Thank you for standing by. My name is Van, and I will be your conference operator today. At this time, I would like to welcome everyone to the LuxExperience Strategic Update Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Michael Krieger, CEO of LuxExperience. Please go ahead. Thank you, and welcome everyone to this Strategic Update Call on LuxExperience, focusing, of course, on the recently completed acquisition of YOOX Net-A-Porter. Martin and I would like to achieve today is to present to you the strategic and operational rationale and, of course, our financial targets that we pursue with this pivotal acquisition for us as a company and also for the sector. If we start the presentation, let's start from the very top. What is our ambition for this acquisition?. In the medium term, we want to achieve net sales of EUR 4 billion. We have a target of an adjusted EBITDA margin of 7%-9%. This means we want to create and deliver an EBITDA of EUR 300 million plus adjusted EBITDA. Obviously, this is a dramatic shift in the size and in the profitability of the combined entity that we have just created. Thus, what are the components to get there? If we go to the next slide, there are four key components, four elements that we believe will successfully drive this transformation and make us the leader in the digital luxury space, continuing to deliver profitable growth. Number one, we have an outstanding market opportunity. Digital will continue to grow, and we will benefit most of it. We have unique valuable assets in this new group in terms of brands, store brands, in terms of the global footprint that comes with all these assets, unprecedented reach, and most important, of course, a high-value customer base in its size, unique in terms of buying luxury shoppers. We have a bold transformation plan already in place that we will speak to. Of course, this translates into ambitious financial targets that Martin will explain in detail. Let's go into the market opportunity. Some of it is well known, but I think it is very important as backdrop to why we believe this is a unique and so positive opportunity for us as a group. Luxury is predicted as a complete market to grow from EUR 360 billion- EUR 480 billion over the last six years, over the next six years. The growth will in majority come from digital. It is estimated that digital luxury is today a EUR 70 billion market, which will grow to EUR 150 billion. Predictions are very hard to do nowadays, but if it's EUR 130 billion or EUR 160 billion, it doesn't matter. We are doubling, and we will benefit predominantly. We will benefit from this opportunity. Of course, in digital luxury, different models are playing, but let's repeat also here our strong view. There are marketplaces. Product seekers are attracted by marketplaces by their extensive assortment. We now also have many brands that have very good digital offers. Brand seekers are attracted by these monobrand stores. They are set and inclined to buy a certain brand, and that's where they go. Mytheresa, but now also all the brands inside LuxExperience are curated multi-brand offers, and curated multi-brand offers are for customers that seek inspiration. They are having occasional needs in mind, and they are looking for a place that gives them the right inspiration. Net-a-Porter gives inspiration. Mr. Porter gives inspiration, but also the outlet in YOOX, they give inspiration to luxury shoppers. These customers may not have the budget to buy first price, but they're looking for luxury. The good news is inspiration seekers are higher spending luxury customers. People that look for a specific product or for a specific brand are often aspirational customers. The inspiration seeking are the high spending, high frequency luxury customers. These are the really interesting ones, and this is where everything that LuxExperience has done is focused on. Of course, if everything is focused on this, what does it mean? Let's summarize first the size of LuxExperience. It's a EUR 3 billion combined entity in terms of GMV, making us the leader in multi-brand digital luxury. In estimated digital, this is ahead of Nordstrom, this is ahead of SAC, this is ahead of Farfetch, and ahead of many other players. Size does not guarantee success, but size creates opportunity. It's not only the size, but it's also the makeup of it. We are the most diverse. We not only have different brands to attract customers. We are much more diverse in regional split. We have, if you use a recent methodology that looks at the highest price listed retail price offered, we have also the highest prices on our website in terms of the value of the item, not the price. Most diverse geographically, most high-end positioned, largest player. Again, no automatic success, but enormous opportunity, and we will leverage this opportunity and make this the most relevant player. Where do we see the relevance? That sits in the unique valuable assets that we have in this combined LuxExperience group. In summary, we have three segments. We have luxury Mytheresa, a EUR 1 billion company, 900,000 customers. We have luxury Net-a-Porter, EUR 1.1 billion company, 1 million customers. We have off-price, EUR 800 million, 1.8 million customers. The size, the diversity makes this so exciting. We go to the next slide. A closer look on Mytheresa. I mean, we talked yesterday about a very solid third quarter. Regionally focused on Europe, but present globally. AOV, as reported yesterday, EUR 750, industry leading. Very important, we get 41% of our revenue from our big spending customers, 3.5% of active customers at the moment. High-end, EUR 1 billion, very diversified. Let's look at Net-a-Porter, Mr. Porter combined. An AOV of EUR 768. Very good presence in hard luxury. This is also luxury because there were some assumptions that there is high-end and premium. No, both Net-a-Porter, Mr. Porter, and Mytheresa play in luxury and also there. Top customer share, 5% of active customers generate 37%. It is the same principles that made Mytheresa strong. It is the same logic of luxury, broad geographical spread, focus here on North America, of course, for historic reasons. Very similar. We got, of course, questions, aren't we cannibalizing? Aren't we competing in exactly the same space for exactly the same customers? No. Both are luxury, but there is a differentiated proposition, and we try to summarize this on this slide. Very curated Mytheresa offer focused on timeless high-end luxury. Net-a-Porter, broader offer focused on elevated contemporary and luxury fashion. This is not a price differentiation, as you saw from the very same AOV. Mytheresa chasing wardrobe building, high-end luxury customers, very set on the brands they love. Net-a-Porter, Mr. Porter, very focused on trend-driven high-end luxury. Customers very interested in discovery and new trends. In terms of geographic focus, Mytheresa over-indexing very strong in Europe. Net-a-Porter, Mr. Porter, very strong in North America. We are so clear that we are highly differentiated because we not only have these propositions, but we also have the facts. This is an analysis that we did and showed before on fall/winter 2024. Brand overlap. Of course, we share brands. We are all in the same luxury space, but you can see here that the overlap is 35% on womenswear in brands, 25% in men. There is much more to the inspirational offer of Net-a-Porter and Mr. Porter. That is for the trend-seeking discovery. There are also other brands that Mytheresa carries, and this is only looking at brands. We have also analyzed that at SKU level. Also on overlapping brands, we have only less than 50% common SKUs. We have a different assortment. This translates, and this is very important to understand our strategy, into a differentiated customer base. On the left-hand side, you see all customers. Mytheresa, 900,000 customers. Net-a-Porter, Mr Porter combined, 1.4 million customers at the time of this analysis. Less than 10% shared customers. We have a differentiated offer, and we attract different customers. The good news is, if you move to the right and you look at the higher spending customers, the overlap is even smaller, less than 9%. This is what we are going to protect and strengthen. We have different offers for different luxury shoppers, and thus, by having these different brands under one roof, we can cover different parts of the market so that in totality, we cover more of the market. This is very important, and this is driving also our strategy and our organizational principles. On the next slide, off-price. Outlet, YOOX, it is a different business. I mean, you can see it here, an AOV of 274. Of course, that is very good. It is high for off-price, but it is, of course, not at all close to what we achieve in first price. Broad global play. A great proposition for different customers. Again, not only what we believe, it is what we have in facts, because if you go to the next slide, we also analyze the customer base for the first price offers of Net-a-Porter, Mr. Porter, and Mytheresa versus YOOX and the outlet. Combined, 2.1 million customers of Net-a-Porter, Mr. Porter, and Mytheresa, only 300,000 shared with active customers over the last 12 months at YOOX and the outlet. Very little overlap because it speaks to different customers. Here also, the good news, high spending customers, this overlap is even smaller. We do attract with these. We do attract with these different offers, different customer bases, and that's a key component of success. What's in place for the transformation plan? It is known that these businesses need to be transformed, and you will see later that we are on a good route, but there's still a lot of work to be done. Five basic principles. We need to create an operating model that is exactly doing what I highlighted before. Strengthening the brands, presenting different offers to different customer base, reduce complexity in the current approach of high integration across the full value chain. We will reduce that. We want to have differentiated offers managed by differentiated teams. Of course, we do see great value in the backend, things that the customer does not care about as long as it works. We have a large-scale operational footprint through this acquisition, and we need to optimize. We need to improve the capacity utilization here. The network that was created for much higher revenue needs to be better utilized, and we need to improve productivity and efficiency. We come to that in a minute. Technology. There is a clear opportunity to give these different businesses a technology that is clearly aligned with its needs. Today, one technology serves all the different brands and YOOX, Net-a-Porter. We will migrate Net-a-Porter and Mr. Porter to the technology infrastructure code of Mytheresa, and we will streamline and simplify the infrastructure that YOOX and the outlet will use. Customer data. You already saw some early analysis. This is the richest database in the world for luxury shoppers, and thus, we can create the best and deepest insights in how luxury shoppers shop. This will improve our offer, improve our proposition, but also make us even more attractive than today for brands to partner with us. On corporate functions, we do see synergies. We do believe and see that we can combine many functions in the backend and administrative functions that serve the whole group, and thus reduce the cost base here. Let's go one level deeper on these points. As I said, size is only one factor. It's really the expertise that Mytheresa can bring. We have proven track record of profitable growth. We have built our own technology base, and it works. We have run new operations centers twice. We have excellent customer satisfaction. We have real proven ability to manage costs and drive growth. This is what we bring to the party. It's expertise, it's know-how, it's credibility. It's not just simply size and scale. It's much more. We have moved fast. We've already put in place a top-notch leadership team covering the different brands. We've appointed a new CEO for Net-a-Porter. We've appointed a new CEO in a role that wasn't even existing for a while for Mr. Porter. We've appointed a new CEO for YOOX. We have also clearly identified the best talent for our central functions to deliver synergies and cost efficiency on technology, on operations, on data, on group commercials, on HR. We have appointed the teams to drive the transformation. All announced and in place, and we have already put the next level in place and have already made announcements, but there will be more coming in the next couple of weeks. We have the team in place, and this is a team that has a proven track record of getting things done. I spoke a minute ago about the new operating model. It is really driven by giving the brands separate identities by having separate people. We are looking and putting in place separate buying and merchandising, separate performance marketing, separate content, and separate personal shopping. Everything that drives the attractiveness and desirability of these different brands to customers will be separate. We afford ourselves to have separated buying teams because the success of this is dependent on retaining this highly differentiated proposition and speaking to different customers. Of course, we are looking for efficiencies and thus will serve these three luxury brands with combined technology operations, group commercial, HR, and finance. On the off-price side, we separate them. They will have their own backend because they are operating a lower AOV and a lower margin business. That is part of the business, and you cannot serve it with the same infrastructure. Also here, separated buying, separated marketing, separated content. Very clear logic, strengthen the brand, give autonomy and responsibility to those teams that create success with customers while still benefiting from centralized synergies. Few highlights. Operations. Early insights. We clearly see 20% productivity improvement opportunities across this network. With this network, we will have much better access and service capability. We see 30% lower cost per customer care contact if we benchmark. We see 40% lower cost per photo production if we benchmark, not based on scale, but based on our expertise that we bring to this. On the operations end, we will over time combine to create one infrastructure. The first phase will really be focused on exploiting these clearly identified efficiency improvements. That will allow us to improve the P&L over the next two, three years. That was operations. If we move to technology, yes, it will take time to move to one code base for the luxury website for Mytheresa, Net-a-Porter, and Mr. Porter. Looking at the analysis, this will open up a 70% tech cost reduction for Net-a-Porter and Mr. Porter. This is a significant savings that we can achieve over the next two, three years as we move from the one monolithic infrastructure that served lineup across the board. It is not only cheaper, but it will be higher performing and will allow more distinctive user experience and unique branding for the different brands. This is a long pole, but a highly valuable long pole. If we move on to data, 4 million combined customer database. It will allow us to drive personalization, use AI models that we already have today for product recommendations across the different brands, improve our relevance, improve brand performance, but also here, we clearly identified opportunities for cost savings by combining the data platforms and the data analytical tools. Also those we will exploit over the coming quarters. With that, I will hand over to Martin to translate this into financial targets. Thanks, Michael. Let's talk about the financial targets of the group. We will, as Michael highlighted, we will be reporting along the three segments: luxury Mytheresa, luxury Net-a-Porter and Mr. Porter, and off-price YOOX and The Outnet, combined with currently around EUR 3 billion in GMV. In the following, we will now share top and bottom line targets for each of the three segments. Let's start with Mytheresa. You're well aware of Mytheresa's strong track record of profitable growth, strong growth. Here again, the last years, on average, 17% CAGR, a 17% net sales CAGR, if you look at the past years, outperforming the market. Also at the bottom, clearly visible, best in class profitability compared to online peers. Fiscal year 2019 to fiscal year 2022, adjusted EBITDA margin, 7-9%. In the last years, even with the headwinds from macro, clearly showing the resilience of our business model, achieving, continue to achieve growth, and continue to achieve profitable growth. With fiscal year 2025, with increasing profitability. Also noteworthy at the bottom, operating cash flow. If you look at the full sequence of the years, fiscal year 2019 to fiscal year 2024, in total, operating cash flow positive. Despite the double-digit growth, despite a 17% CAGR, despite growing from EUR 380 million net sales to EUR 840 million. This track record is also visible on current trade. As Michael said, we had our earnings call yesterday and clearly reported a strong quarter and also strong last nine months. Net sales growth in the quarter, 3.8%. In the last nine months of the fiscal year, 8% net sales growth. Improving gross profit margin, 140 basis points the last nine months, 150 basis points. On all earnings lines, profitability and increasing profitability on adjusted EBITDA, also adjusted operating income and adjusted net income level. Therefore, we guide towards a continuous improvement and confirm our medium-term targets of top line 15%-20% growth. 15%-20% CAGR with strong category, regional, and top customer growth, increasing, continuous increasing gross profit margin as we continue to focus on full price selling. Therefore, returning to an adjusted EBITDA margin of 7%-9%. Let's look at the other two segments of the LuxExperience Group. Let's start with luxury Net-a-Porter and Mr. Porter. They have undergone a strategic reset leading to a conscious top line decline since fiscal year 2023. They followed their volume to quality strategy, refocusing on the business, refocusing the business on high-value luxury customers. Despite the lower net sales level due to the net sales decline, they were able to stay profitable, showing a marginal positive adjusted EBITDA margin. They will now, in the near term, return to a growth trajectory with increased profitability and obviously continue, and we will talk about that in a second, on their focus on SG&A cost reduction. They have done so in the last two years, but we will continue this path on focusing with additional SG&A cost restructure. The potential is clearly visible. If you compare Net-a-Porter and MR PORTER with the Mytheresa P&L, you see net sales decline and their focus on the value. They have to, we will clearly re-embark on a growth trajectory. Gross profit margin level is a good level, but there's still further improvement potential to increase the gross profit margin through continuous focus on full price and customer lifetime value optimization. Shipping and payment cost ratio, they have 12, we have 14, 12 due to a different warehouse setup. With declining net sales, they were able to have a very low, modest marketing expense ratio. As we re-embark on growth, we will have to further invest in marketing. The key lever to increase profitability here is in the red is the SG&A cost ratio. They have 22%, we have 14%. That is an 800 basis points difference. Therefore, the focus also on the transformation program that Michael talked about is to drastically improve SG&A cost ratio. We clearly have identified the potential here and defined the measures. Mytheresa has more than 70% lower tech costs. We will unlock this. We will unlock this cost savings through the migration to the Mytheresa tech stack and capture further efficiencies on customer care, higher productivity on the warehouse, and also in indirect spend. Here, over 70% lower data platform costs to increase the adjusted gross profit margin. Let's take a look at the third segment, off-price. You see here, top line net sales development, off-price has also, last 18 months especially, initiated the strategic shift from volume to quality, focusing on high-value customers, on higher AOV, thereby reducing the adjusted EBITDA margin loss on fiscal year 2024, minus 12% to minus 10%. The profit improvements will continue, but the intensity of the journey will significantly increase. Of course, you can make money at off-price. Here, the comparison of the P&L of YOOX Panton to best in class. Gross profit margin potential, but again, highlighting to the lower middle part, SG&A. 22% SG&A cost ratio worth of 9% in best class. Therefore, our focus, our transformation program is focused especially on improving the SG&A cost ratio, simplifying and building up a lean business model, all the elements that Michael had talked about, thereby simplifying the operational footprint, increasing productivity, adjusting capacity levels, renegotiating 3P contracts, and thereby reducing, continuously reducing the adjusted EBITDA loss and turning this company to an adjusted EBITDA profitable business. How does the road to increase profitability for the two segments look like? You see here are near-term and medium-term targets for the two new segments. On the left side, luxury, on the right side, off-price. Let's start with luxury. Net-a-Porter, Mr. Porter, near-term, refocusing and re-embarking on growth, on the growth trajectory there. In the medium term, achieving a 10% plus CAGR post restructuring. Obviously, there's no structural barrier to not achieve the Mytheresa guided medium-term growth targets of 15%-20%, but we wanted to guide here conservatively. Gross profit margin in the near term and in the medium term, increased gross margin, continuous focus on full price in the luxury part of Net-a-Porter, Mr. Porter, and the focus we just talked about, SG&A cost ratio, decreasing the cost ratio significantly as we streamline the business model and drive the synergies. The near-term targets on adjusted EBITDA margin for the luxury part, 3%-6%, lower single digits as we have to also invest in the business, in marketing, to re-embark on growth. On the medium-term target of 7%-9%. Operating cash flow, near-term, slightly negative as we also have to build up working capital for growth. In the medium term, same as Mytheresa, positive operating cash flow. If you look at the right side, off-price, YOOX and The Outnet. Near-term target, we will continue on focusing the business on value, on high net worth individuals. Therefore, in the near term, having further decline at the top line. In the medium term, also refocusing off-price on growing, plus 10% plus on CAGR post restructuring. Also here, gross profit margin increase and SG&A, as we highlighted, streamlining, simplifying the business model and drive synergies. In the near term for that segment, adjusted EBITDA margin loss will reduce from 9% to - 5% to - 3%. In the medium term, re-embark also on the 7%-9% adjusted EBITDA margin. Operating cash flow, given the low profitability levels, negative. In the medium term, also positive. We clearly see here the benefits of the transformation plan. Let's have a closer look at the one-time cost to achieve the successful transformation. The transformation of the two segments of Net-a-Porter, Mr. Porter, and off-price will require EUR 200 million-EUR 250 million restructuring cost and take two to three years. Here, on the areas that also Michael highlighted, operations, technologies, corporate, the estimated cost to achieve in line with our transformation plan and the completion. Operations, streamlining the logistic footprint, that also is required to drive the technology simplification and process optimization for the two segments. For the two segments, EUR 100 million-EUR 120 million cost to achieve, completion first half of fiscal year 2027. That is the end of next calendar year 2026. Technology, Michael talked about replatforming and simplification, EUR 80 million-EUR 100 million, completion first half of fiscal year 2028. Also on the corporate side, back-end services, indirect spend, synergies, cost discipline, one-time cost, EUR 20 million-EUR 30 million, completion as is ongoing first half year of fiscal year 2028, first half of fiscal year 2028. In total, EUR 200 million-EUR 250 million to achieve an optimal business model setup for the two segments. That will yield what we just saw, around EUR 150 million annual savings in SG&A. Therefore, a good return on investment. Let's look at the profitability of the full group of LuxExperience. For the full group, combined group, LuxExperience, and obviously, this is here on a proforma basis, looking back fiscal year 2024 and fiscal year 2025. Fiscal year 2025, YOOX and Net-a-Porter finished their fiscal year end of March. These are very recent numbers. Obviously, on a proforma view, in the last two years, the combined group would have achieved a slightly negative adjusted EBITDA margin. Therefore, our guidance is on the near term, fiscal year 2026-2027, small adjusted EBITDA margin as we have to also reinvest in growth, 1-4%. In the medium term, have the 7-9% adjusted EBITDA margin. What are the implications of all that on the cash level? The turnaround plan is fully funded with cash on the balance sheet and significant liquidity headroom left. On the left side, you see the transformation cost, EUR 200 million-250 million one-time cost that we saw on the previous page. We also have to fund the operating cash burn until the turnaround, EUR 150 million-200 million during the transformation period. Therefore, the total cash required, EUR 350 million-EUR 450 million, until we achieve positive free cash flow. That is in the medium term, which is after the three-year transformation period. If you compare that to the total liquidity on the right side, EUR 780 million liquidity with EUR 600 million cash at hand and EUR 175 million of non-utilized revolving credit facilities. Also bear in mind that apart from that, the company, the whole group, is debt-free. To wrap it up, let's have a final look at the total group's target. In the near term, given the different segment movements, we target to keep the net sales level stable and in the near term have an adjusted EBITDA margin slightly positive. Obviously, we will refine the near-term targets and give you an update in our September call. On the right side, the medium-term targets stay as they are, 10%-15% CAGR to achieve EUR 4 billion net sales in fiscal year 2030 at an adjusted EBITDA profitability 7%-9%. That translates to EUR 300 million+ adjusted EBITDA. With that, let's open up for Q&A. At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We ask that you please limit your questions to one and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Oliver Chen from TD Cowen. Please go ahead. Hi there. This is Katie on for Oliver. Our first question is really around the turnaround and transformation plan for the outlet business. It does seem to imply that you can achieve a greater profitability margin growth for that business over a similar time period relative to that of the Net-a-Porter and Mr. Porter business. Can you talk about sort of investment required specifically for the outlet business and kind of what's underlying within that margin expansion guidance? Thank you. No, we definitely believe that there is an even bigger opportunity in terms of turnaround with the outlet business, if you call it off-price, we call it, which is based on a couple of observations. Number one, there are benchmark players out there that achieve significantly higher profitability. Number two, the gap that is to be addressed is in the SG&A as Martin expanded. And that comes from the fact that today, the outlet or off-price business is sitting on a consolidated infrastructure. It is being served by an infrastructure that, of course, was built to serve a luxury business. It is completely outsized and far too high cost. Separating, providing it with the right infrastructure in terms of capabilities, but more importantly, cost is bridging the gap. This is not based on margin, product margin expansion. This is not based on sudden growth sprints. This is based on providing the right infrastructure cost base and achieving comparable results that we see with other competitors in an expanding business. Off-price is an expanding sector in the luxury market. Very helpful. Thank you. As a follow-up, I'd like to kind of dig into the key challenges to running these different online platform businesses. You've talked a lot about synergies within the tech stack, but fundamentally, you're serving different customers. You have a different brand landscape. What are you kind of thinking about in terms of the risk for your transformation plan? Thank you. No, the challenge is clear. We need to execute our plan. The plan is to strengthen the brands, to provide them even more differentiation. It is already at a good level, as shown by the customer overlap analysis, but we need to continue. We need to execute the transformational plan highlighted by me and Martin in the backend. The risk is execution. This is where Mytheresa and the experienced leaders of Mytheresa bring a ton of expertise and a proven track record. We know how to execute, and we will execute on that plan. We live in a volatile world. It is very important to see what Martin highlighted based on the need for the transformation and the time needed for the transformation. The cash on hand has an extensive buffer. We do not plan to use that buffer. We do not see any reason at the moment to use that buffer. The last four years have told us that there can be unexpected events. Therefore, we feel we are in an excellent position to execute even if surprises come up in the external environment. Excellent. Thank you so much. Our next question comes from the lines of Blake Anderson from Jefferies. Please go ahead. Hi guys. Really appreciate the call and all the information today. It is super helpful. First question I wanted to ask on the off-price business and just the sales outlook there. For the near-term sales CAGR, you are looking at down 15% to down 25%. I was hoping you could go into a few of the drivers there, maybe in terms of loss of customers versus volume or AOV, anything like that. Assuming some of that is just due to the macro uncertainty right now in the environment. Maybe if you could parse that out. The ramp to 10%+ post-restructuring, what's going to be the key driver for that growth inflection? A good call out. The transformation/restructuring needed on the off-price will require losing certain pockets of revenues that are not profitable. This is a business that is pursuing off-price at a global scale with a global footprint. We believe we need to do some streamlining here to really focus on the core. The core is a certain customer. The core is a certain geography, still a big one. The core is also in the assortment to really drive sustainable profitability. It is not based on an expectation that this market will actually shrink or decrease. The current macro environment is actually quite conducive to an off-price offer. We can see that by benchmarks of competitors that grow in this market. What you see here is more an element of the restructuring that is needed. I do not know whether Martin, you want to expand on this in any way. Definitely. I mean, you said it all. It is not driven by smaller AOVs or different segments. It is a refocusing on continued focus on higher net worth individuals. They have already embarked on achieving higher AOVs, higher AIVs, and also the regional concentration. This requires a healthy looking at the core and really working from the core then and replatforming then and showing good growth. Exactly as Michael said, because I mean, the peers in the off-price space, they are clearly growing. It is an attractive market where you can achieve profitability and also YOOX in the past has achieved a strong profitability. It is all clearly set what they have focused too much on, a vast increase on the top line, vast increase focus on revenues. Now they have to go back to really focus on that segment. Got it. That is super helpful. I think you might have touched on this, but if you could just talk briefly again about maybe if the environment were to be a lower growth environment for the next couple of years or a year or so, how would your margin expansion targets differ? I guess some of the reductions you are talking about are really not dependent on growth on the tech side. How do you think about if growth were to be lower than your expectations, how could you still expand margins? No, absolutely valid question. I think it's important to reiterate the turnaround and transformation plan is not based on a sudden return to high growth. Growth will help. Growth will be needed. As highlighted by the clear benchmark data, comparison data, I mean, it's not even benchmark. We operate the same model that Martin highlighted. A big chunk comes out of the backend. A big chunk is based on cost ratios, productivity numbers that we as Mytheresa achieved today. We have spent an enormous amount of time over the last couple of months to understand how to unlock those. We will follow up on those. Yes, if there is an environment over the last five years, which I do not see as discussed yesterday, I do not see any structural reasons for slower growth. I see at the moment specific events that drive a less dynamic market. Even if there should be less growth, of course, it would dampen some of it. We have a large cash cushion. The key unlock for profitability sits in areas where we can start and work on them regardless of the macro environment. That should be very positive for investors. We have it in our own hand. We have a large cash cushion. We do not see at the moment anything that tells us structurally we should not expect what all the market research analysts out there predict, which is a doubling of the digital luxury market over the next six years. I'm not good in predicting the future, but as a collective group, we are very good in executing plans. That's very helpful. Thanks again and best of luck. Our next question comes from the line of Grace Osado-Lohar from Morgan Stanley. Please go ahead. Hi team. Thank you for taking my question. I just wanted to ask on inventories that you have in the business. Firstly, looking at Mytheresa standalone, you've been quite successful there meeting your days outstanding targets. How should we be thinking about the management of stock both in the luxury and the off-price business? You had said for YOOX in particular that there had been a lot of focus on increasing top line. If there's any opportunity there in terms of how you're shifting stock and we should be thinking about promotions, that's my first question. Maybe on this? Yeah. Maybe on a general note on inventory. I mean, obviously, as part of the due diligence and also all along until today, we really analyzed the inventory level of around EUR 800 million-EUR 900 million inventory in both segments, looked at the depreciation levels, looked at the healthiness, the aging, and found it on a very comparable good level of the inventory level that they're doing. Therefore, no going for this transformation period, no significant adjustment needed, no significant additional inventory depreciation or sale-off needed. Obviously, if you look at the use of inventory, that is fully in line with the top line perspective of reembarking on growth in the luxury field and on the off-price, looking at a further decline in the structuring and then reembarking on growth again. On the inventory side, looking at today's inventory outstanding, I see a good setup for the transformation and for the further growth. Thank you, team. My second question would be focused on the regional composition or makeup of the combined entity. You helpfully gave the color in this release for Mytheresa being more skewed to Europe and the YOOX Net-a-Porter business more to the U.S. Just on the last question, you had said that you do not see anything in the industry that would point to no growth for you, that everything is in your hands. Can you talk a bit more about the benefits of the diverse regional makeup the entity has also in terms of infrastructure and shipping? Any thoughts there would be useful? No, I think it's very good to see for investors that this further diversifies and not puts even more eggs into one basket. So it's a customer base that is not overlapping, very small overlap. It's a geographic footprint that is complementary. And then, of course, as highlighted, there is an operational network of warehouses today. We expand our global reach and our global presence, which again will allow us to be even more agile and flexible in adapting to better demand in certain regions than in other regions. I mean, we have seen several shifts over the last four or five years of Asia versus U.S., U.S. versus Europe. Again, it would be, I think, foolish to now exactly predict where demand will sit. It is much smarter to have a business model that is capable of adapting because we will probably need to adapt again and again. That is what this broader, more diversified portfolio of brands, regional presence, and customers actually is doing for us. T hank you very much, team. There are no further questions. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.