elumeo SE (ELB) Earnings Call Transcript & Summary

Good morning. Welcome to the conference call of elumeo SE. At our customers' request, this conference will be recorded. May I now hand you over to Mr. Wolfgang Boyé.

Good morning, and thank you very much for joining our call for the full year 2019 financials. I'm here in elumeo's headquarters, together with my colleagues, Bernd Fischer, who is our CFO; and Florian Spatz, who is our Chief Sales Officer. And we will now guide you through the presentation that we have prepared in order to highlight the key developments that we have had in the last year, and we will also give you an extensive comment on how elumeo is currently dealing with the COVID-19 crisis, which has been a major event that we have seen in 2020 as we expected. So let's go to Page #2, where we have a summary of the key developments of the last year. As expected throughout the year 2019, we have been able to continually improve our operating performance. We've had a challenging first 6 months in the year 2020 due to the required change of our procurement platform away from single source factory to a multi-manufacturing approach, which has been time-consuming and which was a pretty significant effort in order to complete it, which happily we can now say has been more or less completely finalized. But nevertheless, in the year 2019, this was a major challenge for us. Subsequently, in 2019, gross profit was rising by 11% to EUR 22 million in total, and that was a development that continually improved also through the year 2019. At the same time, as we have said before, we had a big cost reduction program for the year 2019. We reduced our cost by a total of 22%, down to EUR 25 million. And therefore, in total, our EBITDA of the continued operations rose by a total of EUR 8 million to minus EUR 2 million, which leaves us with some homework to do in the year 2020, but at the same time, has improved our position in 2019 dramatically, if you compare that to the year 2018. In the fourth quarter of 2019, elumeo returned to profitability, as we had said before. And the continued operations in total had an EBITDA of EUR 8,000. And if you look at the core German operations so if you exclude our Rome operations that we have closed in November 2019, we had a total positive EBITDA of EUR 257,000 for the third quarter, which was a little bit higher than we had originally expected. Our webshops have been a great focus in the year 2019. In 2019, we said, we were going to give a big push to our entire static online business, and the static online business gained quite a lot of momentum in the year 2019. As you will see in the figures that Florian will present to you because the total growth of 18% actually does not show the true real operational performance because in the last half year or in the second half year and in particular, in the last quarter, this gained a lot of momentum and sales rose much faster even then. So basically, all of the changes that we did in the organization in the first half year started to bear fruit in the second half year and continue to bear fruit also in the year 2020. We've been able to grow revenues by 18%, gross profit even higher by 35%. And at the same time, by using our advertising euros much more efficiently than in the past, we were able to reduce our marketing spending by 20%. In year 2020, we've had, as all of the other listed businesses as well and all other businesses in total, had to deal with the COVID-19 crisis, which has hit us pretty much out of the blue in February this year. And it took us basically 6 months to adapt our entire value chain and to the new supply situation. And I'm going to explain to you exactly what we have done, and what we expect to get out of this throughout the remaining quarters of the year 2020. So we can go basically now to Page #5, where we show you the content of this presentation. We had a short summary. I will now go together with Florian through the key developments in the year 2019, Bernd will then present the financials for the year 2019, and I will then give you an outlook for the year 2020 and our COVID-19 reaction. On Page #6, we've shown you what has been our operational focus in the year 2019. We have focused essentially on 3 core areas, we had to improve the margin, reduce the cost and grow our online business and make our online business stable, a separate business unit that works hand-in-hand with our classic linear moving picture of television operations. Our objective, as presented in 2018 for 2019 was to improve our gross margin and increase gross profit by EUR 5 million, at the same time, to reduce our operating costs by EUR 6 million and make a leap forward in online development and across our webshop and across our -- improve our webshop across all dimensions. Key developments for the improvement of our margin was that, basically, we have established a completely new value supply chain. We have created 2 major hubs to manage the supply chain, one in Bangkok and one in Jaipur in India. And to this supply chain, we have added a total of 28 factories that come from China, India and Thailand. We have, throughout all of these measures, being able to increase our gross profit by EUR 2.2 million. So we fell EUR 2.8 million short of our target. But in the second half year of 2019, we have been able to catch up quite a lot. The biggest challenge for us was to be able to manage the volumes of product through our new value chain. And in particular, in the first half year, we've been -- not yet been able to increase the broadcasting time that we allocate to the new products as much as we would have had to increase it in order to reach the EUR 5 million gross profit target. Second major goal was to reduce our operating cost by EUR 6 million. We have been able to reduce the operating cost in Europe by EUR 5.6 million alone. The total cost reduction, so including the overhead cost of our Thailand operations is EUR 7.1 million. So if we compare the achieved cost reduction to what we had planned in 2018, we came EUR 1.1 million higher than the original cost reduction plan. And the online shops, which was focus #3, grew 2x faster in the year 2019. So with our close to 20% growth rate, we outgrew the market basically by a full 10 percentage points because the total jewelry market in Europe was expected to grow by 10% in the year 2019. So we've been able to outgrow the market, which is obviously for somebody who's in a market-leading position on that area quite important. And in the year 2020, we have continued to gain market share at the expense of our competition. So the new value chain to explain that real quick on Page #7 is basically, we have created 2 hubs, one in Jaipur and one in Bangkok. These are hubs that are proprietary. So these people are on our payroll and managed by ourselves, and these hubs essentially make quality control, so ensure that the products that are produced by the factories match our quality criteria. They produce all of the images and the videos for the product, all of the product data. So whenever we bring a product on air, we show extensive data on this product, carat weights, cuts, designs, gold weight, alloys. We are much more transparent on that front than most of the competition. And this is something that our customers value quite greatly. And therefore, it's quite important to manage this data and make sure that it's always accurate. And then these 2 hubs manage logistics and packaging. This has been centrally managed by our hub, here in Berlin, where we do design, merchandising, gemstone buying, production of orders and all of the general guidelines to do that. The jewelry physically has been shipped from the factories to Berlin directly, but all of the data flow goes through these 2 hubs. And we are quite proud that we have been able to establish these hubs in a total of 6 months, more or less from scratch in order to manage our new supply chain. As you can see on the following page, as we have said in our presentation in 2018, the main reason for us to change our entire value chain is due to the fact that our former production site in Canterbury was producing product that was both selling less volume over -- on air in terms of euro and at the same time producing less gross margin. And as you can see, all through the year 2019, we have been able to maintain this advantage and also gain some ground on that. So the main lever in order to increase our operational performance was to shift our broadcasting air time from the single sourcing model to multi-manufacturing. And now in April and May 2020, we are finally at a situation where we are getting close to 100% broadcasting time from new multi-manufacturing products, which produces much superior results to the previous system. In terms of cost, we had a pretty significant cost reduction target of EUR 6 million. As you can see, our cost development is in the admin expenses. We've saved EUR 100,000 in the selling expenses all across our sales territories, in particular, as compared to our previous approach in the United Kingdom, where we have closed our site, have been reduced by close to EUR 6 million. And then we have closed our factory in Canterbury in Thailand, which has saved another EUR 1.5 million in total overhead costs. So in total, we have saved a little bit more than EUR 7 million in costs. In November 2019, we also closed our production site in Rome in Italy, and we changed that to a system that has been centrally managed from Berlin. So previously, we served the Italian market with a separate television program that was separately managed from Rome in Italy by a completely separate team. Now we serve the Italian market with a picture that's based on the German picture, and we are trying to show this on this Page #10. It's always a little bit tricky to explain this. Probably the best is that you go to juwelo.it and watch the live stream. That way, you can understand much better how it works. Essentially, we combine 2 pictures. You see the Cleanfeed camera 1, so the Italian picture; then you see Cleanfeed camera 1 and camera 2 from the German picture. And out of these 3 pictures, we produce one single fully Italian version. And we can leverage our central database by using all of the Italian translated product data immediately. And therefore, you have a very seamless flow of the presentation, and that is being accepted by our customers very nicely. And we have been able to retain quite a few of our customers in this new system. At the same time, we have been able to reduce our operating costs in Italy further. So these are additional cost reductions that we have been able to realize in the region of EUR 2 million to EUR 2.5 million on a full year basis. And I would now like to hand over to my colleague, Florian Spatz, who is going to lead you through the development in online business in 2019.

Good morning also from my side. My name is Florian Spatz. And since beginning of 2019, I am responsible for the webshop sales activities at elumeo Group. And when I took over this new role, I had in mind 4 main objectives for our webshops in 2019. First one is to increase the online visibility to make sure we get find in the search results. We have a good online marketing. The second was to increase the number of new customers. Then to improve the overall shop experience, the whole customer journey and all touch points, the product assortment and the whole shop experience. And finally, as a result of the first 3 targets to overall increase revenue per customer. And as you can see on the next slide, we can already see the first positive effect in 2019 and the webshop revenue increased by 18%; webshop margin increased even more by 35%. Why is there this difference because of the online product assortment, as Wolfgang told before, the multi-manufacturing product has a higher percentage margin, and we developed an algorithm that highlights more of the products with a higher percentage margin. Therefore, we were able to increase the webshop margin even more compared to the revenue. At the same time, in line with the general cost-cutting measures of elumeo, we were able to decrease sales and marketing expenses by 20%, mainly by identifying and stopping online marketing campaigns that did not perform so well. And yes, this allows -- as this allowed us to reduce our costs by 20%. On the next slide, we see the development of our new web customers. In 2019, we focused on 2 important online traffic channels, organic traffic and paid traffic. We implemented several search engine optimizations in order to improve our ranking of Google for the relevant keywords such as schmuck, for example, a jewelry where we improved the position from 46 so mainly invisible for Google, up to position 6 now. So on the first page of the Google results and this dramatically helped. And then we optimized also our paid online traffic accounts, reducing the cost per new customer by more than 50%. First, these effects took quite a while to show positive effect. But in quarter 4 2019, we can see compared to quarter 4 2018, already the development because here, we have an increase by 28% in new customer -- in new web customer acquisitions. On the next slide, we see that we were able to dramatically increase the revenue per web customer in 2019 compared to the previous years, basically because of 2 reasons: one was general improvement of the shop experience by releasing several new shop features, such as product videos taken from the TV show and implemented as on-demand streaming service on our website. Basically, more than 80% of our products now have a product video. Then we introduced also a KPI-based sorting, which shows customers the best-performing products on the first pages. We experimented with augmented reality that allow us to virtually try on jewelry from home via an AR function. Of course, we also did some mobile-first optimization in order to make sure the website navigation for smartphones gets better. We added some interactive gamification elements in order to always give customers a good reason to come back to the webshop and see if there are some new marketing specials. And the second reason is we implemented a better retargeting of existing customers, for example, by automated and trigger-based customer lifecycle e-mails, reactivating customers after a certain while and getting them back into the webshops. Yes. When it comes to the outlook, 2020 for the web, our development priorities are based on 4 main online market trends. The first one is personalization based on big data. So what we want to do is create a completely personalized online shop, where we show customers based on their data and preferences, their own elumeo webshops. The second trend is the social media. Here, we clearly see that the whole social media commerce is increasing. And what we want to do is to offer an engaging, interactive and seamless social shopping experience on all main social media platforms. For us, this means YouTube, Instagram, Facebook and...

Pinterest.

Pinterest. Thank you. We want to develop our in-house influencer and basically make use of our expertise in jewelry and our expertise also in creating interesting and relevant content on these platforms because here, we have to follow a little bit a different marketing logic. It's less push marketing, it's much more pull marketing. So pull customers by offering interesting content on these platforms. And the third online marketing trend is video content is a big, a huge competitive advantage compared to typical other online jewelers. What we want is to create outstanding and platform-specific online video content. And here, I think this is really interesting because we are able to bring closer together our TV experience, TV world and our best performance in order to create a very interesting video-based online platform. And finally, first -- huge important trend is the smartphone sales that are increasing. We want to create a perfect durability in mobile checkout by offering an easy one-click checkout, introducing all major mobile payment methods and also enhancing our mobile app with new shopping features. So finally, I would say, it will be an interesting also challenging year 2020. I expect to see very good developments this year. And what we can already say is that in quarter 1 2020, we see that the webshop has been growing much faster compared to previous year. And by this, I would handover to Bernd.

Good morning, also, from my side. I'm going to start on Page 17 with the results of segment reporting. And it means -- some of you are aware that in 2018, as far as 2018 -- 2019, we had some extraordinary impacts from the closing of our manufacturing facility in Thailand as well as in 2019 from the closure of our branch in Rome. At the Page 17 and 18, we look at the core business without these impacts so that you get an insight and how the business developed in these years. And for example -- and on Page 18, which was back to the Q4. But let's start with '18 compared to '19 on Page 17. On the left side, you see the full year 2018. We put this in 3 rows basically. The first one is the continuing operations without the branch Rome. So this is basically the picture you see that is also ongoing in 2020. Then in the middle, you have the local sales division Italy, which is closed. So this has gone for 2020 and then the sum. And there is a clear positive development from a total segment EBITDA of EUR 10 million, down to only minus EUR 2 million left. While the German part of our business, without Rome, is almost breakeven with a minus of EUR 300,000 compared to Italy with a EUR 1.8 million. On the top line for revenue and gross profit, you see that there's a decline in revenue through all these parts, but there's quite significant difference in the gross profit. While we see still a decline in Italy, we see a good growth in the German part of the business that is going to be maintained. On the cost side, also for Italy, a massive decline as well as for the continuing cooperations in Germany, which gives overall the very positive development. So looking at Q4 only because this is the most recent quarter, of course, and as Wolfgang already pointed out that we had development throughout the year -- towards the end of the year with a continuing improvement. We see that the continuing operations without Rome already had a positive EBITDA and also had positive EBIT of EUR 31,000. So we were back to breakeven in the last quarter of 2019 for this part of business, that is going to be maintained in 2020. Even though that we had a massive cost reduction in the Italy branch due to the low gross margins and the weak sales we could not reach a breakeven in Q4 also for Italy. But nevertheless, overall, we see a positive EBITDA for the continuing operations in 2019 Q4. On Page 19, the P&L for 2019 in its total. The difference to the segment reporting is, as mentioned, the extraordinary impacts we had. In particular, you can see that in the other operating income as well as the other operating expenses, there we have the impact from the closure of Italy as well as the release of provisions for the facility we closed in Canterbury. So which leads to the earnings for the period of EUR 2.6 million compared to EUR 24 million in 2018. The balance sheet on Page 20, just some highlights. The increase of property, plant and equipment, up to EUR 4.4 million, is due to the IFRS 16 rule, which is new for 2016. So basically, the long-term contract or long-term usage has to be activated in the balance sheet, which we, of course, did. We followed this rule, which is basically our rent contract in the [ border ] facilities. The second topic to mention on the asset side is, of course, the reduction in inventories, which you will see later on also in the operating cash flows, which helps driving to get a positive operating cash flow. And of course, the decline in cash and cash equivalents, which we basically used to pay down our financial debt. On the Page 21 for the equity and liabilities, you will find the decrease in financial debt, as just mentioned. It's only left EUR 0.5 million, which was paid in due time in the first quarter of 2020. For the other non-current financial liabilities, you see the EUR 2.6 million mismatches to the increase of assets, IFRS 16, the activation of our rent contracts. And the decline in provisions from EUR 7.5 million down to EUR 4.5 million, and this is the provision for the closed factory in Thailand. For the cash flow statement on Page 22, to highlight the outcome of the operating activities, which is -- with the positive result for 2019 of almost EUR 1 million, mainly driven by, of course, the reduction in inventories. And on the following page, for the investing activities, it's only a minor amount of EUR 170,000, which is basically maintenance investments for IT servers and then studio technique. And of course, the payment for the redemption of the financial debt, which you can see in the net cash flow from the financing activities. So as said, as per end of Q1 2020, there's no financial debt anymore in the balance sheet of elumeo SE. I'll handover back to Wolfgang for the outlook for 2020 and the COVID-19 crisis.

Yes. After a pretty challenging year 2019, where we have achieved quite an improvement of the company, the COVID-19 crisis was the least we really needed. But I believe this is true for virtually every other business. And so far, maybe because the company was a little bit in crisis mode already when the crisis really hit, we have been able to cope with the crisis much better than one would expect. On Page #25, we have shown you a little survey on how the first quarter has developed in the online sales for jewelry and watches. And you see that in January and February, the market continued to grow in the region of close to 10%. And then in March, the market fell by whopping 50%. So online sales and for jewelry and watches fell by 51%. I can happily report that in the first quarter of 2019, this has happened -- has not has happened anywhere close to this at elumeo. We're currently still in the process of finalizing our numbers for the first quarter, but revenue of our continued German operations is pretty much stable to last year. Unfortunately, we have lost quite some shipments, in particular, from China and India throughout February and March, which has resulted in a situation in which we had to sell a lot of old products that we have been able to sell very nicely, but unfortunately not at the margins that we produce with new products, which has created gross margin pressure for the first quarter. Nevertheless, on the next page, I would like to show you how we have dealt with the crisis, and then we will give -- try to give you as much as we can in the current situation and outlook on how we are going to deal with the crisis throughout the remainder of 2020. Basically, we had 3 focus areas. In the beginning, most important focus internally here in Berlin was health care and protection of our employees, obviously. We have started to do this quite early. We have started to prepare the company for possible COVID-related problems already in February because we were seeing what was going to happen from our suppliers in China and in India. Basically, as early as the second week of February, where the total disruption of any shipments out of China, we had the cries for help of our suppliers in China, who basically said, we are unable to pay our employees. We cannot ship. What can we do. So we could see first-hand how dramatic the situation was and based on that, and we were able to develop reaction systems that were pretty much based on what many companies have done in China. And this has helped us in the situation in a way that up until now, our operations in Germany have, in terms of health care and COVID exposure not been affected by the virus whatsoever. We shipped everybody into home office in the beginning of March. We also introduced split-shift system in which we have separated the entire company into 4 separate groups that operate completely independently from each other. So if one shipping shift or one call center shift basically has a confirmed COVID case, and only the shift can theoretically be affected that and the remaining people are not going to be affected so that we can continue to operate. Based on the fact that our gross profit in the first quarter, again, under pressure due to the fact that we have by no means level of shipment volume that we were able to sell. We have then decided, okay, if we do not have the product volumes that we can offer to our clients, we would like to have a more condensed live shopping experience in which whenever we have a live shopping program, people get the full scope of products they expect. And therefore, we reduced our live broadcasting hours from 18 to 12 hours. We introduced the classic German [ co-payment ] system for that, and that has approved enormously effective, allowing us to reduce our operating costs quite dramatically and pretty much immediately. I hope that the authorities will also now start to pay out the funds because, as you all know, the companies have to advance the [ co-payment ] and then hope that it comes back in time. But as long as this cash comes back, then kind of this has proven to be a very effective and very fast system in order to reduce our costs. And then revenue and margin improvement, basically, the hub system that I presented to you a couple of minutes ago, is a system that, at the moment, works with only 1 hub -- 1/2 hub in Bangkok because the hub in Jaipur in India is completely closed. And Thailand, there's also quite serious restrictions. We have been able to outsource some of these activities through Hong Kong, but the most immediate reaction for us was to shift a lot of our volumes to European producers and European suppliers, which has taken us close to 1 month, but now this is up and operational. Furthermore, for our live shopping experience, it's quite important to have educated guests that bring all of the wealth of knowledge of the world of gemstones to our viewers. And -- also there, at the moment, we have no guests out of India and out of Thailand because -- and they cannot travel. And we have introduced 2 new guests that come from Germany, who are native German speakers, who have been very popular with our viewers. And then we have now a live broadcasting line to our partners in United States of America, where we have one branch, CIRARI, that has been presented by Anuja, an Indian women who speaks fluent German and have been very successful with our customers so far. So essentially, as we move into Q2, at the moment, we are able to cope with the COVID crisis quite well. And as long as the measures that the German government has introduced will stay in effect, and we will be able to get quite properly through this crisis. But it's a very unpredictable crisis and, therefore, it is tricky to say what will happen in the future. Long term, in terms of health care, we will continue to measure our -- monitor our measures and see in how far we can transform elumeo and a company that will have to coexist with the virus long term, which so far works very nicely. We will continue, obviously, further cost focus. We will increase our -- all of our assets in terms of digitalization across our entire value chain in order to take out any possible costs that we can possibly take out. And then in terms of revenue and margin improvement, we have established a new VIP customer system, where we also serve VIP customers directly in order to be able to continue to serve these very high net worth customers that usually spend in the regions of EUR 10,000 to EUR 100,000 per year with us. So that has the potential to really make a big difference in terms of our sales. And at the same time, as Florian has said already in the -- towards the end of the first quarter and the beginning of the second quarter, we have made a very massive push towards social media, where we have started to build up our existing presenters as social media personalities in which we offer individualized collections of jewelry to our customers. And so far, this has been accepted by our customers very nicely. As a financial outlook, obviously, as we've said many times, this will be difficult for 2020 to predict. And we hope that we will be able to come up with a much firmer projection of what the year 2020 could potentially look like together with the Q1 numbers that we will publish towards the end of May. At the moment, the range in which we see the year 2020 unfold is fairly wide. Can be that we will finish in the region of -- what we have finished last year, it can be that we will finish in an area where we will have better results than last year, also slightly but not much worth enough. And obviously, the first quarter was seriously hit. That is clear. And in our business model, we can sell only what we have. And if 2 out of 3 territories don't ship, it's tricky for us to sell even if our customers want to buy. That's fortunately has changed already in the second quarter. India is now starting to be back on track. Obviously, jewelry did not receive the biggest priority in terms of shipments in order to clear the shipment backlog out of China. So it took a little bit longer than with many other products until we started to ship the -- received the missing shipments that we were getting out of China. Also, India now is starting to work on mechanisms to keep the jewelry industry afloat, and Jaipur has been hit much less by the COVID virus than other regions in India. And the Indian authorities are working on how to give them the possibility to start shipping again and start producing again. So as we move into 2020, we will start to cope with this better and better. And as we can do already, as I said, in the second quarter of 2020 so far is performing way better than the first quarter of 2020. There's a couple of things that I would like to add that adds to the uncertainties that we have at the moment, unfortunately, just as an example, elumeo offers in line with the rest of the industry in the extended return rates until the end of June. For us at the moment, it's tricky to predict whether this extended return rate will, in the end, result in higher revenues or lower revenues because we cannot really say so far what our customers will make with this right. Obviously, we will -- we hope very much that everybody falls in love with his story so much that they will not exercise this right anymore in June. So in total, I've said that we are working with various scenarios, scenarios that foresee a slight improvement over 2019, scenarios that foresee more or less same development as in 2019 and also scenarios that foresee a slight decrease of our performance, if you compare that to the year 2019. We have modeled all of these scenarios into an extensive cash flow projection model in order to see how we can continue to operate in these scenarios. And so far, we have no reason to believe that we will not be able to continue to operate in any of these scenarios. So in 2020 and also 2021 based on the measures that the German government has introduced, in particular, the extension of payment terms of any terms of taxes and social security payments and, at the same time, [ co-payment ] will help us to guide the company through this crisis. Fortunately, we still have a pretty significant inventory. And by using part of this inventory in order to generate cash, we can also keep the company running. Fortunately, we have repaid now all of the financial debt. So -- the close to EUR 2.5 million in cash flow for the repayment of debt that we have had over the course of the last 12 months now does not have to take into consideration anymore. So for 2020, at the moment, we are actually quite optimistic, much more optimistic than we were a couple of months ago when this crisis has hit us, and we had no idea on how we were going to be able to cope with this. This was basically our total outlook, and I would now like to open the Q&A session for the registered analysts in our stock, and we will be happy to take questions.

[Operator Instructions] So the first question we have is coming from Mr. Volker Bosse from Germany.

Volker Bosse from Baader Bank. Yes. First of all, congratulations to the impressive gross margin improvement and the cost reductions you achieved last year's profit. And I would like to start with 4 questions. First of all, regarding your online sales. I mean, if I look at your annual report, 2019, you say sales from e-commerce distribution declined by minus 7.6%. How does that fit to be increase in webshop sales, which you described? So what is the missing part of the explanation here? And the second question is based on your increase of administration costs outlined on your Page 19 in the presentation. We see here an increase of administration costs by 7% to EUR 8.3 million. So what drove the administration cost increase here, although you cut costs at all ends? And the third question is regarding your planned CapEx for 2020. And what's the amount of CapEx you have in your calculations? And according to your base case scenario, would you agree to have a positive free cash flow in 2020 again? And then last and final question is regarding your outlook. You said today it's not possible to give an outlook. Nevertheless, in your annual report, you said something like minus 8% of sales is a negative EBITDA -- adjusted EBITDA single-digit million euro amount, is this a kind of worst-case scenario or how can we understand that? And yes, what is your, let's say, changing or assumptions coming to your worst case? Would it be Q1, Q2 down and then second half better? Or now you said potentially flat sales in Q1, does that mean you expect the situation to get worse in the second half or to have a bit more granularity here? And then finally, also regarding gross profit margins for the current year. I mean you just outlined in Q1, potentially gross margin could be hit due to the sale of, let's say, old merchandise. And so is that a fair assumption to be -- to expect gross margin to be down in full year 2020 any case? Sorry, for the amount of questions.

Okay. Thank you very much. I will try to answer your first and the last question, and then Bernd will cover the remaining questions. In our business model, basically, we have 2 origins of revenue. And the first original revenue is what we call the live auction or the live moving picture. The live moving picture is basically either broadcast via satellite or cable networks or it's streamed online or it's streamed via our app. And the second is our static webshop, which is basically a classic webshop that operates completely independently of our television program, where you can just go and browse through our product assortment and get yourself inspired by our product assortment. And the number that you were referring to in our annual report is the e-commerce number, which is the sum of our static webshop, plus all of the revenues that we generate by our streams and by our mobile phone apps. And our live broadcasting is something that is much more dependent on having premieres and new products because basically, you can present at one point all of the time, only one piece of product. So the streaming sales correlate a lot with the sales that we also generate by telephone and television. The numbers that Florian was telling were the numbers for our static webshop only. So these are the numbers, basically of elumeo that operates completely independent of any possible television and moving picture activity. And therefore, it's a subsegment of the e-commerce number that you have seen in the annual report. And if you take this together, you see that basically our streaming and app activities have also shrunk in 2019, not as much as the real-life television program, but they're also shrunk. While our webshop has been growing very fast in 2019 and growing much faster even in 2020. Last year -- yes.