let's say, happy with, with the evolution of, of the different geographies. For instance, the U.S. is in a very good place in terms of profitability right now. And, and I know that for many of you, has always been a concern, the, the, the, the very poor profitability of the U.S., we're in a much better right now. And, the U.K. has also been improving during the course of the year. We have seen more volatility in, Europe, especially in Germany. I don't know if that. Do you want to move to the other? Yes. Regarding the second question, John, on net debt, as you can see, we've not been specific on that. It's not possible to give that answer today. I think the point that we have said is that actually, so we've got net proceeds coming in in relation to the sale to the JV via Heartland. We will be using some of that to repay down some of the debt that exists between us and Nordstrom. The unknown part, which is why I can't give a solid answer, is that we won't know where we end up on the completion of the bond exchange and the tender till later. So but full guidance on that is gonna have to wait until we give the full year update. Okay, that's fair enough. Maybe actually, in that case, just before this started this morning then, I guess obviously with the stronger EBITDA, you, you'd have had eyes on sort of, I guess, low two hundreds in terms of, you know, closing year-end net debt. Yeah. So again, for FY 2024, the update we've given is that just in relation to sales and where we are on Adjusted EBITDA, that we remain confident with the other guidance and consensus as it exists for FY 2024 that's out there, and further guidance remains unchanged, but updates will be given when we give our full results in a few weeks. Okay, great. All right. Thank you very much. Thanks. Thank you, John. Our next question comes from Matthew Abraham at Berenberg. Please go ahead. Morning, all. Thank you. I was just wondering, initially, if there's going to be any immediate operational impact following the establishment of the JV on Topshop? That's the first question. The second question relates to trading. Given that you've guided to Adjusted EBITDA being towards the top end of consensus and sales slightly below guidance, can you just provide some color as to what cost or margin outperformance you can observe that's allowed you to provide that guidance, please? Thank you. Morning, Matthew. Let me take the first one, and maybe Dave can take the second one. On the immediate operational impact, obviously, the answer is no. But let me elaborate a little bit because probably it's a little bit of a very short answer. One of the things that is very exciting about this joint venture is that it's really a win-win option that unlocks a lot of value for us. On one hand, it allows us to focus on what we do best, that is to create, to design, to buy, and to sell through online channels. And on the other hand, it brings the best of a incredibly exciting partner who's one of the best performers and one of the best companies in the world, and especially in continental Europe, and how we can leverage on their capacity to explore new geographies and new channels. So if anything, what it's gonna have from an operational point of view, is an acceleration of all the plans we have for the brand. We're gonna continue doing what we do best, and it's a minimum impact. Obviously, it will take a few months, probably, I guess, for our partner to ramp up what they want to do and do their acceleration, but we are very confident that this is an incredibly positive piece of news for Topshop, and therefore for ASOS. Yeah, on margin as well, Matthew, thanks for the question. I've been here since May, I already know that I've got an amazing finance team, but you'll probably understand, like, we only closed on Sunday. Now, I'm confident enough to give the guidance I've given this morning, just with regards to where we are on consensus estimates. Actually breaking that down at the moment between margin and different points, I think it's just a bit too early for us to make that call publicly. So it will be stuff that will be contained more in our fuller update towards the back end of October. Thank you. I'll pass it on. Thank you, Matthew. Next question comes from Sarah Roberts at Barclays. Please go ahead. Hi, thank you for taking my question. So just quickly, can we have a clarification on the Bantry Bay loan? So the term loan is decreasing from GBP 200 million to GBP 150 million. Just to clarify, we should expect a GBP 50 million cash outflow for the business this year, and, how is that funded, please? And then secondly, can you provide any color on the sales profitability for FY 2024, just purely on the Topshop brands alone? I think previously, you've commented that Topshop tends to be, more profitable than the rest of the group. Was this still true this year? Any color would be really helpful. Thank you. Yeah. Hi, Sarah. Just with regards to Bantry Bay, yes, you can think of it as, as cash out, but it effectively is reducing the term loan as well, so it shouldn't have any impact on net debt. But actually, in the context of cash flow, all of these things are being managed together. But you're right, the GBP 200 million is reducing to GBP 150 million, but it will be still part of our available facilities, it just won't be drawn. On Topshop, I think we've called out in there that we've said that it broadly represents, I think it's 5% of the trade that we saw in FY 2023, and the performance that we're seeing through this year has been consistent with what we're seeing in the rest of the business. Got it. Thank you. Next question comes from Yashraj Rajani, UBS. Please go ahead. Hi, good morning. Thank you for taking my question. So just a follow-up to the previous one. I just wanted to get a sense of, you know, as we lap, P4 from last year, where we had a cleaner stock position, how has your full price sell-through evolved, right? So what proportion of your cleaner stock is actually selling on full price, and are you actually seeing attrition of customers which were shopping on discount earlier, but given your bigger focus on full price, you know, they're actually not shopping now? So any update on that would be really helpful. Thank you. Morning. Let me give you a little bit of color there, obviously with caution, because, as Dave said, we have only closed the year pretty much two or three days, literally three days ago. Well, so we are very satisfied with the evolution of the changes we have done in our commercial model. We see customers reacting very well to a more exciting and inspirational type of range, and we are not seeing any negative impact of our reduction in our promotional profile. I mean, I think that, without giving you any specific data, we are quite comfortable that this is the right direction of travel, and that is clearly connecting and resonating with our consumers. Yeah, as you have seen, we called out, on Test and React, that we've now reached our target of Test and React, hitting 10% of own brand sales, which is, a full price sales driver for us. So very happy with the way that that's performing and how that sets us up when we look ahead to FY 2025. And then the performance in the kind of typically full price months, which are kind of May, June, July, has been really pleasing. Obviously, August is a bit more of a discount period across the sector, so there's more discounting in that month. But in full price periods, the brands have been performing very well, particularly in the U.K. market. Got it. Super helpful. Thank you. Thank you. Next question is from Georgina Johanan at J.P. Morgan. Please go ahead. Hi, good morning, everyone. I think you might have touched on or started to answer one of my questions in your last comments. But just to kind of follow up on that, on the trading in the second half. Can I just confirm that the performance was sort of broadly improving over the second half, and that the exit rate was somewhat better than that double-digit decline seen in H2 overall, just given your comments on the UK sort of improving in full price periods, and that is, of course, still your largest market? Yeah, Georgina, just to confirm on that point, in our key market, we have sort of seen an improving trend as we've progressed through the second half. The number I've obviously talked about is where we expect the full view of the second half to be, but we have seen more positive trends towards the back half of that in our key market. Great. Thank you, and has there been other markets kind of offsetting that, or is it fair to say that broadly speaking, the trend has therefore improved versus that double-digit decline for H2? Yeah, there has to a degree. Some about choosing and others just probably more macro that we're seeing softening in Germany. And from the U.S., we've just been a bit more targeted with regards to where we're trying to invest our marketing investments. Again, like I said earlier in the call, our focus now is on making sure that we're driving profitable sales, and some of that means we've toned down some of our marketing efforts in the U.S., which is sort of largely providing a little bit of a headwind to that U.K. performance. The U.K. - U.S.? The U.S. is providing a headwind to the U.K. performance. Okay. Oh, I see what you mean. Oh, offsetting. Okay, no, thank you. That's very clear. Yes, offsetting. In terms of sales. Yes. Yeah. Does that answer your question? Yes, it does. Thank you. Yes. Yes, it does. Which I think sort of is a nice segue, I guess, into my next question, and I appreciate there's multiple moving parts, and obviously with you sort of yet to finalize the bond refinancing and so on. I guess, just as a theory, sort of given the focus on net debt and cash and so on, for next year, do you sort of have confidence that you will have positive net cash generation based on the trends that you're seeing at the moment, the profitability work, and kind of the level of interest that it's looking like you might pay? Like, should we be expecting positive net cash next year, or in terms of generation, or is that not a given at this stage, please? Yeah. I'm not gonna answer the direction of the question directly. I suppose the information that we've provided today is that actually our underlying FY 2025 guidance has remained unchanged. We are obviously going to see the GBP 10 million-GBP 20 million potentially of headwind on EBITDA as a result of the transaction with Heartland, which comes back just with regards to the royalties on the JV. And then the other part of that puzzle is obviously the incremental cost, the net incremental cost of the financing activity, which we really can't determine until that is finished and closed. So I can't provide a complete answer, but there are the three parts that you should be thinking about in your models. Thank you. Thank you, Georgina. Next question is from Anubhav Malhotra. Please go ahead. Hi, team. Thanks for taking my question. First one is on the... Can you hear me? Yep. Yeah, yeah, go ahead. All right, good. The first one is on the Topshop sale. I just wanted to understand, did you run a competitive process, and did you receive other interest in the two brands, Topshop, Topman, and maybe some color on how you arrived at the valuation that you did arrive at, and then secondly, again, on the sale of those two brands, you mentioned some exclusive design and distribution rights. Are these for certain categories, or is there a certain period of exclusiveness that you have, and after that, the brands will be open to all to put on their websites and on their wholesale channels and stores, maybe? Thank you. Maybe I can take the first one. So in terms of was it a competitive process for the brands? Yes, it was. In terms of how we chose the option that we chose, from our perspective, this is the kind of ideal combination of unlocking some value from Topshop immediately, while also actually retaining Topshop from a customer and an ASOS peer perspective, which probably feeds into your second question really in terms of what it means for us with Topshop operationally. ASOS will continue to design the brand for global distribution. We'll still sell the brand through asos.com. We mentioned in the RNS this morning, within the next six months, we'll also relaunch topshop.com, which we're very excited about, to bring a real home for the brand back to customers. And then ASOS will control wholesale distribution in the U.K. and North America. So we already have a brilliant partner in Nordstrom, and Nordstrom will remain part of the joint venture, but we'll also look for other partners in the US as well, to make sure that we're reaching every customer which we think Topshop is relevant to. And then we have, as Jorge mentioned, an amazing partner in Heartland, to roll the brand out, from a wholesale perspective across Europe and the rest of the world territories. The license that we have for the brands, it's initially a 10 year license, but we have the option to extend that multiple times to give us up to a 25 year license in total. Let me build a little bit on that answer, because I think this is an incredibly exciting moment for all of us here at ASOS, and I wanted to share a little bit of this excitement. I think that Topshop is an incredible asset. We have always been very excited. It's a very vibrant brand. We have been working very hard over the course of the last two years to put it in a better place in terms of improving the creative direction, improving the quality and the design, cleansing a little bit the distribution, and we are very confident Topshop is in the right moment to accelerate and to go to grow and to, let's say, unlock all this excitement and all this capacity that it has. In that sense, ASOS is gonna continue doing what it's done over the course of the last two years. We're gonna continue designing the brand, we're gonna continue bringing all this excitement, obviously, in the categories where we work. We are not gonna be designing the brand in categories where we don't work, and as part of the ownership of Topshop, because as you know, we keep part of the ownership, we will be part of this decision-making. If the brand might expand to other categories, and we will be part of the decision making. But anything that is related with the categories and the markets where we work, we're gonna be there, hand-in-hand with our partner, to make sure we make the most out of this brand. And as I said, it's a very, very exciting moment that we are all ready to start this new phase of Topshop and ASOS together. Thank you so much. Thank you. Next question is from Adam Cochrane at Deutsche Bank. Please go ahead. Good morning, guys. Given the sales and profit balance that you're striking, it's early days, but as we look at twenty twenty-five, given that the weaker than expected sales trajectory across a couple of markets, are you going to have to reassess the balance between sales growth and profitability to get those markets back into growth? Or have the actions that you've taken on profitability have a one-off impact on the consumers that maybe you don't want or whatever, in those areas, and they will sort of flatline from here, and we can see growth in markets such as the U.K. Places like the U.S., we just have to accept are now, without further investment, you can't get that balance between sales and profitability. So I know we might come onto it later with the full year results, but how are you thinking about the balance? What do you have to do to get sales growing again? Does it come at the expense of some further investments? Wow, that is a very interesting question, Adam. I think we should tackle this one probably with a glass of wine at a certain point in time, because it could trigger a very long answer. I'm gonna do my best to keep it short. Trying to go back to two years ago, not longer, we were obsessed with making sure that we were striking the right balance between growth and profitability. There is no healthy growth without profitability, and this is what we've been doing over the course of the last two years, making sure that our growth is profitable, that our sales are profitable. Obviously, that has had an impact on our sales, and we said very openly from day one that we were willing to accept it, provided that we would go to a level of profitability where we were happy. For instance, I think, and we mentioned that before, the U.S. is a very clear example. It was always a concern that the U.S. cannot make profit. The U.S. can make profit, and it is becoming a very interesting market. It has taken a certain time and certain actions to do so. Growth is not gonna come from compromising profit, profitability. If you want gross margin, because profitability, growth should not come from selling the stuff cheaper. Growth should not come from advertising to customers that they only want to buy in promotion. Growth has to come from making a relationship with customers more exciting, more inspirational, bringing them better products, and this is where we're seeing the growth. I think that Michelle mentioned before, how excited and how happy we are with Test and React. We are selling 10% of our own brands or more plus, with hardly any discounts. Because when we bring the right merchandise to customers at the right time, at the right price, it sells at full price, and this is our direction of travel. In some areas, we have had to make some adjustments, and that has had an impact on growth, but we are very excited that some of these pieces, some of these actions or policies are now starting to have fruit. I think we will elaborate much more when we come with year-end results, but... All our thinking is going in this direction. It's like, we will not compromise having the right level of profit for sales, because I think that I heard once that sales is vanity and profit is sanity. We like being sane and not insane. Sorry, I tried to keep it short. I could elaborate much more. To just come across on that as well, Adam, I suppose, bringing it back to the reason why we're on the call today, I suppose it also is the reason why we're super excited about the transaction we've announced with Heartland, because that in thinking about product, creation, style, like, the great thing about this deal is we retain access to two great brands to sell on our website, to launch topshop.com, and to also continue to monetize in the future about the other avenues of growth that potentially might come as part of this partnership. So all of those things play to, like, where ASOS will and wants to go in the years ahead. Great. Thank you. Thank you, Adam. Next question is from Andrew Wade at Jefferies. Please go ahead. Morning, morning, all. Couple of quick ones from me. I guess, first of all, just looking at the revenue trajectory, obviously, at the half year, we were talking of sort of minus five to minus fifteen, and I mean, just reflecting on the scale of that, you know, the midpoint there, minus ten, you'd have been hoping for sort of flattish revenue to get there, and we've done sort of minus fifteen-ish or a bit worse. I mean, that is a big, big top-line miss, and I guess I'm just interested to know, is all of that... Are we to understand that all of that is around decisions that you've made to target more profitable sales? And then, that's the first part, and then the second part is, following on from that, I know if we sort of look back at your base case stress test assumptions, you'd been looking for H1 2025 to see an acceleration to double-digit revenue growth. That obviously looks a ways off now, given where we are at the moment. Is there any reappraisal required of the EBITDA margin uplift that you can deliver in FY 2025, given deleverage from lower sales numbers? Or is the move towards profitability enough to drive that EBITDA margin up? So those would be the two questions. Thank you. Yeah. Hi, Andrew. I'll take both of those. Just first point, I suppose clarification, you're right with regards to to where we are in those ranges, which is what we said this morning. With regards to whether they are all actions we have taken, I think it's probably a combination of both. Like I said, that the U.S. and Germany are are two specific examples where we're seeing things that are different from both our actions and things that are happening in macro. With regards to our base stress case, as you said, I think this will be something that I'll just give more update as we go to the fuller update when we get to the the annual results. But I'm not gonna give revised guidance on where we sit on FY 2025. But we will be looking at all of those things, including both sales and our margin performance, given our full price mix on that, and we'll give a further update when we can. Okay, cool. Look forward to that. Thank you. Thank you, Andrew. Next question is from Charlie Rothbarth at HSBC. Please go ahead. Morning, all. Thank you very much indeed for taking the call. Apologies, my questions are both for clarity, due to my line being a bit faulty. What was the total headwind to EBITDA that you said? I've got GBP 10 million-GBP 20 million here, but I might be wrong. And secondly, what are the brands listed valued at on your balance sheet? Yes, you're right. We did announce GBP 10 million-GBP 20 million. I also think we disclosed that the brand value on the balance sheet was GBP 165 million. The EV of the transaction this morning was obviously GBP 180 million. Thank you. Thank you, Charlie. The next question is from Mia Strauss at BNP Paribas Exane. Please go ahead. Good morning, guys. Just wanted to find out, check if you've ever disclosed what share of Topshop sales are own brand? And then just, not sure if you're going to comment on this yet, but at H1, you spoke about, the inventory level for spring/summer is quite important, you know, the health of the aged inventory. Is there any comment you can give us on how that's performed over H2? Thank you. On the first one, the share of the Topshop share of revenues disclosed in the RNS this morning is about 5% of our revenues. Yeah. I'm not sure. Mia, sorry, I'm not sure I got the second question. Do you mind repeating it? Sure. So I'm just more talking about the inventory. So at H1, we spoke about spring/summer was quite the volume of the aged inventory of spring/summer, and H2 would be important to watch how that sold through. So maybe if you can give us a comment on how that has performed and whether you've increased your level of new inventory intake. Yeah. Like, we obviously gave the update the half year in relation to how we were transitioning to the new operating model and realigning our stock. But, like, we made good progress to the point at the half year, we weren't completely done. And we made further progress through half two, so that we can make sure that we get to the start of FY 2025 with the right inventory we need to move forward with the operating model. Thanks. Thank you, Mia. The final call for any questions, please press star one on your telephone keypad. So we have no further questions on the call. Okay. I'll hand the floor back to José and the team to wrap up. Yeah. Well, let me just thank you all of you for your questions and your time. As I mentioned earlier, there was a lot to cover today. As I also mentioned earlier, we are very excited by this news, and we are convinced that it puts us in a great position for fiscal year 2025. We have made good progress on our Back to Fashion strategy, and the joint venture and the refinancing are giving us the financial flexibility and the balance sheet strength to accelerate on the execution of that strategy. I'm very excited for the year ahead, and I'm looking forward to speaking to all of you again soon on our year-end results announcement. So thank you very much, and have a nice day. This concludes the conference call, and thank you all very much for joining.