Asmallworld AG (ASWN) Earnings Call Transcript & Summary

Good day, and welcome to the ASMALLWORLD Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Jan Luescher. Please go ahead.

Thank you, Stephanie. I would like to welcome everyone to this earnings call for ASMALLWORLD's 2019 full year results. I thank you for your continued interest in ASMALLWORLD, especially during these difficult times that we're all facing right now. My name is Jan Luescher. I'm the Chief Executive, and I will lead you through today's call. The basis for this call is the presentation named 2019 Full Year Presentation. In case you have not yet downloaded this document, you can find the link to it in this morning's press release, or you can go straight to our corporate website, www.asmallworldag.com/financial-reports where you can download this presentation. During this call, I will touch on the operational and financial highlights of 2019. As usual, I will present a few select deep dives to provide additional context. And I will also give you a quick update on where we stand right now and what the outlook is for 2020. At the end, we will also open up for a brief Q&A session. All right. Here we go. Starting on Page #2, I would like to briefly recap what ASMALLWORLD does and what our vision is. Our vision is, of course, to build the world's leading travel and lifestyle community, focusing specifically on experiences, the modern day definition of luxury. Centered around the ASMALLWORLD network, we operate a digital travel and lifestyle ecosystem, which aims to inspire and enable our members to travel better, experience more and make new connections. Moving to Page #3. There are currently 6 businesses that make up the travel and lifestyle ecosystem of ASMALLWORLD, with 1 additional business, the ASMALLWORLD Collection, in development. At the center is, of course, ASMALLWORLD social network, which attracts customers with a high willingness to spend on travel and experiences. This, in turn, creates demand for our other businesses, ranging from events to the world's leading nightlife concierge to bespoke travel arrangements. In short, we attract the right customers with the ASMALLWORLD social network and then increase our share of wallet with those customers with our other business tailored to that audience. Moving on to the operational highlights on Page #5. In June and December, we introduced brand-new ASMALLWORLD iOS and Android apps to increase our user engagement and member retention. We already spoke about the iOS apps in the H1 update. And now in the meantime, we've also updated our Android app, bringing both apps now to the same level and the same great user experience across all platforms. In November, we've launched ASMALLWORLD Explorer, our own digital travel and lifestyle magazine. In February, we took over the management of the iconic North Island resort in the Seychelles with the newly created subsidiary, ASW Hospitality. And at the same time, in February, we also had acquired LuxuryBARED, a travel agency focused on luxury travel. Based on that acquisition, in December, we then launched ASMALLWORLD Private, our personalized travel curation service or our high-end travel agency. And lastly, we've also launched First Class & More International to bring our smart luxury travel service to an English-speaking audience. All these operational efforts led to strong revenue and member growth for 2019, as outlined on Page #6. Revenue growth stood at 55%, which brought it to CHF 13.7 million compared to CHF 8.8 million last year. This significantly exceeded our initial guidance at the beginning of the year of CHF 12.0 million to CHF 12.5 million. And at the same time, we've experienced member growth from 47,800 to 57,900 members during the same time. The combined result was an ARPU, an average revenue per user increase of 12%, from CHF 231 million to CHF 257 million. That strong growth led to a situation where we achieved profitability for the whole of 2019, we reached an EBITDA of CHF 1.5 million compared to a loss of CHF 2.3 million in 2018, as you can see on the chart on the left of Page #7. This, of course, is a strong increase of CHF 3.8 million year-on-year, which is probably the most important KPI change of this entire earnings presentation and the result that we are very proud of as this means that we've achieved profitability ahead of our own long-term plans. So this strong jump in profitability was achieved through a combination of factors, strong growth across all businesses, reduced cost for consultants and lawyers, which we had for -- in 2018, for our going public and the acquisition of First Class & More. The full consolidation of First Class & More, it was an important part. And it is important to note that this great result was achieved despite the acquisition of LuxuryBARED, which also resulted in a cost and also the ongoing investment in the ramp-up of our travel service, which if we would have left that out, would have led us to an even higher profitability for the year. After the operational and financial highlights, we are now moving to the reporting of our 2 business units, subscriptions and services. For participants who joined this call a bit later, the basis for this call is the presentation named 2019 Full Year Results Presentation. In case you have not downloaded it yet, you can get it from our corporate website, www.asmallworldag.com. So moving to Page #9, starting with our subscriptions unit. The Subscriptions business grew by a strong 43% year-on-year from CHF 5.1 million to CHF 7.3 million. This was due to continued member growth within ASMALLWORLD, 21%, the consolidation of First Class & More for the first full year, and also the fact that with First Class & More International, we started to bring our smart luxury travel service to an English-speaking audience. What is important to note is that this segment now reached profitability with a 19% EBITDA margin compared to a minus of 41% in 2018. On Page #10, I would like to highlight 2 important developments over the next few pages for the ASMALLWORLD subscription business. The first one is the launch of our brand-new ASMALLWORLD apps, as previously mentioned. The iOS app was here already in June. The Android app now followed in the second half of the year. And if you haven't seen the app yet, you can click on the app image on the presentation and click -- the video will introduce the new features of the app, and will give you an idea of the new look and feel. Page 11 gives the visual impression of the new app and the selection of features that members can enjoy in the new app. One important new feature that I would like to highlight again is the discovery modes, which allows members to connect with each other for social, dating or business purposes. You can see a screenshot of that mode on the image on the left. The new mode makes it easier, more fun for members to connect while traveling or in their home city. As I have mentioned already in the H1 earnings calls, I would like to repeat here that the app also marks a shift in our own design and development process. From web first, so developing for the website first, to app first. As more and more users are using our service on their phones, we made that -- we made the app our primary design and development platform. That means the new features will be introduced on the app first, and then integrated to the website or ideally on both platforms the same time. Now that a bit of time has passed with the new apps, we can say that member feedback has been overwhelmingly positive, and we see an upward trend in user engagement and again, general use of the apps. Also the Android launch started without any hiccups. No patch is needed or anything and all around happy customers with the new apps also on the Android side. Another new launch this year or in the second half of the year was the ASMALLWORLD Explorer, which is our very own digital travel and lifestyle magazine, which was launched in November. You can see a nice screenshot here of the articles. You can access the Explorer, even if you're a nonmember on our website. So it's open for everyone. Under the heading of the ASMALLWORLD Explorer, we started publishing original content, written by expert travel writers. The content is initially focused in travel, inspiring people to discover the world and travel better. And as I said, it's available to nonmembers as well, which now allows us to use it as a content marketing tool going forward. And it also allows us to do content marketing partnerships with third-parties. With First Class & More, our smart luxury travel service. We launched what we call First Class & More International. You can see that on Page 13. This is the same great service, which has been extremely successful in its German language forms in Germany, Switzerland and Austria. We now bring it to an English-speaking audience, targeting English-speaking Europe. It was originally launched in June, and then we introduced the paid memberships in September. The goal is to leverage the great content that we create for the German-speaking site and leverage it for a much larger audience and -- so bring up our subscriber numbers for the 2 services combined. And also having this service in English now allows for a closer integration and cross-selling with the ASMALLWORLD community, which is also available in English-only. So, so far, we couldn't cross-market much with a German-speaking service, but now this is possible. That concludes our update for the Subscription segment, and we're now moving on to the Services segment on Page 15. Our Services business grew even faster than Subscriptions with an increase of 51% year-on-year from CHF 3.7 million last year to CHF 5.7 million this year. We increased the number of events with ASMALLWORLD by about 14% and RSVPs went up by a similar amount. With that, event sponsoring went up, we also added the full contribution from First Class & More from their travel consulting services. We've also launched ASMALLWORLD Private, the travel agency, which goes into the Service business. And from the acquisition of LuxuryBARED, we also still have some travel arrangements, which added to the Service business for this year. The segment now turned slightly profitable, so it was less loss-making in 2018 with a minus of 6% EBITDA margin. We now came in at plus 1%. Having said that, as outlined earlier here, the full cost that's coming from LuxuryBARED and the operational investments that we have made into the travel service and also the online platform that we're going to talk about in a minute is in this part of the business. So the result would have been quite a bit higher if it wouldn't have been for the investments that we made this year. I mentioned travel and the acquisition of LuxuryBARED. Turning to Page 16. I quickly want to recap why we had decided to ramp up our travel offering. We, at ASMALLWORLD, have a mature audience aged 37 years on average, a good mix, male, female. They're very successful and what is most important is the last bullet on this page, they are very frequent travelers with 21 leisure and 16 business trips per year. On Page #17, you'll see an outline of our members travel spend, which is quite substantial. So they're spending a total of CHF 1.1 billion on hotels per year, of which about CHF 680 million is their leisure part of the hotel spend. We, at ASMALLWORLD, want to capture a meaningful portion of their leisure spend with our travel offering with ASMALLWORLD Private that we just launched in December and -- but also with the ASMALLWORLD Collection, which we'll launch this year, which we'll talk about right now. So Page 18. Our way of -- our strategy is to capture member's travel spend, as I said, with ASMALLWORLD Private partially, which is our high-end travel agency launched in December. And really, wherever our customers want to travel, we will offer a very personalized travel arrangements for them. As a high-end service, this is available for travel arrangements, starting at EUR 5,000. We make money through the commissions on -- for the hotel bookings and the packaging of these arrangements. And this -- obviously, this service is based on the team that we acquired from LuxuryBARED, plus additional people that we had hired to like build up the travel team. Page #19 shows the second part of the travel strategy, which is our online hotel booking platform. This new service will have the name, ASMALLWORLD Collection, as previously mentioned, and it will offer a curated selection of the world's most admired hotels, which customers can book online from our app and website. We are building a service on the technology we acquired from LuxuryBARED. They already had their own online hotel booking platform. We, over the last months have been integrating their existing platform in the ASMALLWORLD environments, improved the back end of the platform and designed a completely new front-end, so members will be able to use the service from their app and from the website. And it looks like it is ASMALLWORLD service, which it will be. The service will be open to members and nonmembers alike. So it's not only for members. We have -- it's open for everyone. And we currently have it scheduled to go live in spring. Page 20 will show you some screenshots of what the web version will look like. These are screenshots from the current development process. You will see that we've opted for a very clean and modern design based on the general ASMALLWORLD style guide. The experience will be visually stimulating and very easy to navigate. Page #2 (sic) [ Page #21 ]. Just to highlight the key selling points of -- for the collection, which are, in addition to it being convenient for ASMALLWORLD to book from the app are actually 2. There, it is selection of hotels and the rates offered. In terms of selection, we will only feature hotels we love and which we believe will work well for our members that are to their taste. And the idea is that members should basically be able to book any hotel blindly and they can rest assured that they have a great hotel experience. So they should trust us to book with us, so they don't have to go anywhere else and click through 400 hotels. For a city, we will have a selection for them, which we believe they will love. At launch, we will have about 800 hotels to choose from, and we will increase that number over time. And the second selling point besides the preselection of hotels is the ASMALLWORLD preferred rate. We always offer our customers 2 rate options, as you can see here on the slide. It will be on 1 side, the lowest rate, which is probably comparable to what you would get on other booking sites and then our very own ASMALLWORLD preferred rate, which usually will be slightly higher in price, but it will come with many benefits on top like free daily breakfast for 2, room upgrades on arrival, and vouchers or hotel credits during the stay, early check-in, late checkout or a complementary WiFi, as you see in this example here. And the option between those 2 rates will give customers a choice that they don't have on a site by Booking.com or Expedia. So this is something that we see as our main selling point. So first of all, as combined with the selection, people come and see which hotels are actually great, especially for a city that they don't know and then check out what are the 2 rates and then hopefully, choose whatever makes more sense to them going with the cheaper rate or the ASMALLWORLD preferred rate. After having presented, so basically, the strong travel -- push into travel, we understand that travel is not a hot topic right now under the circumstances. And we will launch the ASMALLWORLD Collection in spring, which will allow us to be ready in case demand increases again. Of course, right now, no one is booking travel. This is reality. But we believe we will come back to normal, and we will be ready once demand picks up again with our own booking platform. And since there is a bit of uncertainty around when that will be, the exact timing of when we will do the launch for the ASMALLWORLD Collection will now not only be based on when it's done -- when we're done with developing it, which could be actually fairly soon, but also when we will have the highest impact to launch it in this environment. So we are still checking of when that is, when are we going to go in and launch it as soon as we can or whether we strategically delay it by a few weeks, even if we would be ready for a maximum impact in terms of getting bookings when things are picking up again. Moving to Page #22 and in terms of new businesses that we've -- or business expansions that we had in 2019. I also want to recap that we created ASMALLWORLD Hospitality as a new subsidiary in February as our own hotel management company, hotel consulting company. The subsidiary took over the management of the iconic North Island resort in the Seychelles in that month in February. And since then, we have made significant improvements to the property in the Seychelles and strengthened the team. Further, what's new since the half year update is that North Island also joined the luxury collection portfolio in October 2019. So it means -- that means it's now fully bookable through the Marriott Bonvoy app and other sort of Marriott infrastructure, which is great because we profit from the marketing power that these systems have. Also, we can now report that the report can now be booked with Bonvoy points, so the Marriott's loyalty program. The rate is 365,000 points per night. That is its very own category within the Bonvoy program, so that's outside the scale that they usually have because this is such a unique property. Nevertheless, as soon as we went online and brought it online, made it bookable through Bonvoy, we already had customers that redeemed points, hence, driving up the utilization of the hotel. And we believe that there's more to come with people who want to leverage their points at this property. Looking a bit further into the future. The goal is --for the collection is to expand the -- sorry, the goal for Hospitality is to expand the collection of hotels that we have. We are in conversations right now with hotels. But due to the environment right now, there is nothing that is here to report where we would make a move. Obviously, when things return to normal, we will reassess the situation here. Now after the update for the 2 business segments, now let's move to the more detailed financials for the full year. For the coming slides, I would highlight a few important metrics and changes, which allow you to more easily understand our results. A more comprehensive annual report is, of course, available for download on our investor website. So starting with the income statement on Page 24. Total sales increased, as mentioned, by 55%, as we've already seen. Here, I would like to add that we report CHF 12.9 million as regular business, for lack of a better term, and CHF 730,000 as other income, as this was a special one-off deal, which is probably not part of the recurring business. I mention that because for the analysts on the call. So we would say we treat CHF 12.9 million as the core business, and that's probably also the number that should be in your financial models. Expenses increased, of course, as the company was growing, but they're well below revenue growth in all categories, so that it could be like at least half or even went down. R&D expenses have been reduced as more developing cost for this year have been activated to the new platform apps and the hotel booking platform, which we believe we'll have for a longer period of time. EBITDA margin, as discussed, improved by 37 percentage points from minus 26% to plus 11%. And when you go further down in the P&L, we have a few special items. The financial income is fairly high compared to last year. The reason for that is FX changes. Specifically, we have liabilities in euros and the euro came down compared to the Swiss franc. So this is what gave us an additional income on the financial income side. And then income taxes also were quite high. This is a one-off effect from an IP transfer for First Class & More where we transferred the rights for the international business to the newly created entity that is now developing the international business, the English-speaking business. Moving on to the balance sheet, the first part of it on Page 25. Our cash position increased due to the positive net results standing at CHF 6.9 million by the end of 2019, up from CHF 6.1 million. Prepayments and accrued income went up a bit due to higher prepayments for different kinds like travel arrangements or other memberships or other services that we have to render in 2020. Other short-term receivables increased due to the IP sale to third-party, and financial assets increased due to the IP transfers in First Class & More, which created the deferred tax assets and debt position. Page 26 shows the second part of the balance sheet. Here, I would like to highlight that the short-term provision increased. You can see that in the line #4 on the left, quite substantially, to over CHF 2.0 million. This is due to the fact of the timing of the performance-related payments as part of the earn-out from the First Class & More acquisition. You will see that, at the same time, the long-term provisions were reduced by similar amounts. So it's basically a shift in timing. It's not a new position, so from long term to short term. And then long-term financial liabilities increased due to financing provided by ASMALLWORLD Capital or anchor investor for the year. Looking at the equity, the negative equity that we have was reduced to the positive result that we had during the year. And I also want to mention that it is our accounting policy to basically depreciate new acquisitions directly and sort of met them out with equity. So that's why our equity is negative. For comparison, if we would have goodwill from an acquisition in our balance sheet, and would have capitalized that, our equity would now be at 30 million -- CHF 13 million. Page 27, starting with the cash flow statement from operations and from investing activities. We improved the operating cash flow from operating activities from minus CHF 1.1 million to CHF 0.4 million. This is due to the general better business this year. And on the investing activities, the acquisition of subsidiaries reflects the cash needs from the acquisition for LuxuryBARED. Going to Page 28. The cash flow from financing activities and the change in net cash. There hasn't been much happening on financing sites this year. So there were no capital increases or anything else we had in 2018. The only position there is the long-term financial liabilities, which is the financing from our anchor investor, which I had previously mentioned. And then the overall cash flows resulted in a net cash increase by CHF 0.8 million due to all these factors combined. Looking forward, I would like to turn your attention to Page 30. Here, I wanted to give you a quick update and a quick overview of where we stand in 2020. As the world around us is obviously in flux during this global health crisis due to the harmful coronavirus that's in the news, and then the impact, the economy and everybody's lives. Our Q1 results have so far only mildly been impacted by what's happening. However, we can say that the negative impact of the virus is real for us and that ASMALLWORLD will also feel it too. But it is hopefully short-lived. And at the same time, we have also taken steps to protect the company as good as we can under the circumstances. More specifically, the restrictions that have been placed on social gatherings, in travel, of course, have a negative impact on our events and travel business in the short term. Our events have been temporarily suspended globally until the end of April. We've announced that to our community on Monday this week. Our travel services, of course, see fewer requests and transactions as people are asked not to travel, stay at home, travel bans are in place, and there's a lot of uncertainty around travel. Of course, that's not helping with our travel business right now. And because of all of these factors, we have taken steps to adapt our cost position to the current circumstances. What that means specifically, we've, of course, issued a hiring freeze for the entire business. We also had to make a few cuts to the travel team and the development team, which we have reduced in size for the time being. The reasoning being that if we don't see an uptick in travel, we don't need the team of that size. And with development, if we delay the ASMALLWORLD Collection by a week or 2, we probably also won't lose a lot of revenues. So that's the situation there right now, which hopefully makes sense of the circumstances. It's been difficult with the team, but everybody understands where we are and what we have to do to the best for the business. And in Switzerland, we've also requested government support for our staff, especially for our events team that is just, at the moment, has very little to do during these times. However, on a positive note, this drastically reduces the cash need for the business. And we also don't see necessarily a drop in the Subscriptions business yet, which is obviously our -- a big part of the business and a very profitable part as you've seen earlier. So the impact there will be a lot less than for the Services business for the time being. And even the Services business, we believe it will recover quite quickly when people pick up travel again. And I think there will always be a backlog of what people want to do and a flurry of activities, and we want to make sure we're positioned for that. However, we don't exactly know how long the situation will last. And we, as everyone else, we're observing the situation. We're just preparing ourselves for the worst at the moment and reducing the cost position. And due to the uncertainty that comes with the coronavirus, we have decided not to provide any guidance for 2020 at this point. We remain cautiously optimistic that we still have positive growth year-on-year on the sales side. However, we didn't want to quantify at this point because we didn't want to revise the statement multiple times during the year based on where we stand. So we will provide an update here in due time as we know more. So despite this difficult situation right now, the team is continuing to work on our priorities for 2020. And we want to give you a quick overview of what these are in very short summary on Page 31. There -- obviously, there are improvements all around to be made to the business, as always, but we have 3 high-level priorities for the year, in addition, obviously, of course, to managing the business during the corona times. We still want to finish the development of the online hotel booking platform, the ASMALLWORLD Collection. We expect the launch, as I said earlier, in spring this year. We will time it a bit strategically, but we will complete it, and it's on track in terms of development, so there's no issues with it. It's more of the market environment that is a bit trickier for us at this time. And this will, of course, allow hotel online booking directly from the app. And the website will be set to members and nonmembers, opening up a really new and promising revenue stream. We will continue to expand First Class & More International to capitalize on the new English language website. And with sort of the ASMALLWORLD Collection in place, we have, for the time being, completed our ecosystem and it's built out to where we wanted it to be, which will allow us to driving cross-selling or focusing our cross-selling between our businesses and leverage the full strength of the entire group. So that's the plan for 2020. And this concludes the presentation from my part of this call. And I would, at this point, open up the call for any questions from any of the participants, if there are any.

[Operator Instructions] Our first question comes from Marie-Therese with H&A Investment Banking.

I do have a couple of questions, if I may ask them all in one go, but they're very, very surgical. So the first one is, what is the overall package of one-offs for 2019? The second one, what is the current run rate in terms of adds or net adds on your subscription business? The third one is, what is the breakeven level of revenues in the Services business? Then can you explain a bit what this other operating income is of CHF 730,000? I didn't fully understand. And then how much you're going to spend this year in terms of, call them, one-offs on the launch of the rest of your travel platform? And then finally is, why do you choose this policy of netting out the goodwill right from the start? That's it. I hope you could write them all down, otherwise, you let me know.

Yes, Marie-Therese, nice to hear you. Yes, I got all of them. I understood 5 of them. I will come back to you on the sixth one. Let me answer them one by one. So -- as good as I can right now, and then we can always follow-up later with more details. So the one-offs for 2019, right, that was your first question. So we had from listing cost and M&A cost combined, we had a cost of about CHF 600,000 in 2019, which you could consider a one-off cost, right, because it was driven by our listing and the M&A of First Class & More, which cost us a bit of money. This year, this will go down. I mean we'll still have obviously going staying public cost, what we call them internally. And -- but we're talking about sort of the CHF 100,000, so you could say the difference with the one-offs there is about CHF 500,000. So that's sort of your -- probably your answer for your first question. And then the question is what else do you add in terms of investment in travel? So we probably put about CHF 500,000 in terms of investment into travel, into the 2 parts. So depending on how you look at that, you could treat that as one-off costs as well. Having said that, some of that is operational cost of a business being ramped up, right? Sort of you hire people and you get office space and so on and so forth. It's always -- it's not 100% clear on how you treat that, but like as business is ramping up to its scale, so -- but I would say, CHF 500,000, but we reduced these costs now fairly drastically, right? Sort of, because we see that there is no big ramp-up at the moment. So that to add -- your #2 was the one -- I didn't fully understand, maybe you can come back to that -- back to that later. I'm sorry, was there a follow-on to what I said?

Yes. In terms of the launch of the -- I remember you telling us that the apps would cost also some money -- would have cost some money in 2019. Is that something you consider a one-off as well or not? The iOS app and the Android app development?

Yes. So I mean those are the development costs. I mean our development costs are a mix between what we activate, and we put it into under the contractors for the team that builds it. I mean this year the apps were a big part and then the other big part was the ASMALLWORLD Collection, the online booking platform. ASMALLWORLD Private didn't need in that sense a technical infrastructure because it's a more traditional person-to-person business. But sort of, yes, there were -- I mean you could argue that we probably spent CHF 300,000 on the apps or a bit more and then another CHF 150,000, CHF 200,000 probably so far on the Collection. It -- yes, so that's probably roughly the numbers that we have for the investment. Having said that, since we're not developing this with an external party, we're doing that with our own tech team who also takes care of all the other technical infrastructure and keeping things going. It's a bit of a mixed calculation. But roughly, that's how much we probably will have spent on these 2 things, which you can consider one-off as we're building them once and then they're ready to go. And then sort of you asked sort of breakeven -- I'm just going to continue to question three, and then maybe come back to question number two. Breakeven for the Services business. I mean we would have been at breakeven. I mean we're already slightly over, right, in terms of, you look at the margin, but not high because the investments in travel have been sort of the -- the CHF 500,000, obviously, have been bringing down the business. So that means if we take the development cost out, we probably need to have another CHF 300,000 or so for the travel business to be profitable, right, to balance out. And then you will have an overall business that for all the subparts of the Service business are profitable. So that's sort of like probably how you want to think about it. So we have to create a contribution of CHF 300,000 for the running costs of travel, and then we will be profitable. And that's between the ASMALLWORLD Private parts, so the high-end travel agency, the personal and bespoke travel; and the ASMALLWORLD Collection, the online platform. And then yes, your number four was the other operating income. We've been approached by a French company who was interested in producing a print magazine for ASMALLWORLD. And they talked to us about licensing rights of our brand for a print magazine. And basically, we had a deal with them that they can use the ASMALLWORLD brand for a print magazine under certain circumstances, as obviously, we have some restrictions on what they can do with it. But they basically purchased the rights for ASMALLWORLD to do a print magazine. Having said that now, in this environment, it's highly unlikely that this will actually happen, I have to say. But basically, they paid us CHF 700,000, a bit more than CHF 700,000 for the rights to the brand for a print magazine, and that's the difference between the numbers that you have there on the revenue side. And since this is obviously not part of our core business, in that sense, obviously, we built the brand and it has a value that we built it. So that's right, but we don't see it as recurring. No one will come and sort of buy our brand again for something like that in the next year. So that's why we separated it out in the P&L. And then...

And they put it back to you because they're not developing the magazine?

Well, I mean, it's sort of -- the contract is in a way that so -- they can't sell it back, but we can -- we will get the rights back if they're not using it within a certain period of time. So I mean in -- worst case for them, right, they're not going to start with it and then sort of it defaults back to us because they didn't do anything with it. Yes, so that's...

But if you don't have to give back the money -- you don't have to give back the money to them if they don't develop the magazine? Okay.

No, no, we don't have to pay the money back. And then you asked about one-offs for 2020. So we -- at this point, we don't have any. So I mean we -- in terms of thinking of one-off costs, we have to finish the Collection. And as I said earlier, we're actually close to doing that. We know we don't want it to launch at the end of March. Now with sort of the reduction in the [ tech team ] capacity, it will probably be a bit longer, so it will probably go into April. But we said, actually, under the circumstances that's -- it's not an issue and sort of -- I mean no one's going to book in April anyway. So -- but there is a completion, obviously, so we've been running for 3 months now with production, so that you could see that as a one-off cost. But other than that, I mean, we were not planning on acquiring anything. We're not planning on having a new business and bringing it online. So we don't see at the moment any big one-off costs for 2020 at the moment. And your last question was around goodwill and the accounting policy. Look, I mean, there are 2 ways, right? You can do it -- you can purchase the company and then basically have a big goodwill position, and then you have to basically write it off every year to a certain extent, or you do it at the beginning and then you have a negative equity. So we discussed what we prefer, and we decided that we just met it with the equity because otherwise, our results every year would have been negative due to the depreciation from an acquisition because we actually did First Class & More. We acquired quite a big company. And we said we just don't want to mislead the investor who quickly looks at our results. And just every year, it looks negative. It was more a perception -- primarily a perception decision. So that's why we have it. Obviously, also people are a bit confused when they see negative equity. But like in the end, how you and others sort of value a company, you look at your DCF model and then that's when you get to see the value of the company in the end. So yes, that was the reason for that. And then maybe come back to your question number two. I didn't fully understand that one.