Asmallworld AG (ASWN) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the conference call of a ASMALLWORLD regarding the half year results 2023. [Operator Instructions] Let me now hand the floor over to Jan Luescher, the CEO of ASMALLWORLD.

Thank you very much for the introduction, and I would like to welcome everyone to this earnings call for ASMALLWORLD's 2023 half year results. My name is Jan Luescher, I'm the Chief Executive, and I will lead you through today's call. As always, I will touch on a few operational and financial highlights for the period. And I will also provide some additional information to put those results into context, so you can better understand the headline numbers. And in the end, we will also open up for a Q&A session, and I will obviously answer every open questions that you may have at that point. The presentation that I'm using to illustrate the performance is available for download on our corporate website. If you have not downloaded it yet, I recommend that you do so, it will make it easier to follow my explanations. And you can find the link to the presentation in this morning's press release, or you can go straight to our corporate website. The URL is asmallworldag.com. And once you're on the site, you will have to navigate to a section called investors and to the submenu investor documents where you'll find a document called 2023 H1 results presentation, which is the document I'll be using for this call. Fantastic. So let's move on. Page #2 of the presentation, for those of you who are following along is the vision for a small world brief recap. We are the world's leading travel and lifestyle community and we focus on experiences and we want to inspire our members to travel better, experience more and make new connections. And a brief overview of our businesses on Page #3. So the ASMALLWORLD travel and lifestyle ecosystem consists of 8 businesses. At the center is ASMALLWORLD, a social network, which attracts an affluent customer segment with a high willingness to spend on travel and experiences. This audience then creates demand for other businesses, ranging from the ASMALLWORLD events to The World's Finest Clubs, [ bespoke ] travel arrangements or hotel bookings with a ASMALLWORLD Private and ASMALLWORLD Collection. In short, ASMALLWORLD network is what attracts our customers in the first place and we then aim to increase our share of wallet with those customers with our other businesses by generating traffic for them. What is new this time around if you've been with us before, is that we have added another box on this chart. We have added the ASMALLWORLD DISCOVERY business, which is a newly created business that came out of the partnership with Global Hotel Alliance, you can see it at the bottom left there. Here, we act as a partner for independent hotels who would like to participate in the GHA DISCOVERY hotel loyalty platform, and we will speak about that in a bit more detail later. So for -- so much for that introduction of the businesses, let's jump straight to the financial results on Page #5. So in short, the first half of 2023 was another record period. It was actually the strongest sales period in the company's history. We had strong sales growth of 56% compared to the same period last year. And that means we went from CHF 7.4 million last year to CHF 11.5 million this year, very, very significant growth. At the same time, looking at some of our other financials, COGS increased significantly by 126%. This is primarily due to the cost of goods sold for the Prestige and Signature memberships which were the main driver of the growth. So that's, I mean, expected if you have such a great increase in sales and we will talk about that a bit later. On the cost side as well, personnel and OpEx costs -- other OpEx costs, up by 5% and 11% (sic) [ 17% ] respectively, sort of kind of showing the invest in staff and in the business and also in marketing expenses over the period. compared to last year, which then collectively resulted in a lower EBITDA. So it went down by 25% compared to the same period last year. So we went to -- from CHF 1.4 million to CHF 1 million over the period. And I will quickly elaborate on that on the next slide. But what I meant for net income, it was down by 39% from CHF 960,000 to CHF 584,000 and earnings per share for the period were at 0.05%. And the cash position was at CHF 2.4 million by the end of the first 6 months of the year. On Page #6, you can see how this period compares to the most recent historic performance on our main KPIs. In terms of net sales on the left, you can see that increase of 56% compared to the same period last year, also higher than the strong second half that we had last year with CHF 10.8 million, so yes, definitely a big step up from a year before. On the member side, we had growth of 5.6%. We stood at roughly 67,400 members by the end of June and EBITDA was reduced from CHF 1.4 million to CHF 1 million. Having said that, the first half of 2022 was a record year for many factors. And so we -- it looks a bit steeper that decline than what it probably should look like. And also, there were quite a few investments. So let's move to Page #7, where we provide a bit more commentary on the operational highlights for the first 6 months. So as I mentioned, very strong growth, the 56%. Main reason for that was an increased demand for the ASMALLWORLD Prestige and Signature membership. These are the memberships with all the travel benefits that sell for about CHF 5,000 and CHF 10,000. We had started a partnership with Emirates last year and started to offer these Prestige and Signature memberships with Emirates Skywards miles. And that product has just taken off like crazy. So there's a strong demand for that product. And the first half of this year was the first sales period in the first half where we sold that product and if that was the primary reason why sales went up so strongly as they did. At the same time, we also had quite a bit more demand for our subsidiaries, first class and more travel -- First Class & More travel services and upgrade services. We saw an increase in bookings for the smaller collections and in value coming from that bookings. And we also received a fee from a Global Hotel Alliance for a partnership for the first time, which all contributed to that sales growth; having said that, the absolutely biggest portion of that was the sale of Prestige and Signature membership with Emirates Skywards miles. This is what explains the vast majority of this jump in sales. We also continue to invest in the long-term revenue potential of our business. I'll talk about that in a bit, but ASMALLWORLD Collection grew 26% in terms of stays. I mentioned the partnership with Emirates that drove the sales increase and the partnership with Global Hotel Alliance, that contributed quite significantly in terms of fees, but there's also ASMALLWORLD DISCOVERY business that we'll talk about in a second. It's also worth mentioning on the cost side or the profitability side that we started to invest again, into tactical marketing efforts, so paid advertising and working with other multipliers to basically get the message out and sell more, it's something where we've been very cautiously coming out of the pandemic that we don't overspend on marketing, but we felt the need that we should spend on marketing again and get ourselves noticed by the customers. So that include paid advertising, but also we started a comprehensive project to increase our search engine optimization to push our products. So this is a step, I would say, from being very cautious with spending on marketing to cautiously dip our toes in the water again and selectively make some marketing investments that will drive our long-term sales. Also, if you move to Page #8, what is worth mentioning, what also has contributed quite significantly to this decline in EBITDA is that in the same period in the previous year, we had a fairly big consulting project with our ASMALLWORLD hospitality team where we were working with the Ritz-Carlton Residences in Dubai that was very well paid in a high-margin sort of consulting project. Unfortunately, that project has ended. So it's basically missing from our books this year and we haven't been able to replace it with another large-scale consulting project like that one. And so this also has left a bit of a gap in our profitability, less so in sales, but like in profitability quite a bit because it was just quite a high-margin business and the staff that we use to fulfill these or serve these projects basically is obviously still on our books. So that had quite a big impact on the profitability compared to the same period last year. So yes, so the joint effect of the additional investments in key initiatives, some marketing spends and the lack of this major consulting project or a major consulting project has led to a slightly lower EBITDA margin for the period. Having said that, we're not too worried about that. Management expects the EBITDA contribution to increase again during the second half of the year. So I mean to be very specific, we expect the number to be higher in the second half of -- during the second half of the year than it is in the first half. And so that's, I think, also a bit of a more stable or a better reflection of the business, including the investments that we're putting into the business. Having said that, there are other parts of the business which are currently fully investment mode, and this is ASMALLWORLD DISCOVERY, which we'll talk about in a second where it will take some time to see the financial results. And at the moment, it's basically an invest. So going to the initiatives on Page #9. So these are 3 key initiatives that we are working on. And I wanted to provide you with a quick update where we stand with those. So it's the ASMALLWORLD Collection, it's our partnership with Emirates for the Prestige and Signature membership and it's our partnership with Global Hotel Alliance, where we bought a 10% stake a bit more than 1.5 years ago, and -- but are only now getting up and running on a couple of key initiatives. So I want to just talk about those for a little bit and give you an update for ASMALLWORLD Collection, our booking engine for luxury hotels, which we offer online through the web and through the app. It's sort of basically comparable to any other online travel agency in terms of functionality that you may know like a Booking.com or Expedia, just focused on luxury hotels, that offering is still growing. So Page 10, basically just give you the overview. Page 11, you see probably the most important part of our product in the sense that we have a very special rate, ASMALLWORLD VIP rate, which offers customers many more travel benefits on perks for the same price, so they get room upgrades, resort credit, complimentary breakfast, early checking, late checkout, complimentary WiFi. This is really what people book with us and what sets us apart other than the focus purely on luxury hotels and Page #12 gives you an overview of the partners that we have, where we can get our hotel portfolio from. So it's a very impressive list of partners. And Page 13 is actually the most important part here in today's presentation, it just talks a bit about how the business is developing. So on the chart, you see in graphical representation, the stays that have sort of taken place per half year. That's not the bookings, but that's actually what has been concluded, stays that have happened and that will result in commission for us. We find it the more reliable metric because with bookings, there can be cancellations again and stays is really what has taken place. We -- you see it indexed basically on the chart, you see the growth of the value of the stays, and there's a 26% increase from the first half of 2022 to the first half of this year. So nice and steady growth with the business. It's slightly bigger than 2022. I mean it may look like we're plateauing here, but there is some seasonality, so the second half of the year usually tends to be a stronger year in terms of stay. So it's likely summer holidays and Christmas days. So it -- I can assure you that we're not plateauing, it is growing. So the second half of 2023 will definitely be bigger than the first half. But we have operationally -- we found that we need to actually hire additional staff, which we have been doing now because when we started with the ASMALLWORLD collection, what is now probably about 2 years ago, we dedicated all our efforts to bring new hotels to the platform which we did. So we grew the platform to about 1,500 hotels fairly quickly. But we realized over the past few months that once you have the hotels up, there is quite a significant amount of work required to keep the hotels up-to-date to maintain them. And the workload has shifted pretty much to maintaining the hotels that we have and left very little capacity for the addition to the -- to add new hotels, which slowed our growth to a certain point. So we have increased the team and we hope that we can move quicker again and add new hotels more quickly going forward, so -- and with the bigger inventory create even more sales from our hotel bookings. We have also taken steps to improve SEO performance with an external consulting company which we will hope will drive new customers to the small collection for the first time. And we have also continued to make tech changes, make the user process smoother, also add new functionality. We will shortly do an update, which makes it more reliable to book rooms in nonstandard configurations, meaning like if you have kids of certain age and so on, which we have to admit was a bit tricky so far with our setup, so all these things will make the booking platform more complete, more expensive, easier to book in some cases, reducing frustration for people who wanted to book with families where it didn't work very well. And so it's -- we continue to hone the platform and the experience, and we're quite sure that this can become even bigger in the next few years. And moving on to the partnership with Emirates. Here, we believe that Emirates is one of the airlines with a strong international appeal. That's why we signed a partnership with them in July last year. The idea was to have Emirates Skywards miles as the third option for the Prestige and Signature membership, which come with 250,000 or 500,000 Emirates Skywards miles. So it's the third option next to Miles & More and Etihad, so people can choose which miles are most relevant to them. And that offering expanded the reach of these membership so the relevance of these memberships to a lot many new customers, especially also in the Middle East, of course, where Emirates is based. And sales have started in September last year, and we already saw quite a big increase in sales during the second half of 2022. And that a strong demand for this product has continued into this year into the first half and sort of the strong sales growth really reflects the demand for this product. I can also say that the sales for the Prestige and Signature membership with Emirates has now actually overtaken the sales number of the Prestige, Signature with Miles & More, which was previously our best-selling product. And so that really explains the big push. In terms of margins, I can say that the Emirates product is unfortunately not as profitable as Miles & More. So it's a slightly lower-margin product for us. Having said that, we still, on an absolute scale, obviously, make good money with it, and we'll continue to push it. Maybe here an additional point on the memberships and sort of the sales of Miles & More, it's not on the slide, but I think it's worth mentioning as well. With Miles & More, we currently have had a slightly lower or we sold less during the first half of 2023 compared to 2022. It's due to a couple of factors. One is, and it's probably the most important one that Miles & More has actually launched their own miles product. Up to now, we were sort of the only game in town if you wanted to get Lufthansa, Swiss and all these like Lufthansa Group Airlines miles. So for Miles & More, you needed to come to us, where we were the only place where you could get those miles and you could buy them in larger amounts, but Miles & More has started their own product called Bundle & Go, which is too much a copy of our products and probably maybe with a victim of our own success here. So they said we can do that, too. And they started promoting this quite heavily to their customers, and they had very heavily -- heavy discounts that they pushed the product they launched late last year. And we've definitely seen that it's impacting our sales numbers. So the first sale that we did this year was significantly lower also because there was an overlap with the promotion of their product, which is a very unfortunate. Also, we saw that availability for miles bookings were pretty low, which means that people couldn't use their miles, which obviously also reduced demand. So these 2 factors have made it a bit more difficult for us to sell the miles more Prestige membership. Having said that, we have addressed the challenge of the overlapping sales periods, and we will avoid those in the future. And we are seeing that with our second sale this year, we do 3 usually per year. We've seen that there was a rebound in sales. So it's not all bad. And hopefully, we can manage it. Having said that, though, the sales for the middle sales period have moved quite a bit into the second half. There was a lot of sales in July and in August. So we think that in terms of Miles & More, Prestige contribution, the second half will be good again from -- also from July and August sales from that special sales period, plus slightly better coordination with the competitor product from Miles & More. So it's not all bad, but it's definitely -- they're making it a bit more challenging for us than what we had in terms of product landscape last year, just as a -- to complete the picture on the Prestige and Signature membership sales. Good. Then moving on to Page #15 to our partnership with Global Hotel Alliance. For those of you who are not 100% familiar with who Global Hotel Alliance is, it's the world's largest alliance with independent hotel brands. So it brings together hotel groups that jointly work together and jointly operate GHA DISCOVERY, which is the world's largest independent hotel loyalty program so that it's comparable to Marriott Bonvoy or World of Hyatt; basically you earn points or discovery dollars in this case when you stay and you can spend them on other stays in the future. And ASMALLWORLD acquired a 10% stake in the company. It was completed last year, announced actually around Christmas in 2021 but completed last year. And GHA DISCOVERY Elite members, so the ones with higher status levels, started to receive complimentary ASMALLWORLD membership that started in July last year and is still ongoing. Also, GHA has paid their first service fee for these memberships to us, contributing to ASMALLWORLD sales and our cash flow now for the first time, which is great to see. And in general, the -- from an investor point of view, because we're a 10% owner of the company, we're also very happy to say that -- we believe that was a great financial investment because GHA business is growing strongly with a 60% sales increase last year which was much higher than what they had initially anticipated. So they bounced back well from the pandemic also nh Hotel Group, which joined the Alliance, which is a strong contributor, performed better than expected. So that's everything resulted in a 60% sales increase last year. And expectedly, GHA is planning to pay a dividend to its shareholders for last year, which will be paid out during the second half of this year. And so there would also be a financial return on our investment of dividend return on that financial investment quicker than what we had thought which is obviously great to see that the operation part is working and also as a financial investment, it seems like it was a great timing and indeed looks better than what we actually had anticipated in the first place. So all around, actually happy with the partnership with GHA, I can say it at this point. Going into a bit more detail at the operational part or aspect move to Page #16 is -- here is the overview of the GHA DISCOVERY brand portfolio. These are all the hotel brands that participate in GHA DISCOVERY. So meaning customers can earn DISCOVERY dollars, the loyalty currency of GHA DISCOVERY at all these hotel brands, and they can also spend them at all of these brands. So big names here like Kempinski, Anantara, Nikki Beach, Capella, like I said, nh, Corinthia. And then so you're probably familiar with many of these brands. And last year or towards the end of last year, ASMALLWORLD was also added to the brand portfolio, which you can see highlighted here, in sort of the left hand top side of that brand chart -- brand portfolio. And we are now one of the brands of GHA DISCOVERY. Moving on to Page 17. Here is a screenshot from the new ASMALLWORLD DISCOVERY page. So we, as ASMALLWORLD, and we're not going to run our own hotels. So it's not like there will be ASMALLWORLD hotels. We are a service partner for independent hotels who want to become part of the GHA DISCOVERY loyalty platform and the loyalty program. So, so far, you couldn't, as an individual hotel, be part of GHA DISCOVERY because the GHA DISCOVERY was only set up to accommodate brands of a certain size of the hotel portfolio. But as an independent hotel, there was no way for you to join and as part of our partnership with GHA, we have agreed that ASMALLWORLD would become the vehicle for independent hotels to join GHA DISCOVERY. So we work with independent hotels, set them up on a technical point of view, on a process point of view, to provide their guests with all the benefits of GHA DISCOVERY, make them bookable through the GHA DISCOVERY platform, make sure guests can earn GHA DISCOVERY dollars and bringing in many independent hotels into the GHA DISCOVERY Hotel portfolio growing it and so on. So the website explains that. You see the link there. It's asmallworlddiscovery.com, if you want to look at it a bit so it's basically a business card for hotels primarily and in terms of results from where we stand on Page #18, we have the goal to sign 10 hotels by the end of the first half of this year. We have managed to get 11 hotels at this point. So ASMALLWORLD DISCOVERY hotel portfolio now has 11 hotels. Having said that, at this point, 2 hotels are fully connected and are now bookable by customers through the DISCOVERY platform. These are the Chedi in Andermatt and Mandrake in London, which have launched a bit earlier this year. Five more hotels will follow shortly and are in final stages of being prepared for -- to be brought online and bookable. They include amongst them, the Beau Rivage in Geneva and the Hotel Alex in Zermatt. The other hotels are more recent additions and there's a bit of a lead time to prepare a hotel to be part of this like from a technical point of view, from a process point of view, so they will follow later during this year. And then Page #19, just to mention quite a significant development here on this side. There is a German hotel brand called Althoff and Althoff has 18 hotels that they manage. And we managed to reach an agreement with them. There 4 of their 18 properties will actually be added to ASMALLWORLD DISCOVERY. We have already started the preparation to bring them into ASMALLWORLD DISCOVERY. Two of those are by name that have been named already are the same chain hotel and Club in London but also the Althoff Villa Belrose in Saint Tropez. So these will definitely join soon, meaning probably before the end of the year and two more properties are being decided right now. It's a bit of a -- bit of a test case for Althoff so they want to pick those and also make sure we pick hotels that will be easy to do from a technical implementation. But -- so 2 more to be named and those 4 are actually expected to go live later this year. And should this initial phase of collaboration with Althoff go well, there's also the possibility that the remaining 14 properties will also be joining the ASMALLWORLD portfolio in the future. I mean we're talking then next year, the year after. And of course, beyond sort of this conversation with Althoff, we are speaking to many other hotels. So we're confident that this hotel portfolio of 11 hotels will actually grow to 20 hotels, 30 hotels in the near future, and this is becoming a more interesting revenue stream for ASMALLWORLD. I mean for the business part of this, it's a commission model in the sense that whenever customers book through discovery there is a fee that the hotel is paying to us. We obviously have to share some of that with Global Hotel Alliance to provide the DISCOVERY dollars and other services. But a part of that will stay with ASMALLWORLD. So meaning the more hotels we have, the more people that book through ASMALLWORLD DISCOVERY for those hotels, the higher our revenue will be from our hotel portfolio. It's a long-term invest. As you can see, like it takes some time to bring hotels online, so there's a lead time -- there's also a ramp-up time for a hotel to reach full productivity because as you can imagine, people need to know first that the hotel is now part of GHA DISCOVERY, then they need to make the booking and then there's usually another sort of few weeks or even month pass from the booking to the stay until we actually see a money flow. So this business here will not be a business that will sort of have a full impact on our sales and profitability numbers for this year. It's a long-term buildup over the next few years that will steadily grow. And that's sort of the way to think about the contribution from this business. Great. So that's an overview of our most important initiatives. We're now going to go quickly into the segment reporting on Page 21. So the subscription business performance for the first half of the year, it was obviously very strong because this is where we account for the Prestige and Signature sales with Emirates that we have talked about quite a bit. So we grew from CHF 4.8 million to CHF 7.5 million. I mentioned that the Miles & More product is lagging a bit to their competitive product Bundle & Go, low availability and also a late start of the midyear sales period, which shifted quite a bit of sales into the second half year. So that's tough. The EBITDA is lower due to -- sorry, the EBITDA margin is lower mainly due to the margin impact from the Emirates product, which is lower margin and -- but also due to marketing spend on these sales or to generate these sales. Great. The member base grew by 5.6% to 67,454 members compared to June last year. I guess this is quick highlights for the subscriptions business. On the service business performance on Page #22. Here, we've also seen an increase in revenue, so mainly First Class & More is like an upgrade services or travel services in general, have had a strong first half of the year. We also see the collection that is growing, that is sort of in this part. We've seen an increase also in ASMALLWORLD events again. We've -- but we've had the negative impact here from the missing ASMALLWORLD hospitality consulting project, right? That's why we have an EBITDA that sort of decreased here in this side. This is where this high-margin business would have been sitting or where it sat in the first half of last year. And the lower margins basically reflect the loss of this hospitality project, which we just talked about. I apologize, I think there is a mistake here in the way the EBITDA margin is presented in the bottom line that's throwing it off balance. So we will correct that. But I think those numbers are actually wrong on both of those slides, I apologize for that. Good. Moving to the consolidated financials on Page #24. The income statement, no surprises there, starting with the headline numbers of the strong sales growth, but then also the strong increase in direct expenses, which is the cost of goods sold that we talked about earlier. Other operating expenses, you've seen has also increased by 17% sort of showing the investment into technology also marketing costs and a few other costs that have gone up during this period. And the financial expenses a bit further down in the P&L have also increased mainly due to interest payments on our debt, which is worth mentioning as well. And as a result, the net result came in 30% lower than for the same period last year. In terms of balance sheet, on Page 25, we've had no big movement in terms of overall balance sheet size. The cash decreased by CHF 1.6 million, the big reasons here are primarily that we actually did make an investment of CHF 1.2 million into a hospitality real estate investment fund called GE Super Prime Hospitality Holdings. That is a partner that we've been working with in the past for consulting projects on hospitality side. The idea was to secure a few consulting projects with them for hotels that they are looking at. It's also the idea was that in the short term, it will generate a short-term return on investment from investing into this portfolio, which actually maybe we're talking about one hotel right now, but it might be more hotels in the future but that would multiply fairly quickly and be acted as a sort of seed investor there. I'll see how it develops, we'll obviously update the group here. But that's the biggest move there, I think, on the assets and investment. Receivables from service decreased due to a reduction in outstanding invoices. Prepayments and accrued income increased due to prepayments for travel. That's the other thing there in the current asset section. And on the financial asset side, you see that increase, which reflects the investment into that real estate investment fund that I have mentioned above as the financial assets have actually increased. The other big position in there, of course, is the -- our 10% stake in Global Hotel Alliance. Moving to the second part of the balance sheet on Page 26. Here, you see that payables have decreased due to a reduction in open positions from Miles & More Prestige promotions, which we had at the end of 2022. It looks like the short-term financial liabilities at the very top remained stable at -- it looks here like it's 5,431,100; having said that, these are new tranches every year. So due to the accounting, they move from long-term financial liabilities. So that's the bank loan. You can see it there in the -- it move to -- from CHF 8.6 million roughly to CHF 8 million. It's a reduction of debt that we have which then obviously that portion that is being paid out is going into the short-term financial liabilities. So it looks like there is no movement, but pretty much, the CHF 543,000 is what we have paid now in terms of debt reduction payments. So we're slowly decreasing our leverage, which is a good thing, making the company more valuable and increasing sort of the equity that we have. So this is also -- sorry, the equity, which is negative in our case because of the accounting rules that we have where we don't account for goodwill. You can see that it's actually growing or it's becoming less negative, which is nice to see. So overall, less debt, more value in the company, meaning like the increasing shareholder value or the shareholder part from period to period. Page 27 is the cash flow statement or the first part of that would be the operating cash flow and the investing cash flow. So operating cash flow decreased quite a bit. We started obviously lower with net results, but we also have changes in working capital, so overall, the operating cash flow came in at about CHF 400,000 for the period. And then on the investing activities cash flow, you can see that outflow of CHF 1.2 million for that real estate investment, which is sort of the biggest thing to mention there. But having said that, you can also see that in the period last year, it was a massive CHF 7 million, mainly because of that big outflow of CHF 3.5 million from acquisitions and subsidiaries, which was our last earn-out payments for first class or more. So that has stopped entirely. And like I said, last year, we have become fully self-funding which you can see here, there's just no outflows anymore from anything from investment point of view other than sort of the chosen one that we did into the investment fund, of course. Page 28, which is sort of the cash flow from financing activities here. Obviously, you see the number again of the outflow of the payments for -- our debt payments or debt repayments of the -- for a bit more than CHF 500,000. And you can see the net cash change, which went down by CHF 1.6 million. While like I said, the biggest factor there are actually the CHF 1.2 million real estate investment and the CHF 500,000 debt repayment that have driven that number to be negative. And so it feels fine to us, and it's not a case of concern at this point. We also have quite a bit of outstanding invoices, so there will be a cash inflow. So from a cash management point of view and a liquidity point of view, we actually feel quite confident where we are right now. Good. And that already brings us to the outlook on Page 30. We believe the second half of the year we'll see another strong revenue performance. So we will continue to see strong sales. And we believe also that we will probably move up a bit again in terms of EBITDA contribution, so the demand for Precision and Signature memberships will probably remain high for the Emirates products. Like we said, we hope we can sell a bit more of Miles & More, prestige and Signature membership again during the second half of the year, which will contribute nicely and also, we believe that the EBITDA contribution should actually go up in more hotels, we hope that we will get more hotels into ASMALLWORLD DISCOVERY and continue to grow our hotel portfolio on that side. Like we said, it's a bit of a long-term gain in terms of financial impact, but that's what we're focusing on right now and as well for the Collection, we want to add more hotels again and grow the inventory of the holes that we're going to offer with our additional staff that we have hired and obviously promote it more. Also, we have started the project to review the ASMALLWORLD membership levels that we have. And this is a bit more of an outlook maybe going even beyond the second half of the year. We may restructure our membership offering in 2024 to increase the number of customers that we have and bring more new customers into ASMALLWORLD and to then sell them all our other services that we have like the collection and other products and services from us and from our partners. So that's the idea. So it's a bit of a longer-term project to increase the reach and the number of members for ASMALLWORLD Group in the future that we are working on. And hopefully, I can provide an update during the next check-in here. Guidance for 2023, the full year view, we are keeping our sales target, which was CHF 20 million to CHF 22 million for the year. So we're quite confident that we'll be able to reach that also from a member point of view. We keep the member target of 70,000 to 72,000 members. For EBITDA, we have decided because of the first half of the year to slightly revise the number. So we will now expect an EBITDA of CHF 2.2 million to CHF 2.4 million for the full year. So here, obviously, it's always a bit of a balancing act on -- obviously, you want the business to be strong. But when I say what the balancing act is how much do you invest into the long-term growth of the business, how much do you invest into tactical marketing that sort of should drive sales. So we have decided that, we're happy to maybe shave off a little bit of the EBITDA in the short term to grow the business more in the long term, drive the hotel portfolio, ASMALLWORLD DISCOVERY, invest into tech and so on. And the team, for example, in the Collection to bring a better inventory to the customer, which would improve sales long term. So we keep our policy of growing profitably. So we don't want to go into a territory where we just reinvest all the money that we have into the business. We want to remain self-funding. We want to sort of manage cash levels, we also want to make sure we invest where we believe we'll get a high return and if that means sometimes like that we have slightly lower EBITDA, we're okay with that for now, right? And obviously, that's the lack of a consulting project, which we kind of anticipated, but hope that we could fill it with something else has also had an impact on the first half of the year. So we just feel like we didn't want to keep the EBITDA guidance high and then potentially disappoint for the full year but decided to take it down a little bit to a level where we think it will actually be attainable and what we will reach for the year. So that's it from my side. So it concludes the presentation. If you have any questions, I'm happy to do a quick round of Q&A and handing back to the operator for the process.

[Operator Instructions] First up is Yi Zhong from AlphaValue.

Three questions from my side, if I may. The first one, do you hear me?

I can hear you very well. Nice to have you with...

And so the first one, should downgrades with EBITDA guidance for 2023 be fully explained by the H1 underperformance? Or do you also see a less favorable H2 compared to your last trading update? Secondly, regarding your tactically increasing spending on marketing. Should we expect related expenses at a similar percentage for the following years? Or this would be some sort of implementation costs. Last, you mentioned a planned increase in in-person events. Is there a target number for the full year? And that's all.

Okay. Yes. So for the EBITDA -- well, look, you mentioned the term underperformance for the first year. I mean it's obviously, I'm not a big fan of the term underperformance. I think it's just that we have -- we have -- well, obviously, the lack of that consulting project, which I've mentioned a few times is definitely unfortunate and that you could potentially say that is underperformance, right, we should have maybe got another project of that size, so fair enough. But the rest is actually -- I think the rest is conscious investments, right, so into team size in Collection, team size of the tech team, like I said, to your point number two, like marketing expenses and so on. So it's just I think we're trying to make the best decisions for the business as we go along. And sometimes that means there will be different decisions taken along the way compared to when you first sat down and did the budget for a period. So in that sense, I'm feeling comfortable, let's say, what we spend the money on. And I think it's long term, creating value for the company, even if it means for -- maybe for this year, we have to lower our full year EBITDA guidance a bit. So in that sense, I'm comfortable with the money that we -- the business has generated and how we're spending it right now. But yes, that could potentially mean, I don't know, next year will be on the same levels before some of our more long-term projects, like I said, ASMALLWORLD DISCOVERY or the build of the ASMALLWORLD collection or other things like fully funneled through, right, and hit the sales and bottom line. But yes, so comfortable with that. Marketing expenses for the first half of the year, yes, I think they're probably -- we're probably increasing them on a permanent level. So I wouldn't think that we would reduce them again during the second half of the year. So in that sense that additional expense and also, obviously, see the other investments, like I said, in team and tech and so on, they're probably ongoing. There's always something to do, it was sort of the decision where, for example, in the tech team, during the pandemic, we had reduced tech team quite a bit trying to save cost but over the sort of last few months, we've increased the team again to be quicker to build because we've seen that with the team size that we have and I have to be -- I mean I have to say I love the tech team we have. They're all fantastic people, but they're basically -- I always say in a bit of like cynical way that basically, we have a team of a handful of people that run a Facebook and Booking.com sort of set up basically our social network plus the booking platform and if you look at other companies that have similar businesses, they have tech teams that sort of or probably [ 100x ] what we have in that sense, increasing the spend on tech team to move a bit faster and implement changes a bit faster, I think will pay off there. But like, yes, sort of in terms of cost, those costs are probably here to stay to your point. And hopefully, what will offset it is that we generate more sales or profitable sales in other areas in the future that will sort of more than compensate for that additional cost. And in terms of events, yes. So they've been steadily growing. I think I gave an update for the full year. I haven't really brought the numbers to today's presentation, but -- I don't have them by heart, to be honest, I would have to go back and give you an update after the call and like where we stand with how many we've done half of the year and for the full year and how that compares to last year specifically.

So the next questioner is [ Henry Mendes from New Wave ].

Jan, how are you doing?

I'm good. I'm actually having said that. I mean the other -- I'm at the other end of the world right now, maybe Las Vegas, attending a travel conference, so for me this is quite early morning.

[ I will call ] in the evening, I'll call it. I have a couple of...