elumeo SE (ELB) Earnings Call Transcript & Summary

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

Good morning, and a very warm welcome to all of you for the presentation of the full year financial numbers of elumeo SE. We will hold this presentation this year in a group of 4 people. Together with me, Florian Spatz, Bernd Fischer and Dr. Riad Nourallah will present the financials for elumeo for the year 2020. I will make a quick introduction on the summary of the year then Florian Spatz will make you a presentation on the operating performance of the business. Riad will make a presentation of the financials as you may be aware. And Bernd Fischer has decided to resign from his position at elumeo, which we all regret very much over the course of the last 6 months, and Bernd has run the finance department of elumeo together with Riad, who has formally taken over as Chief Financial Officer as of the 1st of April of 2021, and who will be our CFO going forward. Therefore, Riad will present the numbers, but I'm quite sure that Bernd will also give you some comments prior to me making the outlook for the year 2021. So let's go into the presentation straightaway, with the summary of key developments. Clearly, for all of us, the year 2020 was a very memorable year. I think this will be a year we will all remember for quite some time. And not surprisingly, also at elumeo, this was a very interesting year to say the least. After the challenges of the year 2018 and 2019, we had hoped to have elumeo in a little bit more stable waters in 2020. But unfortunately, things turned out a little bit differently. We were probably one of the first affected companies of the COVID-19 crisis because of the fact that already in the first quarter of 2020, our supply chain started to have serious problems because flights between China and Europe and India and Europe were canceled. Factories in China were closed. Subsequently, China went into a complete lockdown. And since we run a pretty just-in-time organized value chain, this has affected us in the first quarter very substantially, which in hindsight turned out to be a great advantage because we were very much on guard already in February and March when the crisis started to unfold, also in Europe. And this has led us into a situation in which we could cope with the crisis much better from the very beginning than it was expected. We used the situation and made some adjustments in the company in order to make it what we call weatherproof all throughout the year 2020, and that has helped the company to stabilize very substantially. In revenue, we were able to grow the business by 10% and also not only adjusted EBITDA, but also after-tax profitability was achieved in 2020, not to the entire levels that we had foreseen in particular due to the results of the first quarter but in the second half of the year. I'm happy to report that elumeo has started to return to its traditional profitability levels. All throughout the year 2020, we clearly had a very strong focus on cash generation because in any crisis, cash is king. So we placed a great emphasis on making sure that we always have substantial amounts of cash available. And this has led to a situation that at the end of 2020, we now have EUR 2.5 million in cash at hand at the business, even though we repaid the remaining amounts of financial liabilities throughout the year 2020. So we were able to achieve the strong cash generation that we had planned for. Our web shops continued to perform very nicely, and Florian is going to give you a lot more flavor to that and more insight. But in particular, in the third and also in the fourth quarter, our web shops performed tremendously well. Clearly, on -- because of 2 dimensions. Dimension number 1 is we have been optimizing all of our approach on the web over the course of the last 24 months. And we made a huge investment into our capabilities to generate revenue there and new customers. At the same time, the COVID-19 pandemic, in particular in the fourth quarter, as does clearly, even though it's a big tragedy for a jewelry retailer to have everybody at home in front of Christmas and not being able to purchase jewelry in traditional brick-and-mortar retail is not necessarily bad, and this has helped us to continue to outperform the market very substantially. So if you compare it to also some of the online competition, you will see that we have been outperforming all of our competition. So the good performance cannot only being, let's say, placed on the COVID-19 crisis only. The other big emphasis in the year 2020 and also ongoing in 2021 is the continued transition to mobile. All throughout 2020, we continued to see that transition of our customer base from less desktop-based purchase to a more application and mobile-based purchases. And in 2021 now, we have introduced a new feature into our mobile phone app both in the Google Play Store and also in the Apple App Store, which is called Mein Juwelo, which is going to be explained by Florian in more detail because it's a very important first step into a nonlinear video strategy. And Florian is going to explain to you how this works. And based on that, I think it will be easily understood or easily understandable how important this is for the future of elumeo. The outlook for 2021, we continue to see a very robust and continued sales momentum in our business. We have said that in the first quarter already. And we continue to see good sales figures also in the second quarter. So we are confident that in 2021, we will continue to be able to improve our performance. Nevertheless, it is a little bit tricky to make some predictions on that, and this is why we have decided, in particular, for the adjusted EBITDA to give more of a range, and I'm going to give you a little bit more flavor to that when we come to the outlook at the end of the presentation. I will now hand you over to Florian Spatz to guide you through the operating performance of the business.

Thank you. Good morning also from my side. I will now guide you through the key developments in sales in 2020. And on Slide #6, I would like to start with an important change we did in our live business. Because in 2020, an important driver for the improved financial performance was the optimization of our live broadcasting schedule, which led to a clear cost reduction and an increase in the profit per live show minute, the so-called PPM. So on the left side, you see that we reduced the hours of live broadcasting from 18 hours to 12 hours. We took this decision after a difficult first quarter in April, and this allowed us to clearly reduce our broadcasting costs. At the same time, despite the COVID-19-related problems in our supply chain, we tried to continue to order a high number of premiers, so fresh stock, a new product, and thus increased the airtime share of premieres from 13% to 23%. And this has a very important and positive impact on our live business because our customers love premiers and premiers have a profit per minute, which is twice as good as strong products that is non-premier. And therefore, by increasing the density of premiers in our live program, the show became more attractive for our customers and better performing and leading to an increased profit per minute of our live show by 38% and allowing us to have a stable overall revenue and margin in our live business despite the reduction of live hours, which resulted in a clearly improved financial performance. On Slide #7, we can see the performance of our static web shop. So this excludes the online billing of the live shops and it really focuses on the classical e-commerce of elumeo. And we can clearly see that the web shops are continuing to show very strong growth, both in revenue with 57% and in margin with 78%, clearly outperforming the markets and throughout the whole year. Main growth drivers were, of course, the optimization in all main online marketing channels, especially in the paid channels such as Google Ads, Criteo and also Facebook. We also improved the general web shop experience. One of the most important improvement here is, of course, the product video. So now over 90% of the products in our web shops have a product video, and I think this clearly distinguishes us from other jewelry web shops. But also, we continue to add everyday interactive gamification elements that give customers a good reason to come back to the web shop on a regular basis. And we also improved the web shop workshop technically, putting a clear focus on usability and especially on mobile devices. And I will come back to this in a couple of slides and show you how the mobile conversion rates improved. Then of course, we continue to improve also the personalization in KPIs product sorting and this helped us to increase the high-value sales. On Slide #8, we can see that improved online marketing and better conversion of new visitors of our website lead to a clear increase of new customers by 75%. And not surprisingly, the strongest quarter here was the fourth quarter, the Christmas season where, of course, we were able due to the COVID-19 restrictions with the push to online to really scale the online marketing. We increased our web marketing expenses by 41% and we're able to more than double the new customers, but at the same time, slightly -- even slightly decreasing the cost for a new customer. And we continue to see more or less this trend also in '21, which is really good. And another positive information I can give you is that we see that these new customers acquired in November and December are developing in a very good way. So the first indicators show that it will -- they will probably have a very high customer lifetime value. Slide #9 shows that we are not only acquiring more new customers, we are also improving the revenue per that customer per year. So this includes new and existing customers. It's a trend that we can see since 2018. And also, the average order value for the average transaction, the average basket in our web shop is clearly improving by 44%. And this is mainly due to, of course, the product videos, as I said, for more than 90% of our products, but also a KPI-based personalized product sorting in which we put a higher focus on luxury products. So we give more exposure to high price points, and this allowed us to clearly increase also the high-value sales. In addition to this, as I said, we implemented some gamification elements. For example, the Wheel of Fortune that gives the merchant codes or a gemstone, [ Chris ]. So we are always trying to give customers a really good reason to come back on a regular basis. And we are also promoting this, the online marketing and an improved e-mail marketing, where we clearly increased the frequency of e-mails we sent out. Slide #10 shows that we successfully transitioned from a very desktop -- originally desktop-built web shop to a fully mobile optimized web design. In 2020, we released some new design, improving the mobile navigation, the article detail page and also the checkout. And the factors on one side, of course, an increased in mobile traffic. So you see plus 31% of mobile users. And this increased traffic also gets converted in a better way, so a clear improvement of the conversion rates of mobile traffic. So what is the outlook for 2021? In general, for our web shops, I expect a continued higher growth in revenue margin on new customers based on 4 trends and 4 pillars. So a personalized marketing based on Big Data and artificial intelligence; an increase of social media commerce; of course, the use of product videos as a competitive advantage; and a clear focus on smartphone sales. And on Slide #11, I would like to show you how these 4 trends are being combined in one very new and innovative project that we launched just a couple of weeks ago, which is called Mein Juwelo. And this is the first step in our strategy for nonlinear video content. So basically, Mein Juwelo is a new feature of the Juwelo app that offers customers their one-to-one communication, their personalized individual jewelry shopping show with an artificial intelligence curated and personally tailored product offering, where an algorithm determines the program for each view individually based on their purchase history, their personal preferences and the way they interact with the Mein Juwelo app because customers will be able to switch between the videos with a simple swipe. So a little bit like you may know it from TikTok, but with an important difference. It's a shopping app, so customers can buy directly from the product video with one single click, no complicated checkout and entertaining and easy shopping experience. The videos for this, the video material is being generated out of our live shows. The article details are taken from our central database. So there's no additional cost in producing these videos. And yes, as I said, we just released the feature. So it's very new, but we already received some very positive feedback from our customers. I think it's an extremely promising project for us. And also in general, it's somehow an important step towards what could be video-based e-commerce of the future. And with this, I would like to hand you over to Dr. Riad Nourallah for the financials of the company.

Yes. Good morning, everybody. My name is Dr. Riad Nourallah. I'm glad to join elumeo and to go into the position of the CFO. And right now, I'm pleased to present to you the financials 2020. Let's take a look at the financial KPIs. So if we take a look at the financial KPIs, we can see that revenues slightly went down. But of course, this is driven by the close of the site in Rome. Without the site in Rome, we grew by 10%. And I think this is a very good story. Second point. So if we take a look at the adjusted EBITDA, so we already said that we will reach the EUR 0.9 million. And this is, in fact, the case. So it's a clear improvement in contrast to 2019 where we were at minus 2.1%. Taking a look at the overall EBIT, it's at EUR 288,000. So we are profitable. And I think this is a very good story. Let's go further, and take a look at the top line. So I think like Florian Spatz already explained the growth we have by mobile, but there's the other point. So -- and I think it comes clearly from the numbers that we have a growth of 10% without considering the site's growth. So driven by mobile, as Florian said, and all the other features we release. Taking a look at the P&L. And I think here in the P&L, they are very -- certain numbers are very interesting. Besides from the top line, the revenue, we already said 10% growth in contrast to the prior year without growth. Of course, we also had restructuring measures, which we can see in the gross side. So selling expenses went down. Administration expenses went down. And I think this is a very good story that all the restructuring measures we promised and wanted to take into force are now mirrored in the numbers. EBIT is positive at EUR 288,000 and even the earnings for the period, so after the financial results, are positive at EUR 154,000. Let us take a look at the balance sheet and starting with the asset side. So the good story is -- as Wolfgang Boyé already said, it's the cash. During times of crisis, it's very important to have enough cash in order to act, in order to steer. And so far, it was very important to have a certain amount of cash. Cash is at EUR 2.3 million. And there, we can see there's a clear uplift in contrast to the prior year. And so this gives us a space in order to measure and to handle. Of course, for every retailer, inventory has taken an important role. We know that by closure of our former factory, so that we have certain kinds of older product. So inventory slightly went down and they are right now at the level of EUR 12 million. Equity and liability. I think the most important point I should see is the financial debt. And as you can see, the financial debt went down. In the prior year 2019, we had financial debt of roughly EUR 447,000, or let's say, EUR 0.5 million. And we succeeded in 2020 to pay back everything. Let's take a look at the cash flow, and there, let's start with the operating cash flow. As you can see, there's a clear increase. And I think the big difference in contrast to the prior year is that the strong increase is driven by the operating performance. In the prior year, our earnings before taxes were at minus EUR 2.3 million. But right now, we are positive. And of course, this was the driver to generate a positive cash flow from EUR 2.4 million. Investing cash flow and financing cash flow. In fact, the investing activities, they are nearly on the same level, a little bit, we invested more. But the big driver concerning like the financing cash flows that the payment for the redemption of financial debt, of course, we paid everything out. And of course, this sample was in 2019, much higher than in 2020. So this leads finally to a cash level of EUR 2.3 million. Right now, let me give over to Wolfgang Boyé, so he will present the outlook for 2021.

Okay. So briefly, before entering into the outlook, I would like to take this opportunity to thank Bernd Fischer, who has joined us for this call, who have been enormously valuable CFO to this company in the time where things were really not easy. He came on board in 2014, helped us to bring the company public. And then in particular, in the years 2018 and 2019, he was kind enough to stay on board and help us navigate through the stormy waters of our disputes with various investors who have been unhappy about the consequences of the closure of the site in Canterbury. And I knew that in the beginning, Bernd had already played with the thought of moving on and doing something else, and I'm tremendously grateful for his loyalty and his soldiership, if I may say so, to help us get through this crisis and not leave his post in times of danger. So thank you very much, Bernd, for this. We are very much looking forward to -- for staying in contact with you.

Thank you, Wolfgang. Just quickly, don't worry. But I would like to thank really everybody for these 7 exciting, and I can say that also, instructive years. It was certainly not always easy for you as investors and also the analysts with us just like from our colleagues and the Board as well as for my team. So therefore, right now, I'm grateful, and I can say also a little bit proud that elumeo is now back on track and especially in a much better financial position than before. I think that is the clearly outcome of what you just -- Riad told us and that the positive development we just had will be continued, and I'm pretty sure that Riad will give the company the right impact for the future. So thank you all very much, and all the best to you. Stay healthy, and the best is yet to come for the outlook for 2021.

So thank you once more. I would now quickly guide you through the outlook, which we have already published. So it's not that much of a surprise, nevertheless. As I said in the beginning, clearly, also in 2021, the COVID-19 crisis doesn't make it easy for us to come to proper projections, which is why we have made for adjusted EBITDA a pretty wide range of possible outcomes. In sales, in 2021, we continue to see a robust and continued sales dynamic. And we have been growing very nicely in the first quarter, which we have published already. And clearly, kind of the formal publication of the Q1 numbers is going to happen already in more or less a month from now. So we have a very, let's say, some understanding of what these numbers look like. And they continued to show good growth rates. We have been able to perform in the region of the performance of the fourth quarter of last year in Q1, and that encourages us to continue in the direction that we have chosen. Also in the second quarter so far, we see a robust debt dynamic. Clearly, as all of the investors who know us for a longer time know, we have 2 tremendously strong quarters and 2 quarters which are a little bit weaker. And the 2 strong quarters are the fourth quarter and the first quarter, which is the 2 quarters where people tend to stay a little bit more home, having a COVID-19 crisis or not, just because of the fact that colder and darker. And then we have 2 quarters that are not as strong as these other quarters, which is the second and the third quarter. And nevertheless, so far, we also see a robust sales dynamic in the second quarter. So based on the fact that we have in front of us at the moment, we are very confident that we will be able to continue to grow in 2020 at a minimum 10% level. And if things go lightly, also a little bit more. Our gross profit margin has now certainly been established above the 50% mark. This was, in particular, in 2019 and 2020, the strategically most important factor because we could just not continue with the margin levels that we have seen. And that's kind of [Technical Difficulty] Can you hear me? Okay. I have on my screen, I have no current speaker. I will just continue to speak. I hope that everybody can hear me. And the combination of the continued sales growth, the higher gross profit margin, will lead us to a situation where we will have a clearly better here adjusted EBITDA in 2021 than we had in 2020. And therefore, that also for the full year, we will continue to improve our performance going forward. At this point, we are still a little bit hesitant to come with a real precise figure here just because there's too many factors that are a little bit tricky to determine. But for sure, it's going to be better than 2020, and we assume it's going to be in the low to middle single-digit million range in 2021. So this was all we had to give our comments to the financial reports of elumeo for 2020, and we would now be happy to answer your questions.

[Operator Instructions] The first question is coming from Mr. Volker Bosse from Baader Bank.

Yes, that first of all, congratulations to the great results. You made an achievement after the years we have seen. And I would like to take the opportunity to thank you, Mr. Bernd Fischer, for this great support and all the best for you. Stay healthy and hope to see you -- speak you by time. Thanks again. So with that request, I would have 2 -- 3 questions. I would take it one by one. Is it fine with you? The first is regarding sales. I would like to understand better the drivers and the component of your sales trend also going forward. And here, I refer to the annual report. The number of active customers decreased by 1.5%, number of products sold decreased by 24%, but the price per item increased by 27%. So less customers, less products, but higher prices per sold items. I think that is not the model you want to continue over the next year. So perhaps, could you give us an idea how these price units sold metrics should look like going forward? For example, you can also give us an idea how the 20% sales growth in the first quarter, which you already reported this morning, saw on a sales level. So how did you regenerate the 20% plus? And how do you seem to generate that plus of 10% in the full year '21?

Okay. Thank you very much for your question. We made the table where we made the adjustment for the year 2019 with our site enrollment -- without the site enrollment order to allow better on a like-for-like comparison. Unfortunately, we could not do this for the entire KPIs. So the KPIs that you were referring to was the active customers in 2019, including the active customers of our Italian operations. But since we closed the operation and moved the operation to a much smaller scale, clearly, we lost some active customers. So that's the reason why the adjusted customer base looks as if it had shrunk, which actually, it hasn't in Germany, our current most important market. And we have been able to grow our active customer base quite substantially. And clearly, as you point out, our sales growth has not only come from the fact that we have sold more pieces to more customers. But more importantly, we have higher price per piece in the jewelry that we sell. And this relates back to what I said in the outlook that the most important strategic project for us was to bring the gross margin to levels above 50% again because with the gross margin levels that we had in the year 2017 and 2018, we were just not able to continue to perform properly. So part of the success story of the turnaround of elumeo Group in 2020 was a continued slight increases in the sales prices of our products, which have then also led to higher average price per piece of the pieces we were selling.

Yes. I understand gross margin, major achievement. Absolutely. I totally agree. However, if you look at the 10% sales growth for the full year, how much comes from price? And how much comes from volume? What do you think the mix, just roughly? And does it mean...

In 2020 and 2021, we will not continue to increase prices anymore. I think we have a stable margin level at the moment. So it will fluctuate around that level but not -- you will not see kind of the same steep increase in margins anymore. And therefore also, our pricing structure will stay pretty much at that level. So all the sales growth that we project at the moment for 2021 comes from customer and product volume.

Okay. Perfect. And second question is regarding the sales split by distribution channel. It's good to see the web shop sales to grow to EUR 11.1 million. But how much comes from income in total? I think, in other words, I think we should not read out of your figures that EUR 31 million comes from TV sales, right? So once gain, how explain -- how can you explain the gap how is -- or what is e-comm in total sales, not just web shop only?

Yes. E-comm, first, includes also the participation in the live show, so the video agents and also the mobile apps, allowing -- giving us -- to participate in the live show. Therefore, normally, I would distinguish between classical e-commerce, the shop logic and the live show. But if we take a look at the online channel altogether, and we see growth of close to 20% in 2020 compared to 2019, and the growth in gross margin of 30% in 2020 compared to the previous year. So also here, there's a growth, but the majority of new customers and the majority of the growth comes from the classical web workshops.

Yes. Pretty clear. So can you give us an absolute figures in e-comm in total or in absolute figures for TV sales generated by TV?

So the absolute number of online sales is EUR 18.5 million. This includes the bidding agents, the apps and the web shops.

So -- and then the delta to the group sales, EUR 18.5 million delta to the EUR 40 million something is in the [ retail ], right? Did I get you right?

Yes, this is also again -- more or less, I have to say more or less because these 2 numbers come from 2 different sources. And, of course, what we have in our annual report are the financial reporting numbers. Due to the regulations of IFRS, it's pretty tricky for us to always compare this to our internal controlling figures because IFRS has very different provisions for what to do with returns, how to calculate for shipping costs and things like that. So more or less, this is right, but not down to the last, let's say, EUR 200,000.

Yes. Okay. Okay, good. The first question would be regarding your sales goods by countries. You made some adjustments here. I was surprised to see that you now show around EUR 5 million of sales for other countries. So besides Germany, Italy, now other countries was EUR 5 million. What made you do this? Why did you make these adjustments? So meeting with other countries out again, and what kind of countries are included here? How should we look at that?

That's also a consequence of the regulations of IFRS reporting. In the past, we have reported our sales figures by the sales entities. So we have elumeo in Germany, elumeo [ in Cambria ] and elumeo Italia for the Italian results and then Rocks and Co. in the United Kingdom for England. Since Rocks and Co. and elumeo Italia have both been closed, we now have only one legal entity anymore. And therefore, we have to determine the geographics not by the country -- company which is selling anymore, but we have to determine the split by the country where things are being shipped to. And the other countries that you have in that table include, for example, in Austria and Switzerland. In particular, Austria was a country last year, where we have struggled to expand our television business because we had some reach problems. So we had some losses in households where we're distributing our channel, which is why you see also in the table the number, if I don't recall it incorrectly, decreasing. And this is the reason why you have this big other countries split. Traditionally in elumeo, we always looked at Germany, Austria and Switzerland as one country because it's one language. And these are the only 3 countries where we broadcast our live TV signal to households.

So it's basically Austrians represented that's in others, right? Is that fair to assume or...

Excuse me?

Is this fair to assume that it's basically Austrian represented which is in our...

Yes, it's also -- French revenue is in there. France was also a pretty substantial revenue. So the ballpark is Austria, Switzerland and France.

Okay. Good. Got you. And the final, if I may, it's regarding the lawsuit. You postponed the release of your final and full report which we received this morning. Due to the pending lawsuit, you expected to get the final results last day. Did this happen? Or could you give us an update here? Is that solved now or -- because there was nothing talked today already about that or in the press release about that in that regard.

No. Prior to the shift of the deadline for the publication of our annual results, we were supposed to publish our results on the 30th of March. And on the 31st of March was the verdict of the case that SWM Trust against -- brought against elumeo in a claims or in damages suit, suing elumeo and Bernd, Thomas, [ Roske ] and myself also personally for EUR 10 million in damages. And I will not enter into this too much, but our auditors were a little bit unhappy about publishing audited figures on the circuit with the verdict coming up on the 31st, even though we were all extremely confident that there is absolutely no chance that SWM Trust was going to win this case. And at our auditors, there was a certain level of, let's say, nervousness on this. And so they requested us to postpone the publication until not only the verdict would be valuable but also the written verdicts. So on the 30th of April -- 13th of April, Bernd and myself and our lawyer went to the court in Berlin to hear the verdict, which usually nobody does. So usually, kind of the judges sit there and just read the verdict and nobody is here and there. We had quite some people because we were really interested. The verdict was that the case was thrown out of court with pretty clear words. So the Landgericht Berlin dismissed the case brought against both elumeo, but also myself, Thomas and Bernd, on the ground that this case was not able to establish the required levels of proof in order to bring this case forward. So it was a pretty clear verdict. So we can say that we won this case. And I'd say at trial again, we didn't publish this or didn't make a press release on this because we have said this all along. We've always said that this was going to be the outcome. So we did not want to make any further comments to this, risking possibly some other comments from other people on whether this is right or wrong. SWM Trust, again, now has the legal rights to appeal against this verdict, which would then mean we would go through round 2. Even though from reading the verdict, personally myself, but also all of our lawyers, appealing to this ruling will be very, very, very hard because the verdict is extremely clear and well-thought through verdict. And it will be not easy to find grounds on which somebody can appeal against this verdict. But as you and also all of the investors who have been with us for quite some time know, we have to deal with a certain level of irrationality. So we don't know what is going to happen.

Okay, I understand. So congratulations on the win, so to say. And what are the new -- on the -- for the provisions you made, could you remind us what the amount of provisions did you book on the balance sheet? And what does it mean for the provision there, the win? Or do you stick to the provisions because that's the second round that you [ are at ]?

We have a provision for the entire -- it's not a provision against this lawsuit, but it's a provision for potential future costs out of the liquidation of the former factory site in Thailand. And we have made a slight adjustment to this provision. I think last year, the provision was in the region of EUR 4.5 million. Now it's down to EUR 4 million because some of the problems of the closure of the site have been solved by now. Others remain open. And so in order to be prudent, we have kept that provision. And for the time being, we are happy with that level. We don't know that we will ever be forced to pay this clearly, and we will defend ourselves with everything we can against this. But technically speaking, this is the nature of the provision, that you put something on your liability side because you fear that something could happen even though you're not sure whether it's going to happen. So I think for the time being, the EUR 4 million is good caution going forward. And the longer kind of we can continue this way, the less likely it will be that we will have to pay anything out of that.

The next question is coming from Mr. Philipp Frey from Warburg Research.

Congratulations also from my side on the very healthy cash position and the debt part. Also, obviously, for Bernd for having such a strong exit and all the help during the years. I would also like to continue one by one, if it's okay for you. First of all, I think Volker covered a lot of ground. But if we speak about prices, I would -- my conclusion would be a bit -- if you look at the quarterly distribution, you have peak in pricing in the third quarter, and it was actually down somewhat in the fourth quarter. So would it be fair to say that the price increases you had in 2020 has nothing to do at all with the lockdown? That would be my first point.

Margins and price increases are something that have a mathematical component to it, but due to the vast amount of product and the many, many, many mix effects that you have in there, it's always really tricky to nail it down to 1 or 2 single component. I think in the fourth quarter, when we have finally established the pricing levels that we wanted to establish, we were profiting from the fact that people have no option to buy jewelry other than online from us or from other online sources. And therefore, we decided to -- after 2 quarters, during which we clearly went for a margin-based approach to go to a more sales-based approach, let's say, let's increase volume. You may recall that there was quite some discussion going on among investors and analysts, in particular, in the second and in the third quarter of last year, with argument saying, why are you not seeing enough top line growth? All of the other e-commerce players have strong top line growth. You are more or less stable. And we always said that strategically, by far, most important, I think, at the moment is to have our margins back on track. And only after we have achieved this, we're in a situation where we can start to continue our top line again. And this is what we did in the fourth quarter just because the margin levels that we have now, I think, are good margin levels. These are margin levels that are sustainable also with our customers in the long run. And therefore, we can now focus back on growing top line.

Understood. So I guess it's clear that it should continue. Secondly, if you look at the Mein Juwelo app or My Juwelo app, however you want to call it, we just began to translate it. What are your experiences in terms of -- if you open the app, how much time are people spending on with this Mein Juwelo function relative to just basically watching the live stream? Have you any experiences there how people allocate their time or how the conversion rate is changing?

It's early days. We started rolling this out in the beginning of April. First, we rolled it out to iPhone users. And then only in the beginning of this week, we finished the rollout in the Android world. The numbers that we are seeing so far look great. This app is essentially exploding. But I would like to add a word of caution. It's clearly, when you sell one piece of jewelry on the first day and then 10 pieces of jewelry on the second day, this is kind of very encouraging. But I have a slight doubt that this growth rate will continue. So you will have then strictly to bear with us for a couple of months until we will be able to produce meaningful numbers. But so far, customer feedback is very good, very promising. And also, the kind of first numbers that we see are encouraging in both at the usage of the app is going up and the videos watched is going up. We still have, I have to admit, a huge set of technical issues with this app. As Florian explained, we have very, very automated database behind this app because we generate the content on this app out of our live program. So basically, out of our live program, we cut these little videos snippets, and then we put these video snippets back together based on past performance and past purchase patterns of customers. So it will take probably a minimum of half, more likely 1 year, until we will be able to really determine how this works and also to make sure that our algorithm has a sufficient amount of data in order to determine whether the algorithm is right or not. Because clearly, the algorithm that we program takes -- just to give you a little bit of idea of what level of complexity we have, for the determination of what the next video should be, the algorithm computes 1.6 billion individual data points, 1.6 billion. So not surprisingly, the algorithm always has an answer. So the algorithm never says, I don't know. It always says this is the next piece of jewelry that should be shown. The reason why it will take some time is we will need to have a substantial amount of time during which we see the purchase patterns. And then we will be able to see whether the usage of the algorithm will produce higher purchases and better customer retention and better conversion rates than with comparable other products. And as I said, I think in half a year from now, we will have a good firm understanding of whether this works or not. Then it would have been fast, could also take 1 year.

Yes. But it should, in theory, particularly help your existing customers at first to increase purchasing frequency because I guess with these customers without a purchase history, even your algorithm will have a hard time to make suggestions.

Just 1 second. We have given customer slide [ median ] customer revenue per customer. And the -- hold that thought. On Slide #9, you see that we have been able to increase the revenue per web customer from -- in the region of just EUR 119 to close to EUR 300. This is the biggest leverage. The biggest leverage because our live show customers are in the region of EUR 800 per customer per year. And our mix customers, so customers that shop on us with us online and live, are in excess of EUR 1,000 in revenue per customer. And this is the major lever we have in this business to start transforming web shop-only customers to web shop plus Mein Juwelo mobile app customers because we are very confident that the offering of moving picture will help these customers to transform and will also increase the revenue spend per customer. Based on this information, we will also be able to give new customers after, let's say, 10 or 15 videos that they have watched much better projections because also based on the pattern of shopping -- or not -- watching behavior, we are able to make better projections on what the next video will be.

So basically, it's a...

In other words, the algorithm that we use does not only take into consideration past purchase habits, design levels, gemstones, pricing levels, all of that. But we record in our database also the swiping behavior. So what apps -- what products have been looked at all of the time, what products are being swiped away immediately. And also out of that, we can determine better projections for the next best videos to be played out for new customers.