MYT Netherlands Parent BV ADR

greetings and welcome to the mytheresa third quarter fiscal 2024 earnings conference call at this time all participants are in a listen-only mode today's call is being recorded and we have allocated one hour for prepared remarks and q a it is now my pleasure to introduce your host martin beer mytheresa's chief financial officer thank you sir please begin thank you operator and welcome everyone

to MyTheresa's investor conference call for the third quarter of fiscal year 2024. With me today is our CEO, Michael Klieger. Before we begin, we'd like to remind you that our discussions today will include forward-looking statements. Any comments we make about expectations are forward-looking statements and are subject to risks and uncertainties, including the risks and uncertainties described in our annual report. Many factors could cause actual results to differ materially. We are under no duty to update forward-looking statements. In addition, we will refer to certain financial measures not reported in accordance with IRFS on this call. You can find reconciliations of these non-IRFS financial measures in our earnings press release, which is available on our investor relations website at investors.mytheresa.com.

I will now turn the call over to Michael. Thank you, Martin.

Also from my side, a very warm welcome to all of you, and thank you for joining our call today. We will today comment on the results and performance of our third quarter of fiscal year 2024. We are very pleased with our results in a still challenging macro environment. With strong revenue growth and positive adjusted EBITDA in the third quarter, we demonstrated our leadership in a clearly consolidating sector. As expected, we achieved a strong double-digit top-line acceleration of our business, particularly in the United States in the third quarter. We continue to see slower demand from aspirational customers and promotional intensity in the market by competitors, but our clear focus on the high-spending, wardrobe-building top customers allows us to win market share in the current environment. Strong top customer growth. a record high average order value, and excellent customer satisfaction scores underline our intense customer focus, which is a key success factor for MyTheresa. We clearly see ourselves as one of the few winners in the consolidating luxury e-commerce space. I wish to highlight today three key messages to you that make us stand out in the third quarter and demonstrate the strengths of the MyTheresa business despite ongoing macro headwinds. First, our commitment to multi-brand inspiration with a highly curated offer of true luxury brands drove strong growth, particularly in the United States in the third quarter. Second, our clear focus on big spending, wardrobe building top customers resulted in both strong growth of the number of top customers as well as the average spending of top customers. This highly desirable audience makes us the best positioned platform to partner with luxury brands for exclusive activations. Third, our very flexible and resilient business model allowed us to significantly improve our profitability compared to Q3 of fiscal year 2023. Record high average order value, decreasing customer acquisition costs, and stable operating cost ratios highlight this in the third quarter. In summary, we have accelerated our top-line growth, we have expanded our top customer business, And we have significantly improved our profitability in the third quarter of fiscal year 2024. Let me now comment in more detail on these three accomplishments. First, let's look at the growth acceleration in the third quarter. We grew our gross merchandise value, GMV, by plus 14.7% compared to Q3 of fiscal year 2023. On a two-year basis, we grew our GMV by plus 35.2% compared to Q3 of fiscal year 2022. This strong growth is clearly above the luxury market average. Once more, our business in the United States generated an outstanding growth with plus 41.6% in terms of GMV compared to Q3 of fiscal year 2023. The United States accounted for 22.3% of GMB of our total business in the third quarter of this year, 2024, and we continue to see the market as a major source for future growth for MyTheresa. The US luxury consumer, including the aspirational segment, definitely shopped more again. Most importantly, the highly curated offer from true luxury brands by MyTheresa resonates extremely well with big spending US consumers looking for multi-brand inspiration. We have grown our US business 2.6 times over the last three years. We also experienced good growth in Europe in the third quarter with plus 9.3% compared to Q3 of this year, 2023, while results in China and Asia were still negatively impacted by strong macro headwinds and uncertainties. A recovery in these markets in the next quarters will provide a further boost to our top line. Second, our clear focus on big spending wardrobe building top customers is the fundamental driver of our success. In the third quarter fiscal year 2024, our top customer base grew by plus 17% compared to Q3 of fiscal year 2023, and the average spend per top customers grew plus 3.3%. Overall, the business with top customers grew by plus 20.9% in terms of GMV compared to Q3 of fiscal year 2023. The further evidence of our success with top customers is that our average order value increased once more by plus 8% to a new record high of Euro 692.5%. LTM in Q3 fiscal year 2024 compared to fiscal year 2023. Our superior access to big spending, wardrobe building top customers makes us the highly desired platform for luxury brands to partner with. The third quarter saw again many high impact campaigns and exclusive product launches demonstrating our strong relationships and the support from our brand partners. All of them further increased our brand awareness and clearly positioned us globally as the leading digital luxury platform. We launched exclusive capsule collections with capes and courage, only available at MyTheresa, as well as exclusive styles from Loewe's Paula's Ibiza collection, only available at MyTheresa. We were also exclusive pre-launch partner for collections from Brunello Cucinelli and Loewe bags, giving MyTeresa customers exclusive first access to these products. One special highlight in the third quarter was also that MyTeresa was one of the very few partners globally to launch the collection of the new creative director at Gucci, Sabato de Sarno, called Gucci Ancora. Please see our investor presentation for more details on our brand collaborations. Reinforcing our focus on big spending wardrobe building customers, we also hosted exclusive events for our top customers, providing them with money can buy experiences. Examples of events in the third quarter included the celebration of the Kate capsule collection in Paris with the founder and creative director Kate Holstein present. In the United States, where our top customer number grew a remarkable plus 48.3% in the third quarter, we hosted events in New York City during the New York Fashion Week, in Los Angeles during Freeze, and recently also in Connecticut. We also strongly believe in the ongoing recovery of the Chinese luxury market and recently hosted VIC events in Shenzhen and Xiamen, as well as in Singapore. Please see our investor presentation for more details on our events and customer experiences. Another recent highlight was the customer and brand experience that we created together with our partner Courrèges during the Shanghai Fashion Week. As part of the official calendar of Shanghai Fashion Week, we hosted three events in 24 hours. We created a public exhibition in the fashion house Courrèges celebrating our exclusive capsule collection, but also showcasing archive pieces never shown before outside of France. We hosted a talk with the artistic director, Nicolas Di Felice, for Chinese fashion students, and we hosted a VIC dinner for press and our Chinese top customers with the CEO and the artistic director attending. Please see our investor presentation for more details on these remarkable events and the media coverage. Let me conclude my statement by commenting on the third accomplishment in the third quarter, namely the significant improvement in profitability compared to Q3 of fiscal year 2023. MyTheresa operates a very flexible and resilient business model, which allows us to react quickly to a changing environment, which we proved in the more difficult recent quarter. Martin will talk in a few minutes about the details of our bottom line results for the third quarter fiscal year 2024. But let me provide you with some key operational results of the third quarter. Customer satisfaction, as measured by our internal Net Promoter Score, reached 80.6% in Q3 fiscal year 2024, a strong increase over last year's Q3 result. As mentioned, our average order value increased by 8% to a new record high of €692 LTM, also driven by the ongoing expansion of our fine jewelry offer. Our number of first-time buyers reached over 118,000 in the third quarter of fiscal year 2024, while our customer acquisition costs, CAC, actually declined by minus 2.8% compared to Q3 of fiscal year 2023, which is a remarkable achievement in the current environment. We also continued the ramp up in our new Leipzig distribution center, from where we shipped already more than 60% of all customer orders at the end of March. Finally, we also recently launched our new MyTheresa retail media services, allowing our luxury brand partners to place paid media campaigns on our platform. With all of the above, it should come as no surprise that we are very pleased with our performance in the third quarter of fiscal year 2024. We believe that our results demonstrate the strengths and consistency of our business model, delivering profitable growth. We see ourselves as a clear winner in the consolidating luxury e-commerce space. We are extremely well positioned to benefit from the tremendous growth prospects when market conditions will improve globally. To capitalize on these prospects, we are actively evaluating opportunities to support and accelerate our investments in future business growth. This also supports our strong confidence in our medium-term growth trajectory and profitability levels, despite the ongoing short-term uncertainties in the macro environment right now.

But now, I hand over to Martin to discuss the financial results in detail.

Thank you, Michael. Yes, we're very pleased with our performance during the quarter. In line with our overall guidance for H2 of our fiscal year 24, In the past quarter, we achieved double-digit growth top line and improved our profitability bottom line. We significantly reduced our gross profit margin slippage and are fully on track with managing our inventory position. We extended and secured our revolving credit facility for the next years and continue to be the value-adding, reliable, and preferred partner for the top luxury brands. In a challenging and consolidating market, we confirmed our successful leadership position as the clear winner in multi-brand luxury. MyTheresa is all set to become a multi-billion business medium term with an ongoing double-digit annual growth trajectory of high teens, low 20s, and an adjusted EBITDA margin of at least 8%. I will now review our financial results for the third quarter of fiscal year 24 ended March 31st, 24 in more detail and will provide additional background on certain key developments that affected our performance throughout the quarter. Unless otherwise stated, all numbers refer to Euro. In the third quarter of fiscal year 24, GMV growth was at plus 14.7%. compared to the prior year quarter, achieving 252.2 million. Our track record on top-line growth is further evidenced by our two-year growth rate of plus 35.2% and three-year growth rate of plus 53.1%. Customer engagement and retention continued to be strong during the third quarter, with a total of 862,000 active customers. As mentioned, we were able to grow the number of our top customers by plus 17% in the quarter and by plus 16% in the last nine months. Our focus on attracting the most valuable high potential multi-brand luxury customers and nurturing the loyalty with excellent curation and service continues to be our winning formula. In the US, our top customer base grew by an exceptional plus 48.3% in the quarter. During the third quarter, net sales grew by plus 17.6%, reaching 233.9 million. We have seven major brands operating seamlessly under the CPM and are able to offer our brand partners both models, wholesale or CPM. From a regional perspective, we saw again exceptional growth in the US and strong growth in Europe and rest of world. In the US, net sales grew by plus 44.6% in the quarter, Europe plus 9.3%, Europe excluding Germany plus 13.1%, and rest of world plus 16.4%. Our global business model and seamless execution worldwide ensures capturing growth opportunities wherever they open up. Our global setup becomes more effective every quarter with now only 51.6% of net sales coming from Europe with strong leadership positions and 48.4% already from the US and rest of world where we experience exceptional growth opportunities. Our LTM AOV increase of plus 8% or €51 per order delivered is remarkable and improves our order economics notably. During the third quarter of fiscal year 24, gross profit increased by plus 12% to €101.6 million as compared to €90.7 million in the prior year quarter and with a gross profit margin of 43.4%. The gross margin slippage further decreased. This come down significantly from 740 basis points in Q1 and 490 basis points in Q2 to now 220 basis points in Q3. In addition, the gross profit margin slippage in relation to GMV was only 100 basis points. We experienced a solid gross profit increase by plus 12%, but still not as strong as we expected. as inventory clearance activities of competitors exiting the market impacted the growth rate. As highlighted before, we clearly see improvements in the cross-profit margin situation. With again expected double-digit growth rate of cross-profit in the upcoming Q4, we expect total gross profit to be on last year's level for the full fiscal year, 24, The overall market environment has not yet normalized, but our margin development shows that we are able to contain the effects. We continue our commitment to full price selling, which is highly valued by our brand partners. Our adjusted shipping and payment cost ratio increased from 14.3% to 15.3% due to our increasing international sales share and strong growth in countries like the U.S., where we pay all customs duties for the customer. Due to our continuous efforts to capture efficiencies in the shipping, payment, and customs setup, we expect to mostly offset further cost increases in the future and therefore target stability in the cost ratio on this level in the upcoming quarters. Following our strategy of the preceding quarters, our focus remained yet again on the acquisition of high potential customers and top customer retention. We adjusted our total marketing expenses to the overall softer market environment. As a consequence, our marketing expenses decreased by 2.6 million to 23.1 million during the quarter. The marketing cost ratio decreased by 250 basis points to now 9.2%. Our CAC decreased by minus 2.8%. Despite this low marketing cost ratio, we were able to achieve a net sales growth of plus 17.6%. This excellent performance on new and existing customers shows the effectiveness of our AI-driven performance marketing tools, our increasing brand strength, the superiority of our curated offering, and our excellent service delivery. We continue to focus on growth in a cost-effective manner. We were able to keep the adjusted selling general and administrative expenses mostly stable in absolute terms at $30.8 million as compared to $29.7 million in the prior year quarter. With our strong growth in the quarter, the adjusted SG&A cost ratio decreased by 130 basis points to 12.2% as compared to 13.5% in the prior year period. We will continue to grow in a cost-effective manner, but we'll also ensure that we build up the right resources to achieve our strong growth targets in our short- and medium-term growth trajectory. As a result, we're very happy about our improved profitability. Our adjusted EBITDA has improved significantly as compared to the prior year quarter. During the third quarter of fiscal year 24, adjusted EBITDA stood at 9.2 million as compared to 3.2 million in Q3 of fiscal year 23. Adjusted EBITDA margin improved by 230 basis points, to now 3.9% as compared to 1.6% in the prior year period. For the full fiscal year 24, ending in June 24, we continue to target the lower end of our guided 3% to 5% adjusted EBITDA margin. Given the continuous challenging market environment and luxury worldwide, to achieve this profitability level is remarkable and clearly beats peer performance. It enables us to continue to capture market share, to grow strongly, and to fortify our leadership position. As the market uncertainties are expected to continue, we also expect our profitability levels in the next fiscal year to be around that level. Given our low levels of depreciation and amortization, unique and typical for the MyTresa business model, We again achieved a strong profitability also on adjusted operating income or adjusted EBIT level. The adjusted EBIT margin was at plus 2.3% compared to a 0.1% adjusted EBIT margin in the prior period. The adjusted net income margin was at a positive plus 1.8% in the quarter. Looking at cash flow for the quarter, given the seasonal inventory buildup, operating cash flow was at minus 11.6 million compared to minus 36 million during the prior year period. The minus 11.6 million came after a plus 18.5 million operating cash flow in the preceding quarter. A much lower use operating cash flow in the quarter compared to previous year quarter is mostly driven by reduced inventory purchases. We are on track on managing our inventory levels. As of March 31st, inventory is at plus 11.9% year over year, lower than our top line growth, and significantly reduced from the 44.4% at the end of Q1 and the plus 33.1% at the end of Q2 of fiscal year 24. was at 280 days, down from 310 days in June 23, and approaching the target range of 260 days. Cash flow from investing activities was at 4.9 million compared to 6.5 million in the previous year quarter. This was mostly driven by the remaining payments for our new distribution center in Leipzig. We continue. to have very low capex cash flows in our business model and therefore expect the cash flow from investing activities in the next quarters to return again to below 1% of net sales. As of March 31st, we have successfully entered into a new multi-year revolving credit facility agreement, replacing the old one and securing us 75 million cash. This will enable us to fund our continuous growth strategy. As of March 31st, the cash utilization of the credit line was at 26.1 million with 10.6 million cash at hand. We expect an even lower utilization at the end of our fiscal year, end of June 24. Please remember that besides the revolving credit facility that we use for seasonal networking capital financing from time to time, we do not have any other bank debts in our balance sheet. We have a very strong balance sheet with an equity ratio of 65%. With all what Michael and I talked about so far, it comes as no surprise that we remain very confident in our short-term and especially in our medium and long-term outlook. For the full fiscal year 24, which ends on June 30, 24, we confirm our guidance for the top and bottom line at the lower end of the guided ranges of GMV and net sales growth between 8% to 13% and an adjusted EBITDA margin between 3% and 5%. The ongoing consolidation in our industry is gaining speed, and it becomes clearly visible who are the outperformers. We are gaining market share on an accelerated level and have completed our two major infrastructure milestones securing our successful growth, our fundamental new IT setup and the new distribution center in Leipzig. MyTrees has all set to become a multi-billion business medium term with an ongoing double-digit annual growth trajectory of high teens, low 20s and an adjusted EBITDA margin of at least 8%.

And with this, I will now turn the call back over to Michael for his concluding remarks. Thank you, Martin.

We are very pleased with our third quarter of fiscal year 2024 earnings results. We are seeing the top line acceleration and profitability improvement as projected and are on track to achieve our fiscal year 2024 guidance. MyTheresa is poised for an extremely successful next chapter in its journey to become the global leader in digital luxury. We believe that MyTheresa offers the best digital luxury shopping experience for big spending consumers and true luxury brands.

And with that, I ask the operator to open the line for your questions.

Thank you. We will now begin our question and answer session. At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. As a reminder, please limit yourself to one question and one follow-up only. We'll pause for 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, Michael and Martin. This is Neil Goh from Oliver's team. My question was just on U.S. growth. Nice job on the over 40% there. What was the year-over-year comparison in the region, and has the growth there been more broad-based across customers and categories, or are there specific areas and trends you'd call out as key drivers of the strength? And then,

are your key initiatives to lean into that customer going forward relative to europe and and asia which is obviously a smaller piece of the business thanks yes thank you for your question um in the third quarter we grew our business in in gmv 41.6 over the quarter of last year so a clear acceleration on the already good numbers double digit growth numbers in q1 and q2 which makes the U.S. business actually now with 22% the largest region for our company. And we are very pleased with this. And we see as drivers a similar pattern what we have seen in other geographies. It's really the top customers. It's really the big spenders. The number of big spenders, the two highest tiers in our customer pyramid, this number even grew 48% in the U.S. So it's really growth at the top. Which then, of course, means it's really growth driven by ready-to-wear. It's really growth driven by the big regions for these type of customers. Number one, California. Number two, East Coast, Manhattan, New York, Connecticut, but then also, of course, Florida and Texas. So highly correlated to the areas where there are these type of customers. And we are continuing to focus on these customers by providing unique experiences for these customers, be it in the U.S. themselves or inviting U.S. customers to come to unique experience that we host in Europe. For example, two weeks ago, we hosted an event with Grillo Cucinelli, and we welcomed U.S. customers there. Next week, we will host an event with Deutsche Gabbana at Capri, and we will welcome U.S. customers there. That continued focus on the high end, plus more brand awareness. We will have, as last year, a pop-up in the Hamptons this year. So there's really a lot of marketing activities clearly targeted to those customers looking for multi-brand inspiration. And we see a clear desire by top-end customers to have a platform that solely focuses on luxury for multi-brand inspiration.

Got it. And then, obviously, you did mention, again, the continued green shoots and the aspirational customer in the region. So are you seeing a pickup in, like, handbags and dresses, shoes, like some of those categories? Yeah, and just any commentary on if that was maybe a sequential acceleration from the last quarter? How do your expectations for the aspirational customer back up compared to the prior quarter? Thanks.

No, thanks for reminding. We continue to see those green shoots. So the U.S. is by far the strongest region in luxury spend, and this is also due to the fact that the aspirational customer is coming back. The only thing I want to stress is our fast acceleration in the third quarter is really much, much more driven by our success with the big spenders.

while we do observe the green shoots on the aspirational customers. Thank you.

The next question comes from the line of Matthew Boss from JP Morgan. Please go ahead.

Great, thanks. So, Michael, how would you characterize overall health of your core luxury customer today? Could you expand on new customer acquisition trends and speak to competitive advantages you see today for your model relative to peers in the marketplace?

Thanks, Matt. Happy, happy to do so. So our core customer base, which are the top spenders is very healthy, very healthy, strongly performing. This drives our unique, plus 14% like-for-like growth in the quarter. To my knowledge, that is not matched by anyone. And it is driven by the core and it's driven by attracting more of these in the last quarter, 17% more, and these customers also spending more, 3.3. There are geographic differences. So as mentioned on the call, the US is the strongest region, Europe is stable. In Asia, we still see uncertainties. But in all the regions, it is from the top end, it is our focus on these spenders. And that is also because we focus on that. That's a key point of differentiation to many other platforms. We focus on curation, on inspiration. This is what these customers look for. This audience is a multi-brand audience. It is attractive for brands to create visibility with them, which makes brands willing, keen to partner with us. We mentioned on the call, again, the unique products, but also experiences we can therefore offer our customers, and then it becomes sort of a reinforcing cycle. You have more unique things, you attract a better customer audience, and that makes it more attractive for brand partners. can work with us and particularly important at the moment while we are of course not completely insulated from discounting in the marketplace from too much inventory it is still the best customer because their full price share is very high and thus we have come quite a distance from the not so great performance in Q1 to the much better performance in Q3. And we see ourselves to continue on that stretch. And finally, the landscape is changing, as Martin and I refer to. So the landscape of truly inspirational multi-brand platforms that operate on a global basis is getting consolidated. And thus, we believe we have extremely good chances to continue and become a multi-billion player with this focus.

Great. And then maybe just to follow up, Martin, could you speak to current inventory in the channel, how that maybe impacts forward expectations for the promotional landscape? And then multi-year, any structural constraints to returning to 46% to 47% pre-pandemic gross profit rate of GMB?

Yeah, happy to do so, Matt. I mean, obviously, as we call it in Q3, we still experience a cross-profit margin slippage of 220 basis points, also driven by a one-time effect of certain competitors exiting the market. And we do see some activities there. And so the overall market situation on inventory levels has has improved, especially on spring summer 24, but there's still uncertainties regarding competitive actions and looking ahead. And always remember, I mean, we are staying true to our course. We are focusing on full price selling. We are the least promotional actor in the market, and that speaks to our, you know, retaining of top customers and retaining our existing customers. That is why they shop with MyTheresa. There are no structural barriers to returning to gross profit levels that we experienced before, but it still waits to be seen whether this is in the immediate upcoming next quarters or whether this is or whether this will take more time.

Great, Carlos. That's the block.

Sorry. Maybe, Matt, I can add to this. There are, of course, two issues in what we call promotional intensity. There are players that have been overstocked and are discounting to get off their discounts. We clearly see the significant improvement in stock levels for spring-summer 24. The current season, we will we also will see that same thing for fall winter 24. So the clear return to normal is happening, but we do have one additional effect at the moment, which short term is not good. Medium term is more as players exit the market is even more one time offloading. And so we have seen one time offloading in the months of February, March, that is not structural. That is actually, positive structurally but short-term there's even more stock coming to the market and thus the strong performance in q3 makes us very comfortable at those short-term pressures which as I said clearly give us medium term upside we can also mitigate but then in combined with the normal promotion density we will maybe have a more lingering effect but the two are quite separate one is one time say it's exiting, the other one is ongoing, and the seasonal buy in the channel as a whole is much healthier for spring-summer 24 and for winter 24.

That's helpful. Thanks, Michael.

Again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, simply press star one again As a friendly reminder, please limit yourself to one question and one follow-up only. Thank you. The next question comes from the line of Grace Smalley from Morgan Stanley. Please go ahead.

Hi. Thank you very much. My question would just be if you could just comment more on what you're seeing on current trading in April and May relative to the acceleration that you saw in Q3 and then breaking that down in terms of any changing behavior you're seeing across different product categories or brands and fashion trends? I know in the past you've spoken about the consumer preferences shifting towards quiet luxury. Just if you're seeing that continue or any changes there. Thank you.

Well, happy to do so. So while we do not comment on current trading, we did, or Marta did, confirm our guidance for the full fiscal year, and that implies that we see continued double-digit growth also in the final quarter of fiscal year 24. So it's clearly implied in our guidance that double-digit growth continues. In terms of the pattern, it is still true that some of the most strongest brands are what you can categorize as quite luxury, even though it's not always clear whether Loro Piana, Zegna, and Bornello are all the same. I would heavily argue they are not. I stated before, I firmly believe that as we are in fashion, this trend will come to an end at some point. And while we have seen great success of a brand like Loewe that does not fit the pattern of Quiet Luxury, it will also be interesting for the coming season to see how the development, how the new creative director Valentino is shaping Valentino, the brand itself, but also the market. Because fashion is about also fashion trends and cycles. So I do believe fashion will come back. I do believe it will be good for the sector. And I also believe the quiet luxury brands will continue because they have a strong relevance for a certain audience. While overall the market has missed some of the more fashion forward aspirational customers and they need to come back.

Okay, very clear. Thank you. And then just as a follow-up, are you able to just comment how you're thinking about your balance sheet and how you go about internally approaching or evaluating potential M&A opportunities versus organic growth opportunities to the extent that you're able to comment, please? Thank you.

Well, happy to address the second question and then Martin can talk to the balance sheet. As is evident by our performance and our positioning, we strongly believe that through our organic growth, we can achieve our multi-year targets, can become a multi-billion company. So organic growth is the default strategy. We may look at unorganic growth. That is an option. While the focus is clearly on organic, but we will not at this stage comment on any specific M&A opportunity that is out there.

And maybe an addition. Thank you so much.

Yeah, maybe an addition, Grace. I mean, obviously, the balance sheet, no change in the ultimate strength there, 65% equity ratio, very, I mean, we don't have any additional bank debt on top of the very operational use of the roll and carry facility. that we were able now to fix for the next years, to have a solid base for the growth, replacing the old one. And so we continue to have that balance sheet strength with having no more longer-term bank debt.

Great. Thank you both.

Thank you.

As there are no further questions at this time, this concludes our Q&A session. I would like to thank our speakers for today's presentation and thank you all for joining us. This now concludes today's conference call. You may now disconnect.