Shelly Group SE (SLYG) Earnings Call Transcript & Summary

Being a provider for the telco industry software solution. And then when we switch to smartphone devices, IoT devices, we found out that there is no hardware for our software. That's why we started making hardware as well. The hardware can be copied. There are a couple of copycats out there. We have protected our design, but the software cannot be copied. That's what we see because even though some people see a device that looks like, the inside is completely different and the functionality is completely different. We have, of course, a mission, vision mainly for our people. Our team develops the best value smart solution that makes people's life easier and help them use energy more efficiently and increase savings. And that is, I think a lot about what we do. I will now go all the topics [indiscernible] What is the team that is here, Shelly Group AD is here today for you. [indiscernible] We have Nikolay Angelov Martinov, member of the Board of Directors from day #1 when Shelly became public, so very long time follower and supporter of Shelly. We have Svetozar Iliev, Chief Financial Officer. He will help me if you ask nasty questions about too many lines about free cash flow and how to book what when I have to give up. So he's there to support that. Mirche Atanasovski, is the guy who delivers the revenue, so very important, especially in this quarter. So thanks for being here and not pushing more products over Black Friday into the markets. Denitsa Georgieva, our Chief Investment Officer, and as well, Head of Legal. So she is responsible for the disclaimer. Among others, it's the favorite page. And she finally gave her okay to all presentation, the things that we present today. And newcomer, Karsten Sommer, he took over my responsibility for Shelly. I'm really happy to have him on board. I know Karsten for a very long time. And in the German market and DACH market, we are at the beginning, although we have some reasonable revenues already and Karsten already started to address a couple of these things. And Dennis Dalgaard, our Nordics manager, who is having a small team in Nordics already, which is the region where we have the highest share of professional products. So thanks all of the Shelly guys to be here as well. The key investment highlights in a nutshell, we are in a positive market that will continue to grow. We have a strong brand. And we think to our knowledge that we are the fastest brand in consumer -- I'm sorry, not in consumer electronics -- in IoT and Smart Home, fastest-growing in the world, at least in our size, not a very small one. I did not find a company that is growing that speed. So with around 50% or above 50% in the last year, that's outstanding. Our technology is outstanding as well. I talked about our software already. The hardware that goes with it is, I usually say to make this very simple, Dimitar could talk hours about that. We are outperforming competition 10 times with what our product can do compared to what their products can do. We have a reasonable scale. Our products are sold in 100 countries, which is a big number. Of course, we are not strong and big in 100 countries, but the product works there. And that gives us strong financials. We have a great management. Of course, what would I say standing here to say we don't have a great management, it would be a bit stupid. And ESG is not only an obligation for us, it's as well something that we stand for and we help a lot of companies to fulfill their ESG reporting and ESG goals. And we help them to save energy as we help a lot of private households to save energy. So that's a very good combination, our own ESG goals, helping others to fulfill theirs. And that's, of course, a driver of our revenue. So coming to the program of today's presentation, I will start talking a little bit about the market. So what is the general market doing? How big is the market? And where is the market going? Dimitar will talk about products and technology and what is in the pipeline, what can you expect in the next 1, 2 years? And there's a lot of really cool stuff coming. Revenue growth, so how we will reach our midterm target? You know that we gave all the guidance beginning of last year already for more than 3 years at that point of time, which is quite long term. How will we reach that? What do we think are the next steps that we have to do to continue increasing revenue? And then the last point is about our financials and the long-term outlook until 2030, what will the market do? What do we have in the pipeline? Of course, that is very far away, and we will not have a very concrete and hard number, but you can make your calculations on your own and find out what is the right number that you put, that's your job, Dimitar. And then if you want to stay after 4:00, we have time to have a glass of wine or water or whatever and to talk. And as well, the team is there, of course, whenever you have questions, feel free to address that. So Smart Home market. Before I start it, the numbers that you see here about the market, they come from different sources. It's super complicated to find a real good number about how big is the Smart Home market or the IoT market. There are usually -- if people talk about Smart Home, they mix in televisions and smartphones and all the stuff that is not our core business. So what we see here is coming from different sources. We have some views into Statista. There is a company called Berg Insight. They are coming from the Nordics. They make a smart home report, 300, 400 pages once a year. There's some data coming from them. We check competition, of course. We have a lot of expert interviews in the United States, people that are a long time in the market and our own estimations. And what you see here is a mixture of all that, There is no hard number. If you go to well-renovated companies like GSK, they have 0, nothing. Smart Home is -- yesterday, we discussed is it 20 years old. I think 20 years ago, I bought my first Smart Home product, one of our competitors, Homematic, didn't work that well. But it has nothing to do with Homematic. It had to do with the time. Dimitar said no, 30 years ago, the first smart home product came to the market. But it was in the old times, it was expensive. So I remember what I paid for my TRVs, my valves, for my second residence to switch off the heating when I'm not there was a fortune and it never worked in a good way. It was more or less installed in new buildings and in very luxury high-end residences. There were many different interfaces and protocols and nothing was really working together. The technology was moving slow, so not fast advancing and every year, something new. The efficiency benefits were limited. So what could you do? Show your neighbor, look, I can switch on the light in the garden with one push on my smartphone or on this button. So it was not really, really good. Installation was complex. So in most cases, you need an installer, you still need an installer today. If you're not really know -- if you don't really know how to work with the cables and with electricity, but today, a lot of people can do this on their own. The integration in the system is easy. And customer awareness was not there. And usually the installers were blocking like, this is not reliable. I have too much trouble with it. So this was not the best that changed. There are a lot of advantages. There is a lot of connectivity and intelligence behind. So if today, I'm not in my second residence. I get an information that I forgot to switch off the light. I can easily adapt the heating, the safety is improved. So our product, and we tested this a couple of times as well with third parties are as secure and safe as your WiFi at home. And over your WiFi at home, you make your banking business. So that should be better safe. And we have a couple of other things that make life easier and make the product more valuable. You can save energy. The high energy prices are, of course, the driver and the helper for us. And I'm always asked, how do you want to compete against Alexa, Google, Samsung, SmartThings, and the other guys, and my answer is always the same, they are an enabler for us. They open doors, and we help them. We are as well an enabler for them. We have a lot of projects, European-wide with Alexa. They want to go into hotels and senior living in facilities for handicap people and put the Alexa there. But what people do if they go to the hotel room, the first thing they say switch the light on. And not I want to order a whiskey or whatever. So first thing switch the light on. And they need our devices to switch on the light, and that's why we are a very good couple in developing the market. So they are helping us and pushing us and the more money Alexa and Google invest in the market, the better for us. So Smart Home market from our point of view is at the edge or just entering the mass market. It's no longer something only for the enthusiasts, for the geeks, for the guys that are super happy that they spend the weekend to install one device and finally make it work. It's a mass market product, and especially in -- with high energy prices and with a lot of other things that you can do, save money, have your life much better it's at the beginning of a very long growth period, and we see this not stopping in the near future. The market expectations, and once again, this is a blend of numbers from market research companies, expert interviews, competition that we check, competition we are talking to in our estimation. The market estimation is somewhere between 10% and 15% the next year. Here, it says 26%. Other numbers, say, 28%, 29%. So we think that this will continue in the next most probably 10 years. A little bit more should come from the professional segments. So the industry because they are -- sounds a bit strange, but they are behind. And we found out that a lot of big players are now waking up because they say, "Oh, oops, we have ESG goals to fulfill. We have to report our energy consumption. And you are aware that we made a bigger deal a year ago or 1.5 years ago, with Vodacom, Vodafone in Africa because they need to report the consumption of energy of their base stations, and they use one of our devices, one of our best-selling devices to do so. And the same with BMW for all their retail outlets, we are one of the preferred brands that they put there. It's not a huge business because it's basically one device that monitors the whole energy consumption and reports this to a central station. There are other options like city automation, city lighting, as well Dimitar will come, I think, a bit to this with some new technologies that we have in the pipeline. I talked about hotels, hope for elderly people, senior living. But as well if older people want to stay at home, there is a lot of things that are there or that will come that make their lives easier and make them more comfortable staying at home for a longer time. So it's growing in different segments. And these are the biggest segments, and you see some estimations about market size, Europe and the United States. That's thermal management, so that's heating and air condition, energy management, a huge business for us. Smart lighting, appliances and appliance business means make your heat pump at Home Smart, something simple as your garden irrigation or open the garage door or make whatever you have as motors or other devices, smart and integrate this in the Shelly environment. Smart Security, a very big business. That is one of the main drivers in the United States for smart business. That security, of course, with the high burglary rate and people are afraid that is not that strong in Europe. And that's a market where we are just entering and beginning, but we have some light for the U.S. market in this perspective. So all the segments are expected to grow. If we look at the markets, Europe versus United States, we see the same number, 10% to 15% growth expected in the next years. The market has -- had a similar size. And if we look to a different split of the market, new buildings, and today, we don't have that much new buildings, especially in Germany, the industry is suffering, versus retrofit and retrofit for us is renovation. So you have an old building, you want to make it smart. And with our devices, you can do this in an easy way. We think this market or we see this market is much bigger, 2x, maybe even more bigger than the new build because, of course, there are more old buildings that people want to make smart, want to save energy than existing buildings. And just to give you an idea, we have such a small device, you make one switch, one room, smart, you can switch the light. You can use a remote control or you open a garage door with the same device. And can from this moment on that the switch continues to work. You just put it behind the walls, which you've seen the videos here before, how this works. And that is very cheap. The product is EUR 15 as well as even EUR 12. You don't need a hub. You don't need anything else. It's the first step into the Shelly world. And there are a lot of trends supporting this. So from whatever angle we look at the market, the market is in a positive move. So people want a connected home and more and more bringing things together, and we offer a full solution for that. Energy Management. I mentioned this a couple of times. That's a big driver for our business. Each of these devices. So if you take that one, it has the same functionality as the blue it is just measuring as well the energy consumption. So it tells you what is this product and it's connected to consuming as energy now, the last hour, the last week, the last month, and you get your reports every month. Commercial applications, I mentioned that as well. If this is in offices, if this is in hospitals, if this is in cities, in senior living facilities or whatever it is, it enters this business because, first, it makes the life easier. Second, the energy consumption is critical. And then we have industrial processes solar plants. We have a solution for a solar plant at switching off the whole solar plant. If the energy price is too low, so that it doesn't make sense to operate it and it's a very cheap product, and it's a very simple algorithm that is connected to the stock exchange, if it drops below a certain price, stop production. And the other way around, it works as well in countries where the energy price is completely flexible and fluctuating. If the price is below a certain point, switch on my EV charger. So very simple solutions that will help to grow the business. We have a position that is quite unique. So first of all, it's very easy to install the product and to use the application. We have the best hardware and software. We just increased our warranty to 3 or to 5 years for pro devices because we see that the failure rate is very low. Best price and value and our products are super flexible and are safe. We use a European cloud. We are 100% GDPR compliant and that is for a lot of customers more and more an argument to buy devices instead of a cheap China device. If we look to the price segmentation on the right side, we have -- we are somewhere in the middle, and we feel very good in the middle. We are twice as expensive as the cheap Chinese competitors, Sonoff and a couple of others. So if you take this nice blue device, if this is -- by the way, that's the smallest [indiscernible] in the world that Chinese don't have that. But if you would take that device, it's like EUR 15, then Sonoff would be EUR 7.50. I think for most customers, reasonable price, EUR 7.50 more or EUR 8 more to have a product that is not produced in Europe, but that is developed in Europe, that uses European cloud that is safe without having any problems. Compared to other renovated competitors like Homematic. They are still on the market. They are very successful, mainly in Germany. Our product is half the price or less than half the price. So if this product is EUR 15, Homematic doesn't have it, but it would be like EUR 30, EUR 35, EUR 40. And if we go to the top, we see Legrand, we see Siemens, we see Schneider, Gira. We have half the price of their devices with our pro line or even less than half the price with the pro line. So we are in the middle of the market. We did not increase the prices for the last 2 years. And we could do that because the others increased the prices a little bit. So the gap is increasing. But we want to be a mass market offerer. We want to push the market. We want to get more people in our system, and you will see later, why this makes sense. And the products are used in different occasions. So residential business, in apartments or in 1 or 2 family houses, in offices, in hotels, in senior living facilities, facilities for handicap people. We will have a road show in Germany in the next 2 months, going from city to city, to senior living facilities together with Alexa to show the solution that we have implemented. There is one of our -- of the user of these solutions that want an innovation prize from the organization, I don't know how this is called where they presented all the things that they did because all the people using it are super happy. So it's not true that all people say, I don't want to talk to Alexa. They use it. They are super happy because they say, "Now I can switch the light. I can change the heating, I can open the curtains without calling someone who has to come and has to open the curtain, I can do this with just my voice." And we will make this aware, we will push the market with this. Industrial applications, city lighting is something that is at the very beginning. We have a cool solution for that in the pipeline. Energy management is something that is for the industry with high energy prices is absolutely crucial. Restaurants like McDonald's in South America, I mentioned just a couple of times is using one of our devices or a partner that is operating the energy for McDonald's, is using one of our devices to monitor the energy consumption of McDonald's restaurants in South America just to make sure that the fridge is still switched on because otherwise they have a problem next morning. But the deep fryer switch off, the air condition is switched off. The outside light is on, but the inside light is off. So to optimize energy consumption and to have the reporting as well. So all this is really important. So about the market. The Smart Home industry is at the edge to become a mass market device. So it's not stopping. And although the growth rate in percentage might go a little bit down because in the past, it was more like 15% to 20%. Now we talk about 10% to 15%. The level of the starting point is much higher. We talk about EUR 1 billion business. And of course, it's more complicated to grow if the level is already higher and the level is zero, to grow from 0 to EUR 1 million, from EUR 1 million to EUR 2 million is easier than from EUR 100 million to EUR 120 million. We lead the market with great products. We have -- if I say global presence, that sounds too bold and too big, but our products are used in more than 100 countries. They work because they are constructed that they work in every country with every switch, with every device. Of course, we need the local legislation. We need certifications for the regions. In the United States, you need UL in Europe, CE and in other regions, it's different. That's a burden, but it's something that is relatively easy to do. We have a unique technology, no one right now can follow us. So there is no comparable product in the market. And we think that with the combination of our software and cool hardware and everything that you will see later, we are on an excellent way to continue growing. So the market is positive. It was the first part now open to your questions. For this part. So we will have a 15-minute question-and-answer round after every segment. If you have questions to the market, ask the questions now. If not, Dimitar can continue with the product? And maybe you have more questions there.

No question from the chat.

Can you hear me? Sorry.

Yes.

How large is your market share -- not your market share but that share of revenue that you have in the United States compared to your global revenues? And how has this been growing?

Yes. We are not reporting the United States separately. We are just reporting rest of the world. Rest of the world is 10% of our revenue, roundabout 8%, 10%. We are growing in the United States. We are growing in the same speed as we grow in other regions like 50%, roundabout. I would love to grow faster because we are at the very beginning, revenue is not where it could be potentially, but United States is a country where we made a couple of changes in the last 12 months. We are addressing more the do-it-yourself market. At the beginning, we were shooting with do-it-yourself products to the professional market that didn't work out. And we see that this pays back. So we have a good visibility that it should speed up, so the growth rate should grow. And later, we come to 2, 3 other points about the United States, why we think that now we found a good key to open this market.

How is the competition in respective market? Does it differ for instance, in the Northern Europe compared to the rest of the Europe or 0how is the competition?

Yes. Yes, competition is completely different region to region. So if I take our strongest region, DACH region, our biggest competitor, of course, besides the global players like Schneider. So Schneider is everywhere, but with different brands. So they own -- in Germany, they own Martin and a couple of other companies in -- so they bought companies in different regions. So if we take our biggest Smart Home competitor in Germany, I would say this is currently Homematic IP. If we go to Nordics, to Sweden and Norway, our biggest competitor is a company called Plejd. And then we have a lot of smaller players in different regions. There's a company called Z-Wave Europe, but they have their own products as well their own product lines, while it's not the standard. It's -- they have product lines. They are quite small, EUR 15 million revenue based in Germany, but not growing. So there is -- and there are -- wherever you go, you have some fee in France, very strong in some of the areas. So it's completely fragmented.

Yes. Could you comment on the market sizes in Europe? Is that corresponding to the GDP level of the countries? Or is it different in terms of the development of the different countries?

It's different. And it's -- I mean we made a lot of analysis now because at the very beginning, 2 years ago, when I started to make the first analysis, my assumption was the markets are similar, and they are comparable to consumer electronic spends. And with my knowledge from the consumer electronic market, I said, okay, it's easy. If Germany is 100, France is 80, and U.K. is 80, which is not exactly true. So now we found out with -- again, with all the interviews and all the market research data that we found somewhere, we see that the biggest market in Europe for our devices is not Germany, it is the U.K. U.K. market is size-wise bigger than the DACH region. So we are at the very beginning in the U.K., we come to some developments later. We are at the very beginning. We just hired the first salesmen, we are looking for more people. We look for technical support and marketing. So we will put a team on the ground in the U.K. because that is the biggest market. France as one of the big economies in Europe is -- the market for our products is on the same level as Benelux or Netherlands only. So that Netherlands is a very strong market. And for us, interesting enough, Italy is a relatively weak market, but it's our second strongest country. So that shows that we can get with our price positioning, we can get a lot as well out of these markets. And we have two, three countries that we analyzed where we saw what was happening. And from this learning, now we will make new steps in some other regions.

We have two questions from [ Rasmus Persson ]. First question is which markets outside the DACH region is most interesting? And the second question is looking at Norway and Sweden, Plejd have a very strong position within lighting. Will that hamper your growth in those markets?

Yes. So first question, I think I answered partially what are interesting markets in Europe. U.K. is the biggest country in Europe for our business, not for -- for our business, but in general, for Smart Home. So that's a market that we definitely want to take very serious, and we do the steps to really address this market in the right way. For us, an important market is Italy as well as Spain. So Southern Europe, where we developed quite nice. Interesting enough that we are very good in Portugal, in a small country and in a poor country in Europe. We are very strong. We have a very good partner there. So there are a lot of countries where we see some potential. Now if we look to Nordics, Dennis is here. So when you have specific questions in the breaks, you can ask Dennis as well. In the Nordics, we have the highest share of professional business. So we come later to this as well. The split between do-it-yourself and professional, Nordics is really heading that development. Plejd is working 100% with distributors and professional electricians. Maybe that's a specific thing in the Nordics that people don't want to touch the wires and they're not that strong in do-it-yourself, maybe. But that's not a burden for us because we see a good development. And we see a very interesting point right now that a Plejd is Sweden and a bit Norway. And we see that the distributors that are working with Plejd are now coming to us. So they come to us, not me to them, asking us if we can make a cooperation because they feel that Plejd is too dominant. So Plejd is doing this year, I would guess, EUR 70 million revenue roundabout. That should be kind of the number, maybe 75%. So they are good doing most of this in Sweden and in Norway. And that means that in the Lighting category in that country with the wholesalers, they have market shares of roundabout 70%. Is this right, Dennis? 70%. Yes. So that's a number that the wholesalers gave us and they said, sorry, someone who has 70% of my business, I want to reduce that. So that's why they open the doors now for Shelly because they see that our solution is demanded and especially in Nordics, Dennis presented 2 weeks ago, what is going on there in the Facebook support groups about IoT or as well the Shelly Facebook support groups. They are really growing tremendously. So we see that in the Nordics, we can make a good development. And the strength of Plejd is maybe helping us because of these open doors from the wholesalers. And because they -- everyone wants to have an alternative that is half the price, easier to handle, and that's a challenge for us, but it's not a burden. Yes. Wait for the microphone.

Quick question regarding the U.K. because you mentioned that has much more -- it could be bigger than even the DACH region of Germany. So how does that market work? Is more professional market, direct-to-consumer. Who are the main players like in the Nordics pledge? And how is your strategy going to attack the country giving all the experience that you have?

Yes. So what we need and what we have in the U.K. is we have -- we think we have found the right partner in the country. So we need a very strong distributor that is -- that wants to work with us. And we identified one, we have found one. We have a verbal commitment. We have meetings in the next 2, 3 weeks. So their CEO comes to visit us in Sofia, and we will talk about how can we develop the market. And if they are willing to put some money on the table for marketing, we are willing to put some money on the table for marketing. We learned that it's better to have a local team with all respect to what happened so far, and this is almost a miracle because we developed the company to the status we have today with a sales team that sits in Sofia. So everything centralized and now we see as well from feedback that we get from Germany that local support in the country language is very well appreciated. Now we could say U.K. is English, easy. No, it's not. So it's the specific words. If you're a native speaker, you find out that's not a native speaker I'm talking to. So the feedback from Germany is super positive and we will as well have technical support in the U.K. That was one of the feedbacks that was coming from our local guide there. We need local marketing because how can you know from Sofia -- I'm from Germany, I'm completely -- it's impossible for me to decide what is the right media. So in Germany, I can tell you the place to be is computer built, its high -- it's two, three other players that you have to be in because that's what people read. What is it in the U.K.? I have no idea. So that's what we need local people and do-it-yourself and professional is similar mix than we see in other European countries, and it's not important if it's 80-20, 70-30, 60-40, both markets exist. We will try with our partner, we will now enter the key players there, which is, of course, it's Amazon. Amazon is in our business is worldwide, the biggest and most important player. There's no way around. Amazon is a dangerous animal. So we need to find the right way to control them. We could grow with them much more, we try to limit the growth, not giving them everything that they want. They are always hungry. And if you tell them, sorry, I don't have enough food for you, they are a little bit less aggressive over time. But in the U.K., it's Screwfix. Screwfix is a place where all the installers go every morning, picking up their devices that they need for the day. And as well the end users going there, picking up the things that they need for the day. Screwfix is like 70% professionals, 30% do-it-yourself and other do-it-yourself chains and onliners. So we have a local partner with this player, we will identify where we have to go and then we will open the market. It will take 2, 3 years. It will not be like tomorrow we are on the level as in Germany, but we see a good development there. And that's what we will do country by country.

[ Oliver Madsen of Baader Bank ]. You mentioned Portugal as being a very interesting and developing market for you. Do you interpret that as a sign that your products could be very suitable for other emerging regions like Eastern Europe and Latin America, Middle East.

I think, Oliver, our products are first suitable for every country in the world because they work in every country of the world. And Portugal as a country that is not the richest country. Of course, people are more open to buy a product for EUR 15 or EUR 20, than one for EUR 50 because they can have twice as much smart devices and make their homes twice as much smarter if you want or 3x as much smarter. But -- that's no interpretation that's a fact. So if we would have the enough people and enough R&D resources to make everything happen that we have in mind and this guy especially has in mind, we could be faster. But I'm a slowing down a little bit, so we want to keep focused. We want to do one thing after the other. Asia, for example, we have a subsidiary in [ Shenzhen ] that started the operations with controlling the factory, going to suppliers, organizing the supply chain from China to Europe, making sure that the factory follows all the guidelines that the quality is good, quality checks. So all this was their origin. So now they start to visit exhibitions in China. So we are present with Shelly booth in China and in other countries in the region. They start to sell. And we see that on a very small level still, they make some interesting revenues. And if we talk to our Managing Director there, he is quite positive about the next 2, 3 years. So again, we will not see a jump to millions as we do it in Germany, but over time, it develops. One of the bottlenecks as is always, is having enough people because we need -- for some Asian countries, we need a special certification. And to pass the certification for Japan, it is not so easy, but we have first demand from there. We have demand from Australia. We had -- last year at IFA, we had a visit from Amazon Australia. They knocked on our door and said we want to sell your product in Australia. And we have as well distributors in Australia. So if the region is coming, it's on a -- still on a very small level, but it's developing. And that's one of the chances that we see for the future.

Just coming back to your last point about China, how do you deal with competition and pricing pressures from China and competitors there?

If you remember our price positioning. So we said we are -- no one is listening. Usually, I say we are twice as expensive as the cheap Chinese [indiscernible] . I would never say that in public. But our products are competing -- outcompeting feature-wise, sum of 10 times. We can do 10x more. So we are not comparing ourselves directly to a product for EUR 7, EUR 8. But we want to keep the distance in a digestible level for end users. So EUR 5 more, EUR 10 more for a EUR 100 product, maybe it's EUR 50 more, but it's much more reliable. So we are -- we think we can handle it, but we keep an eye on them. Looking to the other side where we have upside potential. So companies that are 2, 3x more expensive than we are. That's as well an option to go more up the market, but we want to sell huge quantities that's as well important for us. And the Chinese are good in copying, but what they copy is our hardware. They are not able to copy our software that is not as easy as it sounds. And we are -- Dimitar will talk a little bit about that, what are -- as well our users doing with adding to functionality. That's something that is unique for Shelly. That's why we are not hiding away. China is, on the other hand side, a potential market for us. So part of the revenue that we see now coming from Asia is coming from China. So Chinese retailers, customers, installers are looking for Shelly products. We are well known there, although we are quite small revenue-wise, and they like what we can do. So that's the positive side of that. No more questions? Excellent. Then I give the stage to our -- what did I say? Technical mastermind. Dimitar. Happy to listen to your [indiscernible].

Okay. First, thanks for everybody who's participating in our first Capital Market Day. I'll talk about the products, model technology. And what we're working for the -- not only for now but also for the future, how we can still compete the competitors about, what kind of the features we plan to implement into the devices. But let's start one by one. I think part of the points already Wolfgang talk about that. Something which is really important for us for this, I think, 7 years -- [indiscernible] Years when we start with the first Shelly device. We built not just something to control lighting. For example, when you talk about Plejd, they are very strong, but only in Lighting. And for example, Philips, doing exactly the same. We make the devices, not only for example, to control the heating, which is, let's say, if you're working from the tunnel, they are a very good [indiscernible], but they're all on the heating. We make over at the moment more than, I think, close to 60, 65 different kind of devices, which can control almost everything in every house, which can monitor everything in every house. Energy-wise security, access control, garage water or solar energy, everything, this is -- if it's powered, we can control it. If it's not we can measure it. And this help us a lot to make really the -- to make the experience for the end customer just with a single brand to have everything from it and in a very reasonable price. Because if you compare our component with many others and if you compare the portfolio from many others, then you'll see that even when we talk about the Chinese, there is no single provider which can offer so many devices in different kind of the product lines. Because we talk about the [indiscernible], the retrofit devices which the people can build inside the switch, the professional devices, which working in the breaker box, the sensor switch can be placed everywhere. And all this is the one ecosystem provided for a single company. Maybe we can compare with the Legrand or ABB or Schneider which provides a similar solution. But then really, it's still this solution is very, very, very expensive. And something which we proved that we have many, many partners. And one of the reasons to have that this also -- this is the second big difference between us and maybe all competitors because each device and everything we provide them the open platform. No matter if there is a Chinese or no matter the expensive brands, but their main philosophy is to keep customers walk to their own technology, to keep customers walk to their own cloud. But we think completely different from very beginning. We give options, the customers to choose by himself, do they want to use our cloud and our solution or they are just to use the piece of hardware with our software build in to connect to their own infrastructure, which is, let's say, if you talk here, it's a Windows against Linux. When from Windows, customers stick to the operational system and on Linux anybody can up and can control the environment and control the software from their own side and which is exactly this way. And for what we see -- this is very appreciated from our customers from the very beginning because they don't feel that it's -- we, as a company try to work them exactly, just all the time to be dependent to what we build. They can control their devices by themselves, locally through their own cloud or from a third-party solution. And this is the result. All these companies -- I'd call it, not most but all them, they make a special support and not only this one, I don't want to have more than 400 integrations because they see what we do. They're happy with what we provide them and they start to build their own infrastructure to support our protocols and our devices but from their [ cloud ], from their side. which, for the first time -- and this is nobody make it before a such large scale. And this is really huge. And this is every day, for example, we have a special team now, which is integration team and helping everyday more and more companies to integrate our devices to be part of their own infrastructure. Our quality is completely off. The customer doesn't need it. And this company is also feeling this is given the additional security because in most of the cases, they see that there is a rising star, a new company, which provides amazing technology after 3 years no more money, investors don't want to continue supporting them. And then the company's goal is gone. And what happens with devices and the customers. What happens is all this technology they provide, in most of the cases, nothing and the customers need to buy another technology or something like that. But in our case, because we are on protocol, the devices, they can be connected to everything. And even they know that in their worst case, if something happens with the Shelly Cloud, we don't care because their device is communicating directly with us. And this is something which is completely different with how the competitors think about the business. And the third one, because we are almost software company, and you are very good for the -- to maintain the big -- the huge data and the big amount of data, we have the cloud platform, which for the usual customers, people who don't want to care about the whole process. They just want to plug and play the devices. We have our own cloud solution. Partially these partners are also using our cloud solutions for backup. If something happens with their own cloud, they can use our one. But this is the third part, then we offer not only any kind of the automation, any kind of the area to be automated, but also recovering almost every platform at the moment in the world, possibility of our device to work with it. And on top, we are also covering for the customers which don't want to -- the regular customers, which just want to use the devices, we're offering them a very advanced cloud platform. And we're going to talk about the key drivers. I think more of them maybe many companies can say that, but the next slide, you will see the difference. The first time, yes, that's as we say, is the -- our cloud, which is made from the scratch. And this is very important to be profitable because many of our competitors. What they do? From the very beginning, they don't want to spend money to build their own solution from the scratch. And then they're looking for the ready-to-use services, they use third-party services, for example, Google Big Data Services or AWS, Amazon services, which can collect data, IoT something cloud. What happens in the future? Unfortunately, from the very beginning, this works fine. They're selling the device at once. But this device must be supported in this -- from the cloud for them for the next than 10, 15 years. And when they have, for example, let's say, we have 50 million devices on the market, 50 million, just imagine if this cost them just EUR 0.5 per year per device. This additional cost of EUR 7.5 million for them. And this slowly start killing them because the only way to support this one is to sell more and more and to increase the price of the devices. But because our company history is 20 -- is a 26-year old company, which usually controlling data. We have a big experience with the big data because we have a software for the mobile care, maintenance data for some financial institutions and we have [indiscernible] experience. This call basically, this proprietary secure cloud solution keeps our cloud costs extremely low, which help us to provide the devices and services connect to these devices is very reasonable price compared with other brands. And the second one is fully open protocol, which I talk about just on the previous slide because this also give us option for the customers to use their one cloud. For us, this is fine, okay? They buy the device, they doesn't use our cloud. We were completely fine because we don't need to pay additional costs for the cloud for every device. The second one is everything is the software and hardware is 100% built into -- is in-house development. There is some third-party services, which we use, but it is more, for example, for design, for using some consulting services, how to make something better, but everything is building, and which means that everything is under control. This help us a lot because in case of the chip shortage, for example, or in case of the -- when the [indiscernible] is coming for our team, it's much easier to found the alternative solution, fast, easy and to switch and to use a different type of chips. And components, which help to continue growing and selling more compared with the other companies which suffering and waiting somebody to deliver them the new technology or just to show the [indiscernible] to go to finish. And the second one, which is good, everybody can say that the we have our best world-class engineering and software developers. On top of that, we have more advantage where in Europe, European Union but it is Bulgaria and our R&D is in Bulgaria, where the cost for the people and the taxes is relatively low, one of the lowest in European Union. European, European which help us only to have discounts in the reasonable monthly cost. And to have options not to prioritize the different devices and services, but to try to make more on the same time because we can find the right people. Yes, the integration of the ecosystem, compatabile leading protocols, this means that not only we have open protocols, but if there is a system like Samsung, SmartThings, Google, Alexa, Amazon, Matter, our devices, KNX for example, our device is compatible out of the box with this -- any kind of protocols and ecosystems, which gives customers just easy way to use it. And community driver design For a community driver design. I can show maybe the next slide which is most important because this is from the very beginning. What happened is from the very beginning, and this is -- we still, I think, is moving the company forward, and this is our community. There is no other company, but there is not. We have a such larger community, the brand which have such larger community in the social media. If you open the Facebook and look for Shelly for example, support groups, you will see that there is a main group with 100,000 people there in, very active group with more than 20, 30 posts per day. Saturday, Sunday it maybe 50 posts, more post per day, hundreds of comments every day. And this is something which is not -- which we're supporting but it's not built by us. This is built by our customers. But it's not -- if you check there is a German group, there is a Danish group, there is a Netherlands group. And there is a Poland group. There is almost in every language, our customers create groups where they can talk and where they can share their experience and knowledge about our product. And we are there to help them. We are very actively talking with them. All developers including me but also all developers in the company, they are obliged to see what happens and they personally to helping and to say and to tell people what they can do, which is many companies claim that we are close to the customers. We're working together with the customer. This is okay compared with what we're doing, I think this is a somewhat [indiscernible] because we're really working with them very, very actively. And not only this one, but also we use their experience. I can tell a little bit more about how that will process. But for example, we have a very large QA team, which is made by -- which is our most active customers in [indiscernible] participant in the Shelly groups. We invite them to be part of our external QA team, which has helped us to short time to device to reach the markets. First, if you have some idea, we can talk with them. And I believe some of them they're in very high position. Some of them is working, for example, the main network engineering for Cisco. Another one is, for example, is some of the engineering, which working on the Honeywell and they have all the experience, but they are happy for free, okay, almost for free because we give them, for example, devices to test and everything, but they're happy to test the new devices in different kind of the environment, to give us the real feedback, what -- how, what we can improve the devices to give us some ideas to implement them. And this is really one of the most, let's say, for us, a huge help. It's something which is from the very beginning drive us to the more and more level and don't know because all these people are engaged. Now I think our all channels, we have more than 200,000 people which are more of ambassadors, not just the clients. I think, for example, Tutera or some brands, cosmetic brands, they try to make such kind of multi-level marketing, and they pay a lot of money for that. The good thing is that this is happens for us without paying any kind of the money. We just don't spend for the first year, as you know, from the very first year of the Shelly, we never spent a single cents for marketing. Everything happens viral. And it's happening because these people, which is now is -- in these groups, they just talking about the brands, friends, their coworkers and to everybody, they talk about that, they're showing what they can do with our devices. And this is -- and then this growth what you're seeing is happening because of them. Now of course, we spend money for marketing, but not -- we don't have something which is I have a question for investors, for example, I think, in one of the meetings. The question is, how much is the cost acquisition for per customer? I say, what is this? I don't know what is it because we never spent such a money. I mean if you spend money, we now spend money for the IFA or CS in Customer Electronics Show in Las Vegas. We spent money to have a beautiful booth because we know that the partners will come, we want to talk with them, the people want to see us. And we spent most of the marketing in this direction. We never spend money, okay? Now we spend 10,000 of advertising how much new customers we have for 10,000? No, that -- this is not our -- until now, and during now that is not our -- we never invest money in this area because the demand sometimes it's bigger than as we can deliver and prepare the next production. This is very special for the hardware. If you have -- from months to next month, for example 30% increase of demand, you need to cover it. But unfortunately, for the real KNX, not just the software, you need to prepare the raw materials, you need to be ready for such a scale. If not, this is the people is waiting, complaining. And it's not so easy to work on that area. We're doing very well. But still, this is one of the -- for that because we never spend it, there is no targeting. There's the people just waiting and waiting asking for more and more devices and they buy more devices. And they generate the content. If you're looking at the YouTube and looking for Shelly, you'll see, for example, of 5,000, 7,000 videos already for the Shelly and we never pay for the video. The people make it for us. They share these videos, and this happens. And I don't think this is very unique for the Shelly because there is no other company, which is -- their customers is active. What is the result until now based on what we're talking over 100 countries, and we thought more than 15 million devices which is 6.7 million we sold in the last year, last 12 months. Okay. Last year, yes. We see the growth rate for the sold device is very high. Currently, when we do something and when we say something, we do absolutely without paying nothing. We have more than 1 million reach immediately. Because every post is shared between the many groups for the whole automation over the world, immediately some influencers publishing video about the new devices or the new technology, which is make the million coverage is almost for a day, and which is good also about the customer satisfaction we're measuring -- our QA -- our support team measuring all the time the customer satisfaction is over 60, which is one of the best in this kind of business or area. Currently, we have 1.5 million cloud users. What we can see, let's say, the cloud users mean also a number of the households, but it's not all on because we have some questionary for our customers. And we have some additional data that we know that the 50% of our devices and half of them is sort of the systems, which the customer doesn't want to use any kind of the cloud or they use the third-party cloud. This, for example the user which was in home assistant or open hub or Homey, which they want to use their devices completely isolated from the environment just in their houses. There is many device in the hotels and some institutions, which I also don't want to connect their device to the cloud. They're using some internal platform. And this is 1.5 million customers. We can double the households. This is about 1.5 million households, which means currently, we have over 3 million households, which is operating, which were the Shelly device operating over the world. Yes. And you can see, of course, DACH region is the most successful for us with half of the installations happen in the DACH region. Rest of Europe is 41%, and the rest of the world is 7%. One of the reasons because I see a question what happens in the United States and everything is not easy, and there are 2 reasons. If you can -- there is not so many European brands, European movies which is successful in the United States. And there is many United States products and movies which is successful in Europe, which means the way to make a jump from Europe to United States is not easy. The second one is not only easy, but it's very expensive. And from the very beginning and mostly versus they know us from the very beginning, they know that we are not like -- management is not -- we don't want to do gambling. We don't want to say, okay, let's spend $50 million or $15 million this year on United States to see what happens. We're going slowly. We prefer to go, let's say, with the river and to make small steps but secure steps and not to make some risky steps and to spend a lot of money to see just what happens. And maybe based on that, this is one of the reasons because we're expecting in time -- and we know that it happens the success in DACH regions, for example, in rest of Europe, this will happen in other countries in the world, just need more time and take more time for this one. And this is something which first time I will show Gen4. Nobody see Gen4 because now the current viral device is Gen3. Now we will be first to know that there is a Gen4, which is planning by us. But this is how we're driving the technology and why we are much better than the competition. The first device is in ['27] when we build this is the Gen1 device, which can operate only over the WiFi and the only third-party protocol, which the customers can use to control devices. This is the MQTT. One of the most, let's say, protocol for the geeks and for the home customers. Then in 2021, we make Gen2. In Gen2 devices, what we add on top of the -- all kind of the features we have the WiFi, Bluetooth and still the protocol is only MQTT, which the customers can connect our devices to the third-party services. And then coming to Gen3 and Gen3 what is very special in Gen3, this is the first pilot devices where we're building our one chip. It's not completely one. Let's say, we make it with a partner. We don't produce it by ourselves. We are fabless for the chips, but chip is made by our requirements. This immediately mean that this device is much more capable for the -- compared with the competitors. I can show you something which [ Borgen ] doesn't say, but this small device, when we talk about it's not just the delay, it's not just measuring the energy. But for example, this device is a router. This is a WiFi repeater. We doesn't need repeaters. If you put behind the wall, this device starts repeating the WiFi signal, and you can use it. You can use it for other devices. You can use it from your mobile phone in such a size. This device act us as a gateway for the other Bluetooth device because usually, the Bluetooth devices, for example, [indiscernible] is a Bluetooth, what customers need to have, they need a hub, and you need this hub to -- because the Bluetooth is not in the Internet. This is the local protocol. And if you want to control these devices abroad, you need a hub. Each of these devices is act as a Bluetooth hub. This size, there is no changes. Each of these devices has some thing, this is a Java script we got to explain. I can try to explain the easiest way. If all kinds, if the feature is not enough for the customers. If you -- the customers have very special protocol, which we doesn't implement, we make insights the programming language that every customer can program this device by themselves and can add additional features, something like application and you can install additional application inside of this device. On top of that is not only this one, but this device automatically now, for example, can check the weather conditions and can take a decision. Raining, okay, I don't want to switch it off or can send comment to another device to switch it off. This device guess, know the sunset, sunrise, for example, every day and can act independently without any kind of controller and to control the on-off or dimming or measuring -- if measuring the energy, this device -- measuring the energy can decide if the energy is more than expecting. Maybe it's better to -- or consumption is too high, for example, it's better to tell other device to do something. And this [indiscernible] is building this device, and this is because what we're exactly doing -- adding the -- make a special chip for us. And not only this one, but these devices have a WiFi, have a Bluetooth on top of that supporting the procedures, the Ethernet, the KNX protocol for first time is there. KNX is one of the first home automation protocol. And do you know how costly the KNX device is? Extremely expensive. And not only this one, they're wired devices, mean this room have a KNX, for example, but if tomorrow, you want to put here a new wall and you want to put the device, you need to call somebody to come, new wiring, new cables. What we do, we're building the KNX wireless protocol in this device. And this device can operate with all kind of the ABB, Siemens, Schneider, KNX system without adding nothing on top, and this is inside. For the first time, we are supporting DALI protocol for the lighting, and we're going for the digital automation with the DALI protocol and big office building protocol. And also for the first time, we introduced the matter, which is the new protocol for the smart home and for that end customers. The VoIP is the same size device, just a little bit kind of different chip size to support the VoIP technology, but everything is slightly above these sizes is for the Gen3 devices. And we released them then the first Gen3 device at beginning of the year. And now just a year later, now we think about the next one. What will be the Gen4? What is missing? And as you've seen already, the 2 new protocols is there, LoRa and ZigBee. What is very special for this one, LoRa. LoRa means that these devices because you will keep the size. We can make a little bit bigger, but you will keep the size. These devices can communicate between each other in 5-kilometer distance. And you can make a small mesh for 160 kilometers if you need it, which solve a big issue and also one of the reasons for LoRa, the LoRa is the industrial protocol, which means, for example, with such devices -- but with LoRa, as we've seen LoRa are done because we don't want, for example, the regular customers to spend additional money if not needed. But with the LoRa protocol building into the devices, these devices can start controlling the street lighting or agriculture, for example, sensors to receive the data in very large distance. The next one is the ZigBee. The ZigBee is the same. It's almost industrial protocol but also smartphone protocol. And on top of the WiFi, Bluetooth is ZigBee, something for Gen4, which very important. The customers now if you open the Amazon, no matter what kind of website, you see that you have a choice to buy the ZigBee device or to buy the WiFi device. What we make with Gen4, all of this protocol will be building in the single device. We just buy and then the customers can decide what exactly need to use. I want to use ZigBee. Okay, this device, switch to ZigBee, working with ZigBee. On a WiFi, okay. Go to the WiFi. Not only this one. We make possibility customers to use all of them at the same time means I want this device to be connected over the LoRa, Bluetooth, WiFi and ZigBee. Okay, welcome, you can do that. And you can control device. There is not such a technology on the market. There is not such a device. And on top in this size, nothing different, which is completely new era of the, let's say, possibility, how people can use the Shelly devices. And this is the Gen4, which we're planning in '25, '26. We're coming in the steps from the first to the next devices. And on top of that, you see additional protocols Z-Wave Long Range which will allow devices to communicate the devices, to communicate from 1 kilometer each to another. But this is basically the next step which we're working on. And yes, maybe tomorrow on Facebook Group, somebody will ask me when the Gen4? You know how many questions will be there. I say I don't know. Yes, but yes. Yes. And this is the Shelly Smart Control App. I think there is some kind of a video, which need to be played before I'm talking about that. [Presentation]

Yes. Some customers joking with [Shelly], but yes. The Shelly app. What we build in IT compared with our application, we make a very -- at the same time for some customers, it's a little bit complicated. But when they dive in, in what we offer them with our application and they start comparing with their one, with other applications, they've seen that we provide them a lot. We provide them a really very good customer experience. We are one of the -- or maybe the only one already with somebody which can open the application on the web browser. And this application looks quite completely same as opening from your mobile phone, which make them very easy to managing the application, to install new devices directly from the laptop and also remotely over the VPN and something which is something -- this is again something which is unique. And at the moment, everybody is concentrating to control everything from the smart -- from the smartphone, but really for the large installation of large houses, it's much easier also to open from your desktop. And this is what the Shelly Smart Control provide them with very detailed information about energy data usage, consumption of the houses, give them additional analysis and historical information, what happens in their houses, create different kind of scenes. And absolutely, our application is covering more than one area of the smart home, and it's one of the more advanced applications for the customers. The second one, as you know, a year ago, we launched the first premium subscription for our application. We do that with -- very careful because there is no competitors which, at the moment, asking customers to pay for this one, even the biggest one. If you have Amazon, for example or Google, they never ask for additional payment, especially to control your houses. We got very careful and listening to our customers, we chose a very special things which is not existing in other brands. For example, if they want to have some kind of the EI-enabled features to receive information if they forgotten their lights or if there is a pre-firewall work detection of their devices, automatically, our [clouds] can calculate the data. You can see that there's something happens which is wrong and can send the notification, and they're very happy about that. The second one is the customers which want to, for example, have a really detailed energy data information. We keep them for 5 years. And for every minute what happens for the last 5 years, and they can really go and see every moment what happens in their houses, even they can analyze, they can compare the historic information. This is something when we at the moment we continue adding additional services for this subscription. What we can say at the moment, there's a question, how many is the subscribers. We still keep them -- we don't say how many they are. But what we can say is something which is a very important number. The current premium -- revenue from the premium customers, covering our -- completely covering our cloud cost, which is, for us, this is -- as a first step is just perfect. We continue working on them. We will start to make some kind of the gamification and the application for these customers and hope in time, the numbers will be a significant part of the revenue. But still, as you can say, this is still our -- some kind of not test, but careful steps before to offer such kind of a subscription for the customers. The second, something which is completely new, and you can check in the -- in the Google, if you ask, you can see more data. We start providing not only services for the home automation, but we're working on the security, on the SaaS service, the cloud-based security system, where based on the same our Shelly devices, the customers can create Access Control System and also the working -- controlling working time, monitoring working time of the workers. And this is one of the first additional services which we start adding on top of the device, on top of the -- just the smart home automation, which also showing that our device is not only for automation. They can do many -- any kind of a job with the proper back-end and control. In the very beginning, now we have 2 or no, 3 test customers when we started -- when we -- when the system is launched and is under the testing condition. Next year, that'll be one of the platform and direction where we're going also with Shelly. The third one is very specific, the fleet manager system. And this is related mainly to the big institutional customers and the big buildings. Because just imagine there is a hotel, the one hotel could not be dependent of the Internet connection with the cloud because if something happens, the system will fall. At the same time, they don't want to use a third-party solution. They want something from Shelly. They're asking us, guys, can you provide us the private cloud just for us. And this is the Fleet Manager. Fleet Manager, give them -- give our customers possibility to install our cloud in their on-premises. And this is very important, for example, for the banking institution because one bank, they say, okay, we don't want data to come out of our ecosystem. We want everything to be built in. But at the same time, we don't have -- we don't want to use a third-party services because it's very expensive. And then we provide them the Fleet Manager, which make these customers to control the devices caused in their environment. This is also SaaS service because we provide them under subscription, the support for our cloud but install in their on premises. And also, there's a lot of advanced features. For example, if somebody, let's say, one energy company want to monitoring 1 million energy metering in real time. This is something which is now our code is not built for. This is built to control the house and to monitoring one house. The fleet -- but this is not the problem for the Fleet Manager. If you want to monitoring, for example, 100,000 temperature sensor or water level somewhere or energy in some region, the Fleet Manager is completely optimized to do this job for the such big companies. And also there, there is also cloud version of this Fleet Manager, somebody which want to use the independent cloud, not the centralized cloud. We are also offering as a SaaS service. And this is another area. And there is a Shelly X. I think before talking about Shelly X, it's another view for the Shelly X. It's short video. Without sound? Okay. But it's short. That will be Shelly X. I can start talking on top of the video why and how -- why we decide to have a Shelly X and what is the reason to be there. From everything as I told, connectivity, multi-platform support, the open protocols will cost for the cloud support and maintenance. And because the Shelly is going very popular in Europe, we've seen that many -- we've seen that there is an increasing interest from the appliance manufacturers from China, from Europe, from Turkey, which ask us, okay, can I have something which is -- yes, can I have something -- can I build your technology in my device? For example, let's say, this is the fridge manufacturer, and they want to connect their fridge to the Internet or they're just, let's say, in Turkey, there's many brands also which make the washing machines, and they want their washing machine connected. Unfortunately, if they start calculating how much they need to pay for the cloud cost, connectivity, development and everything, that's such a platform just for the washing machine, this is very expensive for them. And they prefer to use third-party technology. Currently, worldwide, there is just one competitor, a real competitor. It's called Tuya, it's a Chinese company, a big Chinese company, which is providing such technology for many European, United States and China appliance manufacturer. But first, it's Chinese, especially GDPR, nobody know what happens. Also, the cloud is in China. Support responsibility also is not clear what happens. And many customers also because they're going to be too big, especially if they're only one, they start to be a little bit arrogant to their clients. And we want to use that. You want to use that because we want to create and to give the -- not only the -- and also something which is very important. When you talk one of the customers, they don't know what they're afraid. If I switch to Shelly X and Tuya switched me off, tomorrow, nobody will say, for example, that my Tuya doesn't work. Everybody will say, for example, my washing machine, let's say, Whirlpool. I don't know, Whirlpool is there, but just an example, my Whirlpool stopped working. And they're afraid about that to be dependent with a single brand. The second one, which is completely different between us and the Tuya, for example, as a main competitor and only competitor at the moment is that we give them possibility to control devices out of our infrastructure. For example, if tomorrow we're going -- [Wogan] wake up angry and say, okay, kill Whirlpool. No, he cannot do that. No one can do that because the Whirlpool can have additional separate channel next to our cloud. They can continue maintenance and monitoring their own devices and managing their devices, something which, at the moment, nobody offer them such a solution. And for this one is the Shelly X when we provide them our chip making a module, it looks like that, the module, especially this one, is with all kind of software need for them just to be sort -- just to be put inside in their own equipment, and this equipment to be smarter to be monitored from everywhere, to be managed from everywhere. And to have all kinds of features mean, well, this is mean also that this vacuum cleaner can act as a WiFi repeater in your house. If you don't have coverage, you can just set the vacuum cleaner over there, and you have an Internet spot just because this is part of our technology. Yes, funny but this is -- and this is the Shelly X and something which we're working now. The first Shelly X products will be on the market end of the year, beginning of the next year. Let's say, we're planning December maybe for Christmas. There will be first Shelly X product, which is powered by Shelly -- with Shelly building in this product. And this is the live data, which we've seen -- you can see in our web page. Yes, now a little bit just to -- I see it on my screen, just few seconds, you will see over there. This is the live data they can show you, well, how big -- where can -- where we can see almost what happens in the real time. In our website, you can see in real time what's happening. This is the only device which is connected to our cloud, for example, this screen, especially this map is devices which is connecting to our cloud. Just keep in mind that one more -- this is just a half. Another half, we doesn't see because the customers buy it. And they don't allow this device to be connected to our cloud, they choose another solution. And you can see here that especially Saturday, Sunday when the people is at home, you can see that almost every 2, 3 seconds, there is a new device, which is popping up on the map. During the week, let's say every 5 to 10 seconds. Average time between all devices is at the moment is less than 5 seconds. Every 5 seconds, somewhere, somebody in the world install the new Shelly device. And on top of that, you can see, for example, when we talk about the Big Data. Every -- for the last 24 hours, our cloud stored and analyzed 18 terabytes of data. And for the -- traffic, the real traffic, which is at the moment to the cloud is something like close to 30 gigabytes per second. This is a traffic which we receive and an information which we're working on. From the -- this I think is the early morning executed is just 80 million. But end of the day, over 100 million, maybe 150 million since we view, executed from our cloud. And over a median time, somebody -- this is the least number executed Alexa and Google command mean more than 1 million times the people will say, Shelly, switch on the lights. Shelly, set 25 degrees temperature. This is per day. And we have lot's of data. Now currently, 5,500 EV is charging, how many lights is on and off, the real cloud data. Per minute, we're executing 175,000 things in our cloud. And yes, it's a huge data. And this is exactly -- this is one of our big, big, big advantage. That's -- when I have a meeting with Google and show this one, they say, guys, how you do that? Do you know how many times I ask for our engineers to show some amount of the data unless this data in real time and they say, this is impossible. How you do that? I'll not say that our engineers is better than Google engineers, but maybe at the end what we make in our all kind of optimization, what we do, give us possibility to really to present and to maintenance a huge amount of data and still to be very, very profitable on the device. Yes. And I think this is the -- yes, the -- just waiting for the last slide. Yes. And yes, this is some kind of the information, the future prediction. We stopped somewhere because nobody know what happens with the Shelly X. Let's say, if you look in the Tuya, if you compare with Tuya, Tuya is selling 100 million to 200 million modules annually. If you compare these numbers, maybe and if you succeed, Shelly will be over the moon compared with ours and compare with these numbers. But we try to provision what happens if you continue like that, growing like that. And you can see that, okay, 2020, we have 8 million devices on the market. 2023, we have a 30 million. 2024 to end of the year, we're expecting to have 20 million devices on the market and then 2025, it's over 30 million, over 40 million, if you continue like that. Some calculation, maybe we will have over 150 million, 200 million devices operating on the market in 2030, which means this is the customers using our devices using our technology. A big part of them -- half of them will be connected in our cloud. And on daily time, they use our application. And this is showing that the potential with what we're doing, as I say, without adding Shelly X on top is huge and shows the very huge potential of the future of the company. The second, what we're looking for, this is the main area when we are not, let's say, present but working on it and which can add additional customers, revenue streams and sales. The smart locks that you acquired the assets for one company from the smart locks. The idea behind is just to dive also in that area. We believe that the smart homes, smart locks is part of the home automation. And now the integration is done. In a month, the smart locks, which we buy, will be part of the Shelly application, and the customers can automate it. And also, together with that, we don't buy just assets. We buy the experience and knowledge and working for the more than one type of the smart lock in the future. The second one is intelligent sensor. What means intelligent sensor? The intelligent sensor is not only to report the data, but intelligence inside of the sensors can decide how this data is important or it is not important, what means best of historical analysis. Many people will say, enable sensors, which is not true. Intelligent sensor is the most correct world because, yes, you don't need to have an AI with, I don't know, with the power plants to -- for the sensor. It should be the battery-operated device, which with low power profile and energy to be enough intelligent to analyze the data, not just to report it. The smart cameras, camera is a huge area. There's many companies there, but we've seen the demand for our customers to monitoring everything from the single app. And we believe that we could have a not wide range, but the few very targeted smart camera ring bells, doorbells, which is we think that there is demand. And we're planning to in next year to go in that direction. A long range, as I show you with the LoRa technology and also with the ZigBee technology, with the Z-Wave Long Range technology, long range will give us opportunity to go -- to dive into the -- and to approach the industrial market and the city automation, not just the building automation. The Shelly X what I talked about, I don't need to repeat, too. Then the AI-driven predictive maintenance could be additional streams. This is the hardware, let's say, about software. Yes, the AI give us possibility at the moment really to analyze the data much faster and big portion of data and to help customers giving them the -- any kind of prediction. We can tell them how much they will consume at the end of the month, how much energy, how they can save some energy, what to do. This is something which before that is not so easy and also something very important that the customers can control, can create the [things] with the voice. Now they can need to click and to make it. In the future, what we're planning, the customers can say to the application, okay, Shelly, just I want to when I come at home to switch on the light, the heating 25 degrees. But when I go in the bed, please switch off the light, something like that. Then the SaaS services which I show you, now we are also working on a different kind of the SaaS services, which can give us additional revenue or recurrent revenue and working on it. The advanced energy solution and monitoring, we're working with many different energy meters, which can work in the different kind of conditions and analyzing the consumption. Cloud management and data lake, something which we think that is -- the time is coming because we have lots of data. This data we never show and give this data to the third parties. We use in favor of the customers which create the data, and this is very important. But some of the customers, maybe the -- if they allow their data to be used for the municipality or to be used for the third party to improve the environmental, example condition for the -- for ESG goals, we could help there. And the Shelly X software, where we -- with our platform, we also will start offering to our Shelly X partners opportunity they to build the recurrent revenue and to have a recurrent revenue through their appliances. Let's say, the washing machine before the maintenance automatically send the data to the service center to come and to clean the filters or if something -- some of the -- yes, something is gone, that some of the, I don't know, liquids is gone, something the washing machine can order this directly from Amazon or from somewhere. And this is some idea which we're planning for the future for Shelly X, and this is a pure software solution. Yes. And then I can just summarize that is -- we're providing the full range of the technology and to covering any corner and every special task which the smart home requires. We are really -- I can say we're the most innovative company for the smart home. And we're providing the technology. We're creating the technology, everybody following us at the moment. We have right products from the plug and play customers which don't want to -- and the right technology for the customers who doesn't want to do anything, just plug and play and have a simple remote control. To the customers which want really everything, any kind of the data and they want to use it for their special services, we also provide them the service for them. The Shelly X give us possibility, our technology to be a technology enabler for the third parties and to be more oriented, extremely to increase the coverage of the Shelly technology in households, in the customers, basically everywhere. And yes, I think the second one is that what we give them, we give to everybody the right platform. And the people which need the proper -- the platform for -- to integrate the devices, we just give them the right tools to do that. And yes. Thank you. I think this is a -- questions. I just tried to run away from the scene, yes, questions. Yes?

Yes. Thank you Dimitar. Question on the SaaS services, the Fleet Manager and Access Control. Can you talk a bit about the revenue model behind those services? Is that pay per device, pay per company, pay per user?

Yes, it's what -- If you check, there is some kind of the models already in the web page. Both of them is available. It's per account. It's per device. But mainly it's per device. And with both of them it's per device, a monthly fee per device. Yes, it is not so cheap. But, yes. Okay.

As you build these multipurpose chips with all the protocols and the -- do you have to pay royalties for these protocols?

Yes, we pay. We need -- it's not exactly per chip, it's not royalty, but we need to be part of the WiFi alliance, Bluetooth alliance, ZigBee alliance and the matter alliance. Multiple by 25,000 pair for each of them. It's EUR 100,000 per year we need to pay to be part of their alliance. This is -- and on top of that, for each device, we need to pay for certification one more time. WiFi, ZigBee, blah, blah, blah, additional, let's say, EUR 30,000, EUR 40,000 for certification. But this is not the royalty because after that, we don't pay nothing per device. The only one which we need to pay per device is for the matter protocol. We need to pay, I think, something like EUR 0.03. We pay EUR 0.03 per device for special keys, which is all devices to be connected to the matter infrastructure. This is the only royalty which we need to pay for the security, but which is also important. Anyhow, we paid such a -- for these security keys. We also reuse this security key in our -- for other things. If you want to connect the device to your cloud, you can use this security key, which is stored and which is programmed in the factory, but this is the only way which we pay.

We have some questions from the chat. First one is from [Rasmos Pearson] On top of the chip, is there any cost for your customers with Shelly X software cost developing, adopting costs, et cetera?

It depends on the case. Most of the case, we cover it for free. And we give them the chip completely finished for their one solution. If somebody coming with very special requirements, we have such a client, which produced the heat pumps is coming with a very special requirement. Then we can -- there could be some kind of a surcharge for the development. But yes, let's say, this is per case. But in most of the cases, 90% of the situation, the Shelly X is completely capable without any kind of additional development and charges to work -- to drop out of the books.

Just 2 very fast questions. So on the LoRa protocol, that means that you guys can start creating devices for the agriculture sector, and that's something that would be interested in, given that devices can communicate for 5 kilometers. And I don't know if anybody is doing that. And the last question is any...

Well, what is the first question?

The LoRa, the LoRa, whether you are going to go into agriculture industry to create devices to communicate.

No, we don't need to -- these existing devices, they can be used to communicate between each other in such a distance. It's not need -- but okay, because we have devices with measuring the temperature, humidity. We don't have some devices which measuring the nutrition, for example, right? But you can control with our devices irrigation, you can do many things. But now in the building or in the house. For agriculture, this opened -- opening the area. And maybe in the future, there will be some special devices for the agriculture, but it is that existing devices can be used, for example, also in this direction or in this -- yes. It's add-on to existing device.

That's very useful.

Yes, yes, yes.

I leave it there.

And the second one?

No, I just -- quickly whether -- is there any major brands already using Shelly X? Or what is the timeline with...

I cannot disclose.

You can?

I cannot disclose. There is, but they don't tell us to disclose. There is but -- yes. NDA and no. You cannot imagine because the Porsche is there. And because now, Shelly if you buy the new Porsche Macan, the Shelly app seems installed by default. And we're waiting them more than 6 months. They told us we need to make a PR that Shelly is, it's one of the chosen application to be preinstalled on the Porsche.

All right. I have a question regarding what you described with the fleet. Is this aimed at partners then managing multiple of their customers and having fleet installations on premise with each of the customers? Or is that the other way around as well, where as a partner, you can manage multiple of your customers centrally from your location and they said...

Both is possible, both. I mean the initial idea is as you say, the customers install. This is something which is installed in the premises of the customers. And they can -- and they have locally can control the device and monitoring the devices. But what we see when we build it, some company is coming and say, okay, I'm fine, but can you host this solution for me? I don't want to be in my premise. I still find to be on the cloud solution, but I don't want to be connected -- but I don't want to use the same cloud as the regular customers. I want to have an independent, for example, because they pay the -- this is their one premise, cloud premise, for example. They rent it. They own it. They just want to install them -- to install it in their one -- on their one cloud or machines. And this is the, let's say, as you asked, both is happening at the moment with the Fleet Manager.

We have other questions from the chat, Dimitar. Alexander Dupre asks, do you think Amazon, Google will at some point create also premium subscription plans for their customers which could make your plan more attractive?

We will be happy, very happy if they do that because then we'll not be the only one. And for you, I will be much more relaxed to offer them more services or let's say, to limit them, and it will be very good. But if they do that, okay. No, that's good for us.

Very inspirational. Keeping the speed of innovation, do you need to hire more engineers?

Yes, we do that. I think last year, we have 40 more people in R&D team. This year, we're planning almost same number of engineers because I show you Gen4, but okay, me and some small partners working on Gen5 2027. Yes. And we have idea, but now we need to prepare as we achieve something. It's coming. And yes and still we need -- on top of what you see, we need to decide from now and to choose the right supplier, to choose what kind of the chips to -- how to manage, how to change it, yes.

Just on the Shelly X, can you tell us a little bit more about the financials like the gross margins, et cetera? Are they similar to the Shelly?

It depends on the customer. It's too early to say. But yes, basically, similar to Shelly, very hard to see from the beginning. It's planned to be similar and even better. But let's see the reality when we have a customer because if somebody come and say, okay, guys, give me [EUR 100 million] modules. Maybe it will be much more relaxed regarding the margins. And on the base of what we calculate it now, still, we want to keep this one. For example, there is a Tuya. We'll not be competitive to Tuya because Tuya really -- okay, Tuya really lost EUR 100 million every year. We don't want to lose EUR 100 million every year just make the business, which means we will be expensive than Tuya. But you will provide a completely different kind of the level of the security information and capability with our module compared to them.

Okay. And do you think you need to raise prices for the Gen4 series? Or will you keep it similar?

This is the -- about question you've asked me. Never raise the prices. If you can decrease a little bit it will be better. But this is the moment [indiscernible] will have a little bit different opinion than me. And yes, you need to ask them.

Yes. Just one more question on Shelly X. Is there any area where you wouldn't sell Shelly X where you maybe want to have your own products?

Yes, no, this is very strict, yes. We doesn't offer Shelly X to the companies which make products similar to ours. There we don't want to have a company which -- and there is a demand which already -- a request, which already rejected. For example, if somebody make a [relay], there is no way. There is company which they make up -- even the Chinese company, they make it very smart because they come and tell us, guys, you have to see how many relays you have for different cars, but we don't have a relay which is 60 amps. Can we make it for you and powered by Shelly X? We're completely fine. We'll give you the whole development, everything just -- but we can do it for you. We can make it for you. And this is the only partner which we'll allow and tell him, okay, guys, make it. We really don't have something which controlling 60 amps. There is a demand from the market for the water heaters, for the big appliances, which consume a lot of energy. Okay, make it for us; and two, give you the Shelly X module, which is completely capable -- which is capable for your hardware. And this is the only one. The second something which is important for Shelly X is we don't want to -- what's made in Tuya. They make something and say, okay, we have a module for the humidifier. And then they give modules for 1,000 of the -- not 1,000, okay, tens of Chinese companies. And they start making the same humidifier, and they start competing with the prices. At the end of the day, nobody makes money because marketing, competing, nothing. And customers, let's say, win because they have a cheap humidifier. Quality is suffering, everything is bad. In our Shelly X, the idea behind which is not part of the presentation that we doesn't give this technology to everybody. For example, if we talk about the humidifier, we will choose 2 brands which can give them the module for the humidifier, but they should too -- should give us the okay, first year, we will sell, for example, 1 million humidifier, next year, 5 million humidifier. If they doesn't reach the target, then we have a right to give it to somebody else because we're looking for the quote. For example, this year target is 100 million humidifiers. And if there is a single company which can do that, fine. If there is no single company, then could be more. But we don't want to go in the Tuya way, the cheap Chinese or European products just to start competing with the same modules, with the same technology, with the same features. This is not good for the brand.

We have one more question from the chat from [ Rasmus Pearson ] again. Given that the U.S. have a completely different electrical system than you, don't you need to make large adjustments to the product to be able to work? If so, how much of your product portfolio has been adjusted for the U.S. market?

Yes, U.S. market, what is the difference? It's much easier than Europe because the voltage is 120 against 240. It's much more relaxed from the product, developing the product, which means that every European product can work in the United States, which is not true from the vice versa. It's just time and money for additional certification to do that. And this is, I think, it's time every device, the only difference is the socket size, but this is a single device. Everything for our device -- and also our devices at the moment, we don't do any kind of modification for the United States. We just make the EU certification, which require some of the parts to be changed a little bit. For example, to use a different part number because -- this is not because the parts in Europe is better or something. This is because to have a EU certified product, all -- not all but some important component inside must be also EU certified. This is -- and they're a little bit expensive because it's that. And for that for Europe using the non-EU-certified component for EU product, EU-certified components, but that's the difference. Okay? Thank you.

Yes. Thank you very much. We make a 25 minutes coffee break. That means we start -- we restart at a quarter to 3. And we will catch up. I will talk a little bit faster. So we will catch after 15 minutes. And now I'm a Shelly fan because I learned a lot about our products. [Break]

So I hope you're ready for Part 2. As usual, after Dimitar fun part, I do more the boring part, numbers, things and explaining than all the number questions that might come from you. So the third chapter is about revenue growth and scale-up potential. So if we look at what we did the last year, so in 2023, we gave out a guidance until 2026. Some people said, why are you doing that? Others said, oh, that's great. As usual, there are -- there's not only one opinion. We did this for a simple reason. We had to build more credit. So we wanted to give more -- a longer outlook, build some more trust. And we said from EUR 75 million, and don't forget, this is the end '23 number. So before that, we were on EUR 50 million. We said we want to be on EUR 200 million in 2026. And then some people said, this is too much. They will never make it. After we reached the EUR 75 million, and then we said we want to make EUR 105 million in this year. The same people said it's not ambitious. So whatever you do is not right. But how do we think -- and we feel quite good right now. So you know that in the 6 months number that we released, we are growing above around 50%, which is an excellent number. The market is at least in our biggest region in Germany, it's slowing down. There are not a lot of new constructions. If you talk to our competitors, everyone is complaining, it's not so good. The market is tough. And we usually say, we don't care, we grow. So from 2023 to 2026, we have a market growth. And you have seen the number at the very beginning. We expect the market 10%, 15% to grow. Maybe it's a little more, maybe it's a little less than the 15%. But in this area, the market will grow. And then we have a couple of initiatives that I talked about, we talked about at several occasions that should lead to the EUR 200 million because if you just add from EUR 75 million, 10%, 15% per year, we will never reach EUR 200 million. So what are we doing? We have one thing is -- and I touched upon that at the beginning as well. We go into the regions with teams. And we have set up the German team for the DACH region in 2022. We see the results. You will see a graph in a second. We have the Nordics region, and Dennis is here, where we have now 4 people on the ground. We have a local marketing, and Dennis and some other guys in his team are doing local support, that's very well appreciated. And we see that, especially in the professional market, very important for the Nordics. We see some development. And we have added first people, one person in the U.K., one in Spain, one in France and one in Italy. And we plan to increase the teams in these countries. So we are looking for people. We want to set up local organizations with a full small team at the beginning and then to add more people as soon as we can afford. And we have the Benelux and Poland on our list where we want to start with local people next year. So we have a huge search going on. That means we will invest in people in the countries, knowing the countries, speaking the language with the right connections as well. So if we see how the regions developed. So if you take the DACH region and you see the revenue development, DACH was -- and Dimitar mentioned that from the very beginning, our strongest region because we found fans. The community was just started. That's something that you cannot just copy. We cannot say we do exactly the same in the U.S. now it will not happen because it just happened. It was a lot of luck and a lot of positive coincidences, and that happened. But after we opened in 2022 the office in Munich with local support, and if you just read in Apple, in the App Store comments about our application in Germany, you see that people are so happy. They rate us with 5 stars in the application because we have local German-speaking support, which has nothing to do with the application, but it has a lot of impact on the revenue. And you see that in '22, '23, I was still -- now I changed that, but I was still responsible for that region. And I said, guys, we will not continue growing in that speed. We reach a certain limit, and now you see what happened. And we do not expect this development to stop. We are at the very beginning, cast no pressure, at the very beginning of this development, and we expect that this continues to be our biggest region. And you see Italy, that's the blue line, without having people on the ground, we just hired someone now here, and we will add more people, marketing. We expect that this takes the same line. In the U.K. where for a long time, we said yes, that's a market but no focus. You see where is the now taking off a little bit. So this should, in the next year, take the same curve. This is what we expect country by country. That's why we are investing that much in local people. On the right side, there was a question about competition this morning. And here, we talk the 2 most famous ones, Homematic in Germany, a very famous brand, very well reputated brand, very good products. They are much older than we are, like 25 years old. Plejd, I don't know how old Plejd is 10 years, something like that, maybe 8 years. But here you see, and we just made a very simple calculation. We didn't take the last 12 months because it would look much more in our favor. We just took -- since Shelly exists how many devices per year in average did we sell, 3.3. And you've seen that last 12 months, we sold 6.7. So the number would be much more in our favor. Homematic, since Homematic exists average per year, 2.5. Since Plejd exists, 400,000. That's number we have from their website, so that's public numbers. We just compare that. If you look to the lower side, we made a calculation. We know that the average customer that adds the first Shelly device in his cloud account adds an average per year round about -- a little bit less than 2 devices. So it's not like with Tado that you once equip your home with thermostats and then you're done. No, it's every year in average 2 more devices per customer or per account. That means in 2020, we made 35% of our revenue with -- you cannot really call that recurring revenue, but it's like repeating customers that buy. In 2022, it was 40%. And this year, we expect 43%. So customers that already have minimum 1 Shelly device and at minimum one more. And that's the revenue, that's the data we get from our cloud because we can see how much product are added. And we think that this will continue over the years. Why is that happening? Because we are in the whole house, and there are multiple angles where a customer can start. Is this with a very simple plug that people buy now before Christmas to put it in the socket, connect their Christmas tree and make the Christmas tree smart, switch it off, switch it on with Alexa or with your smartphone or with a remote control or whatever because the socket is hidden somewhere behind something, and you cannot really access it in a good way or they have a photovoltaic system, balcony power stations very popular in Germany. They take such a small device to check the power consumption or power production of the photovoltaic system. And then they start to add something like when there is enough energy, switch on the heat pump, they need another Shelly, switch on the car charger, they need another Shelly, switch on the washing machine or whatever you want to do for more comfort, we have the wall displays. So people add more and more devices to their Shelly environment. And this is what we call the Shelly flywheel. So we have economies of scale. We have higher purchase volume. That means we can reduce costs or we can keep the costs at the level with more equipment in the devices, more memory, better stuff. So we are increasing the distance to customers, better pricing, bring higher numbers. The technology is improving. Customers see more and more benefits to use Shelly devices, so energy reportings, energy consumption is reduced. After they are locked in the system as with a lot of others, they want to add more because if now they want to add something to the heat pump, it's better to use a Shelly again. And that all leads to an acceleration because if you have -- if you start with 1 or 2 and then you add 2, you add 2, you add 2, that really spins up and we see that this is accelerating. One more thing is the distribution. We talked about professional installers. We talked about the do-it-yourself market. We are a do-it-yourself first brand. That is our history. In 2022, we decided to enter additionally to the do-it-yourself market, the professional market because we see that the market is much bigger. The do-it-yourself market in total is maybe around 30% of the total market. 70% is done via professional installers because people don't want to touch 110, 230 volts in Europe. That is the bigger market. But it was as well very clear for us from day 1 when we did this, we do not want to risk the do-it-yourself market because that's our core. That's where we are strong. By the way, that's something that in the United States, at the beginning, we targeted with do-yourself product to professional market, and that didn't work. Now we changed that. And we go more to do-it-yourself, Amazon, Home Depot, [Lowes], Walmart Marketplace. And we see that it's step-by-step, it's picking up. And then after a while, we get demand from the professional market. In '23, we realized -- and that's -- where is this number from? It's some calculations, some information. What are we selling to professional distributors, okay? We have that number. So Rexel, Sonepar and a lot of others in Europe. But as well from Hornbach, we know -- the do-it-yourself store in Germany, we know that because they told us that they sell 30% of Shelly devices to professional installers. They go to the store, pick it up in the morning, and install it during the day. So we are -- we were at 80% do-it-yourself share, 20% professional in '23. This year we see it's going to 70-30. Next year, we expect this to continue growing. In the Nordics, we are already [ Dennis ], 40%, 45% professional? Yes. That's the number that we already see in Nordics. So it is working, and we will add more professional devices. And we see currently that the professional distributors for those guys, that's a completely different way of distribution. They come to us because more and more installers call them and say, "Why do I have to buy this product at Amazon? And why don't you offer this?" So it's starting. We as well have a platform for installers where they can register, where the customers find them. That is growing very nicely. In Germany, we have now roundabout 500. The next country, of course, Nordics, where we have a couple of hundreds and where we will onboard much more. We train those people. They have different standards. And we will professionalize this platform as well, giving them some displays so that they have some showrooms where they can show Shelly devices. And all this is on a good way. So if we see the development of distribution, on the left side, the professionals that I was just talking about. In 2020, I don't want to say maybe 0, but let's say 0. We had no contract with Rexel in any of the countries, or Sonepar, or [ Tunda ] or [ Figma ] or others, nothing. In '21, we had 5; in '23, 10; end of this year, we will have 20; and next year, we estimate 35 to 40. So we will be in most of the countries onboarded with these big players that are important to sell to installers. On the other side, do-it-yourself channel, and I mentioned a couple of times, Amazon is a big player. There's a lot of online channels. That's as well Hornbach, [ Bauhaus ], Obi in Germany, the do-it-yourself guys with online and physical stores. That's Conrad Electronics. That's a lot of specialized platforms. And it's more and more distributors, retailers with stores like Leclerc in Italy, very strong, very strong development, just onboarded in Spain, and we are waiting to onboard them in France as well. So there is something going on. Hornbach takes us to all their other countries. So they want to start with us in Sweden now. We needed to change some things with the owner's manual of the products. They have not been localized. But all this is developing. So we will have roundabout 80 professional players working with Shelly devices in the retail sector and next year will be above 100. We have, I mentioned that at the very beginning, we have, of course, our ESG strategy, but we have as well help from the ESG regulations from EU regulations or country regulations. So that's like all the buildings need to report their energy consumption at a certain point. The companies need to report their energy consumption at a certain point. Need to prove that they reduced without monitoring this, without showing how much did I consume at which point of my company. It's impossible to fulfill that. So that's a tailwind that we get. There is a new EU regulation that forces manufacturers of household appliances to monitor and to report and to register the energy consumption. So every washing machine, now I have to admit it's in 1 or 2 years that it starts -- do you know that, Dimitar, the regulation for washing machine? I think it's in 2 years. So everyone, Miele, Bosch, Vestel, Beko, Hisense, everyone needs to report how much energy is my refrigerator, my washing machine, my dishwasher, whatever, consuming. And they have no idea how to do that. And some of them are coming to us and they, "Do you have an idea?" And of course, we have, just build one of the Shellys or the Shelly X and then you have the data. And we have the storage. So that's another tailwind that can happen. Maybe they find a different solution. And of course, we have our own target as well that we communicated already 1.5, 2 years ago. By 2030, we want to use 100% renewable energies. We want to reduce our energy consumption by 70% and net zero GHG emission in 2030. That's tough targets. But if not we, who else can do that? Because we have all the tools to make that happen, with some challenges like supply chain and a couple of others. So we have a clear idea where to go from 2023 until 2026, to 200 million. That was, I say it again, that when we published this, everyone said they are completely crazy because we made like EUR 50 million. It was super ambitious, and it's definitely something they will not achieve, and we got a lot of questions and big eyes. Are you completely crazy? Why are you doing this? But we did it to build reputation. Because at that time, I made the tours typically in Germany from Montega Baader Conference, Equity Forum in Frankfurt. I was at every investor meeting, and everyone said, Where are you from? Bulgaria. Thank you very much. That changed, and we did this as well to change that, and to show that we are there and we want to deliver. So we have a growth strategy. We know how we want to reach, and we will reach the 2026 target, and we feel quite comfortable. So if you make a simple mathematics, so this year, our guidance is 105, we will be in that corridor more or less. So you never know how Black Friday will work. The hot season for us will start in the next 4 weeks. But it will not be -- even if Black Friday fails, will not be a disaster. We will have a good year and we feel comfortable, whatever happens in detail, to reach next year's target. And if you just make the mathematics, you will see that average growth needs to be below 40% then. And I already hear the next guy saying, "Below 40%. What a disaster. They are not ambitious. This is the end of Shelly. They will never make it." So we will -- at the end, we will deliver 200 and everyone will say, This story is over, more or less. I don't think that the story is over, and I come to this in a second. So we want to go to the countries to our customers in the country language with local support, with a lot of challenges that come with that. Because if I see Svetozar sitting there, he says, Oh my God, I have to close how many subsidiaries or branch offices and include this in the monthly closing, quarterly closing annual closing, yes, that comes with the size. That is absolutely normal. The Shelly flywheel, so the effects that come from someone has the first product, likes the product, adds the next product, 1 more product, 1 more product, makes 1 room after the other smart, once again, such a device, the red one is with power metering, so that shows you the energy consumption. That is a EUR 15, EUR 20 product, and you have your room, the light or whatever you want to do, smart, and you have the energy consumption. If you start this in 1 room and you say, oh, it was easy to install, or my electrician installed it, you do it with more rooms, and at a reasonable price, you have made your whole house or apartment smart. And that's -- on top of this, adding more products and adding more ideas because the community shares ideas and our online shop, our online platform, we show ideas. All this really accelerates the system. We have a lot of help from third parties like Huawei or other manufacturers of solar panels that recommend our product. That is another entry point. And all this will hopefully lead to our guidance in 2026 of EUR 200 million. Questions before I come to the last part?

Can you hear me? Yes. How do you plan to set up the sales force given that it's vastly different to sell DIY devices to a mass consumer market versus the Pro devices to a professional audience?

So first, that's what I said in my first presentation. We need the right distributor in the country. So we have a very strong partner in Germany. That's a company called ALLNET. They do a lot of logistics for us, but as well open a lot of doors to distributors where they have contracts already. The same in the U.K., we have found a partner. We will make the final contracts and have the final talks in, I think, in 2 weeks from now. And we expect that this really helps us to accelerate because they have the contract already with Screwfix and a lot of other players. There's no additional negotiation needed then. And we need the local team. So if I take the German team that is, of course, after 2 years now, big -- or 3 years bigger, and more specialized, we have 2 full-time employees for marketing. So for localization of stuff, but local marketing. We have now added to our team, we had 1 salesperson, now we have 3 more salespeople. And they can be specialized. So 1 goes to Rexel, 1 goes to Hornbach, 1 goes to some others, to help our distributor to make the business. And the key is always local marketing. We have to create demand from the market. We have to play -- in Germany, we have a very strong relation to Computer Bild. So that's a magazine for mass market, but as well for some electricians. And that really helps us to be -- and they love our products. So the boss of Computer Bild is a Shelly fan. He has a lot of Shelly equipment at home. And with them, for example, we had a live stream. They do live streams about special products every month, with very selected partners. And we had a live stream with them. Our German technical head was there talking about Shelly together with the boss of Computer Bild. And all this makes us more known and create demand. And then if you have someone who says, like Tim here in the first row, I have [ 2 left hands, ] I cannot install that myself. He goes to an installer and says, "I want a Shelly," and then the installer goes to the wholesaler says, "I want Shelly," if this happens 10 times, the wholesaler wakes up and says "I need Shelly." And that is how this works.

Okay. One more question with regards to the Pro installers. What kind of charging structure do you suggest to them given that historically they usually charge x percent of the device costs, which can here be -- I mean, if you have a EUR 20 device, it's probably not feasible for them.

I mean my electrician historically charges me EUR 40 to EUR 50 to EUR 60 per hour. So they are not charging additional to the product costs. What a lot of those guys understood is that, with Shelly, the device is cheaper, which means, in the first moment, they say -- but they earn less. If I have my 30% margin on a EUR 50 expensive device, 30% is EUR 15. If I sell EUR 100 expensive device from Gira or Schneider, I make EUR 30. On the other hand, they realize that if they install twice as much devices in a house, they can make much more money with these EUR 50 per hour that they charge. And maybe as well with contracts later on for maintenance and if something breaks down, I make the updates and all that stuff. So we have the first ones that are in a very positive mood about Shelly, again, because they can install more. And for the end-user, it's -- they usually spend a similar amount of money if they buy a full solution, just they make twice as much -- they have twice as much devices and can make their house twice as much smart. And that makes a big difference. And again, the electrician makes money with the hourly rate that they charge.

Wolfgang, how do you see the trade-off between maintaining profitability margins and reinvesting back in the business and growing it?

That's an excellent question. And it's easy to answer. We have a couple of sources for increasing our gross profit on the products. So one is a constant discussion that I have with this guy over there, increasing the prices. Our competition, all of them increased the prices in the last 2 years, we did not. So we will make, and we started to hire -- or we hired a pricing specialist that will make very concrete analysis in the market, to see which product we have to -- we have the possibility to increase the price without losing our position in the middle. And you remember this lineup where we are in the middle where we feel quite comfortable. And maybe where do we have to reduce the prices, because we might need some fighter models to bring as much plugs as possible in the market, because that is the door opener. This is the door opener. Because that's something that -- and by the way, when you leave, you have a bag outside where one of these plugs in. So they can all try that out at home. This is a product you put in the socket, you don't need an electrician. You open the Shelly app, install the Shelly app, open it. It's easy to install. It pops up, it shows -- and then you see how easy that is. And then you all will be addicted. I mean that's why the product is for free, not because you are here. Because you will buy 5 others afterwards, and you will start to call your electrician or do this yourself and install these devices. So we might have fighter -- need to have fighter models like that to open with lower margins. But we did not even start to optimize our supply chain. Today we are flying 100% of our products from China to Europe. We have to change that anyhow because of ESG. And if we -- now shipping is a bit complicated because of the situation in the Suez channel. But if this is over one day, hopefully, we can ship. And shipping would save us, if we would ship 100%, shipping would save us 4%. 4% on EUR 150 million, you have -- you can make the calculation yourself, it's like EUR 5 million, EUR 6 million savings, just because we ship. We will never ship 100%, but maybe half of that, that is possible. We have -- of course, we talk to our manufacturers and to our suppliers, but not in a very systematic way. We want them to live. We don't want to over-squeeze them and risk that they are going bankruptcy, they don't like us anymore. But there is as well 1%, 2%, 3% optimization. So on the gross profit side, I think we are -- we have a lot of resources to increase that, even though we might lose this money because we have to be more aggressive with some devices in the market. So that's the balance, that's a wash. There will not be a big effect. Of course, if we hire people in the countries, they are more expensive because of the tax situations in Western Europe where you pay 50% tax. In Bulgaria, you pay 10% tax. So the gross salaries are higher, the cost for the companies are higher. But we will not hire so much people there. It's just the core team that we have because all the back-office functions, all the supporting functions will, of course, stay in Sofia, where it's -- or in Bulgaria, where it's cheaper. As a lot of Western European companies outsource some departments to Eastern Europe, sorry, we are already there. So we would be stupid to build up basic functionalities in West. And with the economies of scale, we will not need to hire proportionally people in every department. A lot of our investment goes in R&D, and R&D has a payback time because of the very short development cycle of products that is very short as well. So Dimitar and I, we have a plan how much people -- how many people we have to hire per department. For example, for the cameras, we need a full team. So we cannot just say that's something that Dimitar makes in his garage over the weekend then we have an assortment of cameras. Not going to happen. We need a team and that costs money. But it's well calculated and it's balanced out. On the other hand, I would prefer if we talk about EBIT margin now. So we are around the 25%. So let's say, 25%, 23%, 24%, 26%, in this range. And that's where we want to stay. But I would be more than happy to deliver in -- and don't take this as a hard number, but to deliver in 2026, to deliver EUR 50 million revenue, which is 25% out of EUR 200 million, but coming from EUR 250 million with only 20% EBIT margin. So same euro EBIT amount from a higher revenue, which means a higher market penetration, which means more devices in the market, means more first-time buyers, more people that come into the flywheel and that buy more devices later. So it would be an excellent investment. It's not about hunting the percentage of EBIT margin. It's about the total picture and what is best for the future of the company. Questions? You have a question? Good. So yes, Marco.

And my question is around the DAC experience, and you were showing that at some point that really started to speed up. My question to you is how that then fed into the new regions where you launch like Italy and U.K. And how do you think this will help you in terms of R&D and synergies in your future?

That's a good question. I mean the -- we need a certain number of customers in a country. And so that's -- if you see -- if you remember the curves that goes very slow. And then after a while, we are everywhere. Everyone talks about us. Everyone knows us. And if we are at IFA today in Berlin, which is all respect international IFA, it's a local exhibition, in Germany. But how many people pass by and say, "Oh, Shelly. I have a Shelly at home. I heard about Shelly." They stop by, they see what's new. And that is the effect that we want to have in all countries. So we need a certain level of customers. And why am I confident that we will make a good development in Italy? Last IFA, there were a couple of Italians, just professional customers, not end-users. And they said -- and I was surprised because they said, "We don't know what happened, but everyone in Italy talks about you." So it's -- now is the moment where this happens what happened 2 years ago in Germany. So that will repeat. And I think after everything we plan to do with the sales team in U.K., we will expect the same effect, will take 1 or 2 years. So people need to talk about us, and that is the strongest thing, because we are not planning -- Dimitar said at the beginning we didn't spend a penny for marketing. We are not planning to spend now EUR 10 million for above-the-line communication in the U.K., we cannot afford that. You all would be disappointed if we invest EUR 25 million EBIT into nice videos with nice ladies showing some -- sorry, men as well because it's more men show here, in nice devices, and this will not bring our revenue. But we need to invest in YouTubers, in platforms, being in the right support groups. So all this is something that is relatively cheap and brings a high effect. And then it starts multiplying.

Okay. We almost catched up. So the last point: Key financials. Bit of aview back and a little bit to the future. So this year, after 6 months, we have a growth of 49%. EUR 42 million is in the pockets, in Svetozar's pocket in this case. So still a good number to come. We published our third quarter numbers already, the preliminary revenue. Next week, on Thursday, we have our earnings call, where we will publish the final numbers. I do not expect big surprises on the revenue side, and the EBIT, let's see how this came out after 9 months. And then we have the last quarter to come. So we are on the way to reach our yearly target. And I do not see huge surprises there and huge deviations. There can always be a small hiccup. We are a bit late with some products, but we are very confident to reach our targets, which would give us a kickstart into the next year. So we are good. 55% gross margin 26% EBIT margin after 6 months. And I said already, in the corridor of -- so basically, when we started with the guidance, we said we want to reach 25% EBIT margin by 2026. Unfortunately, we were there already last year. But it's -- the corridor that is around 26%, 24%, 23%, that is perfectly fine if we reach that. And we are in an excellent way. 22% net margin. So you see the difference between EBIT and net margin is not that big. Reason is 10% tax in Bulgaria. We have to pay some small taxes, much higher in Germany as well, but we try to limit that. And in other countries like Slovenia, the same, but we try to limit it. And that gives us as well a nice advantage. And 5.1% cash ratio is as well an excellent number. In general, so that -- you see the revenue growth, in the last 2 years, we grew 57%. I double-checked the number because, by coincidence, 57 -- so it was 56-point-something, and 57-point-something. So 57. This year, we expect it, with EUR 105 million, 40% growth. Once again, the basis is much higher so it will be more complicated to add more revenue on top of that. But we are on an excellent way, EUR 105 million. And then we have 1 step in between to reach the EUR 226 million, all on a good way. EBIT margin as well. The expectation for this year is still EUR 26 million, 25%, so somewhere in this region. And the cash position, I talked about that very extensively in the last earnings call. The cash that we are generating with our net profit is mainly going in the working capital, with bigger distributors that are buying as professional guys like Amazon and Hornbach and [ Bauhaus ], they all ask for longer payment terms. So the times that we could ask a distributor to pay upfront are definitely over for most of them at least. We have to plan our chips in advance. We have to pay them 6 months or longer in advance. So the bridge to finance is very high. On top of this, in this year, beginning of the year, we made the next step in the acquisition of Qubino, the Slovenian -- today, our development hub that we bought the next small proportion of shares, we paid a dividend to shareholders of EUR 2.3 million, and that's where our cash is going. Next year, we already -- for next year, we already started a lot of measures to optimize working capital. We are working customer receivables much better already than we did before. And I think that we will have a solid position like we had after 6 months by the end of the year. So we are good with cash. On top of this, we still have an equity ratio of 90%. So we have always the option to talk to banks for a bank loan or to have, if we need more money, to have some other creative ideas how to cover that. We have, historically, the last years, so from '18 to '20 to '23, let me say it was maybe a little bit easier on a very small level. If you go from 0 to something and then from something to higher, a bit easier to grow with 68%. That's as well why for me it's normal that the 40% or 40-something percent or only 38% is not less ambitious. It's a very, very important number. But we have outperformed the market. And if we look to the number for '23 to '26, we expect the market growth 10% to 15%. We expect to continue growing 2, 3x above the market, which means we end up with 40% growth and with EUR 200 million revenue that we promised. We have as well, historically, and you see all these years, we have performed against our guidance or forecast or however, you call it. So whenever we said that's the number that we are targeting, in some cases, we had to rework it, so upgrade it a little bit. But we were never below. As well this is with a hard number that we are communicating is tougher because if now we make, in 2026, we would make 195 instead of 200, everyone would be super disappointed. So we have to avoid that, and we plan to avoid that. But EBIT and revenue, we always outperformed the market. And we are not planning to change that. That is something for us, I don't want to overstress that we are a Bulgarian company, but still there are a lot of people looking a little bit like, who's your auditor? Deloitte? Okay. Yes. But even the big guys, you cannot trust them anymore. So that's what I heard, I don't know how many times. So it's strange. But we are delivering, and we are delivering like a good-oiled machine. I would keep that. So there are a lot of things that support everything that I said: market expansion, high-quality product, our margin. Supply chain is a big source of increasing or stabilizing the margin. And let me say that as well once again, I'm not a big fan of delivering more than 25% EBIT margin. If we would go to 30%, I would say we made a mistake because we did not invest enough in R&D, I mean, in the future, in what is coming next year, what is with -- what did you say Generation 5? And I'm sure this guy has Generation 8 already somewhere in his mind. So we need to reinvest, we need to invest in more people in the countries to grow faster. We need to invest in a better supply chain. So everything above 25%, I would say, not good. If it's 26% by accident, fine. But if it's 30%, something is wrong. So reinvest in the market, invest in growth, reduce the prices, be aggressive, stay attacking and not just lean back. That's something you can do if the market is not growing anymore and if you are not growing anymore. So margin, I think I talked enough about margin, I can skip that. Just as a reminder, this year, we want to make the EUR 105 million. And that would mean the average growth, the CAGR until 2026 is only 38%. EBIT should grow in the same speed. We are not expecting to lose on the EBIT side. We are not expecting to win on the EBIT side. It should be in this corridor. So the EUR 200 million are not something where we say, this is -- oh, that starts to be tough. The percentage of growth goes down with the higher level of the basis that we come from. That is all absolutely normal. What are we doing with the capital that we generate? So we are planning again to fuel with this our organic growth. Working capital is something that, I don't want to say will be critical, but will demand more investments. We will optimize that in the next years with reducing the stock level that we have in Sofia, agreements with our Chinese suppliers about payment terms, and a lot of other activities. We will optimize that, but it will not go away. If you grow 50% or 40%, you need more working capital. R&D, everything that we planned now on the product side that Dimitar tells you needs teams, and we need people. So we will hire something. I think it was 45 people or 50 people that we have on our list in for R&D in the next year. That's huge. So most of the hires will go to R&D. In other departments, we will not hire that much people, over-proportionately to R&D to build a solid future. M&A and organic growth is an options. It's not something that we are really seeking, that we are looking for. We had 2 opportunities, one with Qubino that we took, the Slovenian company that is strong in the Z-Wave, which gave us access to the Z-Wave technology and to some of their customers. And with LOQED that was as well something that was there on a silver plate and we said, look, that's very low investment. The teams are working on integrating that in our Shelly environment. And then we are in the market of smart locks that is huge. There are a lot of players that are on the market, penetration is very low. And if there is tomorrow a company we can buy in the United States to get a better market access, I don't want to say to products, because we are good with products. We don't need to buy a company that gives us some product innovations. We have enough of that. But access to the markets, to the retailers, to the channels. That would be an option. As long as it makes sense and as long as this is in an area that is payable. So sometimes in the U.S., you pay huge multiples for companies. We have to see if this makes sense. That comes back to what Dimitar said. We are really careful step-by-step and not everything on one card, and now let's buy something for EUR 100 million and the world is great. Shareholder returns. Traditionally, we pay a small dividend, mainly for the Bulgarian shareholders. And here I'm not talking about Dimitar and [ Svetozar, ] I'm talking about the other shareholders. That's a specific Bulgarian thing that they expect a very small dividend. Normally, you would say, from a Western European point of view, a share price that doubled in 1 year, where you make EUR 10 profit on a share, and then you pay EUR 0.10 of dividend, that's a joke. But we need that as long as we want to respect what they did for us in the early days. We will continue if at a certain point, we think we need the money better to fuel our working capital, we might do that as well. In the midterm, we decided on the Board of Directors that we want to tie this to the free cash flow generation. If there is enough money, we don't need the money in the next 12 months, we pay a dividend. If not, we don't. But right now, the idea is to keep a small dividend for the Bulgarian tradition to pay something. And we have a return on capital employed of plus 30% in 2023. Financial stability, we have a -- we are careful with spending. We are as well careful with activations. So we want to have a traditional and clean balance sheet and not put that much in there. That's as well the reason why we -- why I specifically always talk about EBIT and not EBITDA, which is the number that is more used in our industry, because this is, for me, that's a bit like some fog around. So we think is, okay, EBITDA, great number. What about the EBIT? And then usually EBIT is negative? So we have nothing to hide. And the difference between EBIT and EBITDA, in our case, is as well very small because we do not have to write off that much. One more word to the acquisitions I talked about LOQED already with Qubino. We have one hope, good development for the United States, not yet materialized. But now we have an almost full range of Qubino devices, Shelly Wave devices, how they are called today, Shelly Wave devices with the Z-Wave standard, and Z-Wave standard is the standard for the United States. So WiFi as well in the cheap areas, but Z-Wave is test standard. And at the very beginning in my first part of the presentation, I showed you that in the United States, the security market is the market that is driving smart home. And the security market in the United States is companies as Alarm.com, Resideo, Vivint and a couple of others. And they all work exclusively on Z-Wave standard. So now we are with our devices in the process of certifying them with Alarm.com, Resideo, Vivint, which means that the installers are enabled by those companies to install Shelly devices to make something beyond the security business. So they can now use the first -- I think first 1 or 2 are certified. We want to certify, of course, all of them. And this can be a door opener for the United States. So if Alarm.com jumps on our devices and now with Z-Wave, that's -- find that's something that I can do, that can be a game changer for us for the United States. Now the famous 2020/30 outlook. I see a person in the first row who is very disappointed because I promised to put a huge number on the chart, and now he sees I did not. I think it would not be serious. So if now -- we would say this is the number that we expect for 2030, that's 6 years, 7 years ahead, that is not serious. No one really knows what's going on. But all the expectations, all the sources that we have, say, the market will continue growing 10% to 15%. Now we can discuss is this conservative? Is this optimistic? 10% to 15%, I'm coming from consumer electronic market, The market was flat over the last 10 years. So that's a great number. Historically, we outperformed the market by 2 to 3 times. Now you all have a calculator in the smartphone, you can make your calculations. The conservative guys would say, okay, 10% market growth, maybe not 2x, 1.5. What is the number that is there. If the starting point, and that's given for me, is 2026 EUR 200 million, what is the outcome for 2030 for the Shelly core business? Here I'm talking about Shelly core. The other things that are coming potentially on top, Dimitar touched upon a lot of them in his presentation. They are, in most cases, still a bit away. So that's nothing that we will have in January 2025 or in beginning of 2026 in a materialized number. Shelly X is -- can be a complete game changer, can fail. Our fleet manager, our access system can be a complete game changer, it can fail. But there is a lot of potential that is giving some upside. So we talked about AI-driven maintenance. Already today, that all sounds a little bit like future and, oh, this might happen 1 day. We have with a discount chain in food. We have a very small project, just a test project to figure out if the fridges and deep fryers need maintenance. So how do you do that? You put a Shelly plug, the Shelly plug reports to their central platform, the power consumption. And if the power consumption goes up, something is wrong with the machine because then the filter is blocked or the ventilation is blocked, and they better send a technician before the machine breaks down. It's just a very small test. We don't know if they rolled it out. And if they roll it out, it's not a super big business. It's like they have a couple of thousand stores. Of course, everything fine, they need a couple of plugs per store. Yes, fine. We sold -- last year we sold 1 million plugs. So this will not be the game changer. But it shows what can be done. And with integrating Shelly X in the device, lot more of this. And that can be something as well with recurring revenues and other things. Software as a Service, Dimitar talked about fleet manager and a couple of other things that give us -- might give us recurring revenues as well if we talk about Shelly X using our platform for some of the manufacturers and charge something for that because we can do this much cheaper than they can, can give additional revenues. Advanced energy management. We have something like this already, but it's not used like that. So what we do today is optimizing the energy is coming from the solar panel, switch on the heat pump, switch on the air condition system and the EV charger or whatever. But here, we can talk about as well in combination with the next one, with data monetization we had visits at our IFA booth from big energy providers. They all see our data and they say, wow, that's amazing. I mean we can do something with that. If you say what, they say, I have no idea. But some of them are talking about this can have -- can give information about how the grid is used and how they can optimize in a whole country the energy consumption. So we talked about that with EDF in France, that we are still way too small. We need the size there. But they said, oh, if we have a shell device in every of the water boilers that they use with electricity, we could switch them off in case we have not enough energy, and we can switch them off to -- on 2 hours later. So there is a lot of -- about national energy management. And in Germany, we have the size -- now we start talking to the energy providers. We talk to as well to them about selling energy contracts. We know what the customer is paying for his energy because he puts it in our application. So if we can, with, of course, with the consent of the -- Dimitar is somewhere, so legal is here. So with the consent of -- ah, there she is -- of the customer, we can send him offers about having a better energy contract, and we can monetize that. So there are -- that's a lot of things. Cloud management, Dimitar has said, I did not -- I think he did not mention a number, we are much, much cheaper in cloud management, in the storage of the data, than every of the manufacturers and our competitors. And we have expansion into -- that's partially baked in new categories. We expect the cameras to come not after 2026. So they should give us as well some tailwind to reach to 2026 numbers. But new regions -- and here it's not only about the United States. If we win in the United States, the game completely changes. If not, we have enough to conquer in Europe. We have enough to gain in Asia, in Australia and in other regions of the world. There is enough room to grab and to reach our numbers. So we have outstanding financials. I think that's without any doubt. So whenever I start a presentation with the key numbers, people say, is this really true? Or is it -- sounds a little bit too good. Ah, you're Bulgarian. And we outperformed the market that is expected to grow in the next year 10% to 15%, historically 3x. So for the future, we say, let's take 2 to 3x, but we want to, of course, grow above the market. We are not only in 1 country and we see that all the expansion is at the end. We have -- with all that, we have a nice top-line growth. We think margins will be stable. We will have some measures to increase them, but we will lose something with more investments, but this should be a wash and should be balanced. We are generating a lot of cash. We think that it's enough to fuel the working capital. If we would need something special for making a bigger acquisition, we might think about other ways of getting more money. And we still have no bank loans or almost no bank loans, so we can go to banks and get some money, which, of course, at a certain time, we will do. But if we need much more for a bigger acquisition to consolidate the market faster, which is not in here, we might have some other ideas. And if we tap all the opportunities or only some of the opportunities beyond the Shelly core, I leave this to your imagination what this could give for 2030 or 2028 or 2032 or whatever. Dimitar realizes the number and I look at this from the shareholder point of view, sitting there retired and smiling and pushing the team a little bit to deliver the numbers. That's all. Questions?

So you alluded to outside investors. I mean do you -- is there no discussions around getting a larger investor in to fuel the growth, to conquer more markets at the same time or a bit more in R&D?

Excellent question. Actually, we have a couple of potential investors, and I'm not talking about strategic investors, knocking at the door. Right now, the majority shareholders don't want to sell. They sell to small proportions last year and the year before. They don't want to sell a big part of the shares because they believe in the business. And we have -- we are not planning a capital increase in the short term. But as I said, if we would need more capital for making some bigger things, the opportunities are there. So we have people that say, I would buy -- I would like to buy a bigger proportion. And that's nothing that you can buy on the market. Opportunities are there, but we are a bit careful. And as well, if you look to this round, a lot of people will say, don't make a capital increase, this would dilute me. So there are always different ways right now, nothing concrete.

And another question as a shareholder. When do you plan on listing on NASDAQ?

No concrete plans. No, believe me, we have enough work with being in Sofia and being in Frankfurt. That is sometimes a nightmare because we have to follow 2 legislations, and they are completely different. So having a third place, I don't know if this would be that much fun. But never say never. So it's right now, no plans.

So your marketing ratio was quite low the last few years, and you said it was mostly trade fairs and not the usual paid marketing you would expect from consumer electronics company. Do you plan to increase that in the future? Or what is your paid marketing strategy?

Yes. So first, our marketing spend increased already significantly. Because in the last years -- this year, we were at CES. We were at Light and Building in Frankfurt, most successful show we ever had. We were at IFA, a very successful show for us. And we were at, [ Dimitar ] help me, 10, 15 -- 10, 15, maybe even 20 smaller shows. IOT Barcelona, Light and Building Istanbul, some things in Nordics, in the U.K. In Italy, we had 2, so smaller things that -- but it's the small things cost each time EUR 30,000 40,000, EUR 50,000. The big one is EUR 300,000. So that's where a lot of our money is going. And we do a lot of, nowadays, a lot of marketing activities that are connected to sell-out activities with our distributors. So we are not going to the TV channels in Germany and say, let's make a nice campaign. We go to our distributor and say, what can we do to sell out more of the product that we have on stock, that you have on stock, and that your customers have on stock? So that's where we invest a lot of money. And that's what is as well visible. But we balance that still to keep the 25%.

And another question for me. You build out the central functions in Bulgaria, but also in the countries quite a bit in the last few years. There are some sales and marketing, which you mentioned you will further build out in the countries. But is the central functions build-out more or less complete?

Central -- you mean the teams in Sofia?

Apart from the engineers and the R&D...

Yes. So we will invest in R&D. We will have to add a couple of people, but underproportionally. So of course, with rising revenues, we need -- with all respect to SAP, that is almost fully integrated now, but this will not book everything automatically. So we will need more people. We invested in controlling. So we have a much better view on numbers now than we ever had before because we have specialists in controlling. So -- as well in sales, we will add 1 or the other person. We have an Amazon team there. We have an online team there, with rising revenues, we need more people there, but underproportionally. So the big number of investment goes into R&D and goes into people, sales, marketing and technical support in the countries.

What do you see as the main risk factors? Is it external or internal? What keeps you up at night?

In my age, you sleep well. What keeps me up at night? I mean there is a limitation in growth that comes from people. We have hired first salesperson in U.K., and we failed. After a year, we had to change. Happens. Same happened in France. We hired a salesperson in France. After a year, we kicked them out, and have a new one. So that's something that I don't like, but that happens. But that's a normal daily thing. So get the right talent, find the right people that you have the right level of trust in the countries, and let them do their business. That is something that do we make the right choices there. And we are careful. We have always more than a 4-eye principle if we hire people there. And then we need to find the person that can run our business in the U.K., like we have now Karsten running the business in DACH. And of course, reporting and all that, that needs to be done. The bigger thing is: what happens if something happens in China? So what happens if Trump wins today or end of the week, we will most probably know did he win or did Kamala win, what is the effect on that? Will they increase the import duties from China to 50%? Will our products then not be competitive in the U.S. market anymore? I mean everyone will have to pay that, so we would -- proportionally, but what is the effect on the market? For some of the things we have plans. So we might be able to produce the UL devices somewhere else, so do not pay the high import duties, as well if something big happens in China, we have plans, and we discussed this already in meetings that we had before, to move factories to Vietnam or to other places, maybe even to Europe, to Bulgaria. Labor costs are not that high there that we couldn't do that, just the supply chain. All the spare parts are coming from China, doesn't make life easier. So that's the big thing. But that's something that more or less, we cannot influence. So if this happens, sorry, but the whole European economy is in deep trouble because everything comes from there. And that's -- if this is medication or if this is car industry or whatever, then everyone is -- it's not only us that is in problems. But I sleep quite well, Tim.

We have a question from the chat.

Now the guy comes saying that he is disappointed that I did not put a hard number.

Thank you for that actually. It was very good. This is -- we'll keep you away from troubles, believe me. One thing about you 2 guys, like what are you going to do different from today that you did last time? So what are like the main lessons on the industry and approach and all that will make the success more likely or some change of approach?

I mean, lessons learned. One lesson learned is -- and I think [ Mercer ] agrees there with me as the top sales guy. We will be faster with hiring people in the country because we see the effects and we see that we cannot control everything from Sofia. So that's something that, if I could do this again, I would push for doing it yesterday and not tomorrow. Lesson learned is, and I think here Svetozar will agree. We started with an professionalizing our systems in the company -- in this case, it's SAP, could be something different, too late, which -- and we pay a high price because now we -- the whole team booked and worked on 2 systems in parallel the whole year, so which is a huge effort, costs a lot of money. Everyone is, of course, tired. And hopefully, next year, this is over and we only have 1 system and release a lot of working power that we can use to continue growing. So some of the things I did not -- I saw it coming, and I didn't insist enough to make it happen now. I waited too long. That's what I would do different. The way we work together, I think I would not change anything, because we are, as an unmarried couple, we are super different and that makes the strength. So that is Dimitar's strength that I will never have. Maybe I have 1 or 2 things that he might not have, but that makes the balance between us makes. And that's not always easy for the teams, you can imagine. I mean you have 2 co-CEOs that are super different and to manage this balance is complicated, but I think that's part of the strength of the company, and I want to keep that. Something from your side to add?

Okay. Wolfgang, we have some questions from the chat. Russell Mark asks, will you be able to grow free cash flow positive given that you're now having a Software-as-a-Service model and Shelly X?

Okay. Which year? 2029?

Did not specify.

No. So I think that we will have a positive cash development next year. As soon as -- not from January, but as soon as all the measures that we implemented, so now we will have a procurement department. We did not have a procurement but everything was done by Mercer. So Mercer was, in the past, he was our super man. I think he's wearing the shirt below his -- if he makes like this, it's a big S, because he did everything: marketing, sales. And now we want him to deliver EUR 105 million this year. At the same time, take care for procurement, go to China, talk to the factory. Impossible. So we will have a procurement department that will constantly negotiate with the suppliers, payment terms, optimize the stock, optimize the supply chain, the flow. So if we can reduce our stock level by 1 or 2 months, that is a release for working capital. If we control our customer contracts better, this is -- that helps to optimize that. So I think we will see a positive development there next year, but it will not go through the roof. And until we see first effects from recurring revenues, that will take a while. So that's not something that I expect in 2025. Maybe a bit in 2026 that will go beyond. And Shelly X, we will have to order the chips 6 months ahead. And I have not the right experience to say that if you make a deal with Bosch Siemens, that they pay upfront. I would -- if knowing them, I would say they ask for a 30- or 60-day payment terms, so that's not a big help for working capital. That will really demand money.

Okay. We have 2 more questions from [ Alexandra Deprait ], Baader Bank. Do you expect EBIT margin to be around the same level beyond 2026?

Yes.

Thank you. Next question.

Sorry, with the exception of what I just said, I would prefer to grow the top line faster and sacrifice the percentage margin a little bit, but the euro amount should stay or should grow.

Okay. Next question is regarding reporting. The listing currency recently changed from Bulgarian lev to euro. Do you plan to change as well the currency of your accounts in the future to attract more international investors?

We will change the currency and accounting as soon as we can, which means as soon as Bulgaria joined the Eurozone.

Which is probably 2025, right?

You never know. I mean there's people -- people expect it. Other people are not expecting it. So that's -- and the currency, Svetozar, maybe a question to you. Can we change that without this? I do not think so.

[indiscernible] We started to discuss this with the auditors and with other external parties like, for example, the company that is making ESF tagging. And there are some companies that report into currencies, but people -- the legislation is quite restrictive in this respect. So we will keep trying and we might surprise you at the end of the year.

That's something that is new for me as well. But in general, I mean, I think everyone knows that the Bulgarian lev and the euro are linked. There is no currency exchange risk. So if you just put this once in your Excel, you have the euro numbers. So I do not know if this is a huge burden for international investors. We are already paying our dividend in euros. We are traded at Sofia Stock Exchange in euro. This was a prerequisite to be listed on XETRA. By the way, we see as well in the last weeks that our trading volume on XETRA is really growing. The whole market was under pressure, but we are, let me say, relatively stable. And we have some ups and downs, but the trading volume has been very well digested by the market and taken by the market. That's good news for me. So that XETRA starts to play the role that is expected, and that's all quite fine.

Thank you. No more questions.

No more questions. Questions? No questions?

One more question.

What's your favorite Shelly device?

This one. That's a device that I have -- I mean, beside the TRVs. So the most used are most probably the TRVs for heating. But this is a device that I have built like, I don't know, 20 times, 30 times in my house, to switch lights and to control lights where I could not control them before. So this one, all the 2 channel version of this one.

Further questions?

Good.

Wolfgang.

So thank you very much for coming. This was a long day with a long presentation, 56 charts. So I know this is the maximum, or maybe even a bit more, as a maximum that companies do at the Capital Market Day. So thank you very much for listening, for being here, for supporting Shelly. And yes, let's have -- let's stay a little bit. We have time for networking. Talk to the people that I hear from the countries, the specialists. If you have more questions about finance, please go to this guy, not to me. And yes, enjoy some time here. I think we have some drinks as well. So thanks for coming and supporting us.