Cherry SE (C3RY) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Cherry SE's Full Year 2025 Earnings Call. Thank you for taking the time to join us today. You have just seen the launch video of Cherry XTRFY first TMR-powered keyboard. This product exemplifies our strategic focus, combining cutting-edge magnetic technology with premium build quality and next level performance. The keyboard is designed for gamers who want maximum speed, precision and customization. As customary, today's call is being recorded. [Operator Instructions] Joining me today are Rogier Volmer, Chief Executive Officer; Jurjen Jongma, Chief Financial Officer; Dr. Udo Streller, Chief Operating Officer. Today, Udo has dialed in from China. Let me briefly outline today's agenda. Rogier will begin with introductory remarks. This being his first earnings call as CEO of Cherry and will frame the strategic direction of the company and highlight key milestones achieved in 2025. Jurjen will then walk you through our Q4 and full year 2025 financial performance, followed by a segment review and a detailed discussion of a comparable P&L also on a segmental basis. He will also explain the structural and operational drivers behind the significant reduction in working capital. Udo will subsequently provide an operational update, including progress on our restructuring program and advancements in sustainability initiatives, particularly regarding our carbon footprint. We will conclude with Rogier outlining our strategic outlook, including insights into our innovation pipeline and our way forward. After the presentation, we will open the Q&A session. With that, let me hand it over to Rogier.

Thank you, Nicole. Good afternoon, everyone, and welcome to Cherry's Q4 and Full Year 2025 Earnings Call. Today, we will walk you through our final 2025 results and the actions we have taken to reshape our business across the key segments. We will also outline the actions already implemented and those that are still ahead of us to ensure a sustainable change, of course. While this call is primarily about the financial performance, it's also an opportunity to introduce myself and to share my initial observations. My mandate from the Supervisory Board is to create stability, support the team and ensure Cherry is managed with professional discipline during this important phase of the company. Most of my career I spent in peripherals and accessories. I worked 9 years at Philips, 10 years at Logitech and 4 years at Trust. And most recently, I held a management position at Haier Europe, where I have been responsible for driving a turnaround in 2 of the core European regions. What attracted me to Cherry is the combination of a global recognized brand, strong engineering capability and a company that is at an important turning point. We have leading technology and highly committed employees. Over the past weeks, I have visited our teams worldwide and without exception, I've experienced strong engagement and pride in the company. The focus now is to strengthen stability, set clear priorities and build a sustainable future together with the team. To deliver sustainable performance, we first had to analyze -- we first had to stabilize foundation. 2025 was fundamentally a year of structural refocusing and operational cleanup. By reaching several critical milestones, we created the necessary room to shift from stabilization towards more disciplined execution. A key step was strengthening the leadership team to ensure clear accountability across all segments. Alexander Hecker took the responsibility for global sales of peripherals and Philip Groth has been leading the Digital Health business and Solutions until -- since March 2025. In September, Jurjen Jongma joined as CFO, bringing the Management Board to its full strength. Another important milestone was the sale of our Active Key hygiene business to Contour. This transaction generated a fixed purchase price of EUR 10.3 million and a book gain of EUR 5.7 million. More importantly, it allows us to focus our resources on our core competencies. In digital health, we achieved TI Messenger provider approval from gematik in August, followed by the TIM Pro approval in December. These approvals are important building blocks for our positioning to secure digital communication. Finally, we made strong progress in our operational fundamentals, particularly in reducing the inventory, a key focus of the strategy. The group inventories now stand at EUR 28.8 million, down EUR 29.5 million compared to previous year. At the same time, we reduced complexity by cutting the number of SKUs by more than 40% since January 2025. These steps support our stabilization and have been delivering the first results that are needed for the next phase. Over to Jurjen, who will guide us through the financials.

Yes. Thanks a lot, Rogier, and thank you all for your interest in our Q4 2025 webcast. So let me start with an overview of the key KPIs and the main drivers behind it. At EUR 94.3 million, our full year revenue was down 15% in 2025, primarily driven by weaker demand in the Components segment, but also due to the basis effect of the deconsolidation of Active Key, which we sold in May 2025. On a like-for-like basis, revenues actually grew by 4.7%. As a consequence of this, adjusted EBITDA in 2025 was significantly down as well. In the fourth quarter of 2025, revenue amounted close to EUR 24 million, down 10% versus the same quarter of the previous year. And adjusted EBITDA of the same period improved on a year-on-year basis, driven by strong underlying demand for our eHealth terminals as well as narrowed losses in peripherals and much better capital and cost discipline. Now obviously, we are far from satisfied with these numbers as we have promised to reach EBIT breakeven after 2 comprehensive and consecutive restructuring programs. If we then move on to the next slide, I start with addressing overall performance in terms of revenue and adjusted EBITDA. Note that Q1 is depicted in dark gray, Q2 in light gray, Q3 in red and finally, Q4 in black. We ended 2025 with EUR 94.3 million of revenue, like I just said, against our guidance of north of EUR 100 million. This is predominantly related to lower-than-expected sales of our card reader terminals in the Digital Health segment on the back of the government decision to postpone mandatory adoption of terminals. We see, however, that we are recuperating from that, and we are positive about the initial developments in Q1 2026 in our Digital Health segment. In addition, our Peripheral segment suffered from the inability to fulfill all of the orders towards the year-end of 2025 due to shipments arriving late in Europe, and these orders will shift to 2026. In terms of adjusted EBITDA, I'm encouraged by our lower operational cost levels, which is one of the key drivers to narrow the losses in both Q3 and in Q4. I will dive a little deeper in adjusted items later on in the presentation. If we then move to the next slide, let me elaborate on the results per segment for the full year and for Q4 2025. As it is our custom in this slide, the Components segment is shown in light gray, Gaming and Office Peripheral segment in red and Digital Health & Solutions in dark gray and the Central segment in black. Looking at components in light gray, we can be brief. Annual revenue to third parties is now less than half of what it was in 2023, with a significant loss. As far as components are concerned, we obviously continue to use our switches in our own keyboards. And going forward, we only entertain profitable sales with third parties. As can be seen on the slide, the business showed a considerable loss in 2025 of more than EUR 5 million. Our peripherals business, even though pressured by supplies arriving late in Europe, showed low single-digit growth in the fourth quarter, bringing annual revenues to a level of EUR 67.2 million. As it has been the case throughout '24 and '25, the EBITDA contribution of our peripherals business continues to be negative, driven by adverse margin effects. We see, however, that the loss in Q4 was half of the loss recorded in '24, signaling the first signs of margin recovery. In Digital Health, the sales decline versus 2024 is entirely driven by our Active Key business, which was divested in June of 2025. Excluding this, on a like-for-like basis, the Digital Health business shows very healthy growth levels of 17%. Although the adjusted EBITDA numbers in 2025 contain part of the proceeds from the Active Key's divestment, the Digital Health segment performs on a very strong and healthy EBITDA level. As I said, I will elaborate on adjustments in more granular detail as I believe that the 2025 adjustments results contain too many nonrecurring items, which blurs a transparent view on underlying operational performance. As I commented during our Q3 call, it's obvious that our Central segment is too heavy a burden on the total organization with an adjusted EBITDA level of minus EUR 15 million in 2025. However, our cost reduction efforts are beginning to bear fruit, and I will provide a little bit more color on cost and cost effectiveness further on in the presentation. Let me now spend some time on a topic that is very close to my heart and that we really must address in order to get a better, more transparent view on true operational performance. Unfortunately, in 2025, our adjustments did not fully reflect the nonrecurring nature that, in my view, adjustments should reflect. Let me illustrate this with the next slide. In brief, although our methodology of arriving at adjusted EBITDA was consistent, it did not include a clear distinction between recurring items that reflect normal continuing operations and nonrecurring items that should be adjusted out. Upon my start in September 2025, we looked closer at this methodology and came up with a stricter definition of items to be adjusted out and obviously, which one not. Although the adjusted EBITDA for the group as a whole remains largely unaffected, we did find that the adjusted results for the peripheral segment were picture too low and the adjusted results for the DH&S segment were picture too high. While this transparency certainly is something that we wish to provide for our investors and our shareholders, it is also important for ourselves in a sense that we must focus on true underlying operational performance. In the slide that is currently screened, you will see what we actually adjusted our '24 and '25 results were as they are now published. But you can also see what we should have adjusted for it had we followed a more robust distinction between recurring results and operational performance. So if we then do this, and apply these effects on our actual segmental performance, we arrive at a segmental view that makes more sense, allows us to look at real progress over time and more importantly, let us take the right decisions going forward. You will see this depicted in the next slide. We can now start and take a closer look at segmental performance and can draw a number of important conclusions, specifically related to peripherals and DH&S. For peripherals, we see that gross margin appreciated by some 500 basis points to almost 38%. While this is still too low, it represents an important improvement versus prior years. In Digital Health, margins remain strong and results are largely in line with 2024, albeit that we continue to invest to ensure that we capture the growth opportunities in this market. In 2026, we will adopt this methodology of adjusting EBITDA, and we will restate the 2025 results for it so that the 2026-2025 comparison is on a like-for-like basis. Before we now move to the balance sheet, I would like to highlight what has been done on the cost side since 2023. As you can see, on a comparable basis, we've taken out approximately EUR 16 million of cost over these 2 last years across all cost categories. Given where we are in terms of profitability, this is still not enough. And therefore, we're planning to take out at least another EUR 10 million in 2026. Now that I've taken you through the main elements in our '25 P&L, let me move to working capital. Since March ' 23, the group has consistently managed inventories down from EUR 75 million in '23 to EUR 29 million by the end of December 2025. As it is very apparent in our results, a part of this inventory decrease is related to write-offs, and these have no cash effect. Importantly, however, almost 80% of the inventory reduction actually represents the sell-off of inventories. As the quality of our gross margin clearly suggests, this has often happened at a strongly discounted price, but it obviously did generate liquidity for the group. If we now take a little closer look at the cash conversion cycle, you will see that this has improved by 90 days since 2023, which is the key driver behind our resilience from a liquidity and cash point of view. With that, let me pass on to Udo.

Good afternoon also from my side. Greetings from China, exceptional. So I mean I'm not in the same room like my colleagues being in China here. So warm welcome also here to all of you in today's conference. In a few -- in the next few minutes, I will present you a detailed strategy update. We'll provide also an example for our ESG measures, one just as an example and also the restructuring benefits that we have waived so far -- we have so far. With the slide, you see now that explains how we translate strategy into sustainable value creation. At the core of our operating model is what we call the heart of Cherry. It's our culture and our ESG foundation. For us, ESG is not a reporting exercise. It is embedded in the operational decision-making, risk management and capital allocation. It reduced volatility and strengthens long-term resilience. Around this core and its first driver, we focus on 4 additional strategic value drivers. In alphabetic order, I means all are equally important. It's the product and the innovation and the technology, ensuring differentiating customer value and protecting pricing power through innovation. It's the performance of the footprint, continuously optimizing our global manufacturing footprint to secure scalability, cost efficiency and margin stability at the quality, preventive and best-in-class, reducing failure costs and safeguarding our brand and customer trust. And last but not least, the supply chain being resilient and customer-centric, mitigating disruption risk while protecting service levels and working capital performance. Execution discipline is critical for all of these elements. Here, we operate with a clear annual strategy review cycle and a structured half year road map deployment. This creates transparency, accountability and measurable progress. From the CEO perspective, this ensures 3 things: First, the operational leverage, the risk mitigation and the disciplined capital efficiency. In short, as a scalable, resilient operating platform designed to deliver sustainable returns. Within the field just as of ESG, as an example, we compiled in 2024 now for the first time since the IPO, a detailed materiality analysis based on a previously complied long list of potential material relevant topics. A total of 7 ESRS topics, including corresponding subtopics were systematically assessed in terms of the impact in the financial materiality, critically examined and classified in the materiality metrics. Strategic packages of measures were then derived accordingly here as example, and it's just one example, provided for the topic -- so-called topic E1, the climate change. It's our CCF-Corporate Carbon Footprint analysis we have done. If we're looking to and we have looked in detail and in total, all of our emissions for 2024, we had this slightly more than 36,000 CO2 equivalents were caused by our business activities in the year 2023. Less than 2% out of these are really direct emissions, what is the so-called Scope 1 emissions from our factories itself. An extremely tiny fraction are upstream's emissions related to energy consumption, Scope 2. Also, I will come to this why it's so low. And the far majority, roughly 98% are due to other upstream emissions, the so-called Scope 3. The corporate carbon footprint serves to identify the large sources of the emissions within the company and along the upstream and downstream value chain. With the support of our CCF, we focus on 4 value relevant outcomes. First, what we had achieved is increasing transfer across Scope 1, 2 and 3 emissions, strengthening risk management and strategic steering. Secondly, ensuring regulatory compliance and future-proof reporting, reducing exposure to transition risk. Thirdly, improving energy efficiency and cost discipline, protecting margins. And the fourth point, enhancing access to capital and customer contracts by demonstrating measurable ESG progress. In short, the CCF is not just a sustainability tool, it's really a risk mitigation and a volume protection instrument supporting long-term shareholder returns. For the point of the general optimization and footprint optimization and restructuring Rogier already mentioned, we have gone through several quarters over a period of time, which resulted in a production shift to China as well as the reclassification of the Auerbach site. For this, I would like to give you a quick overview on the main benefits that resulted from these measures. First, we have reduced our in-house manufacturing sites to 2, one in Zhuhai and one in Vienna, Zhuhai for the peripherals, Vienna is for the terminals, completed by 2 established SubCom partners for peripherals in Slovakia and China. Secondly, we have streamlined the number of warehouses, our global warehouses from 7 to 3, one then each in Europe, Asia and one in U.S. In the European Auerbach warehouse, all European business, including the Peripheral webshop and the digital health products are being handled. Auerbach remains the development site for the hardware technology, and that means also including switch development and for some piloting for the metal parts. It is becoming complemented by our development hubs in Sweden and in China. So by this, we are really globally set it up. Our software and firmware development center is based in Vienna. With this, back to you, Rogier.

Thank you, Udo. Now moving to our outlook and the road ahead. Our priorities are clear: transparency, operational discipline and realistic sustainable goals. We're not here to make any bold promises. We're here to show how we steadily strengthen Cherry's foundation to create long-term value. Our business stands on 2 pillars: one, the continued transformation of our digital health business into a platform-driven model; and two, the structural realignment of peripherals and components to reflect market realities and focus on our core competencies. Our long-term ambition remains clear: to evolve Cherry into a provider of secure, quality and high-performance input solutions built on our hardware footprint. In Digital Health & Solutions, demand for our terminals remain solid. Our installed hardware base is the foundation that enables us to bundle software solutions. With the rollout of TI Messenger, we are progressing from a hardware-focused model toward a more platform-based model with recurring revenues. Over time, this shift will improve revenue visibility and margin quality. We expect our proof of patients' present SaaS business-based offerings to become increasingly relevant over the coming years. Our hardware creates entry points. Software adds recurring value. In peripherals, stabilization is visible. The foundation is stronger, and we still have improvements to make. We are positioning Cherry as a focused input device specialist with our proprietary technology. And with this, our ambition is to strengthen our position in the core segments, in the core markets over the coming years. From a regional perspective, in EMEA, we see that the transition is progressing and operational stabilization becomes more visible. In APAC and predominantly China, we see that a disciplined execution and a clear focus is driving solid performance with room for further profitable growth. In the Americas, the reset continues. We are prioritizing structural profitability of a short in volume. This turnaround requires discipline rather than quick fixes. Overall, the foundation is stronger, transparency is improving, and our focus is firmly on sustainable profitability. Now a bit more details on the specific businesses. First, let me start with Digital Health. Our eHealth business is built on a strong foundation. Looking at the numbers, we expect up to 200,000 additional unit deliveries through 2028. A key highlight of our operational improvement is the 45% decrease in return rates in 2025, which provides a direct increase of our margin. The strategic logic behind this business is simple but powerful. Our established hardware footprint enables bundling with new software offers. This is the foundation for our licensing model, which creates compounding recurring revenues. By moving away from purely transactional hardware sales, we ensure that each new bundle adds incremental predictable revenue that accumulates month-over-month. This shift not only increases our visibility, but also ensures that the platform-driven transformation we talk about is backed by a scalable and highly profitable financial structure. Furthermore, the 120,000 new TI users who were previously postponed represent a unique opportunity. Unlike existing customers, they will need both hardware and software right from the start. This perfectly fits into the new business model. The German telematics infrastructure remains a regulated and highly attractive market with long-term visibility. Several regulatory milestones will drive demand, including the mandatory connection of 90,000 therapeutic and medical aid providers. The PoPP is an important component of the telematics infrastructure in Germany, enabling digital verification that a patient is receiving medical care. It is scheduled to be rolled out at the end of 2026. Next to this, we are actively evaluating all opportunities here and identifying exactly where our expertise in secure hardware and certification plus software can create a differentiated value. We will focus on secure connectivity solutions with this new architecture. At the same time, the integration of AI into TI Messenger opens opportunities for additional value-added services. On Peripherals and Components, as mentioned earlier, 2025 was fundamentally about stabilizing and strengthening the foundation of this business. We will focus on 3 core areas. First, working capital and inventory discipline. We significantly reduced our inventory from peak levels, actively sold down slow-moving SKUs and we restored price discipline across our core portfolio. At the same time, we implemented a more demand-driven replenishment model, and this was essential to improve transparency and control. The second part is our portfolio and commercial focus. We initiated SKU simplification, and we have sharpened the differentiation between B2B and B2C. Our emphasis is clearly shifting toward our core higher priority segments where we see sustainable demand and margin potential. The objective here is to focus and to do more with less and clear positioning of the products. Thirdly, the structural simplification, we optimized our distribution model, clarified regional ownership, streamlined logistics and improved visibility across the value chain. This reduced and will further reduce complexity and strengthen accountability. Importantly, although the reset is not yet fully completed, the business today is structurally stronger than it was a year ago. Working capital intensity is improving as shown by Jurjen. Transparency is higher, operational discipline is increasing, and this provides us with a foundation towards a more disciplined execution. On products, with the portfolio stay streamlined and inventory largely normalized, our focus now shifts to innovation with fewer and bigger products. Our 2026 pipeline is balanced across office, gaming and security peripherals, all built on our foundation of in-house technology and hardware expertise. In office, we are expanding our cordless and premium portfolio while strengthening our presence in the B2B environment. A key highlight is the MX 8.2 TMR, as you could have seen in the intro video. Here, we bring our high-end mechanical technology into a modern wireless office design. This segment is about stable demand, margin consistency and quality differentiation. Gaming. In gaming, we will continue to leverage our Cherry XTRFY brand and with launches like the K5 TMR and other MX-based platforms, we fully control the core technology inside the keyboard. This gives us a clear differentiation in performance and durability in the premium segment. The security and specialized markets where our certified hardware solutions underline our role as trusted partner in regulated environments where compliance and secure connectivity are critical. Products such as the SmartBoard 1150 and the Smart Terminal highlight our capabilities in reliability, security and long product life cycles. Across regions, including China, we use our global platforms and products with locally adapted editions like you can see here with Pokemon that increases brand visibility and support our China for China business. Overall, the pipeline shows innovation with fewer and more targeted products aligned with our cordless growth, mid- to premium positioning and secure connectivity. As I mentioned earlier, we see an opportunity in retail and wireless products. So as you -- our portfolio has historically been strong in B2B and cord products. However, the market clearly shows that structural growth lies in retail and wireless products. According to the GfK data for Germany, retail growth accelerated to 14% in Q4 2025. More importantly, the retail value share of the total market increased from 65% to 74% over the past periods. This confirms a structural shift towards the retail channel. The market mix is moving, and we are aligning our portfolio and go-to-market strategy accordingly. The wireless category has reached a critical point. Approximately 80% of the German market is now cordless. Given our historically stronger position in the corded products, this is a clear opportunity for us. By strengthening our cordless portfolio and expanding our retail business, we are addressing the segments with strongest opportunity. Our strategy is, therefore, to build on our technological strength and expand into segments where market growth and potential are structurally higher. Let me briefly update you now on the ongoing strategic review. As announced in last November, an M&A process was initiated for the divestment of one of the segments, peripherals or Digital Health & Solutions. The objective of this process is to further strengthen the company's financial position while ensuring that the remaining division is optimally positioned and financed for its future growth. As previously communicated, we continue to work towards concluding the strategic review within the first half of 2026. The process is progressing in a structured and disciplined manner in line with our internal planning. Engagement with interesting parties is ongoing. These discussions are being conducted under customary confidentiality arrangements and such -- and as such, we are limited in the level of detail we can provide at this stage. What we can say is that we are seeing interest from both strategic and financial investors. This reflects the underlying value and positioning of the business. Our clear priority throughout this process is to act in the best interest of the company and its shareholders. We remain focused on executing the process professionally and with discipline. We will provide further updates as appropriate and when there's a greater certainty. In the meantime, we ask for your understanding that we cannot provide any further information on the details of the M&A process. This is a structured process in which, in accordance with market practice, detailed information is only disclosed to those involved in the process. And lastly, let me close with a brief perspective on our priorities going forward. After a year of focus on stabilization, we are now moving into execution phase. We will continue to reduce inventory and complete the remaining cleanup. This improves our capital efficiency, increases transparency and will strengthen our operational foundation. At the same time, we are sharpening operational control across the organization. This means clearer targets, better performance tracking and stronger cost discipline. We will simplify processes and further clarify regional responsibilities. Decision-making is moving closer to the market, which strengthens ownership and improve the execution. At the same time, we are focusing our portfolio on core priorities, directing resources to areas with clear strategic relevance and sustainable margin potential. Our goal is to improve margin quality and optimize our product mix through disciplined commercial execution and structural improvements. Regarding guidance, we will provide a credible outlook in the second quarter based on better visibility and realistic assumptions. Regaining trust through reliable and consistent performance remains our key priority. Overall, our focus is clear: strengthen operational performance, restore sustainable profitability and position Cherry for long-term success. With that, I hand over to Nicole.

[Operator Instructions] The first question comes from Bastian Brach, Montega.

So some questions for me. The first one is on the card reader with obviously strong growth in last year. And you said software revenues could outpace hardware revenues there as early as 2029. Could you give us some guidance when we can expect material software revenue? Is it already like in H2 this year? Or is it more like '27 and late '27? This would be my first question. And the other 2 for Jurjen. The EUR 10 million cost savings you mentioned in some of the slides, could you like detail in which department? Is it mainly in G&A? Or is it a marketing reduction or more on the operating side? And then my last question would be on the gross margin adjustments that you also mentioned in the peripheral segment. Could you explain that further? I didn't really get it in the short amount of time.

Okay. I think all these questions are for me. So thank you, Bastian, for these questions. So on -- I think, by and large, your first question is on the distinction between the hardware sales and software sales in the digital health area. In 2026, we expect the vast majority of our revenue to be hardware-based still. Obviously, we also see that at a certain point in time, all the health care providers will have a card reader and then this business becomes more of a replacement business. We have forecasted some software revenues in the course of 2026. But like I said, the vast majority will still be on hardware, and we see that gradually picking up in the years thereafter. When it comes to cost savings, you would actually see this across the board. So I mean, it would be difficult for me to highlight a particular department or a particular cost category. What I can say is that, by and large, these savings are, let's say, the outcome of all of the restructuring that has been done in the past. And so you basically -- you will see in 2026 a cleaner run rate of operational costs. And obviously, that is across the board. But the big impact obviously comes from, by and large, closing down our production facilities in Auerbach.

Okay.

So then on gross margin, perhaps you can reiterate the question. So the slide on, let's say, the adjustments and the changes were unclear or what is question?

Yes. On the peripherals segment, you restated the gross margin. Could you explain why you did that and why it's now higher? Is it the -- yes, inventory sell-down to your partner in the U.S.?

No. So first and foremost, we're not in '25 adjusting the numbers. But I was interested and so should you in, let's say, a true operational outlook of performance. So if I do that and then in peripherals, by and large, clean for extraordinary items that largely impact margin like selling off of inventories and obviously, the Argand transaction fits in that profile, then a comparable operational margin performance in the peripherals segment would be around this 38% as opposed to the adjusted number that you see. So on the slide, you see that in the adjusted picture, as we will also publish it in our segment reporting, you see a margin of 20 -- gross margin of EUR 20 million. And if I adjust for those, let's say, nonrecurring items, you end up at EUR 25.5 million. So if you will, a bigger adjustment, bringing the operational performance in the peripheral segment to close to 38%.

Okay. Okay. Got it. But the published numbers are like the adjusted.

Correct. So you will -- the numbers that we published are in the adjusted column indeed. Yes.

The next question comes from Oliver [indiscernible]

I would start maybe with the Q4 shipment delays in peripherals. Could you quantify these? And how much are you expecting to get in Q1?

No, it's difficult for me to quantify it. So like I said, we missed -- we gave guidance of just short of EUR 100 million. So if you take that, it would be approximately EUR 6 million. That is too big a number because the miss against the EUR 100 million was also, to a certain extent, health care related where we expected to ship more. We expect a, let's say, modest quarter on the peripherals side for Q1, and it's difficult to exactly quantify the, let's say, delayed shipment number, Oliver.

Got it. And maybe on the restructuring side, how much expenses are you planning in to get to those EUR 10 million in savings you are targeting?

Yes. Like I just mentioned to Sebastian as well, thanks for the question. The EUR 10 million of cost savings that we're planning in 2026 are a result of restructuring that has already happened. And so I'm not planning to spend additional restructuring on it. So that is already included in all of the actions that we did so far.

Perfect. And maybe as a small last question on inventory side. I think in earlier of 2025, you mentioned the targeted run rate of around EUR 50 million. Did this change?

I don't think that this EUR 50 million is coming from me because the EUR 50 million was already achieved somewhere half 2025, if I'm not mistaken. I think when I joined, we were somewhere in the high 30s. So I've never seen this EUR 50 million level. And if you look at the number of days in terms of inventories that you can also see in the cash conversion cycle in the picture. And then we're at 114 days towards the end of 2025. That's occurred approximately. So that is like 4 months. I still think, honestly, that 4 months is on the wrong side. So we see some further opportunities. But EUR 50 million is a number, Oliver, that I don't recognize.

I can shortly comment. I think EUR 50 million was, as mentioned, as a reasonable target for end of 2024, we reported then in the quarter 1 2025. This is the figure. And also for this year, it was a realistic figure. As mentioned, EUR 50 million for now would be by far [indiscernible].

We have another question coming in from [ Philip] [indiscernible].

Can you hear me now?

Yes.

Yes, sorry. Difficult question. Thank you very much for the elaborate presentation. I'm a bit struggling, honestly, with the impact of the Argand deal and your gross margin adjustments restatement, however you want to term that because I was under the impression that the Argand deal is also impacting your sales and that this negatively in that way. So first of all, how should we look at the Q4 underlying growth in peripherals? What's the best way to get your real underlying growth? Shall we probably just look at Europe where you didn't sell any inventory, how you performed there? Or what's your suggestion?

Yes. So Philip, I thought about this long and hard. because you can argue not only for the Argand sales, but for all of our inventory cleanup sales that you should not only adjust margin for it, but since you are selling at a discounted price, your sales level is also subdued, right? And that is exactly your point. Although I would describe myself as creative, I really don't dare to go as far to adjust sales to a higher level. So I have to -- if any margins -- if any adjustments, they would impact margins and not sales. But it is clear also if you look at the inventory picture, and the 80% of the inventory reduction that comes from sales. Now some of that is really truly normal at normal prices and normal distribution, but a lot of our sales in the past 2 years are accelerated inventory sales at discounted prices. So a very, very valid question, super difficult to answer. But maybe, Rogier, you can say something to it. I don't know the exact answer to it.

Yes, I hear something like that.

I can give it a go, take it as an action, but it's very difficult.

Yes. So related to that, and well, if you stated now in peripherals, something like 38% gross margin. And I think we understand that there is still quite a lot of exceptionals in that. If you look at fresh merchandise that you are sourcing right now, what kind of gross margin do you consider feasible if you are, well, in a, say, normal mode and not selling under duress?