ABOUT YOU Holding SE (YOU) Earnings Call Transcript & Summary

Good morning, everyone. And thank you for joining ABOUT YOU Conference Call for the first quarter of '21, '22. As you know, this is our first earnings call following our IPO in June, and we are excited to have you all with us this morning. Please let me make a couple of introductionary remarks. Our management is represented completely on this call. It's my pleasure to present you to the 3 co-CEOs and cofounders: Tarek Müller, Hannes Wiese and Sebastian Betz. My name is Julia Stotzel, Head of Investor Relations here at ABOUT YOU, and I will guide you through the call today. Hannes will walk you through the Q1 results in just a second. The corresponding slides, his presentation, has been published this morning on our website, under the publication section. After his presentation, Hannes, Tarek and Sebastian will be happy to answer your questions. And with this, I will hand it over to Hannes.

Yes. Thanks, Julia. So first of all, many thanks for all your trust and support during the IPO process. It actually feels great to run a public company now, and we're looking very much forward to leverage this position to capture the huge opportunities ahead of us. For those who are new to this round, just quickly by means of introduction: We're a founder-led management team consisting of 3 cofounders with a very diverse background in tech, marketing and business functions. And we want to start this presentation with a brief recap on what we're doing, what's special about us and where we want to take our company in the future. So what are we doing? First, we are digitizing the off-line shopping stroll for the Gen Y and Z. We're an online fashion platform, but we're not only offering a large assortment at competitive prices and a great fulfillment experience. On top of that, we are creating an inspirational discovery shopping journey, leveraging our tech skills to create a personalized experience on the smartphone and our huge influencer network to create great content and entertainment. And that enables us to digitize the traditional off-line shopping pattern which has shaped the fashion industry over decades and centuries before. Second, we create incremental revenues for fashion brands. Due to our focus on inspiring customers to interact with fashion online, we generate buys that wouldn't have happened without ABOUT YOU, so from a brand perspective, we're not merely cannibalizing existing revenues. We can provide sustainable revenue growth for our suppliers, combined with strong branding opportunities tied to our discovery proposition. Third, we provide the technology to help our partners grow their online business. In our hearts, we're a tech company, so aside our commerce business, we've developed a SaaS business licensing out our proprietary technology to third-party brands and retailers. And that means that our revenues are not limited to transactions on ABOUT YOU but also extend to the broader online fashion ecosystem. And with these 3 pillars combined, we believe we have the potential to disrupt future markets and establish a leading position in the fashion industry. And that is also what our vision is: continue to outgrow the market to become the global #1 fashion platform. Let's quickly recap where we are today on this journey and what makes ABOUT YOU such a great company for us. Well, for founders, it's of course difficult to condense this on one single slide, but we try to limit ourselves to the 6 key factors here: first, huge online fashion market. I mean we operate in a 400 billion addressable market that is being shaken up by various factors. We see long-term structural growth in the online channel and huge opportunities for online fashion platforms. And that is true especially in our discovery segment, which has [ barely been ] digitized so far. Second, influencer-led discovery proposition. We are mobile born and we're a young company that understands the needs of Gen Y and Z, so we've built an entire ecosystem around our huge influencer network to enable our users to discover the best of fashion online and seamlessly buy it on their smartphones. And all that is delivered in a highly personalized way and enriched with great content and entertainment. And we're leading this discovery space, which we believe will redefine the future of online fashion. Third, outstanding company growth. We're the fastest-growing online fashion company of scale in Europe. We've achieved more than 90% revenue CAGR since our inception. We've launched 13 new countries in 2020 alone, and we're seeing strong growth again in our Q1 results as well as outstanding future growth prospects. Fourth, superior unit economics. Our discovery proposition translates into extremely loyal customer cohorts. Our sales retention rates and LTV-to-CAC ratios are amongst the best in online fashion, if not the best. Unit economics are further supported by our unique hybrid model seamlessly integrating 1P and 3P assortments to optimize both customer experience and margins. Fifth, unique SaaS, B2B business. With our tech business, we're targeting a huge B2B opportunity. We're able to generate extremely fast-growing revenues at EBITDA margin levels reaching 50% for the tech stream, so our B2B business is not only generating incremental revenues, it is also substantially contributing to a superior target margin profile for the group. Sixth, multiple future growth levers. ABOUT YOU has been all about growth in the past and will remain all about growth in the future. We still have substantial growth potential in our core business, and on top of that, there is a huge growth opportunity in expanding our footprint and extending our assortments and categories. And of course, also our tech B2B business will help us to continue to show industry-leading growth rates in the future. Before we jump into our Q1 update on business and financials, we want to briefly touch on another Q1 highlight, our IPO. We successfully completed our IPO in June '21 and entered into the next phase of our journey as a publicly listed company. Some highlights shown here: EUR 23 initial share price, up 10.8% on first day of trading. Total proceeds were EUR 842 million, including a EUR 657 million primary raise for the company. And it wouldn't have been a real ABOUT YOU IPO if we hadn't used also this event as a great marketing opportunity, so we've invited many of our key influencers and business partners to celebrate with us, which helped us generate more than 550 million media contacts around our first day of trading. So we are seeing positive signaling effects from being public already today providing further support for our B2B business, our partnerships with suppliers as well as our recruiting efforts. The IPO was, of course, also an important milestone for ABOUT YOU, for our employees, for our shareholders and for the management team, but for us it is still early days. We will keep our feet on the gas to capture the opportunities that lie ahead of us and to grow ABOUT YOU into the world-class company that it deserves to be. First proof points for this can be seen in our strong Q1 results, so let me take you through the highlights of our first quarter as a publicly listed company. We saw a strong top line performance, with group revenues up 65.5% year-over-year. As lockdown restrictions eased across Europe, we've observed increased consumer spending, a gradual shift towards going out categories and consumers continuing to gravitate towards online channels, so overall it was a favorable market environment for us, which caused tailwinds for our growth. Next, on customer metrics, continued investments into our core product and user experience paid off in further improvements of our core metrics. Active customers are up 41% year-over-year to 9.2 million in the last 12 months. Average order frequency increased from 2.6 to 2.8 orders per year, and average order value increased to EUR 58 per order. Number three, our highly profitable TME segment has shown strong growth of 136% year-over-year, driven especially by our media and enabling businesses which have benefited from a post-COVID return in spending also on the B2B side. We also continue to progress on our international rollout. Our Rest of Europe segment again grew more than 100% year-over-year in Q1; and we've launched 3 new countries with Norway, Greece and Portugal. Number five, in addition to growing our top line, we've improved our profitability. The group adjusted EBITDA margin has improved to a negative 2.9% of revenues, driven by strong improvements in our already profitable segments, DACH reaching a 7.9% EBITDA margin and TME with 13.6% in Q1. Now on guidance. We want to reiterate our revenue guidance as we continue to expect to grow by 40% to 50%. However, given the strong start into our Q2 '21, '22 trading, we believe it is now realistic to reach the upper half of this range. On an adjusted EBITDA basis, we continue to expect a full year result around a negative EUR 70 million driven by investments into our international rollout and long-term growth. Now this is the structure for the slides to follow. We will give you a short update on our business, followed by our Q1 financials and the outlook section. And as Julia already said, we, of course, have a Q&A at the end. So let's jump right into our business update. This is a chart that many of you are familiar with, summarizing our growth strategy along 4 key levers: core product improvement, footprint expansion, category optimization and scaling TME. And as this is very close to our hearts, we also want to provide you with regular updates on how we are progressing on these levers, so over the next quarters, our growth cube will also define the structure of our business update section. So let's start with some highlights on our core product. We've rolled out a new drops feature to promote new releases. The idea here is to create FOMO, so fear of missing out, dynamics by limiting products and capsules in time and quantity; and to communicate this effectively via countdowns, on-site banners, social media and so on. And we'll be using this feature, for example, to create product release calendars like the sneakers example shown here, promote new influencer collection like the one with Kendall Jenner currently or also live shopping events. And early results of this new feature look very promising with high and fast sellout rates as well as significantly elevated new customer shares for drops being promoted via the new feature. We've also worked on the basics of our digital proposition. We've achieved high-performance uplift on article detail and category pages via architectural changes to the software running our ABOUT YOU apps and shops. So performance uplifts here relate to faster load and response times which in turn improve customer experience and conversions. Lastly, we've hosted the first ABOUT YOU Awards in a purely digital format. Well, this was probably the largest virtual influencer awards show of the globe, generating a total reach of 346 million media contacts in the DACH region alone. Now on footprint expansion. Our financial year '20, '21 has been a particularly successful year for our international rollout, and we see this momentum continuing in '21, '22. Spain, for example, continues to deliver strong results following the big bang campaign which we successfully executed in March '21. AY is now present in 26 markets, following the recent soft launches in Portugal, Greece and Norway. And first metrics that we gather here look super promising, so we are really looking forward to scale these countries up over the next quarters. And although many of the bigger markets that we entered in 2021 are not yet in campaigning stage, our Nordics and Southern Europe clusters already represent more than 10% of our Rest of Europe revenues. And this is the result of both successful big bang campaigns and strong trading dynamics already in soft launch phases. Next, on our offering. Our fashion proposition is constantly evolving, and we are committed to provide our customers the best brands as well as exclusive own assortments. On the brands side, we've had a number of new partners, including Weekday which is part of H&M group and several medium- to high-price brands like AllSaints and Kate Spade New York to further support our premium offering. We were also able to grow the number of products online by almost 30% year-over-year. This is not only the result of a significantly increased brand count. It is also driven by deepened customer -- deepened relationships with existing brands, leveraging our hybrid model and granting us better access to limited assortments. On the exclusives side, we've launched several new capsules and brands in cooperation with our influencers in order to further improve our offering and margins. A special highlight, so far, is the new sustainable brand a lot less, which we launched together with famous German musician and influencer Lena Meyer-Landrut and which is generating very high demand and elevated new customer shares for us. We've made good progress also in our new and still underpenetrated categories. One highlight here would be our premium category, which is currently significantly outgrowing other categories while generating much higher contribution margin levels. We also see excellent growth prospects going forward here, and that is justified by the metrics of our new premium cohorts which generate almost twice the revenue of our average new customer cohorts. Now on to TME, our B2B segment combining our Tech, Media and Enabling revenue stream. TME is, of course, a key pillar of our growth strategy, demonstrating a strong post-COVID momentum with a growth rate of 136% year-over-year. TME also remains a highly profitable segment with a 13.6% EBITDA margin in the last quarter and a 30% long-term EBITDA margin potential. Now on to the single TME revenue streams. Our tech revenues keep scaling fast, driven by, first, good development of revenues for our existing clients; second, the completion of implementation projects with recently won clients like Marc O'Polo which went live in Germany in the last quarter; and third, notable new customer wins in Q1 '21, '22, including large fashion brands like Tom Tailor which were announced as a new client in the last quarter. Now on media, where our revenues have grown strongly year-over-year. On the one hand, that is driven by a relatively weak comparative Q1 '20, '21, as media clients were freezing their budgets when COVID started. On the other hand, this is also driven by new and improved media products. For example, we see strongly growing demand for our self-service campaign manager tool which enables our brands to effectively optimize their paid product-boosting campaigns. And we've seen pretty much the same pattern for our enabling revenues: strong year-over-year revenue growth in comparison to a moderate Q1 '20, '21, supported by good progress in product and client development. For example, we have recently onboarded the VF Corporation as a new fulfillment ABOUT YOU partner, featuring brands like Vans or The North Face. So far on our business update. Let's now move on to our financial update section. On the revenue side, we are seeing high growth rates across all our segments. Let's start with the group trading on the left-hand side of this chart. Following an already strong Q1 '20, '21 with 67% year-over-year growth for the group, revenues are again up 65% year-over-year, reaching EUR 422 million in the last quarter, so hardly any deceleration growth at that scale. And if we look at revenues from a segment perspective, we see DACH growing at 27% to EUR 218 million, Rest of Europe growing at 119% to EUR 186 million and TME growing at 136% to EUR 34 million. And these results are driven by, first, generally positive demand trends across Europe as countries are transitioning out of lockdowns; second, in Rest of Europe, continued overproportionate growth in our CEE countries as well as great results in our new Southern European and Nordic countries which already contributed more than 10% of our Rest of Europe revenues; thirdly, for TME, great recovery from a moderate COVID-affected Q1 '20, '21, especially for media and enabling, and structurally good progress in product and client development. This growth is underpinned by our strong cohort data. If we look at the revenue buildup for our commerce business, that is for our DACH and Rest of Europe segments combined, we see ongoing improvements in all last 12 months customer metrics. Active customers are up 41% year-over-year from 6.5 million to 9.2 million, reflecting the strong growth potential in new customers. Order frequency increased from 2.6 to 2.8 orders per year as a result of both increased customer loyalty and cohort age mix effects. Average order value increased from EUR 55.8 to EUR 58.1 per order, driven by structural product improvements as well as COVID-related consumer patterns. In addition to our strong growth, we have also improved the profitability across all our segments. Let's start again on the left-hand side of this chart showing our group adjusted EBITDA margin improving by 1.3 percentage points to a negative 2.9% of revenues. This improvement was largely driven by the profitable DACH and TME segments both demonstrating strong EBITDA margin expansion, leading to high margin levels in Q1, 7.9% for DACH and 13.6% for TME. Rest of Europe continues to be in an investing stage as a result of ongoing market entry and scaling campaigns. Still, despite launching in 3 new countries to date, executing our big bang campaign in Spain and continuing to invest in overproportional growth in CEE, our Rest of Europe EBITDA margin also improved by 3 percentage points compared to our Q1 last year. Let's now take a look at the key cost lines to see how our operating leverage drives the profitability improvements for the group. Gross margin has improved by 0.9 percentage points, reaching 41.8% in Q1 '21, '22. Positive drivers here were increased share of high-margin B2B and own label revenues; favorable product mix dynamics towards going out categories; lower price elasticity compared to Q1 '20, '21, when COVID started; and scale effects resulting in improved buying conditions. Next, our fulfillment costs ratio has been reduced significantly by 1.9 percentage points, reaching 19.2% of revenues in Q1 '21, '22; positive drivers also here increased share of B2B and also 3P dropshipping revenues, both with relatively low fulfillment cost ratios, a high utilization rate in our fulfillment infrastructure as well as positive basket and item price dynamics. Marketing costs rose as a percentage of revenues, which is driven by targeted investments into our Rest of Europe segment. For most of our older Rest of Europe countries, marketing cost ratios have continued to decline in the last quarter. However, also here marketing costs remain elevated due to ongoing investments into overproportional growth. In our new Rest of Europe countries like the Nordics and Southern Europe, marketing costs are currently particularly high because of launch costs and market entry campaigns. And both effects have been expected and are part of our Rest of Europe growth strategy. Marketing costs in DACH, on the other hand, continued to show a slight decline as percentage of revenue. Lastly, admin and other costs benefited from operating leverage and fixed cost degression throughout Q1 '21, '22. This has led to admin cost levels of just 5.6% of revenues, which equals an improvement of 0.9 percentage points year-over-year. And all these effects combined resulted in an increase of our group adjusted EBITDA margin by 1.3 percentage points to a negative 2.9% of revenues. Following on our EBITDA development, let's now take a closer look at our cash flow drivers. Our net working capital remains negative and broadly in line with the levels of our Q1 last year as a percentage of revenues. Net working capital in total reached negative EUR 48 million, contributing to a strong operating cash flow in Q1 '21, '22. In line with the IPO disclosure, CapEx increased from 0.9% to 2.6% of revenues. And for Q1 '21, '22, this includes own work capitalized of EUR 4 million; loans granted to subsidiaries of around EUR 6 million, mostly relating to joint ventures with influencers; as well as acquisition of companies of around EUR 1 million, also largely related to our influencer initiatives. And these investments have been expected and are also already reflected in our guidance. Moving on to our liquidity bridge. Operating cash flow in Q1 was strong at EUR 18 million, largely driven by favorable net working capital dynamics. Investing cash flow is at a negative EUR 11 million and reflects the CapEx seen on the slide before. And this translates into a positive free cash flow of EUR 7 million in our Q1 '21, '22. Financing cash flow is at a negative EUR 1.3 million, largely driven by payment of lease liabilities. So overall cash generation in Q1 positive, leading to a cash and equivalents on balance of around EUR 114 million per end of May '21. In addition, we raised EUR 657 million in primary proceeds during our IPO, which will be shown in our Q2. And these proceeds will allow us to invest in scaling our commerce business internationally and accelerating the rollout of our SaaS business and in our tech infrastructure and distribution centers. Moving on to our guidance for the financial year '21, '22 and our medium-term outlook, but before I do that, let me briefly recap what we committed to during our IPO. We said that we expect our revenue to grow by 40% to 50% this year, driven by continued growth in our core markets, our rapid international expansion and strong growth in our TME business. And we want to reiterate our revenue guidance, as we continue to expect to grow by 40% to 50% year-over-year. That is EUR 1.63 billion to EUR 1.75 billion revenues in the financial year '21, '22. However, given a strong start into our Q2 '21, '22 trading, we believe it is now realistic to reach the upper half of this revenue guidance range. On an adjusted EBITDA basis, we expect a full year result of around negative EUR 70 million, which is also in line with what we communicated before. Our CapEx target for this financial year is EUR 34 million. And our net working capital is expected to remain negative in the low single-digit area as percentage of revenues, so also the guidance for our cash drivers remains unchanged. I would like to conclude our presentation with our medium-term outlook. We have communicated in the IPO that our medium-term group revenue target is EUR 5 billion, which we plan to achieve in our financial year '25, '26. And with the development we're seeing at the moment with strong growth in all our 3 segments, we remain very confident that we are well on track to achieve this EUR 5 billion revenue goal. Now I would like to finish this presentation by thanking you all for all your support, for your time today but also for the trust in us to deliver on our plan. This really means a lot to us and is much appreciated. And on this positive note: We are confident that this will be a successful year for ABOUT YOU, and we hope you will keep supporting us through this growth journey. And with Tarek and Sebastian also on the line, we are looking forward to answering your questions, so moderator, can we start?

So the first question we received is from Anne Critchlow of Societe Generale.

It's really about the big bang activity. I know you did Spain in the first quarter. What have you got coming up for the second quarter and the rest of the year by quarter? So we can have an idea of how to look at the marketing costs. I've got a couple of other questions as well. Do you want me to ask those after the answer or ask them now?

Yes, please continue.

So just wondering about the tech customer pipeline. You mentioned Marc O'Polo, for example, but how is the pipeline looking now compared to the IPO stage, if there's any developments? And then the third question is about conversion. So conversion looked to be down very slightly, with frequency up, and I just wondered if that reflects pandemic behavior. Or is there something else behind it?

All right. So let me take the first question, on big bang plans. So what we're definitely planning is elevated campaigning activity in the new markets in the second half of our financial year. We're not yet fully clear as to how these campaigns will be carried out exactly. So whether this will be big bangs in a similar scheme as we've done before or whether this will be slightly changed. So this will be decided in the Q2 and then executed towards the second half of the financial year. And on the second question, regarding tech customer pipeline: So what we've disclosed, for example, is that we signed Tom Tailor as a new client in Q1. And we've also won 2 other wins that are not yet disclosed or may also not be disclosed going forward because this is, of course, also a sensitive topic where we strive to protect the interests of our clients. And with regards to the pipeline going forward, the figures that we disclosed haven't materially changed since the IPO. And that also implies that we continue to have a very strong pipeline. And we expect further wins in the next months for our tech business. And the last question, on conversion. I mean, ultimately for us, conversion is not the #1 metric that we look at. We rather try to optimize on frequency, customer lifetime value, but on the dynamics here, I mean, what we certainly see is that there are different conversion patterns across different markets both structurally and also in terms of the different maturity levels of these countries. So an increased activity on traffic and revenue side, for example, in Rest of Europe may [indiscernible] also lead to an adverse impact on the conversion rate as such. I mean another way to look at it is also that, as you know, we are heavily focusing on inspiring customers. And many of our users are visiting us on a frequent basis without immediate transaction, especially in earlier stages of the funnel. So this can also be seen as an indication that there are many customers now in early stages of the funnel, so visiting ABOUT YOU for the first, second, third time, which may then convert into buyers in the next quarters.

The next question we received is from Georgios Pilakoutas of [ ABOUT YOU ].

Yes, from Numis, just to clarify. The first question is on big bang in Spain was kind of 3, 4 months ago. Just any commentary on how those cohorts are trending, how that is relative to expectations? And any potential read across to kind of your ambitions both for France and Italy? The second one was just you spoke about premium a bit more today. Is that kind of part of the driver of the higher average order value? Can you talk a bit about how that premium category is trending in terms of also perhaps the margin dynamics? Is it kind of higher [indiscernible] acquisition costs? Or is it more similar and therefore potentially a higher-margin business? And then thirdly, we're kind of 7, 8 weeks into the second quarter, so we're just looking for any commentary on current trading.

Sure. So starting with the first question, on Spain performance. So what we are seeing now with the cohorts acquired during the big bang phase and shortly after is basically a positive picture. So we're seeing good performance here in repurchases rates and also in [ COD ] projections. And as we've told you during the IPO, in the soft launch phase for us, France and Italy actually look even more promising than Spain. And that makes us very bullish on France and Italy going forward now that we have some more data points in Spain and Southern Europe. So that looks all very good. And on the second question, regarding premium, it is certainly one of many drivers of the positive AOV dynamics. There are certainly several other factors, including COVID-related consumer patterns, including product improvements that we're doing and so on, so I wouldn't relate this to premium exclusively, but it's certainly one driver. And with regards to dynamics on customer acquisition costs and customer lifetime value, what we do indeed see is that more premium customer types, more premium channels tend to have higher customer acquisition costs, but at least for us at the moment, that's by far overcompensated by higher customer lifetime values and higher customer lifetime value projections. And this is a function of, first, the higher item prices that we see. And so of course, this then scales against, for example, fulfillment costs, so we're seeing a strong contribution margin profile for premium as such, but it's also driven by the total spend of these customers. So these come -- they tend to have deep pockets, of course. And yes, we tend to have high total spend over periods as well, yes. And on the third question, with regards to the dynamics in our Q2. So what we can say is that we had a good start into our Q2 that would relate largely to June as being the first month in our Q2. And as said, this also makes us very confident to say it is now realistic that we're going to reach the upper half of our guidance range. When we look at our very recent current trading, what we see is, of course, different trading dynamics in different regions across Europe, so some volatility here, but I would actually consider this on a relatively normal level for this time of the year because what we usually see is, with different vacation and weather patterns across Europe, this can also then impact different countries or different regions differently.

The next question we received is from Georgina Johanan of JPMorgan.

Can you hear me now?

Yes, we can hear you now.

Apologies for that. I've got 3, please. And the first one was you just -- you referenced some sort of normalization of the category mix. And I was just wondering if you could make any comment on where returns rates are trending at the moment and indeed if they are still below that 50% level and if you have -- you now have kind of further confidence that they won't trend back above that rate. That was the first one. The second one was you talked at the IPO about building out your tech sales team. I just wondered if there's been any progress on that, so far, please. And then third question was we've obviously seen Zalando recently expand into a few of the new CEE markets. I think Slovakia, Slovenia and another one. And I know it's only been a few weeks since they've been there, but I was just wondering if you could talk about if you've sort of seen any impact on your own performance since they launched in those markets, please.

Yes, sure. So on the first question, regarding return rates. So let me distinguish this on 3 levels being the product mix, the customer behavior and also our regional mix. So on the product mix, indeed as you rightfully pointed out, we're seeing a gradual shift back towards going out categories as countries are transitioning out of lockdown. So categories like dresses, occasion and so on being back in demand. And as these categories tend to have higher return rates than, for example, leisure wear categories, that also then leads to, I mean, gradually higher return rates on a [indiscernible] basis. However, what we see is that the product mix effects here are kind of in an interim stage, so the product mix that we see now is not yet back to where it was pre-COVID levels. The second driver, customer behavior: So if we look on returns on a real like-for-like basis, so say a new customer buying a similar-style group, in a similar price range also, then here we also see a slight increase in returns on a like-for-like basis probably because customers feel more comfortable to return now, in an environment where restrictions are eased, to pick and return stores and so on, but also here that is not on pre-COVID levels on a like-for-like basis. So again kind of in an interim stage. And on a regional level, as you've seen, our rest of European segment growth by far overproportional to the group. And in these markets, we tend to see much lower return rates, so this then positively affects our return rate for the group. And taking all these effects together leads us to having a return rate as a whole for the group that is not materially different to what we've observed in Q1 '20, '21 and also not for the full year '20, '21. So total return rate on an item basis continues to be slightly below 50%. Then on the second question, regarding -- or the build of our tech sales team. Yes, we're making very good progress here. I mean we cannot disclose any specific wins of recruiting effort on that end, but that looks all very good. And that is also one driver of us saying we continue to be very confident on not only the sales pipeline that we have now but also on the buildup over the next quarters and years. And last question, on Zalando and CEE: So what we are seeing in our Q1 results is that we continue to grow very strongly in CEE and also in these countries where competitive activity has increased. So at least from these data points, we couldn't say that we are adversely effective (sic) [ affected ] as at now. We've also commented, I think, in the course of the IPO that in some instances we saw that, competitive activity, especially when relating to market education, so doing broad advertising campaigns that ultimately educate customers broadly about the benefits of buying fashion online, this can actually have positive spillover effects also on our trading. So coming from these 2 data points, we wouldn't be overly concerned at this stage.

Are your questions answered?

Sorry -- yes.

So then we go ahead with Olivia Townsend of UBS.

Yes. I have 3 questions as well, please. The first is just on the shape of trading throughout the quarter. So you previously mentioned that group revenue growth in March and April was ahead of year-on-year growth seen last year. I'm just wondering. Are you able to put any more numbers around this so we can get a sense of the quarter exit rate, just sort of how much higher than growth last year was growth in March and April? My second question is on the margin in the DACH region. So even when sort of accounting for any negative margin impacts from COVID last year, the increase in profitability is clearly very significant. I'm just wondering how you're thinking about this margin going forward. Are you happy for it to stay at this kind of level? Or would you be looking to invest more to drive higher sort of top line growth? And then my final question is just a kind of factual one on the level of "fulfilled by AY" penetration now. If -- has there been any change from the 25% that you mentioned previously?

Sure. So on the first question, regarding the shape of trading in Q1. So all 3 months showed strong trading results, so growing strongly. And please excuse that we cannot disclose specific monthly figures here, but it's certainly not that we saw a strong drop in trading in May or so. And that is also consistent with our statement saying that we also had a strong start into our Q2, meaning in June. Then on the second question, regarding DACH margin and, as far as I got it, also implied growth ambition, growth prospects: So first, maybe on growth. So I mean we've grown 27% year-over-year. And that comes from a pretty strong comparative quarter, Q1 '20, '21, where we've grown 46%. So actually, growth dynamics, as we see it, they look pretty healthy and, as you rightfully pointed out, that in light of a strong EBITDA margin expansion, particularly positive. Certainly we've seen some tailwinds in the Q1 also for DACH margin evolution, for example, basket dynamics probably partly also related to COVID but especially the strong demand that we've seen as the DACH countries transition out of lockdown and the return into going out categories and so on. So going forward, I mean, we wouldn't expect material investments into campaigns as we see that, for example, in Rest of Europe. So we expect the -- continue to expect the DACH margin to expand on a full year basis, but certainly we are observing market opportunities. And we may consider raising our customer break-even targets from time to time, and this will then also [indiscernible] to higher marketing spend. And the last question, regarding -- I believe that was fulfillment by ABOUT YOU. So the 25% -- or around 25% share of 3P revenues, that has not materially changed. We continue to see a positive trend, but that is not materially different in terms of share now versus the IPO.

Great. If I can just quickly follow up on the answer about the margin in the DACH region. So as you say, sort of tailwinds as the markets reopen. Are you also seeing a sort of better pricing environment in the DACH region, given the higher demand, that you're not having to promote so much?

If we relate this to the Q1 '20, '21, I will definitely say yes. So what we've seen in the time of when the COVID crisis unfolded, also in DACH was increased price elasticity, so consumers being very price conscious in light of the crisis; also yes, a pretty tough competitive environment when it comes to pricing. So this has definitely calmed down and we're seeing a more stable pricing environment both on the demand and supply side.

[Operator Instructions] And the next one is from Mrs. Nizla Naizer of Deutsche Bank.

Great. I have 3 questions from my end as well. The first one is on the big bang in Spain. Could you perhaps help us quantify what the cost of that big bang might have been in Q1? And just curious to understand why you may change the strategy for some of the new markets in the second half, based on something you said on the call which is that you would consider how you'd want to expand in these new Southern European markets. Some color there would be great. Secondly, could you share with us how the share of your exclusive assortment changed in Q1? Did that increase from last year? And has that impacted your margins or your profitability positively in any way? Some color around your exclusive assortment strategy would be great. And the third is on the order frequency. Could you give us some color on how it has trended among your existing customers or your repeat customers given that -- on a group level, it's increased nicely, but how has that trended for your existing customers?

Sure. So on the first question, regarding big bang costs in Spain, I think we had also already indicated this, during the IPO, to range in a significant single-digit-million range, so more like on the upper end of the single digits. So that's indeed a significant. And on the strategy going forward, I mean, please excuse that I cannot comment on really country-specific strategy or thinking at the moment, but what I would expect is that, for the second half of the financial year, we're going to see a mix of big bang -- sort of typical big bang campaigns in some countries as well as elevated campaigning activities for others. Second question, on the exclusive assortments: So we will not disclose the shares on a quarterly basis, but what I can tell you is that the share of exclusives has increased in the Q1 '21, '22 both versus the full year '20, '21 as well as the Q1 '20, '21. So we are seeing this positive trend continue, and that is also in line with what we would have expected and guided for. And the strategy here is, of course, or remains to build that out. We're seeing this positive momentum. Maybe you've heard that we've now started into the teaser phase of our Kendall Jenner campaign, also causing very high interest levels. So yes, we remain very excited about this topic and also now particularly excited about the Kendall Jenner collection to launch in 25th of July. And the last question, on order frequency. I mean, the dynamics that we see here, they remain relatively stable. So the older a cohort is the higher the transaction frequency. If we normalize, for example, order frequency by excluding new customers, where we have a very high new customer share, then order frequency continues to range far above 4 times per year. And if we now look at older cohorts in that sense, it is even higher. And these dynamics, they are relatively stable and we also expect these to remain stable going forward. I hope this answered the question, Nizla.

Yes, it did. That was perfect.

As we received no further questions, I'll hand back to Hannes for closing remarks.

Yes. Thanks very much. Let me close our presentation by reiterating some key takeaways for our Q1. I mean we've shown strong top line growth across all our segments. Group revenues are up 65% year-over-year, and both our Rest of Europe and TME segments show growth rates of more than 100%. We've launched 3 new countries to date, yes, and we see good traction in all our Southern Europe and Nordic markets. We are seeing an improved group profitability. Highlights are DACH with 7.9% and TME with 13.6% EBITDA margins. Our guidance for the financial year '21, '22 remains unchanged, but given a strong start into our Q2 '21 '22, we believe it is now realistic to reach the upper half of our revenue guidance range. So thank you all for your support, and everybody for joining today's Q1 call. Handing it back to Julia now.

Thanks, Hannes. Also from my side, thanks, everyone, for joining our very first quarterly results call. If there remain to be any further questions, please feel free to reach out to the IR team directly. We're looking forward to seeing some of you also during our upcoming road show. Have a good day. Bye.