Shelly Group SE (SLYG) Earnings Call Transcript & Summary

Welcome to today's earnings call after Shelly Group AD. In today's call, we will delve into the Q1 figures of 2024. [Operator Instructions] And with this, Mr. Kirsch, the stage is yours.

Yes. Thank you very much. Good morning, everyone, and welcome to Shelly Group's Q1 earnings call on behalf of Dimitar Dimitrov and myself. And yes, this is the normal agenda that we usually use. So I will show you some highlights then Dimitar will talk a little bit about our products and innovations. And at the end, we will go a little bit more into the Q1 detailed financials. This is usually as in the last times, a relatively easy task for us today because we have good numbers to present. So just as a typical reminder for those who are not that familiar with Shelly Group, we are making smart building solutions, and we help people to save energy with that, and that makes us unique and helps us as well to drive our business and to reach our numbers. We have sold more than 14 million devices since in 2018when the first Shelly device was sold. In the last 12 months, it was more than 5.5 million devices. So that proves that we are accelerating our growth. We are today in more than 3 million households. That's always a rough estimation because we can make estimations seeing our cloud users and then we make the calculations, how many products are not in our cloud. That's a specific Shelly topic because our products work as well completely without cloud. We have increased the number of households in the last 12 months by more than 900,000. Then we have cloud users using our application, our cloud more than EUR 1.35 million, and we have added more than 600,000 in the last 12 months as well as this is accelerating. Now to the financials that -- sorry, to some more key highlights. We have reached in the first quarter all our KPIs, revenue and EBIT targets. The revenue growth in all our markets is above the market growth. We are with smart home in a positive market, always a bit complicated to say is the market growing 10%, 15%, 20% or even above. We have some competitors in the market that say the market is not growing, but it's usually the ones that are suffering a little bit more than -- or enjoying less growth than we do. We have successfully enlarged our distribution channels. We have a significant growth of addressable customer ownership, mainly via our cloud users. We have widened our product portfolio, and we have a new tool that is our installer finder that we will talk in a minute a little bit more about. Now to the numbers. In the first quarter, we reached a revenue of EUR 20.5 million, which is an increase to last year of 45.5%. With this, as I already said, we grow above the market whatever is the market growth that the market enjoys right now. In the last 3 years, we had an average growth rate of 53%. And we expect that we are continuing to grow over the next quarters and over the next years. Our EBIT reached a level of EUR 5.3 million growth versus last year, 43.2%. And with this EBIT, we are on an EBIT margin level of 26%. I always say twice EBIT margin, not EBITDA margin of 26%, which is a little bit above our midterm target of 25%. There are always questions when will we reach 30%. And the answer is always the same, we are not planning to reach 30% because we think that for our business, 25% is an excellent margin, especially compared with a lot of our competitors or most of our competitors, and we prefer to invest whatever we have on top in the market to accelerate our growth. Our cash is on a stable level, although a little bit below the same number on the 31st of March 2023. We are a little bit below with a level of EUR 14.9 million, but we have enough money to finance our growth in the coming periods by our own without the need of bank credits or something else. We have grown our do-it-yourself platform. You all know that we are mainly do-it-yourself brand, 70%, 80% of our business is done with do-it-yourself customers and with do-it-yourself retailers. This might be online retailers. Amazon is the biggest one of them. It might be physical retailers that usually start the business with Shelly's online and then take us step-by-step into their physical stores. And that's on an excellent way. We have, as I mentioned, very good business relation with Amazon. We are in Germany as a vendor that means we are selling products to Amazon, Amazon selling the products to the end users, and we are not in the marketplace anymore. This accelerated our revenue with Amazon in a very impressive way. We did the same in Europe, in France, Italy, Spain, Benelux in 2023. We are live now in Australia with Amazon, and we plan to move in the United States from the marketplace to the vendor platform as well during the year 2024, which should give us a nice acceleration in the business there. And the physical retail in Germany, Hambach is a very important partner for us in do-it-yourself business, taking us into the stores now and planning to expand with us as well beyond Germany and Austria. And as well with Leroy Merlin, we made very good steps in Spain already last year. And now we are in the physical stores in Italy since the first quarter 2024. And we expect that most of these retailers that are international take us in more and more countries. On the professional side, we are growing as well as the platforms. We have -- that takes usually a little bit longer because those guys are not that fast in deciding and changing their habits, but we see a good development in a couple of regions. And as well here on Amazon business, Amazon B2B part is growing as well nicely. To push that business a bit more, we are training a lot of installers. We have trained more than 4,000 installers in the DACH region and the Nordics and to train the next generation of installers, we are working closely with technical schools in Germany, Austria, Switzerland and in the Nordics. We have already onboarded and equipped more than 90 schools with Shelly devices. We are training the teachers so that they can train their people and the pupils and the future electricians. And if they have learned with Shelly devices to make a house or a building smart, that should help us in the future as soon as they have really grown up electricians. Our new tool or our new toy is the Shelly installer finder. We launched that around light and building in Sanford. So only a couple of weeks ago. We have started that in Germany. And the idea is that a customer that is on the Shelly website types is postal code or address and he gets a recommendation for installers that are traded with Shelly products that know how to install Shelly products that are recommended by us. They see how they can contact them and then they get someone who makes the professional installation if they are not able to do that on their own. We had a couple of installers, if you go to the installer finder sneaking in from Denmark. This was not planned, but we have already, I think, 20 installers in Denmark Life. And we have some in Austria and some in Switzerland as well, but Germany was the main focus. And now we will roll that out as the next region to Nordics, where we have good relations with installers already and with electricians, and then step-by-step other countries will follow. So now a couple of information about our product range and Dimitar will take that.

Thank you, Wolfgang. About the products. There is a crater is no big update until today. But as we say in 2023, we update 6 products and 21 products, new products is released in 3 new product categories. In 2024, is going exactly as we plan. The 8 products is updated and until now and 15 new process released, but something which is very important. Our next product release is on 30th of May because we've seen that we [indiscernible] at the moment and because we're leading the market. And competitors very closely work what exactly we are releasing about the process in the future, we decide not to show the new products before their official release, which is centered amount, which means until now there is nothing new compared with the results -- with the previous investors calls, but this is coming 2 weeks from now. And I should ask be amazing because we have very, very interesting features and new products, which will be on the market soon. Yes. About something which is important also, we're visiting our new factory. This important moment because this factory is completely built from beginning with our partners in China. The built exactly by our requirements. This factory is exclusively using to manufacturing our only Shelly devices. The factory itself is completely Shelly brand, including also the staff budgets and everything and everything is controlled by us by processes to be sure about the quality of the products and to be sure about the quantity, which can be reused. Something which is very important, the new factory at the moment still has a much bigger capacity to cover the demand. But also on top of that, there is an opportunity and very easily, we can extend the capacity twice and triple if this is needed to this year. And very important topic that the tot is already checked the factory, and we pass all tests with the positive results. And also from United Kingdom, we have additional certification, which allow us to selling devices in United Kingdom in the big electronic chains and in the big combine markets. The new factory is up in Q1 '23. And that's something which is very important for us because this gives us the flexibility and also the truth that we can cover the demand this year and not only this year on the 8 years. Something which is very important, we decide to extend the warranty by all that the United States, the warrantees here in Europe, the usual warranty is 2 years, the standard one because we've seen -- and we have already numbers from our new devices, generation 2, generation 3 devices. We decided to extend the warranty for all customers, including the ones which already have Shelly devices, which is buy, for example, a few months ago, which is generation 2b, which means for the retrofit for the small devices, we extend the warranty to 2 years. And for the Pro series, which is mainly used for electricians, we extend the warranty for 5 years. Something which is important also, this means that we doesn't prepare the devices. We just -- if there is a problem, this is mandatory directly to replace the device with a new one. And this is -- by this, we also want to give additional trust and reputation to the stores and to the customers that the device is completely safe and secure, and they can work for the long time. Also, there is something which is very important, we enter in the business with renewable energy, and there is a very huge partners is start integrating Shelly device as part of their equipment. As we can see, if you could change the Huawei side, you will see that the only devices which is supported is add-on to the system is only Shelly devices. They integrate them to their one ecosystem and everybody for the cost monitoring for the -- for managing the energy production and also the appliances in the house depends on the solar production. Therefore, sites endure, which we're working with them very closing more than a year, but the coverage is coming quarter-on-quarter. And there, this is one of the best solution to have the solar plant or if you have a solar roof in our houses, it using the Shelly devices, these give to the customers the maximum flexibility or maximum efficiency of what they do. And now back to Wolfgang again.

Thank you. And back to the numbers. I just want to add something to the solar panel thing and to the Huawei cooperation that Dimitar mentioned. This was a surprise for us because they did not ask us. They just put Shelly devices in their presentations to their installers all across Europe and integrated it in their owner's manual and installation menu. So now we are in contact with them, and we will try to work on closer and deeper integration, so to make it even easier for customers, but it's for us some very positive signal that the biggest manufacturer of solar panels and solar systems in the world is recommending as the only third-party brand Shelly, that's something very special for us and shows as well that our products are very well reputed in that business. So coming back to financial highlights. You have seen that chart. Just to remind you, EUR 20.5 million revenue, EUR 5.3 million EBIT, which is an EBIT margin of 26%, EUR 14.9 million cash on the bank account. And now I go a little bit more into details like the regional share. It's well known that the DACH region, Germany, Austria, Switzerland is our strongest region with around about 50% revenue share. We expect that in the future, this revenue share will go down because we think that we can grow faster outside of Germany than inside of Germany. On the other hand, there is a lot of room to grow if we compare ourselves to other competitors in the German market, we see that there is enough space to get. We grew 45% in Germany. So that's more or less exactly on the level of the average growth. So that shows that everything that we did there in the last 2 years, establishing a local team, local marketing, local support and German language is paying back. So we continue on a quite high level for our total numbers to grow the revenue. The rest of Europe, 35% growth. We have a very good development, especially in Spain, Italy and the Nordics. And here as well, we have local people on board. It's a bit complicated to find the right people to onboard them. That takes more time than we expected, but we are quite confident that the acceleration is coming in 2024 in the rest of Europe. This for us is as well a very important signal because we have a lot of competitors that are good in one country in Europe or in the world, but not in more countries. And we think that we have proven already that our business model works and the products work outside of Germany in other countries and that will continue with adding more countries where we can expect a nice growth rate and in the rest of the world as well. Rest of the world grew by 88% on a quite small level. Last year was EUR 1.2 million revenue. This year, it's EUR 2.2 million. We see a good development in Australia as a relatively new region for us. And as well, the United States is growing still on a quite low level and still not as fast as we would like to, but we see some positive developments here. If we look into the -- a bit more detailed P&L, I just want to mention one point because that's a bit outstanding. And you might ask why are the sales and marketing expenses tripled or quadrupled in the last year. That has a couple of reasons. One is that we have been participating with a very visible booth at CES in Las Vegas and light and building, and we have not been on site and building with such a big move before, and Light Building did not open last year. And we have invested more money than before in third-party marketing activities in other countries, in new regions. So we give our distributors some budgets so that they can work on sell-out improvement and on more visibility. We go to more local trade shows as well yesterday, we have been on a trade show in the Nordics. Our booth has been crowded this week. We have been on the IoT in Barcelona. So we invested a lot of money in being visible for end users, but as well for professional installers. And we started as well to spend some money in Google ads and Facebook ads and Instagram ads, and we see that we are getting a lot of traffic from this from first-time customers, bringing them to our brand. That's as well something that is very important. The rest of the G&A is growing under proportionately, although we have a higher headcount than the year before, but that is planned because we cannot add more people and grow all the costs proportionally to the revenue. Otherwise, we would decrease our EBIT margin. The cash flow, the first chart that you have seen about the cash position is a comparison with the 31st of March 2023 compared to the 31st of March 2024. This now is the bridge from the 31st of December '23, so just the 3 quarters. And just a couple of things to mention. We have increased our inventory from EUR 9.3 million to EUR 10.8 million. We have as well EUR 1.8 million higher prepayments to factories, especially for CHIPS that we have to pay earlier. And with the expectation of selling higher numbers, we have to increase the prepayments to the chip manufacturers. And in the investment area where we see the negative development we have bought beginning of the year, the next 16% as agreed in the contract from the very beginning of ShellyTec, formerly known as GOP in Slovenia in January, and we have some investments in R&D that you see in this minus EUR 920,000. Our equity ratio increased a little bit to 89.1%, which is as well an outstanding number. So where are we with the guidance and with the achievement so far. So first, we are confirming our target for this year of EUR 105 million and EUR 26 million EBIT, which should be an EBIT margin of 25%. After 3 months, EBIT margin is 26%, the EBIT 5.3%. And the EUR 20.5 million represents 19.6% of the EUR 105 million. That means after 3 months in the year, we have reached 19.6% of our annual target. In 2023, to compare the numbers, we have reached at the same time, 18.8%. We are roughly around about on the same level, a little bit better than last year compared. And last year, we reached 74.9% finally. Now why am I talking about that? Because you have to understand that our 4 quarters are not equally distributed. The fourth quarter of the year with Black Friday with the Christmas business is very important for us and is usually representing tofu quarters with all the promotional activities that we have around that period. That's why the first 3 quarters, we will be proportionately a bit lower and then the fourth quarter will help us to reach the annual targets, and that happened exactly like this in the years before. So now I'm already with the summary. In Q1 2024, we reached revenue and EBIT, and we are with both numbers a little bit above our own targets. All regions have grown over the market growth. So we are winning market shares. We are sure that this growth is sustainable because we have already proven that it works outside of the DACH region and especially in the German region. We have the first countries where we have some very good results. We continue to expand in new countries and new regions. That's one of the drivers for future revenue. We are expanding from the do-it-yourself market where we are strong and have a very good reputation more into the professional market, which is the much bigger market than the do-it-yourself market for our categories. We have a wider product range already launched products in the first quarter. Dimitar mentioned that there will be some product launched in May. And we have some very important products in the pipeline for the second half of the year that make us sure that we will reach our EUR 105 million target as well. And we have our cloud business and the premium app as additional potentials for future revenue. For 2024, we have a guidance of EUR 105 million that we confirm as well as the EUR 26 million EBIT. We confirm as well our revenue goal for 2026 of plus EUR 200 million and the EBIT goal for 2026 of plus EUR 50 million. And right now, everything looks fine. We have enough cash to finance our growth. If we are not making jumps via the acquisition or via other big investments that we are not seeing currently. So that's all. And with this, we come to questions and answers.

Yes. Thank you so much for the presentation and congratulations to the numbers. [Operator Instructions]. And we've got a first question from Bastian Brach.

So quite a couple of questions for me. So I hope you have some time on hand. The first one is on the working capital. So you had a slightly positive operating cash flow in Q1. Can you elaborate on your planned working capital development in the next few quarters. So do you expect the working capital ratio to remain stable compared to last year? Or is there any increase because of the many product launches you will have this year?

No, the ratio should stay the same. As I already said, all our cash calculations show that we have enough cash to pay and to finance the growth from our own bank account right now. So we does not look like that we need important bank loans. On the other hand, increasing revenue means that we have increasing outstanding payments from customers. And we have as well with our own Shelly CHIPS, we have to pay the CHIPS in advance. That's what I mentioned during my presentation. So that will stress that line a little bit. But right now, all calculations show that we are good during the year. So I hope this answers your question somehow without having now all the numbers present. But we have made this calculation a couple of times. So it looks like we will not need bank loans or capital increases. So there is nothing planned in that in this regard.

Yes. So second question is on the Amazon vendor business. So you launched that in Germany and in some other European countries in the last 12 to 18 months. What do you see after the launch of the vendor business. So I would expect, obviously, a significant increase in revenue growth. But do you also see a decrease in gross margin? Or was that compared to liquidity stable?

That's an excellent question that I all refused to answer because we are not disclosing individual margins of customers. But what I can tell you is that, first of all, we are happy with the revenue development with Amazon and this move to the vendor account usually increases the revenue with this channel by 3 or 4x, simply because customers prefer to buy directly from Amazon and not from a marketplace player. Second, we are controlling as good as possible the revenue level with Amazon because we do not want to be dependent on one channel. If this is Amazon or another one, it would not be healthy to go full speed with Amazon and not to develop other channels in the same way. And the third point is that we are relatively happy with the margin with Amazon. But please understand that if I would tell you now Amazon margin is not good, other customers would complain and would say why do they get better prices. If I would tell you Amazon margin is over proportionately good, I would have Amazon at the telephone in 5 minutes. So we are not disclosing individual margins by customers, but we can very good live with that.

Okay. So last 2 questions for me. The first one on the marketing spend. It was quite a huge step-up compared to last year. Do you expect that to grow further in the next couple of quarters?

No.

Okay. So it stays roughly on the same level or is it like a onetime peak?

I expect that it goes a little bit down but we will see that. As I said, we have a lot of activities that we expect as well to pay back into more revenue. That's mainly presence on trade shows, and I mentioned IoT, Barcelona. And there are 5, 6 other regional shows that we have not been participating in, in the last years that will add up. And as well, we are, of course, in a digital time. You can very good check the investments in digital marketing and what is the payback. We are monitoring this very closely, and we see right now, if all the numbers are correct, and I don't see any reason why they should not that we get a lot of first-time customers to our web shop to our platform, and that's as well as something that it's worth investing in.

Okay. And then the last one on your premium subscription service. So it launched like Q3 year '23 when I remember correctly, what do you see in terms of adoption levels. So are you happy with that? And also like the first customer reviews. And yes, also the retention. So many people like leaving the service after the trial period? Or what can you…

Let me answer this question. The real large is Q4. It's Q3 at the end of the Qterics Q4. At the moment, we're preparing in the next -- in the investor call to discuss our numbers. We still not want to present them because it's working to develop the service is not completely -- I mean the big huge part of service, but we have more and more feature for our premium clients. But this is important at the moment, the premium clients completely cover our cloud costs at the moment for whole pie. I mean for the all connected devices for all connected households, only the income from premium subscription completely covered, and now we start looking at the positive numbers on top of that, which is very important because for the first 6 months because at the beginning, the customers has this 3-months fee trial period, then they switch the paid subscription. This is a very good result that for such a short time to cover something which we need to pay every month for the whole infrastructure, which we manage. This is the first one. The second one, which we see is very positive for the moment that most of the customers prefer to pay the annual subscription, which means that they trust and they believe that they want to disservice from the onetime, not by monthly base, and then we can cancel every month just to decrease their spends and the costs. And this is the second, which is very important. But there's a lot to do in the future. And we're really going very, very careful because there is no other platform, which are asking customers to pay or if there is, they just make some trials. Maybe even we are very careful and we stay a little bit positive. At the same time, I think we are much more aggressive than the competitors, especially in this to show the customers that okay, the basic service is enough reach and big to control everything. But if you want to dive in, if you want to have a much more precise information, then it's good to spend some money and to have it in your account. And this stat, I can say at the moment.

We have another question from John Philip.

So congratulations on the numbers. I would like to ask if you can please give us an update on the module business? How is it going as much in force as you can. So that's very exciting.

That's something which we'll present in 2 weeks from now. Let's say, the official start is 2 weeks from now. And at the moment, we have a first half acquired, which is testing the technology and give us the feedback before to show to everybody. And this business well going by steps. First will be with a special type of declines, then we will go in quite but the official launch of the modules, which is named CLX because on the official event we already named is SX will be 3 weeks from now, I think, 30 May 7 p.m. Central Eastern Time.

We have another question from [indiscernible].

Yes, I got 2 questions. One is, you mentioned the competitors that are closely watching your developments and new products. So has there been any evolution in the competitive landscape, new players or anyone who you find more, I guess, threatening than previously. And the U.S. business is still very small. So the question is, are there competitors or alternatives popping up there? And the other question was really on the cash flow. You mentioned the reasons why you are -- why cash flow has been burdened somewhat. But do we have to see this as a sort of one-off during the year, and it will reverse? Or is this somewhat more subdued cash flow development? Is that more structural now?

Okay. So let me try to answer one by one. There are no really new visible competitors. There are some competitors that we take serious and there are some competitors that are small and that we monitor, but we do not take that serious. Like in Pledge in Sweden is a competitor only in Sweden or mainly in Sweden. That's why I mentioned earlier that we are proud that we proved that our business works as well outside of Germany because we know that Pledge is trying to enter other European countries, and they are failing right now. So the feedback from all our sources is that they are not developing in other countries as they expect. But that's a very serious and good company. In the U.S., there are a lot of bigger companies. I was just participating in a smart home conference in Dallas last week. And there are a lot of really big companies, huge companies, mainly in security business like Alarm.com, Resideo or some others. So that's a different league because that's multibillion euro revenue companies. And there are some smaller ones that are struggling that we are as well looking at if we can take over some of the technologies or some of the people to push our U.S. business and make it faster. We are -- as I already said, we are growing in the U.S. We are not growing fast enough. We are growing above the market, which is definitely not enough. So we are working on alternative scenarios to bring the U.S. business in line, but I don't see a risk here for our total revenue because it's -- if U.S. works, it would be a huge push. If it would not work and would continue developing like it is today, this would not be a risk to reach our EUR 200 million in 2026. On the other hand, if we move, which has been discussed a couple of times with Amazon on the Amazon Marketplace, this would give us a similar push as it did in European countries and would help us to make a jump in the revenue in the U.S. So that's about the competitive. There are some smaller competitors. I don't want to mention too much names, but EoTech is a German company. They are stagnating around EUR 15 million revenue not developing. That's one of the guys that always says that the market is so tough, and we grew 45% in the same tough market. So we think that the market is not that tough. And there is no one close to our technology.

I can add 2 things. The first one. Yes, there is a competitor. We try visually to make a device, which is similar to ours. But the benefit is not -- will not make jewellery, and we don't make gadgets which people can place on the word as a picture to be cared about that, somebody try and mean that if somebody tried to copy how devices looks like physically is not enough. The whole technologies, the beauty is the community, is the philosophy of the company, it's a procedure with the customers and so many things together that we've seen and they just -- many times, we do one customer said to other just don't make a run to buy the device, which looks like a Shelly, but it's not the Shelly because this is completely different. And not only -- I don't talk about the quality or safe. I talk about the completely how this -- the user experience and what exactly they can do that. Thus, we see from the competitors is completely not -- we don't see any -- we don't worry about such a try of the copy of how devices looks like.On the United States, all the time, we think about, okay, it's a big market. Usually, United States, movies, they're going in, they're boosters in the United States, they are blockbusters almost everywhere in the world, which is not [ Kaposi ] opposite way. And to do that, we need to go slower, but let's say, not cheaper, but not spending so much money or to tell, okay, we invest $10 million, $15 million this year from the United States to build a huge team because the salaries expectation that really is completely different than the Europe, even compared with Germany, it's much higher. And all the time, we say, okay, but we find now to risk and why, in this case, maybe we need a capital increase to do something to invest especially in United States. Why to do that feeling comfortable now? And where we see that we can reach the target. And on the top, the business Units is growing, but just not with the speed as we're looking for.

So the question concerning the cash flow. I think that this year, it will be a bit stressed, which does not mean that we don't have enough cash because we have as well changes in product generations that obliges us to buy a little bit more CHIPS and other things very early and different generations of them. In the midterm, we have possibilities to work on our -- on a reduction of our physical stock because we always say that we have 4 to 5 months of stock or we want to have 4 to 5 months of stock in our warehouses in Europe. And this is something that we can reduce as soon as we feel comfortable that everything in the supply chain works smooth and is supported by systems. We mentioned already that we are moving to SAP. The process is not yet finished. The system is not running very smooth and easy. That will give us a lot of advantages with planning and help us to reduce our stock. And that will really help us to reduce the working capital and give us some more cash back. So I see a bit stressed during this year, but not overstressed. And I think that we will have a swing back next year in a more positive direction. In general, of course, with the plan to grow over 40% revenue every year, we will need more cash, and we hope that we can generate the cash from our operational business, how we think all the calculations on that. I hope this answers your question.

We have another question from [indiscernible].

I have 2 questions for Mr. Wolfgang and one for Mr. Dimitrov. Dimitrov, do you keep an eye on the products and strategy of Melissa coin and the way they go with their professional wine things?

Yes. Almost every day, we will because we're partnering with them. And very soon, we'll have the devices which we have some cooperation. And let's say, we are in the online half of the -- some of the oil pass online half of the they're working time with them to work which we need. We know everything. And because they're a good company. They have a good specialists. They have good ideas. And they also help them about this, and they help us to do something to have a one on the market, and you see.

Okay. And Mr. Wolfgang, is it not a good idea to buy directly a small company in America, which is have infrastructure, knowledge stuff? Is it not an easy way to enter the American market this way?

It's a good idea. I just need to find a target which we can buy because in the United States also, the money look quite different. Even the small company, they say, hey, we're a small, we are not profitable. We doesn't make any money. Maybe we'll make some -- just a $5 million, $10 million losses a year, but our business is for the $100 million. And then we just -- at the moment, we doesn't see the company which we can fit and we can buy. Let me say like that. So we are always open for an acquisition in Europe and in the United States. But we are not desperate about making an acquisition and we are not making an acquisition that would be too risky for us. And that's why we are very careful. But of course, we are constantly looking at the market. Is there something that would make sense if there's something that would really help us. And for the United States, especially, that would mean we need to find a company that has access to the right channels where we are not in right now that brings a team that works in a good way or that has products that we do not have right now. And then always the question is how fast would be the acceleration? Do we win 2 years, 3 years, 5 years? And what is the price for that. On the technology side, in a lot of cases, we would say we can do this on our own, and we can do it faster and cheaper. On the channel side and people side that, that would be a good investment. And that's not only for the United States, if we would find a company at a good price level where it makes sense to -- so not crazy multiples for the United -- sorry, for United Kingdom, England or France that would help us to bring the country on the same level as the DACH region immediately and it's an affordable effort, and it's a company that we can integrate, then we would do that. But again, there's nothing visible on the market that would make sense that gives us that advantage that this investment would pay back in a reasonable time. But we are always looking at it, of course.

Okay. And second question for Mr. Wolfgang. You didn't mention anything about our opening offices in Turkey and Poland and how we're selling the chip so far this year?

So we are not opening offices wherever we go, that the first move is we hire a person. So we have an office outside of Bulgaria right now besides China and the United States in Germany, but not in all the countries. So we have hired people for France, for Spain, for Italy, for Nordics and for the U.K. now, and we do not have offices everywhere. We only open an office if we need or if we have more people than just one. Because after having the first salesperson business developer, the next step would be to hire people for local technical support in the country language and marketing support in the country language. And then that might be the timing to open an office. So if we had just one person, it's simply cheaper if these persons-- we are looking for people in -- that's on our plan for Turkey, for Poland, for the Netherlands. We did not find someone right now. And at the very beginning of the presentation today, that is more complicated than we thought. So now we are happy that we have finalized the countries that I already mentioned. The last country we have now signed with someone is Italy, and we are happy that we found a very good person. That's what we hope. But it's not as easy as we thought. And then we need to onboard the people. We need to train them. That's a big workload for the existing team. That's why it's a bit delayed. But there's no change in the plan.

You didn't mention anything how we're selling the chip so far. And the connection with Samsung Q, there was a news that we are now working with Samsung for a plug something like…

So first is the CHIP. Dimitrov mentioned something about the CHIP. So that Shelly X. Talk about the Shelly CHIP that Expressive is producing for us in a special version that is integrated in the Gen 3 devices and will be integrated in devices that come afterwards in new versions. So that's part of the product that we sell, just makes the product better. And Samsung is we have now got official certifications for the Z-Wave devices for the Samsung SmartThings platform. And that means that they are visible on the Samsung platform that Samsung can bundle them with other of their devices. That's something that is now an official statement from their side. The products are working with the Samsung platform anyhow for the last 2 years already.

We have another question from [indiscernible].