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Yahoo
15-05-2025
- Business
- Yahoo
Q3 2025 MYT Netherlands Parent BV Earnings Call
Martin Beer; Chief Financial Officer, Member of the Management Board; MYT Netherlands Parent BV Michael Kliger; Chief Executive Officer, Member of the Management Board; MYT Netherlands Parent BV Unidentified Participant Matthew Boss; Analyst; JPMorgan Chase & Co Operator Greetings and welcome to LuxExperience third quarter fiscal year 2025 earnings conference call. (Operator Instructions). Today's call is being recorded, and we have allocated one hour for prepared remarks in Q&A. It is now my pleasure to introduce your host, Martin Beer, Chief Financial Officer of LuxExperience. Thank you, sir. Please begin. Martin Beer Thank you, operator, and welcome everyone to the LuxExperience investor conference call for the third quarter of fiscal year 2025, our first investor conference call since we closed the acquisition of YOOX NET-A-PORTER and changed our company name to LuxExperience to reflect the best of the combined companies. So this call is dedicated to the fiscal Q3 results of the legacy Mytheresa standalone business. With me today is our CEO, Michael we begin, we would like to remind you that our discussions today will include forward-looking statements. Any statements we make about expectations or forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in our annual factors could cause actual results that 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 the IFRS on this call. You can find reconciliations of these non-IFRS financial measures in our press release, which is available on our Investor Relations website at will now turn the call over to Michael. Michael Kliger Thank you, Martin. Also, from my side, a very warm welcome to all of you and thank you for joining our call. We will comment today on the results and performance of our third quarter of fiscal year are of course truly excited to have completed the acquisition of YOOKS NET-A-PORTER on April 23 and to now operate the leading global luxury multi-brand retail group under the name LuxExperience. This acquisition brings together some of the most iconic brands in digital, luxury, retail and will generate enormous value for our customers, brand partners, and is now the pre-eminent multi-brand group in digital luxury with combined net sales of around EUR3 billion. Our medium term ambition is to reach EUR4 billion in net sales and 7% to 9% adjusted EBITDA margin. We will provide much more details on the just completed acquisition tomorrow in a separate investor we now embark on the exciting new chapter as LuxExperience, I'm very proud to see our company in a very healthy and strong position. I'm specifically very pleased with our results in the third quarter of fiscal year 2025. With solid revenue growth and positive adjusted EBITDA, we continued to demonstrate our ability to execute well and achieve strong results on the continued macro uncertainties where other players are a leader in a clearly consolidating sector and continue to display the unique characteristic of profitable growth. Our improved cost margin, the strong growth of top customer spend, the outstanding high average order value, and the excellent customer satisfaction, all highlight the fundamental strengths of our business model.I wish to highlight today three key messages to you that make us stand out in the third quarter and demonstrate the strength of the Mytheresa business despite ongoing macro our unique focus on high spending, wardrobe-building luxury shoppers drove again our solid profitable growth around the world. We build a community for true luxury end-users and we create desirability with them also through unique physical the strong relationship that we have with big-spending, wardrobe-building luxury customers continues to drive the desire by luxury brands to partner with us. This gave us again access to many exclusive capsule collections and pre-launch campaigns that in turn drove our global business growth in the third quarter of this year our very resilient and consistent business model and execution allowed us to significantly improve many of our key performance indicators in the third quarter. Expanding gross margin, outstanding AOV, and increasing top customer spends were again drivers for improving profitability in terms of adjusted EBITDA in the third me now comment in more detail on these three messages. First, let's look at how building a global community for luxury enthusiasts is driving our business. In the third quarter, our GMV with top customers grew by plus 7.8% compared to the prior year period, underlining resilience of top customers to macro headwinds. This growth was largely driven by an outstanding increase of the average spend per top customer in terms of GMV by plus 17.9% in Q3 fiscal year '25 versus Q3 fiscal year ' the United States, our business with our top customers even grew by plus 12%, driven by the impressive growth of average spend per US top customer of plus 17.8%. We mentioned already in the last quarter, our two-week immersive invite-only apres-ski experience in Aspen in collaboration with Bemelmans' bar. This is a great example of how we are able to attract high net worth customers in the United 1,800 guests were seated over 17 days in the pop-up, and over 2,300 contact details were captured with 56% registrants being new contacts. Since signing up for the event, guests have generated a total revenue of EUR830,000 and their repurchase rate is already at 48%.Our clear ambition is to build the strongest relationships with our top customers, and we therefore constantly engage with them. In the third quarter, we hosted again various events for our top customers across the include Style Street in Miami, Dusseldorf, San Francisco, New York, and Hong Kong. We hosted Michelin Star dinners in Houston and Washington, D.C. We invited top customers to an intimate lunch with the Khaite in the Khaite showroom, allowing top customers to meet with Catherine Holstein, Founder and Creative Director of Khaite, as well as seeing the latest pieces from the newest with Caroline Herrera, we welcomed top customers at the Hotel de Creon, where Creative Director Wes Gordon shared the inspiration and artistry behind his latest runway collection, followed by a lunch with we partnered again with Porsche for a driving experience in Los Angeles and for the first time with It's Fast Ice Race inviting ten top customers to a motorsport ride, racing experience on ice in Austria, including a cocktail moment with Ferdinand Porsche. Please see our investor presentation for more details on our various top fulfill our ambition, to build a community for luxury enthusiasts through digital and physical experiences, we organize for our top customers true-money-can't-buy experiences. In the third quarter, top customers were invited to an event with Alaya and Venice, including a dinner on the first night at the famous Harry's Bar, a private tour for the very first time in the renowned knitwear factory in [Vishtensa] and a beautiful dinner to conclude the event at Villa [Payalmara].We hosted an exclusive dinner with the Creative Director Christopher Esber of the Namesake brand at Loulou Restaurant during Paris fashion. We hosted a two-day experience with Patou in Paris to celebrate the exclusive capsule collection for first day included an afternoon tea at the private apartment of the brand's Creative Director, Guillaume Henri, followed by an elegant dinner at [Brasserie lele]. The second day, top customers were invited to explore Paris with a curated guide to the city's hidden gems by Guillaume, concluding with an intimate lunch at [Brasserie lup].Together with Pomellato, we also hosted top customers for a two-day [Neena] experience, including a private tour of the renowned Casa Pomellato factory, an elegant dinner at [Krakow in Galeria], a Polato showroom visit, a private guided tour of Casa Contatti, and a lunch at the iconic [Beacher] we hosted the Texan experience with Pucci to celebrate the launch of the exclusive Pucchi capsule collection in Austin. The afternoon started with an intimate cocktail moment with Pucci's Artistic Director, Camille Miceli, followed by a cocktail party at the famous Austin Hotel where guests were treated to custom cowboy head-shaping, a live country music band, and lively two-step dance addition to providing our top customers memorable experience, such events also create brand awareness for Mytheresa brands through global social media amplification. Please see our investor presentation for more details on these unique money-can-buy our strong relationship with such customers clearly drives the desire of luxury brands to partner. One evidence for the strong trust and support we enjoy is the recent expansion of our partnership with Prada, which allows us now to distribute Prada products globally, effectively doubling our reach and our business potential with the third quarter saw again many high impact campaigns and exclusive product launches that drove our global business growth with high spending wardrobe buildings capsules. We launched exclusive womenswear and menswear runway looks from Loewe, as well as exclusive bags and accessories from the Loewe Lunar New Year collection for launched an exclusive capsule collection by Manolo Blahnik for women's wear and menswear, only available at Mytheresa. We were the exclusive pre-launch partner for Toteme's key lock clutch bags and the Toteme card holder collection, as well as actual spring summer '25 also launched exclusive womenswear styles from Balenciaga's Summer '25 collection and exclusive menswear styles from Tod's Spring Sumer 25 collection. Please see our investor presentation for more details on brand collaborations in the third unique offers drove the interest by wardrobe building, big luxury spenders and thereby our solid top line in the third quarter of fiscal year '25. We grew our net sales by plus 3.8% compared to Q3 for fiscal year '24. The first nine months of fiscal year '25, net sales grew by plus 8%.The United States saw similar growth with plus 3.9% in Q3 fiscal year '25, while in Europe, including Germany and the UK, we experienced a very strong net sales growth with plus 8.1% in the third quarter compared to the prior year in the first quarter of the year '25, we continue to improve our business performance, thanks to our very resilient and consistent business. Martin, will talk in a few minutes about the details of our bottom line results for the third quarter, but let me provide you with some key operational achieved outstanding customer satisfaction measured by our internal net promoter score. It reached a record high of 86% in Q3 fiscal year '25, demonstrating the consistent excellence of our customer service proposition. Our average order value last 12 months increased by plus 8.8% to an outstanding EUR753 in Q3 fiscal '25 demonstrating the success of our focus on selling full price high-end luxury products to top our gross margin improved by 140 basis points, which underlined our successful strategy of full price selling. Our return rates decreased in the third quarter, also contributing to the strong profitability of plus 3.9% in terms of adjusted EBITDA these operational highlights serve as a testament to the fundamental strengths of our business. With all the above, it should come as no surprise that we are very pleased with our performance in the third quarter of fiscal year see this quarter as further proof that our business can deliver profitable growth, even under the ongoing macro uncertainties due to the strengths of our model and consistency of our execution. This proven strength and the track record of our teams for excellent execution drives our strong confidence in creating enormous value through the acquisition of YOOX now, I hand over to Martin to discuss the financial results in detail. Martin Beer Thank you, Michael. As Michael already mentioned, we are very excited about our successful closing of the YOOX NET-A-PORTER acquisition on April 23. The closing in April falls within our fiscal fourth quarter and as such is not reflected in the reported numbers for our fiscal Q3 reporting which covers the period from January to March 2025. For this reason, we will dedicate today's call to Mytheresa's fiscal Q3 on May 15, we have an additional call scheduled to provide more details on the newly formed group structure of LuxExperience, key strategic initiatives, financial details, as well as our plans and strategic direction moving forward. Therefore, let's talk today about our fiscal Q3 reporting ended on March 31, very pleased with the financial performance in the third quarter and also in the past nine-months of fiscal year 2025. In the quarter, we achieved a solid net sales growth of plus 3.8%, fully in line with our guidance. Our AOV LTM again increased plus 8.8% to a record high of EUR753 per order gross margin expansion, which we've also seen in the two last quarters continues with now 140 basis points improvement in the quarter. We continued to increase our profitability with an adjusted EBITDA margin of plus 3.9% in the quarter. We also achieved positive operating cash flow of EUR18.7 million with stable inventory levels compared to previous year and achieving our day's inventory outstanding target of 260 days. This underlines Mytheresa's unique the track record of profitable growth, at the high end of true luxury in an overall tough market environment. I will now review the financial results for the third quarter covering January 1 through March 31, 2025 in more detail and give additional information on certain key developments affecting our performance during the quarter. Unless otherwise stated, all numbers refer to the first quarter, net sales grew by EUR8.9 million, or plus 3.8% to EUR242.5 million as compared to EUR233.6 million in the prior year quarter. The GMV for all customers grew by plus 8.9% while the GMV per top customer grew even stronger by an impressive 17.9% during Q3 of fiscal year ' the first nine-months of fiscal year '25, net sales grew by plus 8% to EUR667.2 million, fully in line with our given top line guidance for the full fiscal year. GMV increased by EUR9.5 million to EUR261.3 million in the third quarter of fiscal year '25, also a plus 3.8% increase from EUR251.9 million in the prior year by EUR61 for order delivered, our average order value LTM grew by plus 8.8%, now standing at a record high of EUR753 as compared to EUR692 in the prior year period. The increase in AOV strengthens our unit economics and highlights our strategy of full price selling to the high end of growth was well balanced worldwide, with our core market Europe growing by plus 8.1% with a net fair share of 53.8%. The US had a share of 22.5%. The rest of the world of 23.7%. In the third quarter of fiscal year '25, gross profit increased by plus 7.2% to EUR108.5 million from EUR101.3 million in the prior year gross profit margin increased by EUR140 basis points to 44.8% as compared to 43.4% in Q3 of fiscal year '24. This is fully in line with what we achieved in the preceding quarters. In a less competitive and discount-driven market, we stay true to our strategy of a higher full price share in our curated offer and thus we were able to improve our gross profit the last nine-months, fiscal year '25, our gross profit margin increased by 150 basis points. The shipping and payment cost ratio decreased by 130 basis points in the third quarter from 15.3% per year to now 14% of GMV. The decrease is mainly driven by continuously improving unit economics, resulting from the increase in AOV and lower return same effect is visible for the first nine months of fiscal year '25, during which the shipping and payment cost ratio decreased by 90 basis points to 13.8% compared to 14.7% in the prior-year marketing cost ratio increased from 9.2% to 10.2%. As we continue to invest in capturing market share, we build on our successful strategy of investing, marketing efforts directed towards our top customer base and brand campaigns while maintaining efficiency in targeting high-quality first-time the quarter, we increased our marketing activities in line with this approach. The adjusted selling general and administrative SG&A cost ratio in the fiscal third quarter stood at 13% lower what we've seen in previous quarters. In relation to fiscal Q3 of the previous year, the cost ratio increased modestly by 80 basis points from 12.2% to 13%.During the first nine months of fiscal year '25, adjusted SG&A cost ratio decreased by 40 basis points, 14% prior year period for now 13.6%. In Q3 of fiscal '25, adjusted EBITDA increased by EUR0.5 million to EUR9.3 million from EUR8.9 million in the prior year quarter. Adjusted EBITDA margin increased from 3.8% to 3.9%.For the first nine months of fiscal year '25, adjusted EBITDA increased significantly by EUR13.2 million at an adjusted EBITDA margin of 4.3% compared to 2.5% in the previous year period, fully supporting our guidance for the full fiscal and amortization remained stable at EUR3.9 million and 1.5% of GMV in Q3 of fiscal year '25 compared to the previous year period. Our profitable growth is also evident at adjusted operating income and adjusted net income the third quarter of fiscal year '25, adjusted operating income was at EUR5.5 million, a 20 basis points increased margin at 2.3%. For the first nine months in fiscal year '25, adjusted operating income was at EUR16.6 million, at 2.5% margin, with a significant improvement to the previous year. We also delivered positive adjusted net income in the quarter at EUR5.4 million and for the first nine months of fiscal '25, adjusted net income was at EUR21.4 million at a 3.2% margin, also significantly improving from last take a look at the cash flow statement. During the third quarter of fiscal year '25, we achieved a positive cash flow for operating activities of plus EUR18.7 million compared to minus EUR11.6 million in the previous year quarter. This is a EUR30.3 million positive cash flow driven by effective working capital the first nine months, operating cash flow only used up EUR13.9 million compared to EUR26.4 million in the prior period. This is mainly driven by our careful management of inventory levels. Our inventory stood at EUR372.8 million, fully stable compared to the beginning of the fiscal year and despite an 8% net sales growth in the first nine months of fiscal year ' of March 31, '25, our days inventory outstanding were right at our long term target of 260 days. Cash flow from investing only used up EUR0.6 million in the quarter and only EUR2.3 million in the first nine months of fiscal year '25. The heavy investments in our new tech platform and the move to a new center warehouse all have been completed successfully and we're now returning to our expected, long-term CapEx average of below 1% of ended the quarter with EUR14.2 million cash at hand and a EUR25 million cash utilization of our EUR75 million revolver. The solid financial performance in the third quarter of fiscal year '25 is fully in line with our expectations and supports are given guidance for the full fiscal year on all new tariff situation and especially its impact on customer sentiment and the global economy still remains unclear. We therefore for the full fiscal year ending June 30, 2025 expect the lower end of our given guidance of GMV and net sales growth between 7% and 13% for the legacy Mytheresa stand-alone our continued focus on profitability, we confirm our guidance on adjusted EBITDA margin between 3% and 5%. The acquisition of YOOX NET-A-PORTER in the fourth quarter of our fiscal year '25 is expected to add another EUR300 million to EUR350 million net sales and then adjusted EBITDA loss of EUR20 million to EUR30 million to the legacy Mytheresa stand-alone business fiscal year '25 numbers, ending on June 30, all of the above, it comes as no surprise that we are very confident in the continued success of Mytheresa business as a cornerstone of our new LuxExperience Group. With the successful closing of the acquisition of YOOX NET-A-PORTER, we are very excited for the medium and long-term outlook of the combined our proven ability to execute and to show strong results, we reconfirm our medium-term outlook for the combined business to achieve EUR4 billion net sales and an adjusted EBITDA margin of 7% to 9%.And our tomorrow's call, we will provide more details on our exciting journey ahead. And therefore would welcome very much your participation in tomorrow's call on LuxExperience. And with that, I hand over to Michael for his concluding remarks. Michael Kliger Thank you, Martin. We are very pleased with our third quarter fiscal year 2025 earnings results. We have seen a continued performance improvement this quarter. With this strength and consistency of our business model, we see ourselves well positioned for any further macro uncertainties. We continue to focus on building a community for true luxury enthusiasts worldwide and creating desirability through digital and physical see ourselves as well prepared for the formation of LuxExperience and the transformation of the combined business to the world leading multi-brand digital luxury platform, creating significant value for our high-end customers, brand partners, and with that, I ask the operator to open the line for your questions. Operator Thank you, ladies and gentlemen. We will now begin the question-and-answer session. (Operator Instructions)Oliver Chen, TD Cowen. Unidentified Participant Hi there. This is Katie on for Oliver Chen. I'd like to ask a question about the 4Q sales guidance and what's assumed for the legacy Mytheresa business. I know you spoke to sales, sort of at the lower end of the original fiscal year guidance. Can you talk through your assumptions for the consumer health and consumer reaction to the current environment and how that's derived from any trends you saw during the quarter or even quarter to date, and then what's assumed for both pricing as well as the number of orders, and then I'll have a follow up. Thank you. Michael Kliger Thank you. I'm happy to give a bit of insight on the assumptions, but of course, mathematically, it's pretty clear what we assume if we believe we're at the lower end. I think the biggest challenge at the moment looking at Q4 is of course understanding how further decisions by the administration would influence consumer have seen a lot of decisions at the beginning of April, some of them were reversed. We saw very positive development on Monday. So we at the moment expect a slower demand in the last quarter based on uncertainty, particularly in the North American market as we highlighted today in our call, the strongest region in Q3 was Europe with 8%.US, North America used to be the strongest region, so that's where we feel uncertainty and therefore caution is warranted as we simply don't know. I mean how new changes would influence our business model of sending products through customs into North America. So current decreases for China, made in China tariffs are was a report that the minimus would be abolished. So these are all factors which we don't have specific assumptions other than we we feel, we expect further uncertainties and that has dampened demand effects. I don't know, Martin, you want to add anything. Martin Beer Yeah, I mean, but you picked up the growth assumption for Q4, right? And it's mathematically just easily done. I mean, fiscal year-to-date for the first nine months. We grew 8% net sales. So if we guide to the lower end of the 7% to 13% top line growth, that would imply that we are -- that we expect to grow in Q4, obviously at a lower rate, 4% to 7% in Q4 to arrive at the lower end of the top line guidance. Unidentified Participant Okay, and then just as a follow up to that, how you're thinking about the pricing and if you've seen any different changes in pricing versus the number of orders placed. And then as you think about gross margin, what were really the most significant drivers to the gross margin improvement in Q3. Michael Kliger So on pricing, I think we always have to consider the lag effects in our industry. I mean we are currently selling spring-summer. So we do understand that some brands are looking at price increases. Some brands have done price increases. But that will most affect fall-winter merchandise, which is arriving, but the current season is spring-summer which has -- price decisions that were taken months ago. So that's on that gross margin, the biggest influence of gross margin is full price selling. How high is the share of food price, that's the biggest driver for further margin improvements that we expect. Unidentified Participant Very helpful, thank you. Operator Matthew Boss, JP Morgan. Matthew Boss Great, thanks. So Michael, maybe larger picture, how do you see the luxury industry position today just given the dynamic economic backdrop in? And maybe near term just based on the changes in sentiment that you cited, have you seen any direct impact on spending to date so far with your core high net worth customer base, whether it was April or May? In the US or Europe? Or is your guidance change more reflective of just the prudent potential that we could see a softening effect? Michael Kliger Thank you, Matt. No, I think this is really influenced by the short-term impact that we have seen. It's a multifaceted game. I mean, as a lot of our customers are managers are company owners, so a lot of these have kept them busy. I'm not in a position to say, oh, fundamentally something in the market has changed. Was there something broken by these decisions? I don't see that. Have these decisions over the last couple of weeks, really created uncertainties, definitely, and as always in the consumer game, stability is the the new number is X, but that is a guaranteed new numbers, companies can adopt to it. Consumers can adopt it. We have unfortunately seen more the numbers change all the time. So at the moment, we are cautious, but we have also seen that the mood has dampened, but I don't see at the moment any concerns that something has changed in the luxury industry. Matthew Boss Okay, great. And then Martin, just maybe relative to this year's guidance for 3% to 5% adjusted EBITDA margins for the legacy Mytheresa business, what would be the timeline that you see for profitability to return back to the high single digit EBITDA margin that you realized pre-pandemic? Martin Beer Yeah, I mean we always said that in the medium term, we want to go back to the 7% to 9% and we will go back. The question is, the key determining factor of this reverse that we always mentioned is the continuous improvement in the cross COVID margin that we saw in the last two quarters, that we also see in this quarter 140 basis points in the quarter in the last nine months, 150 basis points. So we are right on track in improving the overall adjusted EBITDA you also pointed out in the call, the higher AUV, lower return rates, all increase unit economics and also help on the, for example, shipping and payment cost ratio. And for this, we expect a continuous improvement in the bottom line and as our core focus stays on improving the profitability levels that we have showed in the last with, I mean giving the uncertainty in the top line, obviously has some effect on the profitability, but we explicitly kept the 3% to 5% bottom line guidance because the focus is on maintaining and improving the bottom line profitability and all the underlying business elements of our business model are fully intact on the journey to improve the bottom line profitability, to improve the adjusted EBITDA and when, we will come back to the 7% to 9%. This is in the medium term and we will continue this trajectory and then in our September call, we'll get the guidance for the next fiscal year, fiscal year 2026, and at that time we'll also have a much better visibility on the overall macro situation that obviously is also a key key driver. But the driving forces to continue to improve the bottom line profitability fully intact, and we will strongly continue to follow that path to the 7% to 9%. Matthew Boss That's great color. Michael, Just one quick follow up. On the dampening that you cited, have you seen that both in the US and in Europe? Michael Kliger More so in the US. Matthew Boss Great. Best of luck. Operator Ashley Hogan's, Jeffries. Unidentified Participant Hi, this is Blake on for Ashley. Thanks for taking our questions. I just wanted to build on that last one in terms of the US performance. Could you break out at all by providing a little bit more color on sales trends by month and then aspirational versus your top customers in the US, would be great to get a little bit more color there if you could. Michael Kliger Yeah, easy on the second one, like. Our top customer group in the US in the last quarter, our business view even by citing directly 12%. So that business is intact. It's sort of as we have seen in the past quarters, it's always the lower medium and that was a hit and uncertainty hit it again. That's where it's happening. The resilience on the top side. The resilience on the ultra-top is fully intact with the shocks that you see, with the shocks that also the equity markets took this aspirational, the occasional customers, not speaking to their wealth, just speaking to their spending patterns are always impacted more so and so it's an even deeper polarization. But again, what we have observed seems to us, a snapshot seems to have an immediate knee jerk reaction to this, as we have seen over the last weeks. There has been some reversal of it. But I will not position to predict in which way we will go from so on a month-by-month basis, it has started end of January and then you get peaks with events. I mean, we are really in an eventful moment and the stock market, but it's also macro crisis in regions. I don't know. It's almost impossible to that does not take anything away as you can see from our numbers, the fundamental strengths. I mean, in a reversal, look at what is happening and we can confirm our profitability. We can confirm marginal improvements. We can confirm cost control. So while the top line is not fully controllable, our business model allows us to control our bottom line. Unidentified Participant That's super helpful. And just to follow up on that, I wanted to ask on gross margins specifically, and you kind of just referenced the ability to still grow margins and maintain profitability, but how should we think about in an environment where maybe the aspirational customer slows down, can you still grow gross margins, or how much incremental promotions do you see yourself doing, wondering how you think about your target of, maintaining gross margin expansion versus maybe leaning into promotions or any other headwinds that you might foresee that would limit that ability? Michael Kliger No, we're absolutely able to further increase margin, the pace and the size of it. We won't guide now, but we absolutely have the ability to further improve our gross margin. Unidentified Participant Got it. And then last one, I was just wondering if you had any more color on your exposure to brands that are manufactured in China, maybe how that is impacting your business, and if you could talk more about, indirect versus direct tariff impacts and maybe China exposure specifically? Michael Kliger No, I mean we had different tariff impacts. One is, of course, that there is a flat increase by 10% for product going into the US and then of course, made in China has very high and they were not reversed. They're still in place on Monday, my understanding is there was a decision to reduce them for the moment, which is again, this uncertainty. It's not clear if it's now permanent or don't have a huge chunk of made in China and dresses and contemporary brands. We do have brands that have manufacturing in China. Most of our products are not only sourced in Europe but also manufactured in Europe. And therefore, there is an impact on the US channel. And there is an impact for product made in China, but that impact is, at this stage controllable, obviously at duty rates which we had at 140%. You cannot pass that along that effectively means you cannot sell the product. Unidentified Participant Really appreciate the color. Best of luck. Operator And it seems that we have no further questions. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-03-2025
- Business
- Yahoo
Verbund AG (OEZVF) (Q4 2024) Earnings Call Highlights: Navigating Challenges with Strategic ...
Revenue: Not explicitly mentioned in the transcript. EBITDA: Decreased by 22.5% to EUR3.48 billion. Hydro Segment EBITDA: Decreased by 23% to EUR3 billion. New Renewables Segment EBITDA: Decreased by 25% to EUR170 million. Sales Segment EBITDA: Increased to EUR7 million. Grid Segment EBITDA: Decreased to approximately EUR284 million. Gas Connect Austria EBITDA: Approximately EUR86 million. Group Result: Decreased by 17% to EUR1.87 billion. Operating Cash Flow: Decreased to EUR3.25 billion. Free Cash Flow After Dividends: Decreased to EUR145 million. Net Debt/EBITDA: At 0.6 as of December 31. Dividend Proposal: EUR2.8 per share for 2024. CapEx Plan: Increased to EUR5.9 billion over the next three years. 2025 EBITDA Guidance: Between EUR2.7 billion and EUR3.3 billion. 2025 Group Result Guidance: Between EUR1.35 billion and EUR1.75 billion. Release Date: March 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Verbund AG (OEZVF) reported a significant increase in hydro generation, with a 9.6% rise to 33,448 gigawatt hours compared to 2023. The company successfully commissioned new renewable power plants in Spain, Austria, and Germany, contributing to increased generation from wind and PV. Verbund AG (OEZVF) completed important projects like the 45-megawatt ReiBeck II pumped-storage power plant and the 11-megawatt Gratkorn run-of-river power plant. The sales segment showed improvement, with EBITDA increasing to a slightly positive value of EUR7 million, driven by lower procurement costs. The company plans to invest EUR5.9 billion over the next three years, focusing on growth and maintenance, particularly in the regulated Austrian electricity grid and renewable generation projects. Verbund AG (OEZVF) experienced a decrease in average achieved contract prices, impacting overall results despite increased generation volumes. EBITDA in the hydro segment decreased by 23% to EUR3 billion due to lower achieved contract prices. The new renewables segment saw a 25% decrease in EBITDA to EUR170 million, affected by lower achieved prices and higher operating expenses. The Grid segment recorded lower contributions from Gas Connect Austria and Austrian Power Grid, with a significant negative impact expected in 2025. The company faces uncertainty regarding the Austrian windfall tax and potential adjustments to the price cap, which could affect future financial results. Q: What is the impact of the new tax in Austria on Verbund's financials, and how does it affect future projections? A: Peter Kollmann, CFO, explained that the new tax could range between EUR50 million to EUR100 million for 2025. The government aims to collect EUR200 million annually from the energy sector, and Verbund, being a major player, will contribute significantly. The tax's future impact depends on potential changes in the price cap and the ability to offset investments against the tax. Q: Can you provide more details on Verbund's hedging strategy and achieved power prices? A: For 2025, Verbund has hedged approximately 74% of its production at EUR117 per megawatt hour. The unhedged portion is currently marked at EUR90, leading to a mark-to-market price of EUR109. For 2026, 42% is hedged at EUR80, with a mark-to-market price of EUR82. Q: How does Verbund plan to manage the lower hydro coefficient and potential buybacks of power? A: The hydro coefficient is currently 14% below the long-term average. Verbund typically hedges only 80% of its production, reducing the likelihood of needing to buy back power. However, if conditions remain dry, there is a possibility of buybacks, although it is considered a low-probability event. Q: What are Verbund's plans for renewable investments, particularly in Spain, and how do they manage risks associated with these projects? A: Andreas Wollein, Head of Group Finance and Investor Relations, stated that Verbund aims to develop 1.7 gigawatts of renewable capacity in Spain, focusing on solar and wind projects. They plan to mitigate risks through long-term PPAs, although some merchant exposure will remain to optimize generation. Q: How does Verbund view the potential for increased gas plant utilization in light of lower hydro production? A: Verbund's CCGT in Mellach is efficient and modern, but the company does not plan further investments in gas plants, as it focuses on renewable energy. The existing gas plant can help stabilize the system during low hydro production periods. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
12-03-2025
- Automotive
- Yahoo
Volkswagen AG (VLKAF) Full Year 2024 Earnings Call Highlights: Navigating Challenges with ...
Group Revenue: EUR325 billion. Operating Profit: EUR19.5 billion. Operating Margin: 5.9%. Net Income: EUR12.4 billion, a 31% decrease year-on-year. Dividend Proposal: EUR6.36 per preference share, 30% payout ratio. Vehicle Deliveries: 9 million units, 3% decrease from the previous year. Battery Electric Vehicle Deliveries: 745,000 units, 3% decrease from 2023. Net Cash Flow (Automotive Division): EUR5 billion. Net Liquidity (Automotive Division): EUR36.1 billion. Passenger Cars Operating Result: EUR11.4 billion, margin of 5.3%. Heavy Commercial Vehicles Operating Result: EUR4.2 billion, margin of 9.1%. Financial Services Operating Result: EUR3.1 billion, an 18% decline. CapEx and R&D Expenditure: EUR37.9 billion, 14.3% of sales revenue. Incoming Orders (Western Europe): Increased by 128,000 units in Q4, total of 800,000 units. Order Backlog (Europe): 850,000 units at the end of December. Warning! GuruFocus has detected 2 Warning Sign with VLKAF. Release Date: March 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Volkswagen AG (VLKAF) launched over 30 new models in 2024, enhancing brand identity and product quality. The company maintained a strong position in China, earning profits from its combustion engine business. Volkswagen AG (VLKAF) achieved significant milestones in its global software strategy, partnering with XPENG and Rivian. The company reported a solid financial performance with EUR325 billion in group revenue and EUR19.5 billion in operating profits. Volkswagen AG (VLKAF) maintained its market leadership in Europe for both combustion engines and electric vehicles. Volkswagen AG (VLKAF) faced weak demand in Europe and fierce price competition, particularly in China. Operating profit fell by 15% to EUR19.1 billion, with a corresponding operating margin of 5.9%. The company experienced a decline in vehicle sales in China by 10%, impacting market share. Volkswagen AG (VLKAF) faced significant restructuring expenses totaling about EUR3 billion. The company anticipates a weaker Q1 in terms of margin and cash flow due to increased BEV mix and ramp-up costs. Q: Ollie, as you enter your third year as CEO, what are your main priorities moving forward, and how do you plan to ensure effective execution, particularly on cost management? A: Oliver Blume, Chairman of the Management Board, emphasized that Volkswagen has made significant progress in restructuring and product strategy over the past two years. The focus now is on accelerating execution, particularly in cost management. Blume highlighted the importance of having a clear plan and maintaining a strong team to ensure progress and address any challenges promptly. Q: Arno, can you explain why the free cash flow guidance for 2025 is not improving despite strong results? A: Arno Antlitz, Finance Director and COO, explained that the free cash flow guidance is affected by several factors, including a EUR2 billion restructuring cash outflow in 2025 and a high level of investment. Additionally, reduced dividends from Chinese operations due to lower equity results will impact cash flow. However, Volkswagen remains focused on improving cash flow and working capital management. Q: How does Volkswagen view the potential changes in European CO2 regulations, and what impact could this have on your strategy? A: Oliver Blume expressed optimism about the proposed phase-in for CO2 regulations, which provides more flexibility and reduces potential penalties. Volkswagen continues to push for electromobility while adapting its mix of combustion, hybrid, and electric vehicles to meet regional demands. The company is also engaging with the EU on supporting infrastructure and industry transitions. Q: What are the expectations for the partnerships with XPENG and Rivian in 2025, and how will they contribute to Volkswagen's strategy? A: Oliver Blume stated that the partnership with XPENG is progressing well, with plans to launch two Volkswagen models in China by 2026. The collaboration aims to reduce engineering time and costs significantly. The Rivian joint venture is focused on concept work, with milestones set for winter testing in 2025-2026. These partnerships are expected to enhance Volkswagen's competitiveness in key markets. Q: Can you provide insights into the impact of the European pricing environment on Volkswagen's performance and outlook? A: Arno Antlitz noted that positive list price increases and new model launches have contributed to a favorable pricing environment in Europe. However, increased incentives for electric vehicles have been necessary to boost order intake. Despite these challenges, Volkswagen aims to maintain stable volume-price mix in 2025, supported by strong new model introductions. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
11-03-2025
- Business
- Yahoo
La Francaise Des Jeux SA (LFDJF) (FY 2024) Earnings Call Highlights: Strong Revenue Growth ...
Revenue: EUR3,065 million, increase of 17%. Recurring EBITDA: EUR792 million, up 21%, margin of 25.8%. Adjusted Net Income: EUR490 million, up 13%. Dividend Proposal: EUR2.05 per share, increase of 15%. Net Financial Debt: EUR1.818 billion, leverage ratio of 1.9 times recurring EBITDA. Cash Conversion: Current EBITDA to cash conversion at 85%. Pro Forma Revenue: EUR3.788 billion, with recurring EBITDA of EUR964 million, margin of 25.5%. Bond Issuance: EUR1.5 billion eurobond issued to finance Kindred acquisition. Cost of Sales: EUR1 billion, primarily retailer remuneration. Marketing Costs: EUR223 million, increase due to Kindred acquisition and Olympic partnership. Personnel Expenses: EUR443 million, increase due to Kindred, ZEturf, and PLI integration. Net Depreciation and Amortization: EUR224 million, increase due to acquisition-related amortization. Free Cash Flow: EUR675 million, up 15%. Net Profit: EUR399 million, adjusted net profit EUR490 million. International Presence: Operations in 13 locally regulated European markets. Retail Network: 34,000 retailers, including 29,000 in France. Online Revenue: 35% of total activities. Warning! GuruFocus has detected 4 Warning Signs with LFDJF. Release Date: March 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. La Francaise Des Jeux SA (LFDJF) successfully acquired Kindred, forming FDJ United, which has diversified the group's geographical and activity scope. The company reported a 17% increase in turnover, reaching EUR3,065 million, with a recurring EBITDA up 21% to EUR792 million. The integration of Kindred is well underway, with identified synergies and cost optimizations expected to generate over EUR50 million. The company maintained a strong cash conversion rate of 85% and a leverage ratio of 1.9 times recurring EBITDA, indicating financial stability. La Francaise Des Jeux SA (LFDJF) continues to invest in responsible gaming and sustainability, dedicating over 10% of its advertising budget to responsible gaming initiatives. The company faces increased taxation in France and the Netherlands, impacting revenue and EBITDA by approximately EUR60 million. Regulatory tightening in the Netherlands and the UK is expected to negatively affect revenue by EUR30 million to EUR40 million. Despite the acquisition of Kindred, the company projects a stable turnover for 2025, indicating limited growth potential in the short term. The integration of Kindred and the rollout of the KSP platform will take time, with full benefits not expected until 2027. The company's adjusted net profit decreased by 6% due to the cost of debt and amortization related to the Kindred acquisition. Q: What analytic tools are you using to manage competitive pricing and risk in sports and online betting? A: Pascal Chaffard, Executive Vice President - Finance, Performance and Strategy, explained that they use tools implemented in the Kambi platform for online betting and gaming, as well as in-house tools for Unibet in France. They are transitioning to a unified sports betting platform, KSP, by the end of 2026, which will enhance pricing management and product differentiation. Q: Can you elaborate on the timing and impact of the mitigation measures for tax and regulation changes? A: Pascal Chaffard stated that EUR20 million in savings is expected in 2025, with a gradual ramp-up to EUR100 million by 2027. The measures include cost optimizations and synergies, particularly from the integration of Kindred and the rollout of the KSP platform. Q: What is the expected financial impact of the new tax regulations in France and the Netherlands? A: The tax changes are expected to have a EUR60 million impact, with EUR45 million from France and over EUR10 million from the Netherlands. Additional regulatory impacts in the Netherlands and the UK could add EUR30-40 million to this. Q: How will the omnichannel account offering be regulated, and how does it align with the wallet separation project? A: Stephane Pallez confirmed that the omnichannel account is consistent with regulatory requirements and the separation of exclusive rights and competition market customers. The program has been approved by regulators and will be tested in a French region this year. Q: Why is the 2025 revenue growth guidance below the long-term target of 4-5%? A: Pascal Chaffard explained that the lower growth is due to tax impacts and regulatory changes. The French Lottery and Retail Sports Betting BU will see low single-digit growth, while the Online Betting and Gaming BU will experience a slight revenue decrease due to these factors. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
