The Platform Group SE & Co. KGaA (TPG0) Earnings Call Transcript & Summary

So a warm welcome from our side. Thank you for attending our Capital Markets Day by January 2025 here in Frankfurt. We have a full program for you, and I think we can really make some deep dive sessions today. And we have 3 hours' time. So within the 3 hours, we can discuss a lot. We can make enough Q&A sessions with you together, and I'm happy to answer all your questions today. To give you a brief update about our current agenda. First, we start with an introduction from TPG with Laura and me. We give you some updates on the latest developments. After that, we will go on with our financial outlook. Reinhard, our CFO, will take over here and will also give you an outlook for this year and maybe it's not very common, but we also do it for next year. So we give you a midterm guidance. After that, we will continue with the M&A track. That means to show you what is our M&A strategy, what are current M&A targets and how do we currently value potential companies for our group. After that, we will continue with Software. Christoph Wilhelmy is, today, here, and explains about our latest developments in our software project, and he will also announce a new project, which is quite relevant for us, and I'm happy that he will explain it to you. There was some feedback before this Capital Markets Day. And the feedback was, well, you sell so much on platforms and you make so many marketplace projects. Why don't you explain a little bit more about the platform projects and where you sell and how you sell. And that is the reason why we added one point here, and that is the platform part. Frederic von Borries will mention and explain that to you today. And after that, we will finish this day with a lunch and network break. I think, Sven, the lunch will be right over here. All right. So you are all invited and enjoy the day with us. All right. Let's start with the introduction and up from our side. As you might have seen, we just communicated our latest figures within ad hoc news just an hour ago. And so you can see we are on a good way. We have pretty good numbers for last year, and we also increased our guidance for this year. And we will come back on that in the financial part. So from the introduction side, our management structure, most of you here know us already. I'm the CEO. I'm Dominik Benner. I'm also the majority shareholder with 70%. Laura, she is a member of the Management Board; and Reinhard, he's the CFO of the group. And our group is structured in 4 segments. We have Consumer Goods segment. We have Freight Goods like cars or bikes and so on. We have Industrial Goods like heavy machines, and we have Service and Retail Goods like finance consulting, et cetera. So our group, that was our starting point, 1882. So a long time ago, that was one of my ancestors. He started with a brick-and-mortar store. And the development from this time to today is quite a big difference. Today, we are a software group. We run different platforms. And the backbone of our knowledge, the backbone of what we do are 2 things. First, these are our partners. Partners means retailers, manufacturers, traders and so on. And we work with them, we make e-commerce with them. And the second backbone is our software because without software, we could not work and we could not make any revenue in the e-commerce world. And what we do is just we connect the partners, make all the services for e-commerce, and we connected with more than 5 million customers already on 30 different platforms. So customers can reach our products on more than 30 platforms, mainly here in Europe, and we already cover 25 industries. You are shareholders or the majority of you are shareholders or bank analysts. So just to mention our stock developments. The first day we start with our listing of the Fashionette AG, it was by December 2022. That was the first since the acquisition of Fashionette AG and started our merger project. And from this time, we had a pretty good development. You can see here platform Group in comparison with DAX and SDAX, so 2 major indices here in Germany. And I think from the development, we can be quite happy that we have such a good development over this time. And even if you take only the last year, so 12-months period, you can also see that we're very happy about this development. When we started with Fashionette, to be honest, we only had one research guided that this is not a good idea. We want to increase this number, not to have more research, but to have a big variety and have better qualificated research reports on different perspectives. We did it in a very good way. Now we have more than 8 different research partners who work together, who make researches on monthly or quarterly basis and make great updates on what is critical, what is good on this company. And also, you can see that we have, I think, a pretty good price range between EUR 12 and EUR 16 [ amid ] the price target of this share. So the latest developments of our groups, I hand over to Laura.

Yes. Welcome from my side as well. As always, and usually, I will present you the latest development of the platform group and the acquisitions we did in the last month. So we were able to enter new branches and new markets, as you can see. So we started with the acquisition of Lyra Pet, which is a platform or an online shop and website web shop for pet accessories, pet food, especially for dog things, cat accessories, cat food, wild bird food. So I learned a lot with where we can earn money with in this pet industry with this acquisition.

But to be honest, you have a dog, so you this experience...

I have a dog, but most of the revenue at the moment, they are really doing with wild bird food. This is really interesting. But we will expand now in new categories. We will expand the platform. We will open it to other partners, and expand this assortment and yes, the customer experience. Yes, as well, my dog is very excited for this acquisition as well. The next one is another new market entry. We acquired FirstWire, which is a platform for financial transaction. For example, if you want to buy a house or something like this, you can enter your application there, and they will find and search for you for partners who will support you in financing and so on, which is quite interesting. And the third one is an acquisition, which I personally really like as well because it's the Chronext Group, which we bought out of an insolvency last year or end of last year, which is a perfectly fit to our existing luxury platforms like Fashionette and Winkelstraat, and I'm really curious how we can grow together in the future and the further partnerships, and we go to this M&A acquisition later on with a deep dive. So we will give you more insights on that later on. Then we have 3 other developments. The first one is that we increased our shares from Simon Profi-Technik to 100%. The acquisition of Nullachtfünfzehn, I think I presented already in the last quarterly numbers. So this is a platform, B2B and B2C in Austria, which are selling like all goods you need for your house, your hobbies and so on, especially like electronic goods like hoovers and air fryers and so on. And the last development was that we successfully increased our bond, which we started or released mid of last year, and we increased it now to EUR 50 million end of last year to grow with our acquisition and yes, have some money for further nice products as already seen.

Right. This is our software architecture. We also will show later on how we have the structure built up, what is relevant for our further growth and also how our partners benefit from this development. And maybe it's a little bit technical, a few may be interesting in more detail, so we come back on that later. And also to mention our vision, we want to become the leading platform group in Europe. We already have more than 13,000 partners, and we show you how we will increase this number in the next years up to 20,000, and we do not know any platform in Europe, which has more partners than we would have. So I think this is quite a good development. Yes. And we go with our strategic goals. That means we always want an organic growth, which is higher than the average in the market. We also want to make sure that our long-term track record is both balanced organic and inorganic growth, and we want to make an expansion up to 30 industries by this year. On the bottom line, you see our strategic initiatives. Every year, we acquire 3 to 8 companies and make sure that we also invest in our software platform. So every year, we invest between EUR 5 million and EUR 7 million in our software platform, and this is also what we do this year. Additionally, you see that we also increase our operational and software capabilities. That means if we acquire more companies and bring more companies in our group, we have to make sure that we make a good service for them. We have to make sure that we have enough people in our headquarter that they work and make a good job for them. On the right side, you see one thing. We are still very much focused on Western Europe, and our strong intention is that we want to change that. And we will be on a very good path this year to do that. And I think we also have the right decisions to expand and make a footprint outside of Western Europe. All right. just to explain a little bit more because we have more than 40 people listening abroad in the virtual sector and most of them we have never heard before. It takes some explanations for them on how we make our business and how we run our platforms because sometimes it's not so easy to understand. So first, you see our portfolio. Our portfolio is differentiated in 4 different segments. And you can see that the number of companies is increasing. And I think we are on a pretty good track to really make the synergies between these companies to realize the cost potential between these companies and to increase the revenue. How we do that, we will show you later. We have 2 cases for you today where we really make a deep dive session with Chronext and with Winkelstraat to show how we make the synergies happen. And this is not a buzzword or bulls* word. It's what we really do every day here. So our core competencies are 3 things. First, we know how to make software. So in the last 12 years, we invested a lot of money in our software development because this is a backbone on how everything is running in our group. Additionally, we are, I think, pretty good on marketing and operations. That means we have a big pool of customer data from different companies already. We target these customers in a very efficient and cost-efficient way. You will also see that our marketing expenses are not as high as other competitors have it. So usually, we are between 5%, 6%, 7%. So this is usually half of that what other competitors do in this market because we always want to make profit, and we want to avoid any high expenditure on that. On the right side, you see M&A track. We already did more than 25 acquisitions in the last 5 years. And all of these acquired companies are still part of our group, and we can be quite happy that the integration was successful and that we didn't [Technical Difficulty] any big failures or something like that. So -- but before I want to make boring slides for you, we made this presentation today in another way. We asked ourselves, what are our most beloved 10 questions, what we usually get from investors or bank analysts and so on. So this is a better way to explain or to give a better understanding on how we and what we are not maybe. So first, why does retailers need TPG? So the question is sometimes, well, today, you have Shopify something, why on earth does a retailer or your partner go to TPG? So the answer is pretty simple. We are not like Shopify, a front-end provider. So Shopify, maybe some of you know that. It's a good company. They make front end and you can book a front end with that. but it's only a small part on e-commerce. It's like when you are an auto manufacturer like BMW and there's one company which makes the design. The design is great, important, but it's not everything of the car. So our value creation is much deeper than just offering a front end. We make the full chain when you make e-commerce. That means if you are a partner for shoes, for furniture or for cars, you come to us and we make all the photographies for the products. So we really make the full content creation. We are the seller of the product. That means we are the contract partner. We make all the payment services. So all the money comes to us, and we make sure that the customer is really paying his product. And additionally, we take care about the shipment and also all the packaging and the marketing. So the retailer has nothing else to do then wait for the order. And when the order comes in, he puts the parcel in front of the store. That's it. So there's no other thing to do, and he has not to get adequate people for e-commerce or for marketing. That's not necessary. So he just wait for an order and then he fulfills the order with us. So I always give one example on how this works. Here is a typical example of a brick-and-mortar store here in Western Germany. This is a typical store with a EUR 1 million revenue in this local store. And when he connected with us, he had an increase of 27% within 1 year. And why does he get this increase? Very simple. We make e-commerce for this retailer so he can get this EUR 300,000 revenue additionally to his local revenue. And quite importantly, he has a good margin on that. And when you make a margin comparison between local revenue and online revenue, you see that the online revenue is a little bit higher because he has no additional cost for e-commerce. Of course, he has to pay provisions and so on. But all in all, he has some better margins compared to his local revenue. Why M&A? That's also one of our beloved questions because in the first 8 years, we never made any M&A because the valuations were much too high. But in the last 4 years, some of you might know that the valuations had a big decrease, and that was a point where we said now it couldn't make sense from a financial perspective to focus a little bit more M&A, but not only we grow also organically in a good way. So every time where we say, okay, we would like to enter an industry, for example, finance, B2B platforms, we said, okay, what is the best way to do that? Should we make it by ourselves or should we make it by an acquisition. And then we go through this decision path. And at the end, we say, okay, when we do that, we only acquire a company which is fair valued, so it's not too expensive and only if we can have synergies with our headquarter. If we do not have synergies with our headquarter, we do not do that. Maybe this is obvious to you, and I also would think that. But to be honest, in the last 5 months, I traveled a lot through Germany, and I asked portfolio companies, big portfolio companies, stock-listed portfolio companies and ask them, what do you exactly do with your subsidiaries? What do you do with them? And so I don't want to mention any name here, but I was a little bit wondering because I was well, we get monthly our BBR, our financial report, okay? And one or twice a year, we make a nice, warm welcome with some champagne. So that was basically their way of how to manage subsidiaries. And we said, okay, this is not our style. We really work together with them every day on an everyday basis because we have to fully cover their marketing, the software people, the HR, the finance, the payroll, everything. And this is quite a big difference to the usual portfolio holding companies, which I see in Germany. And yes, maybe this gives you a better understanding on how we work together with them. And also to mention that we are not the only company which makes acquisitions every year. So you see Siemens, Bosch, you see Fielmann, SAP, Danaher and so on, Constellation Software. These are all companies which make pretty much M&A. And what is Constellation Software. We know them pretty well because they are operating in the software industry. They also buy a lot of companies here in Germany, but software companies with another multiple, but it's quite interesting how they make their management, and they have a very good integration path. So they make a pretty good job with that. I can skip that early. The people also ask us how much do you pay for this? Currently, we pay between 3 to 5x EBITDA. This is our average. We later show you on what is our return on invest on average on M&A acquisitions. And so this year -- last year, we made 9 acquisitions. We planned to have 8 acquisitions, but there was one target which was not planned. It was Chronext, and we had to move in this by December very fast with this target. And so it was included by December last year. So we had 9 instead of 8 acquisitions. So our current M&A pipeline to give you a short impression about that, what we plan for the next 3 months. On the left side, you see a B2B finance platform. And it's a finance platform. They are focusing on banks. So the clients are only banks, big banks, small banks, midsized banks, and they make software solutions for them. And so we already did the due diligence. We already have a signed term sheet. We expect the signing of the SPA by end of February, and we think that it's going to be by April. So you see that after our first acquisitions in the finance sector, we want to add the sector within other acquisitions and they are -- they have a good fit to each other. Additionally, you see here the B2C luxury platform. It's a very special because they are only focusing on vintage products, so pre-owned products. We never did this so far, and we are very critical about that because earning money with pre-owned products is very, very difficult. But they are focusing on a very small niche, but a very successful niche, luxury brands, luxury products and the average amount is between EUR 500 and EUR 5,000. So when you spend EUR 5,000 for pre-owned products, it's very expensive, but it's very high luxury brands like MS and so on. So they are located in France, and we are still negotiating with them. We have our due diligence up to end of February this year. We are not sure if it works or not, but we are optimistic from a current perspective, and we expect the closing by May this year. On the right side, you see B2C optician platform located here in Germany. They have local stores and an online platform. And we already planned to do that by January, but it takes a little bit longer time. So hopefully, we will get it by February. And yes, it's a player here in Western Germany. All right. Next question. It seems like a mix of many shops of Deutsche [ EuroShop ] [indiscernible] or they buy small nonrelevant companies. That's also a beloved question from our side. Well, maybe if you compare with Zalando, yes, indeed, we buy small companies, which are not disruptive or anything like that. We are investors, and we operationally drive these companies, and we really love small and midsized companies. We don't want to make an acquisition with EUR 1 billion or whatever it takes. It's not our business. We really focus on niche shops on niche, and that is the reason why really nonrelevant companies, but cash earning companies. That is our focus. And additionally, we are not a mix of shops. We are a platform group, and that means we have one software and we rise the synergies with that. So it's not sort of a strange mix of shops. It's one player who is entering new industries with our software. That's what we do. And here, you can see our operational holding. I think it's very important to understand that we've divided our holding in 2 different segments. So one segment are the operational departments like developing software, make the marketing, run the marketplace teams because we sell a lot on other platforms like Walmart, Shein, Temu and so on, and the quality management team, a design team and also BI, business intelligence team that the companies when they come to us and be part of our TPG group, they get a really good data quality and can steer their company with that. On the right side, you see the centralized functions. That means HR. HR is also quite important because usually, when you buy a small company with 20, 30 people, they do not have a real HR service. They do not have HR people. They are too small for that. And when we buy this company, we just start implementing our process and support our people. Additionally, we make all the finance and also we have our own lawyers who support our portfolio companies every week with all their cases. Why not just SaaS revenues? Because I know SaaS revenues are much more popular on what we do. SaaS revenues are much better valued. I understand all of that. Of course, you're right with these questions. And yes, we also have SaaS revenues in our group, but they are not so high, they are not so relevant, and they are not our focus. We don't want to make only SaaS revenue. We want to focus on the full value chain because if you are a SaaS provider, if you only offer the software as a provider, then you can be changed every year, every month, whatever. And we don't want to be replaced just because there's a new competitor. So we always decided that when we work with our partners together, we will -- we want to have full control on how we work with them. We want to make the content, we want to make the payment. We really want to make a very dependent relationship with them. And this is not possible just with SaaS. How can you grow by segmenting markets? Also one of our beloved questions because when you say, well, the e-commerce market this year in Germany, it's maybe growing by 4%. How do you want to grow faster than 4%? It's not possible. We have a slightly different opinion about this question because we do not grow by an industry or by a market, we grow by partners. That means if we get more partners like retailers for shoes, retailers for furniture or B2B partners, we get more products. And with more products, we get more customers. And we just showed you by last year, end of last year, we had around 5,500 partners. Now it's more than 13,000 partners. And the reason for this big increase has 2 things. First, we had a good organic growth by existing partners and existing platforms. So more than 1,500 partners came to us. And additionally, we acquired some companies with included partners, for example, Winkelstraat, Avocadostore and Hood. Hood is a big player for partners here in Germany. There are more than 4,500 partners only operating with Hood here in Germany. Is Amazon a competitor? Also one beloved question. Well, Amazon is not a competitor. We sell on Amazon. So Amazon is a selling channel for us. It's not a competitor. I think Amazon has no interest to connect all the small little strange partners, make the content for them and make all the daily handling processes. It's much too cost intensive for them and too much complexity. What is your peer group? Are you a software e-commerce or serial acquirers group? Also, this is a good question. Maybe we do not have a direct peer group. That is a little bit strange for bank analysts because they always ask us this question, what are you? Should we compare you with software e-commerce or serial acquirers? Maybe you make your own decision what you prefer. From my perspective, sometimes we are a little bit unique. We do not have a peer group because of that. But in your life, you don't have -- need a peer group. That's my opinion. Why are we stock exchange listed? Why do you make several small capital increase per year? We come to that later to also answer you this question. Before we do that, I hand over to Reinhard for our financials and for our outlook for this year and for our midterm outlook.

Yes. Also from my side, a warm welcome to all of you. So for my voice, I don't know what happens last night. Hopefully, you understand what I want to give up to you. I'm very happy to have this intro before I can present our financials because I guess the expectations are now very high. Dominik and Laura did a very great introduction what has happened, what is our target, our way we are working all day. And now the expectations are high, what has really happened in '24 and how could -- what we explain to you and how to come up with the background of what we are doing and how does it look like in the figures. And we increased our guidance a couple of times last year. That is for sure, mainly based on our acquisitions. And everybody knows when we acquire a company which has a certain revenue, then we have to increase our revenue for the year because otherwise, you would ask, okay, when one company is coming in with high revenues and you don't increase your guidance and revenue, what happens with the others? Are they now decreasing in their figures and so on. That's for sure clear. But nevertheless, we are all the time very optimistic in what we are giving up to you in the information. We are, for sure, looking for the right partners for the right companies we are acquiring and our aftermarket business -- sorry, our after merger business is also very well running so that I can really explain to you now that in most of our guidance, KPIs, we really could overperform or outperform what we have explained to you. So for example, when you see our guidance for '24 in the GMV was around EUR 880 million to EUR 900 million. And finally, we could reach in 2024, EUR 903 million as a GMV. The net revenue, the difference between GMV and net revenue is that we have cancellations. We have sending backs from our customers. They are, first of all, checking-in in their selling list -- sorry, purchase list, a couple of pieces that they want to try. And then finally, they pick out a one-off, for example, shoes or rags or whatever and then we get it back. So that our net revenue, so the final sold revenue is lower than the GMV for sure, and our guidance was around EUR 500 million up to EUR 520 million. That was our guidance for the year, and we could outperform in this regard as well. So we reached the EUR 524 million for the year '24. The other items, I will a little bit step over and will directly go in what was our profitability in '24. So as you can see, our adjusted EBITDA, we announced, okay, we are expecting a range between EUR 29 million up to EUR 30 million. And finally, as you can see in our presentation here, we could also outperform and could reach a little bit higher results by EUR 33.2 million. And the net profit, last but not least also was a little bit above [ expectations ]. So we were also very conservative in looking for, okay, where we are at the end, we could really reach what we presented to you over the whole year so that the net profit could also reach the number EUR 35 million for the year [ 2024]. Now I step over to a comparison, okay, what is coming from the net profit and divided to the earning of shares, what is the income. That calculation is something what everybody can do with his own. But as you can see, with an earnings per share by EUR 1.70 per share, we are again above our own expectations. And that for sure makes us very happy that we could reach that increase. And when you compare, and that was something what Dominik already explained to you earlier, the year '24 was in some areas, a very high pressure year. But nevertheless, we could really outperform in some areas so that the expectation could be reached or we are higher than expected with our earnings per share for the year. Now here, a little bit illustrated by graphs, you can see that our increase from 2023 to 2024 is all the time in that way running up as we are giving up in our guidance. So you see coming from EUR 705 million of GMV, we reached now the EUR 909 million, which is an increase of GMV by more than 28%. The same in the net revenue, we are reaching the 19% of increase from 1 year to the other. The adjusted EBITDA is much more higher, and I will later explain something more about our adjusted EBITDA and our reported EBITDA. But here, you can see we have also realized very high increase rates by 47% in EBITDA adjusted and in the reported EBITDA, we are increasing by 17%, which makes us, for sure, very proud to realize these figures in '24. Net profit, same situation, also very well development. So coming from EUR 26 million in 2023, we could realize EUR 32.7 million in '24. So I explained that already that we have a huge increase here also realized, and that is also we can see in the earnings per share by an increase of 7%. Now some words to our EBITDA adjusted and EBITDA reported because that is very often directly in opposite what everybody is expecting. So usually, we are -- we see in comparable companies that the adjusted EBITDA is higher than the reported one because you take out all of these extraordinary expenses, which has nothing to do with the operational business. And so that shall clear up a little bit what has happened in the market and in your entity. In our case, we are extremely in opposite. So our adjusted EBITDA is lower than the reported EBITDA, and that has to do with our very efficient M&A strategy. We are more or less all the time looking for getting targets and acquire targets, which are, on the one hand, profitable. But nevertheless, we also give very good reasons to the seller to sell their entity to us so that they are becoming part of our group, which is also an advantage to the sellers of their own companies. And as you may have already heard, so our whole M&A strategy is that we are starting with the 51% to purchase the shares. And then we are keeping the management, we are keeping the owners inside of the company and developing them into our group so that we are on the other hand realize a win-win situation. That means that the entities are happy to come to us. They can increase their business. They can turn or they can set up some plans they already want to do, but were not able to realize them by themselves. And that gives us the advantage that we could acquire these entities a little bit lower than their value. And so that is from an IFRS perspective, realized in a badwill, which is a direct profit in the P&L. And so this is something you need to understand when you read our balance sheet and for sure, our P&L. that we have an extraordinary income coming from the badwill means badwill sounds such bad, but it is something positive. We could acquire an entity underneath of their value. And this has the result that we have an extraordinary profit in our P&L so that finally the reported EBITDA is much more higher than the adjusted EBITDA. And so therefore, it is important and it is yes, hopefully well explained to you and understandable what the reasons are that we are completely in opposite reporting our figures than usual you may see in other companies. Here, we have a picture and summarize segments do we have. So Dominik already explained that we are acting in 4 segments. So the Consumer segment, Freight segment, Industrial segment and [Technical Difficulty] here, I'm sure later on, you will download that present here from the Investor Relations page. So I will not go in all the details, but feel free to walk through these explanations. And if there are some questions, please let me know and I can come to you and explain more in detail what are the parts in each segment and how do they cooperate to each other. Here again, some overview regarding the nonfinancial KPI. I guess that's also very important to understand, okay, how could we grow in our market, for example, with the numbers of orders for sure as more partners we can bring to our platforms as more interested customers are coming up more customers, we are very attractive to more partners who say, okay, there is a great platform, and I would like to be part of that platform so that we are very successful in increasing the number of orders. So the customers coming to our platform and doing their choice. So the number of orders increased from 6.2 million up to over 7 million. The average order value increased. And as already explained, we have had an increase in active customers on our platforms. So that this, for sure, is the basis for our ongoing and much more increasing high-volume business for the future. Some further interesting numbers here. So the employees at the end of the year, including all the new acquisitions are now increasing up to more than 1,000 employees. And the partners, Dominik already explained, we did a huge jump based on Hood and Nullachtfünfzehn from 5,500 partners to 13,500, which is, for sure, the basis for our ongoing well successful business for the future.

Maybe one explanation because a lot of people always ask us how much is organica growth and how much is nonorganic growth. And here, we also showed you these numbers. We had a total revenue gain of EUR 83.8 million. And when you divide it between nonorganic and organic growth, you see that a little bit more than 50% was nonorganic. That was due especially to Odoo Group and Nullachtfünfzehn. And these 2 companies have a very big revenue part and the rest was organically driven by our existing platforms.

Yes. So as I already earlier explained, you can see a very high increase from year-to-year in the relevant areas. And here, you also can see what is our guidance expectation for the year '25. So the GMV, we are already could show that we are starting from EUR 900 million in '24 and considering what we are expecting for '25, we now would like to give out the guidance of a GMV development by EUR 1.2 billion. The revenue development, we are coming from a little bit more than EUR 0.5 billion. We are now expecting we can reach the area of EUR 590 million up to EUR 610 million. Adjusted EBITDA, as mentioned, we are realizing in '24, EUR 33 million. And regarding our pipeline, our development, our expectations for '25, our guidance will increase up to by EUR 42 million and -- okay, sorry. So EUR 2 million. So these are the key KPIs we are usually explaining to you, and that is our target, what we want or what we are sure to reach in '25. And for sure, you can count us in this regard next year at this time. Nevertheless, for sure, to realize all these plans and our acquisitions and everything what we do, you can see here the development of our debt situation. You know that the bond, which was known -- which is well known by everybody that was sometimes explained from our side, what is the target of the bonds -- of the increase of the bond. We want to increase the number of acquisitions and the volume of the acquisitions so that overall, the debt situation will be like we explained here in the chart. So cash and cash equivalents for sure, will go down a little bit. The short- and long-term loan situation including our bond will be more or less what we are already realizing in '24. And overall, with regard to the last 12 months EBITDA, we could -- or we are expecting a leverage, which is a little bit higher than which was in '24, a little bit higher of what we all the time announced, and we are coming back now in '25 by 2.3 multiple of the last 12 months EBITDA. So you can see we have also a very solid development in our debt situation in '24 with regard to the new bond and so on, which is not yet invested and not yet financed back. That is something that brings the leverage a little bit up. But now when it is running, when the usage of the bond amount is well done by acquiring new entities and these entities are profitably implemented in our group, we are exactly there where we are -- want to be the leverage by, again, 2.3 multiple of last 12 months EBITDA. I guess that's it. Yes, one overview as a summary, what we are looking for to realize in '25. As mentioned, the revenue will increase up to EUR 610 million, so between EUR 590 million and EUR 610 million. The adjusted EBITDA up to EUR 42 million and the GMV will now exceed the EUR 1 billion level to EUR 1.2 billion. That's our target for 2025. For sure, under consideration of -- of the development of what we already know for sure, when we are acquiring additional entities during '25, then we have to exceed numbers again because as I explained earlier, we have to -- when companies are coming in, they are already earning revenues and profit situation needs to be added to these numbers here. So we are based on the considerations in the group. Again, what I mentioned, so 2.3 is the leverage of our bad situation, and we are still ongoing to reduce that leverage again so that we have a guidance of '25 overall between 1.5 and 2.3. The partners will exceed again. So as I explained, we are currently 13,000-something. So we are looking for that we have huge increases here as well so that we have 15,000 partners and in around about 30 industries. So at the moment, we are in 26. So we are still looking for new area, new segments, new niche markets so that our expectation is to realize in '25, 30 industries under the whole umbrella of the TPG Group.

Yes, maybe some developments about our last year, and what is relevant for this year. So first of all, we see that the consumer confidence in a lot of European countries is coming back. It's higher than 1 year before. We see that other companies like Zalando, Mytheresa and so on, they all increased their guidance. And we also see this development. It's not jumping up, but it's going up. And so we have a positive trend here. And additionally, we see a very good profitability side. Last year, you know that we made a cost reduction program. This was also very efficient and reduced some staff and some offices. And all in all, this has positive effects also for this year '25. The one thing which is negative are the distribution costs and logistic costs. So we see, especially in Germany, we see higher rates from the carriers. We see the logistic costs and also the [indiscernible], which goes up. And so we have some actions defined and we try to have a stagnating level, but we will never ever decrease that. Next thing is we see excellent conditions for new M&A targets with very fair values in this year. So there's no change. To be honest, we expected that because of this declining interest rates, we expected higher values of companies. But right now, it's not changing. There's no difference because there are no buyers in the market. So in our segments where we operate in, we do not see many buyers or sometimes we see no buyer when the company is for sale. And that gives us the confidence that we see a good year for M&A activity in '25. Additionally, we see the increased scalability of our software. That means we can enter an industry with less than 4 months. When we say we want to enter the industry, for example, for cameras and we love cameras, whatever, then we say, okay, when we enter the industry, we can ramp it up with less than 4 months and can also connect to first partners after 4 months. Our 4 segments, they grow. This is important because sometimes not everything is going well. Of course, it's not possible that all companies are perfect, but we are very confident that all our segments will grow this year and that they have also positive contributions to our margin. And also the Industrial goods segment, which was a little bit the poor dog last year, which has a low margins and we see that the margins go up, and we also think that we have better developments in '25. So you see we see a strong guidance for 2025. And we also make a new midterm guidance. We make midterm guidance. We make it because we want to give you a better confidence on what is our expectation also for the next year and what is our growth perspective. Because we come back to the question, how much do you organically and how much inorganically. And the answer is very simple. We regard no new M&A deals. We just say all the companies which are integrated right now, they are here, and we calculate on what we plan for this year and for 2026. And that is our growth. So here, you see that we expect a revenue of at least EUR 700 million. We have the same EBITDA range with 7% to 10%, and we expect a GMV of at least EUR 1.5 billion. The leverage, the no change compared to this year. Partners, we will have 2,000 more partners, reaching 70,000 for next year, and we will add another 5 industries where we operate in. And last but not least, you see our financial calendar. It is a bit small written, but we have Investor Relations page. So feel free to visit us on the next presentations. We have a lot of conferences this year coming up. And also, you can always reach Reinhard as the CFO and Head of Investor Relations. All right. Thank you very much. Before we go on, do you have any questions to the financial perspective to the outlook to the midterm guidance? We can directly start with some Q&A points here from you.

Oh, now everyone's hearing me. Thanks. So you start with top 10 question. And there's one question really missing because the question I ask all the time, why is the guidance so low? I mean if I look at the acquisitions you did last year, so only the ones already consolidated now, at least in part, will have some months in there where there's still some first-time consolidation effect. And I think with that alone, the guidance should be very well reached there. So my question always is, why are you so conservative on the organic growth? Or am I missing something?

A very direct answer on that. So first, we always have to consider that companies coming us, they have a consolidation point. So for example, Nullachtfünfzehn was consolidated only for 2 or 3 months, for a very short time. And second, we are conservative. So you never ever hear any hockey stick case from us. We are always conservative, and we always make conservative planning process with our subsidiaries. So when you meet with our subsidiaries, we have a 3-point planning process. First, we make an indication around with them and ask, okay, let's make a bottom-up approach and tell me what you expect. Then we make a deep dive approach and ask what can we contribute to get higher revenues with you and higher EBITDA. And third, we make a critical valuation on that and say, okay, what is the risk buffer that we have to analyze and how much risk potential do we see in that case for this year. And when we do that, we always take a discount on that and say, okay, what is the risk profile and what is conservative for us. So you always will hear conservative planning process from our side, nothing else.

Okay. Perfect. That helps. And a follow-up question, if I may. I would like to get a bit more understanding on what -- why you would consider a target attractive or a good fit? Because for me, at least, Chronext, no-brainer. Luxury product, not a lot of weight. So logistics isn't really a thing. It fits very well in terms of like the partner network with Fashionette, of course. Pets, not the same thing. Heavy stuff. I don't think a lot of synergies with existing partners so far. So just give me an idea of what was the thinking behind that? And maybe -- and that's kind of also plays into the same question. There were a lot of synergies where I thought, well, this could be internally very interesting for Platform Group more than the usual expanding the network, expanding the partners and having this growth cycle out of that. And there was especially the secondhand thing you talked about today, makes total sense with return. So are you thinking also to have their other synergies internally other than connecting them to your huge partner network? And I was, of course, always thinking the same a little bit about the Odoo Group. So here also the question, how is the integration going? Are actually your partners now using services maybe that they didn't use before, thanks to those acquisitions?

Yes. Thank you very much. There's one thing and maybe we are completely thinking in a different way. We do not think about products. In your mind, you say the luxury watch, this could also be attractive for the Fashionette customer. You are right with that. Absolutely, you're right. And yes, you can attract the customer with a Rolex watch and with a Gucci bag. absolutely right. But when we make acquisitions, this is one part of it, but it's not so relevant. We make acquisitions when we think, okay, we can make an additional value for this company, help them growth and reduce the costs. And when we do so, we look different on companies. Let's take the example with what you mentioned with Lyra Pet. This is a company -- let's go back to that. So Lyra Pet is a company with pet and pet things to buy for dogs, birds and so on. And we decided not to say, okay, Lyra Pet is attractive because the EBITDA is EUR 1 million, for example. It is a little bit more than EUR 1 million besides that. But we said, well, this is a market where we see 2,000 retailers selling pet [indiscernible] we see 2,000 players in this market and not only Fressnapf. So we see a lot of local retailers for horses, for dogs, whatever. And this is an attractive market. And we said, okay, we see one company here. This is not so big. So whatever, EUR 20 million revenue, EUR 1 million EBITDA or a little bit more. So let's take this. We transform it to a platform and then we connect more and more partners. So we do have a complete different look on that. And then we say, okay, these are current figures, EUR 20 million and EUR 1 million EBITDA. How can we change that? And the change is very simple. So first, we have to change a little bit the logistics there, but this is a special topic. Additionally, we have to implement our software and reduce their marketing people. We completely make it with our headquarter. And on the revenue side, of course, we have to ramp it up because they make marketing in a very small dimension, almost nothing. And they just have very loyal customers, which are buying there for 10 years already. And -- but it's more -- it's not a professionally run company, and we can change that right now. So when we buy them, when we integrate them, we change this way of how they do it, we will change the front end. This is a front end, which is, I think, running for 7 years. Okay, it's fine. The people are used to that, but it's not professional. So we will change that in the next 3 months. So -- and these are the typical processes we do, and this is how we can increase revenue, decrease the costs and also start a new vertical in a new industry, pet. And pet, I don't know how many of you know that. It's a billion market here in Europe, everywhere. It's a really big market, and we did not cover it so far. And when I see the average order value, it is between EUR 80 and EUR 120. So I was astonished about that. I said, well, I expect a EUR 10 or EUR 15 for pet food, whatever. It is not. It's much higher. Any other questions?

Secondhand.

Secondhand?

Your question was also, secondhand. Because if you think about the secondhand topic, it's a little topic, it's extremely squeezing, but still a small topic in Germany. But if you go through other European markets, it's a very, very big topic. And we found a player who has several thousand articles live worldwide from professional partners, but also from private partners. Also this partner, this company as an essential way to prove all of the goods of authentication so that it's real things, not fake things. And if you see, they only sell about their own selling point. And if we would add up our software solution, it's a very handmade software solution there and also add up all our marketing power and all of our platform power. So the whole synergies about the technical part, we can really improve this. And I think this really adds up with this pet's part because it really doesn't matter about the branch. It's a topic where we can have some leverage into it, into the business, into the technical part, into the marketing part and also into several German -- European markets, not only the German market.

We have a lot of other questions. So we have to continue, yes.

Dominik, I'm interested that you've increased the number of industries you want to serve next year from 30 this year to 35 next year. But you you're less specific about the countries you want to operate in. Obviously, you're making lots of progress in European countries. And I think you've previously said you have aspirations to go to places like the U.S. and India. So when can we expect a wider growth outside Europe?

Very good question because we are very conservative and have some fears that entering a market could make losing money or could result in losing money. That is the reason why we are really making small steps with that. But you can be sure that we already started in a not obvious way, selling in the U.S. market. Frederic will tell you later on that. We already started selling there, and we ramped up the business there with an office and return hub and so on. And we did not announce it so far. But we did it. And when we have the confidence that this market is good for us and that we can earn money, we also communicate it and make it more obvious to our shareholders and our partners. Yes, we already started selling there. Next thing is India. We have all the basics done. So we have all the contracts and so on. I'm not sure when we start, but we will start this year. Definitely, yes.

So just a quick follow-up. In terms of the guidance for '25, always in the way of my view of what's at the bottom of the slide. But can you just confirm the guidance for '25 includes the 3 acquisitions that you have expected that you mentioned earlier that will complete in the next few months?

No. When it is not signed, it's not part of our guidance. So after signing, it is for sure, and we can pay, of course, the target, then we include it in our guidance, not before. Otherwise, it would be -- we don't want to make any fantasy things here. Other questions? Yes, here.

Of the acquisitions you made in 2024, are there any that have not yet been consolidated? And if yes, which ones?

Yes, yes, yes, definitely. I'm not sure about that.

The kind of number you mean of the...

Which one -- no, no, which was not consolidated.

Chronext was not yet in.

Chronext was by December. By December, but only 1 month.

Yes.

FirstWire is starting by January.

Yes.

So it's not included in '24. And Lyra Pet is also not in.

Lyra Pet is also not in.

So it's coming up this year.

So 3, 4 was my expectation that we have not yet in...

[ In ] targets.

Which are now for sure in the guidance, we considered them, but not yet in the '24 figures and because we're not in, we cannot count them.

Okay. And could you give us a revenue range for these last 3 acquisitions, Lyra Pet, FirstWire and Chronext, revenue and adjusted EBITDA maybe?

We go make a deep dive session for Chronext later on, yes. Any other questions? Yes.

Do you know roughly the split between revenues going from third parties and your own platforms?

No, we have no publication on that. Other questions? All right. Some questions from the external parties?

No, no questions from the chat.

Okay. Then again, thank you very much.

All right. Now we continue with our M&A track. Just [ keeping ] all [ these ] slides. All right, [ Heinrich ]. So let's start with our systematic approach. [ Heinrich ], you can start.

Okay. Systematic approach that we drive sustainable growth and shareholders' value by searching out relevant companies to acquire parts of them and fully to increase their value by going together with our value things we can go for. Could you please have to...

Yes. Sure.

We had roughly 1,700 opportunities. This is really quite a lot to go through them. So we just matched, do they match to us? Will we have some platform topics in there and so on. So roughly 100 still left, so roughly 8 months. And out of this, we had 24 end due-diligences and had final acquisitions, roughly 9 in a year. We really go through it, but our approach is always to stay on the same level with entrepreneurs. In most cases, we don't buy from other private equity companies. We buy from entrepreneurs shares to increase and leverage the business. That's our approach. I'm so proud to be someone like a typical M&A adviser, but to be on the commercial side and go on the same level with entrepreneurs to also grow together and stay with them on the level to increase the business together. This is general topics.

Yes. I mean this is a good comparison between acquisition-driven compounders and private equity investors. We think when you are acquiring a company, sometimes there are one or nobody besides us. Sometimes we have 5, 6, 7 other competitors who wants to buy the company, the target, and of course, we think that saying, okay, we are a long-term partner. We are not a PE player. This is a very relevant point because when you see we make a permanent home for them. So it's not a short-term track selling after 4, 5, 6 years. So it's a long-term home for them, and we want to make a really stable environment for them that they can grow with them -- with us together. They will stay as Board members. And of course, they have a very high autonomy on their operational business. On the other side, we take over the software, the marketing, HR, finance. So it's a big change for them. But sometimes they really say, okay, I'm happy that I'm not responsible for that anymore. So it's quite different. I think we can skip that. And here, you also see the programmatic approach because when you see on some studies about M&A, and I really love the study, it's a very good one from the U.S. and they make some comparisons between large deal M&A makers, organic growth makers and programmatic M&A deals. And we are very much focusing on programmatic M&A. You see that in a long-term perspective, they have very high returns. They make a good job with that, and the risk is very low. I don't want to bother you with too many slides on that, but we all upload you this today so that you can also ask us in the Investor Relation way if you have further questions on that. What is really interesting, I mean, you know our criteria. So buying companies or Heinrich and his team, he starts buying companies starting from EUR 3 million revenue to EUR 100 million and only buy profit with our due diligence. Because typically, when other parties like private equity player make their due diligence, they make their financial DD, business, environmental DD, HR and so on. Our first question is always synergy. So before we make any [Technical Difficulty] ask ourselves, what kind of synergies can we analyze, identify and realize. And we make it 3 times. So first license with the target, when we say, okay, it's a financially attractive target, making good profits, but we see no synergies, we are directly out of this -- of this process.

I think that's the most important point. That's also when we go through everything. How is it -- how do we understand the business, the commercial is the first important thing for us, not the results. But what is the business of the company? What are they really doing and how can we improve their business with our surroundings and our -- and also we had something, I think last year, pre last year, perfect fit, but then we had a person that we don't really trust this person. You can't really write it in paper. But just out of a belly feeling, we don't want to work together with them because we just don't really trust the person. And then we also don't go for it because, again, we usually start with 50.1% and we want to work together with the managing directors and to improve with them together business. And if there's also no, let's say, social fit, it doesn't work out because it has to be a mindset that is an open topic that we work together, that we really improve and go forward. And as Dominik explained, that we pass over relevant marketing parts, for example, that we look for technical stuff we build, yes, every time we increase the technical team, Christoph will talk through it every year, nearly every month to have a really, really strong core technical setup, which we can develop together with the new parties, but also with which we can really increase the business impact for them.

I think we already mentioned that.

Yes.

We can skip on that. So this is maybe a very important slide for you. And what do we show here? We show a typical case. So Heinrich and me, we just were thinking what kind of business case can we show you. Here, we have one example. Here, we took over 100% for EUR 8 million. This is very typical because we usually buy companies between EUR 2 million, EUR 3 million, EUR 5 million, EUR 10 million, EUR 50 million equity value. And this is a typical example on how we make the purchase price and the allocation for that. So first, of course, one part is equity. So we take it from our equity side, from our cash account. Additionally, we make usually earn-out structures. So our average earn-out structure is 2 years based on EBIT, not EBITDA, based on EBIT. And after 2 years, we get this earnout paid, and this is also paid by equity. And then we have our debt or bond. This is also part of our acquisition. And then in some cases, not all of them, but in some cases, we use shares. On the right side, you see that last year, we had an increase of our shares by 3 million. Well, that's quite a big number. And I'm the major investor, so I'm diluting. But on the other side, we think that this is quite a good way because it's the best way to connect these people, the leaders to our group. And we really believe in this approach that when you have good people and they want to work with you for many years together, it's the best way to connect them to our group. With that, we always make sure that we have good lockup periods that they cannot just sell their shares. We always make sure that after the lockup period, they can only sell very small parts of their shares, so there's no risk for the share price. And here, we have some examples of all the companies who received shares last year from our group because they sold the company or parts of their company to us. So this is the reason why we initiated 3 million new shares last year. But most important is here, return on investment. When people ask us, why do you make these investments? Why do you pay EUR 8 million, whatever? We just make a very rational analysis and say, okay, what is the payback time for that and how much return do you get with that? And this case is very -- I think it's a very good example. We have 1 point in EBIT per year in the first 2 years calculated and also in the history. So it's a factor of 4.2 and this is an ROI of more than 23%. And this is very attractive for us because this is a market where almost no competitors buying these small companies. You have good returns and we can -- with our synergies, we can increase this ROI always in the first 2 years. And yes. And I also show you always the comparison between horses. Of course, we do not buy horses, but I like horses. And on the right side, you see factors between 13% to 25% currently when you buy horses in Frankfurt, Cologne. Software companies are right now valuated with 8 to 14 as a factor, and we buy between 3 and 5, so I think this is quite attractive investment case, and this is why we do this right now. [ And if the times are changing ], we will stop buying. So we make 2 cases. Maybe, Laura, you come up to start with that. So the first case is Winkelstraat. Winkelstraat, none of you have heard this company because they are operating in the Netherlands, and they are primarily focusing on women but also...

Men.

Yes, men and women, yes.

That's obviously something where we can value from or benefit from with Fashionette because Winkelstraat still is very focused on male. Fashionette on the other hand side, really focused on female. And now with the combination of both, we can like target groups in both companies and in special markets because, as Dominik said, nobody will know it here because it's like really focused on the Benelux. And we are still focused on the -- or we, as Fashionette are still focused on the German-speaking countries. So also there, there is a big potential and a synergy to reach like a higher and wider customer base yes, to sell like really high valued end-products. So that's as an introduction. And we took over or we acquired mid last year. And we can say that we, from a lot of synergies. We are really close in contact with Joost and Matthijs who are still there and the -- partners in case of the marketing activities, the tech stack. We already combined and merged the HR departments in the Netherlands with our other company in the Netherlands, which is called Brandfield, which is also not very known here in the market, which are like very focused on jewelry and watches. But there, we have a finance team there, we have an HR team, and we already merged those departments within the Netherlands because this is like a bit more complicated to merge this with the German-speaking or German countries or German companies. But yes, this was like the immediate thing we did, also together with the marketing and the tech synergies we had. So here, you can see it's a very different look and feel as we have on fashionette because it's due to the fact that Winkelstraat is really much working with new designers, new upcoming brands, a bit more fashionable and probably a bit more edgy than we have at the moment at fashionette. But nevertheless, they are also working with brands like Brunello Cucinelli, which are really high-priced brands, which then, on the other hand side, perfectly fits to fashionette. And on the other hand side, when we are talking about like new coming brands, new coming Dutch brands, for example, where they are very close working together, we have the potential to also increase their brand experience, their brand awareness, in our markets or in the German-speaking markets and benefit also from that because they will put more money into our market and our marketing activities. So on the one hand side, the fashionette probably can work with those brands as well and benefit from marketing spends or retail media budget from those brands as well. Yes. As you can see here, we started the project or the merging project, and/or, in Q3 last year. As I said, finance, HR, we merged within the Netherlands. The risk and payment, we have like a very strong team at fashionette in Dusseldorf. So there is a very high exchange between those departments. And on the other hand side, we work much closer together in marketing activities, software, business intelligence and marketplaces. And when it comes, for example, for content creation, the fashionette has a very big team, photography team, content team in Dusseldorf and not only for Winkelstraat, but also for Aplanta, which is our fake plant company. And as well for Brandfield, we are now taking over the photography and content creation part in Dusseldorf. So there is like huge things going on in cases of synergy in that case. Yes, as you can see here, we started the cross-listing with fashionette already last year. And I must say that Winkelstraat is really focused on multi-brand retailers, especially in the Benelux, but also in European markets. So they are really focused. They have a strong team, very much expert in this kind of area. We as fashionette has a strong like position in wholesale and retailer brands, connection with brands directly. So there is also, again, a synergy in combining products on both platforms. And on the other hand side, we have still Brandfield where I must say the average price or the average order value is much lower because they are focused on another like target group. But still, there are a lot of products where we can also like share and combine there. Yes. And the third topic was the vintage one or we call it pre-loved products.

It's a secret. We cannot communicate the company.

Yes, we won't do it, but you can have a look on the Winkelstraat platform already. So find there a huge portfolio of pre-loved and vintage products at the moment. And this is a retailer in Europe where we start as fashionette working within the next days, I would say. So it's not released and the go-live is not done yet, but we are like in the end phase of our testings, and we are really looking forward and so curious to onboard those products as well to fashionette because we did some researches with existing customers and surveys with probably potential customers last year to find out where do we need to focus on the next years, what products we need. And we found out that the loved brands of our customers are probably like products as Louis Vuitton, Chanel and Hermès, which you will never sell or resell, in the one hand, stadiums. So we are really dependent on those retailers who has expertise in authenticating and so on those products because it's important to that you're not selling fake goods, for example, and you have the expertise to find out if it's real or non-real. At fashionette, we don't have this expertise at the moment, so we are dependent on retailers like the one we are starting working with. And yes, we are really looking forward how this will work. So with an Hermès bag, for example, there is the price of over EUR 10,000. And yes, we are curious how this will work.

Yes. And here, you see some financial figures and operational figures on how this integration work. So right now, before we entered the company, they had 410 partners, luxury retailers in Europe, mainly in the Benelux countries. And this year, we have additionally more than 170 new partners for them. So we will integrate them with our platform, with our software, and this will also go up within the next year. Also important, the GMV, you asked us for the GMV development. And right now, this is a small company because Benelux is small, Netherlands is small. But you see here, we have a very strong increase planned for the next 2 years, and we are quite optimistic to achieve that because when we start our post-merger project by September, we directly see an increase, and we also saw an increase by January, so I think we are on a very good path with that. The cost efficiency program works pretty well. We are also conservative about these numbers. But as you can see here, they have a positive EBITDA margin and we will increase that. This is important for us, the number of products because, as you know, the more partners we get, the more products we have. So here, we will increase it in the next 2 years. These are thousands. So 109,000 you can find currently on Winkelstraat, and we will increase it by more than 50% within the next 2 years. All right. Our ROI target is at least 30% on this target. It's a small company. They only have around 35 people in the Netherlands, but we are quite optimistic to achieve that. Next case, it's Chronext. Most of you maybe know this company because some of these people here might like watches or luxury watches. And I'm also happy that Frederic is taking care of this subsidiary and also can tell us some insights about that. Laura, do you want to start or Frederic?

You can.

I can. A very warm welcome from myself. Yes, Chronext, maybe, as you know, we have just 1 big competitor, it's Chrono24. And what makes that maybe very special, we have a very unique way that we are taking every watch what comes in through like private customers, which are selling through our marketplace because Chronext is already a marketplace right now. And we connected like 3 jewelry stores already and also you, as a private, can sell your Rolex, Patek and so on. And every time, with our watchmakers internally, we are checking your watch, certifying them internally and then we bring them online. Especially here, if you compare maybe the product data on our website, the website is taken directly by us. And so we have a very smart, clean content, as you can see, and we are not selling any fake goods. And to be honest, right now, the average order value is not only EUR 10,000, as I just checked in the morning, we have EUR 11,800. So we are increasing day by day, to be honest. Do you want to take over?

Yes. As you can see here, so this is a selection of the assortment from Chronext. And as Dominik already said, a lot of our fashionette customers or Winkelstraat customers are very used to fashion and [ luxury goods ] as well as to watches, yes, as well. And so we are also starting not only putting vintage bags on the fashionette website or the Winkelstraat website, we are already started to put also the watches on the website and do some co-content creation because we are convinced that we are addressing and targeting the same customer group and hopefully can, therefore, decrease a bit more individual marketing expenses and increase our working together and our selling points for the customers. And also here, Chronext is a bit more focused on the male business and they are hoping more access to the female customer group with fashionette. And on the other hand side, we're hoping the same, on the other hand side or vice versa. And I think this is a really good fit as well.

What also is a very, very big point, to be honest, since last [ few ] years, I think everybody knows the main watch business is just decreasing day by day and also year-by-year. But this year will be the first year where we see that we are increasing the value chain, especially for Rolex, Patek and some different other companies, which are right now generating and also increasing their value. How does it work, especially due to the fact that we are implementing certified pre-owned in our business and certified pre-owned is right now coming day by day even more into the jewelry stores. Also in Wiesbaden, a very small jewelry store, it's called Epple. Epple just opened for the first time certified pre-owned, and we are already in contact with them that we can just sell those watches directly through Chronext, and we are just accelerating that business directly through e-commerce because they are not visible online, nobody just can sell the watch. Like, how do I say it? The physical store is not generating that much revenue. If you sell it online, and through Chronext, we are selling worldwide nearly.

So maybe we give you some examples on the size of Chronext. So from the inventory side, you see the percentage here. So the majority is Rolex, and they source Rolex from different countries like Japan, like Asia and the U.S. And on the right side, you see the locations last year, so 2024, this changed directly after we took over. And we also see that they have these watchmakers here. And you see also they have their own watchmakers and they are located in Cologne, and they make a proof of every watch which is listed or which is delivered there. And they have the certificate which everybody gets when you buy a watch there. So this is quite different to the competitor, as Frederic already mentioned. And the global shipment, they source from more than 40 countries and they sell into more than 100 countries worldwide. So they are quite international operating. The very good thing about Chronext is that they have a very high customer loyalty because when you buy a watch there, a used watch, you can be sure this is an original one. And it's not a trader from Italy where you don't know what's going on there. So they have a very high Net Promoter Score. So it's much higher than other competitors or other players. And they always work with the authentication, which runs pretty well. But they have one problem, and this problem always was their problem last year, where they had some financial troubles because they had 7 different business models in one company. And that was for us a real disaster because we saw a company which was burning money, which had 7 different business models in 1 company and it was not structured at all. So we decided to change this directly when we took it over. We made an asset deal. So we don't want any risk from the company side, from the legal entity side. And we said, "No, we only want to focus on two of this business." We want to focus on platforms. This is the most important thing. It was not really there though. They just make it as a niche. It was not relevant. So now we are very much focusing on marketplace, on partner side, to ramp up this business and to not expand the inventory. We want to reduce the inventory, not expand it, and focus on more and more luxury partners everywhere in Europe. And this is what we did.

Yes. As I already said, so there is a lot of cross-listing potentials as well for fashionette, for Brandfield, as they are like specialized on watches and jewelries, a bit lower price, but there is assortment there on the bright side or we can source it there. So there is still a potential to sell it or cross-list the products on fashionette and Brandfield and as well as for Winkelstraat, we are now starting with the cross-listing with fashionette and also the co-brand or co-content recreation and then we are expanding that or adding that to the other marketplace. Then it's like easy, but we need to figure out how it's working and what do we need to take care of as the reliability is the most important thing in those vintage luxury segments, and we need to wait for like how is it working, how is the delivery process and how is the customer like reacting on those kind of things.

What also is a big part of it, we had a value chain property on our side because we want to [ get value ] exactly for Chronext as well. In this case, we have our own TPG ONE system and software. So firstly, we just connected Chronext directly to our ERP system to say, okay, you as a partner, you can directly connect to us via CSV file, API or any other middleware. In this case, we already connected this in the first 2 months. And right now, we start the acquisition of the first jewelry stores and first partners, but also we want to enable a direct API integration for everybody soon.

Also from the financial perspective, Frederic also mentioned that the average order value goes up. Right now, they also have some cheap watches. Cheap is the wrong word, but I think for them it's cheap compared to the average order value, and they want to increase it this year by at least 10%. And also the [ value ], Chronext 3 years ago was much bigger than right now. So 3 years ago, they plan to make an IPO, but it did not work for some reasons. And after this failed IPO plan, they had already some costs and they decreased the company. And right now, we start the opposite. We will increase it again. So we bought this company. We reduced a lot of the staff. We reduced a lot of the offices. So now we have half the size of those people who are based there. So it's a very hard project for us, but it was very efficient that we make already profits this year from day 1. So for me, this is quite impressive. And also what Frederic says, we acquired this company, and 2 months later, the software was implemented and we connected the first partners, 2 months. And this is why we are so happy about this development. We can really jump into a company, reduce costs, implement our software and connect partners. And this is how we can increase the value of the company and drive up the revenues. And also the number of products, it will go up by double within 2 years.

And also maybe just to add something, in the first time of the history of Chronext, we combined the rights of the domain and also the brand rights into one company. First of all, it was separated to different companies. And right now, we have everything in one. So we created a new value in founding a new company.

All right. That was it from the M&A perspective. What kind of questions do you have? Let's open up for some questions. Yes?

So we have learned that synergies are quite essential for your business model. Maybe you can give a little bit more insight what's more important for you, the measurements with regard to cost reduction or to increase the sales potential. And the second question regarding M&A, just the opposite side of it. Are you also open for exit? Do you receive any inquiries from one of your portfolio companies?

Well, let's start with the last one. In general, we are always open for something. So we are an open company. If somebody says, "We really want this," and this is an extraordinary price level, of course, we think about it and we have to think about it because we have shareholders here and shareholders want to increase their value. So of course, we think about it. Right now, we see no opportunity for our portfolio companies. We don't want to prove that. But maybe someday, if somebody, a strategic buyer, is coming and we say, well, maybe an advantage, maybe we are also invested and the other party will also step into our investment. Let's see. I don't know. But currently, we have no plans on that. The first question about our cost and revenue synergies, it's always from both sides because, as Heinrich already mentioned, we can only make a value gain when we have higher revenues, more profits and [ reduced ] costs. And usually, we make it on the same level. So that means we have to make actions on both sides.

But it always likely come together with a new group. You have to feel comfortable together, you have to understand each other and then you go topic by topic. So you write everything down, you prioritize and there are some no-brainers like selling, in the example of Winkelstraat, their goods via the fashionette marketplace, for example, other marketplaces. It's quite, let's say, within 6 weeks, 8 weeks, and it's running. And if you go through cost topics, you really have to understand them and afterwards go through them, see the synergies and pass them. Like finance was clear for us to put it on one place, but it's always a way to get there. Finance is always about trust. It's like this.

Next question. Yes?

Yes. If you could go back to Slide 75 for a second.

75?

Yes.

Okay. It takes some time, yes.

Yes, there. For b, it says it includes Mister Spex. Were new shares issued for that transaction as well?

Yes, it was a share exchange. There was a share exchange. We received Mister Spex shares and vis-a-vis [ Paladin ] received TPG shares.

And these were newly issued ones?

Yes. So we paid nothing for Mister Spex shares.

Okay. And for the Chronext acquisition, I assume, obviously, with the average order value above EUR 10,000, this will affect your order value, or your average order value, which is around EUR 120 right now. How much do you think it will affect it?

Not at all because it's not such a big company. For example, we have a machine trade company and the machine platform, GINDUMAC, and the average price is about EUR 40,000 per machine. And they have, I think, more or less the same revenue like they have. So I think it's not so relevant, maybe EUR 2, I don't know. But it's always a weighted average, yes.

Right. And one last question regarding the inventories of Chronext. You'd mentioned that you plan to reduce them. Can you give us a figure approximately how much you acquired and where you expect it to be by the end of '25?

We have no numbers about inventory here. We only have percentages. I don't know the exact number, but maybe we decreased it by 20%, 25%. It's not the intention to gain money with that and say, "Wow, we have an inventory, let's sell it," then we get more money. It's not the intention. We have a strategic path. And the strategic path means platform. And platform means we connect paths, and therefore, we do not need inventory. But we think some brands, especially Rolex, they have a very good sourcing team at Chronext, and also, as I said, Japan, Asia and U.S. markets and we want to [ win ] them and also want to continue that. Well, they always will have an inventory. If it is EUR 2 million or EUR 3 million higher or lower, it's not relevant for us.

We need to like see it separately because we have like own stock, what we did buy in the past and also like that in the last company, but we also own like the stock, what is directly stored in Cologne. But this is not owned directly by Chronext, owned by the private seller who just send the watch to us and we try to sell it via Chronext. So this is also like different and to see separately.

[Foreign Language]

Yes, maybe to answer this question, so first, it is always both sides, marketing and software. So our general idea is we will not beat Fressnapf, for example. They are very successful. They make a good job, and they are very big. Our intention is not to beat them and that we will have EUR 1 billion revenue because we have some pet accessories here. It's not the intention. Basically, we are very conservative, and we do not have any crazy fantasies about that. We are rational and rational means we make a platform model out of that. A platform model means we connect several hundred partners. I don't know where you're from, but you have some local pet stores in your environment, in your city, and we want to connect them. And if you connect more and more pet partners, our product range will be higher, bigger and much more diversified compared to Fressnapf. Will we have more revenue than Fressnapf? Never ever. This is not our intention. We don't want to put billions of dollars, euro into marketing. But with our big product range, when we connect these partners, we will automatically get new customers organically without paying too much money. And with this path, we grow. And if we grow by 20%, 30%, 40% per year with more partners and more products, we are absolutely happy. So this is our business model. We always think about when we have a software, we implement it, we change the shop, we change the ERP system. We save a lot of money with that. When you ask other competitors, usually, if you ask a bank here in Frankfurt and ask how much do you spend for your ERP system, for your [ bank system ]. You will hear 2%, 3%, 4% of the revenue, and we can save the cost with our own technique because we already have the software and they can use it. So this is the basic intention. And again, it's both sides, saving money with our software, connecting third parties, retailers with our software and increase revenue because we have more products.

Can you provide us the amount you spent last year on acquisitions and probably also the portion of the earn-out component you paid last year for historical acquisitions?

The earn-out component, we do not have it right now here available, no. Reinhard says no. Investment, I'm also not able to communicate it right now because it's part of our cash flow. Cash flow is not finalized so far. But we had an estimation in the last Capital Markets Day, where we said the investment will be between EUR 30 million and EUR 50 million. And I think this estimation between EUR 30 million and EUR 50 million is quite realistic.

Does this include the earn-out components already? Or is that then on top?

No, it's additionally, but it's not very high, or last year also not, because the earn-out components, usually, you can get the money after 2 years or 3 years when you sold your company or part of the shares. So it takes more time. So most components will maybe work in 2026 or 2027, not last year, not this year. But there's not a big hole or danger where you would say, "Whoa, EUR 50 million earn-out, oh God, the company will go bankrupt," it's not existing like that. So the numbers are much smaller.

Okay. But it's fair to assume that the earn-out component is included in the multiple you pay, right?

Yes, we have a base case scenario, yes. And this base case scenario says, if we expect an earn-out and what size we expect the earn-out, but if the companies perform better, then the earn-out is increasing. And you will see this in our equity change calculation in the balance sheet when the earn-out is increasing because the portfolio companies perform well, then we have a negative position there, though our equity is going down because of that.

Dominik, a related question. I don't need to go back to Slide 75, but there are shares which the companies you acquire...

I thought this slide is interesting for everybody.

So the equity, the earn-out paid with equity, that becomes available for the party to sell in 2 or 3 years. Is the intention that you actually buy those shares and so you maintain your shareholding in the group? Or are you happy for the free float of the business to increase?

I did not understand.

So in the earn-out paid with equity, the second block, that equity will become available for those parties to sell.

No, no. It's our cash. That's what I mean, it's our cash. We do not take additional debt because somebody is getting earn-out money. Just pay by cash, that was what I meant by that. Sorry, maybe you're right, we should clarify that next time, yes. But we pay from our cash flow. Any other questions regarding M&A, the financial perspective? All right. So we will go on with the next part. Oh, there was one question.

Yes. We have one question from the chat. How do you expect artificial intelligence will influence your software and/or business model? Do you expect this to have a big effect on TPG? And if so, in what way?

Christoph will mention that and answer this question. To be honest, I have a personal perspective on that. I think AI is great. I think with AI, we can work in the business units in a very profitable way, and it reduces effort and people work. But on the other side, we always want to avoid naming -- in our presentation, we want to avoid labeling our company with AI because for us, it's a buzzword. It's absolutely a buzzword. It's a hype. And when I see a company making marketing and say, "We are an AI company," we have been very disciplined, we talk with them and say, "Okay, what?" This is Excel. This is machine learning, but it's not AI. So I don't like this word anymore. We use it, we work with that, but we make no marketing, and you will never ever find this word in our presentation because we don't like it. People make wrong marketing with AI, and we do not do that. Was there any other question? No. Okay. All right. So let's continue with our software part.

Hello, everyone. So Dominik, sorry, we have one word in which we say AI, but just to mention why we use it and why we use it here, an AI company, of course. I have a little wrap-up from our last Capital Markets Day from where we came. So we came from an external ERP system to develop our own ERP system, the one, what we already introduced last time. Part of it's completely finished. Parts of it are getting updated or more developed. And we will also talk about this time about TPG PAY later on. Since we were here last time, we increased our IT department. We doubled. We have 20% more developers now. So we also have a very strict structure for every company [ we're buying ]. So we include our IT structure with a ticket system, with a scrum process so that all tickets run through our process. And we also increase our development skills. Now I will go to the updates of the TPG ONE and to the new features. This is, of course, what we already showed in the other slides in the last time. I will go a little bit deeper in what we have developed, for example. So I will go in the middle. This is what we call the TPG ONE cloud and the connector, and we'll talk about a little bit later the CDN layer and the storefronts, what we have done. So I will start with some more high-level slides. So what we have done with the TPG Connector is, I would call it, the basic entry in one of our heart, is it all starts with a retailer who is connecting us or contacting us and saying, "Hey, I want to sell my products with you. Can you help me?" And normally, when you go on Amazon or Zalando, it's a very, very painful process to get your products live. We made this process much more easier. And we are partnering with the biggest ERP systems, with any kind of shop systems. You can even just upload an Excel file of the products and you're ready to go. And here, we have AI mapping because it's painful to map 20,000 of categories of products to our categories. So in here, we have little support of AI, of course. And this is just giving the customers or the retailers more speed to get ready to sell your products. Below is the TPG ONE Cloud, and this is our heart, I would say. It's starting with the B2B portal. It's an order management system. It's a PIM system where the product information lies in. Then we have a DAM where the product data like the image and all this stuff or, for example, user manuals for the big machines are lying. Then we have a stocking tool, and we have a pricing and a reprice. So the reprice is very, very important for us. For example, the moment we switch on the reprices, we can challenge all the competitor prices and see, hey, we want to be always on Level 3 with the competitors, and it's directly driving much, much more sales. Also our ERP system, this is for us the internal orchestration of all orders, what was to which retailers, what products is from which retailer, and to see all the orders of all our shops. In this slide, you can see what we are doing with our storefront. So as we mentioned last time, we were upgrading all the storefronts to make it more efficient, more faster, more stable. And here, sometimes we use parts of the Shopify checkout. As you know, the Shopify checkout is the fastest in the industry, and they're guaranteeing us 45,000 checkouts per minute, which is absolutely enormous. We also integrated here retail media. This is also new since last time. And retail media is already live on a couple of our shops like on [indiscernible]. It's live also on [indiscernible], they're using it already. And we now integrated a retail media solution to promote products from retailers to any kind of our platforms, not just only for -- what is normally known that a brand can do retail media, that a retailer with multi-brands can use retail media. For example, when you are selling adidas shoes, for example, but you're not adidas, you are a retailer who is selling the shoe. So when a retailer, ABC, for example, is selling adidas shoes in our web shop, Schuhe24, we know when this shoe gets sold, is there any promotion behind and then the company with a promotion gets the deal, for example. So our system is smart enough to trigger which kind of products has been promoted and which retailer did the promotion if it's not a brand. This is at the moment the current development status. So the TPG ONE Connector is in testing at the moment. It's already in use. We have also rolled out it to a couple of our customers who can use it. And also the TPG ONE Cloud, I would say it's an updated situation. So we're using it already as well, but we're updating it all the time, making it better and better. The shop updates through the TPG core shops, so we had a lot of questions received, when are you doing new shops. So the Thonet, the Schuhe24, Outfits24, all these shops, what are the core TPG shops as we bought so many companies and, of course, we increase. And now we say, hey, we are working on it, and I will show you in a minute how the shops might will look. And also, we're updating our merchant of record shops. Merchant of record shops like shops like fashionette or [indiscernible], all these shops. So we are updating these as well. We're also updating the marketplaces like Avocadostore, Winkelstraat and so on. And the new solution, TPG PAY is also in development. I will give you a small example of the company, Jungherz, where we also updated the shop Fahrradteile, and we will show you what happened when we moved this shop in just 1 month to the TPG ONE platform. So the shop is now looking like this. It's a complete new design. It's a modern design. It's also mobile first. This is a desktop screen. But when we moved the shop to the new TPG ONE Cloud, the sales turned up to over 280%. So we moved in calendar week 40 with a short drop to start all the marketing engines. But from week 2, we have stable sales already and the sales are now growing and growing. And the impressive thing for us was it's a store for bike spare parts, normally, the season ends on a good November day or October already, and all the years in the past, the sales were going down and after we moved it to our systems, the sales were going even up, even if it was out of season. It was very impressive for us to see. I'll also now show you how the new shop of Outfits24 will look like. So on the right side, you can see how it will look in the new design. This is the current design. This will be the new design. And this will go live in February this year. It's a mobile-first design as we saw that Outfits24, 70% of our customers are using smartphones and not desktops. So we made a mobile-first design to make this shop super smart and innovative. It's an extreme fast design. We also moved the menu to the lower end, but the menu will also change when you are on the product detail page so that you can superfast put the products in the cart, of course. And release date, as what I mentioned, it's February 2025. I will also quickly show you a demo how the connector will look like. So this is the new back end, what we are testing at the moment. It's also live for a couple of test customers, but not for all. So when the customer, for example, says, "Hey, I want to import new products." So the customer starts, select this ERP system, a web shop or a feed engine, and we have multiple interfaces to any kind of the market-leading systems. So you can just use, for example, when you say, "Hey, my shop is Shopify shop," all you need to do is enter your Shopify credentials, click enter and our system is doing the rest. So it's crawling the shop. It's connecting the shop. It says, "Hey, I have seen 20-odd categories and a couple of thousand products." Then here's the AI mapping already done. The AI mapping is checking if you have a women category, we have a women category; if you have shoes for women, we have shoes for women. You have ballerinas. We have another similar category, what might match. Then it gives you already the recommendation, is this the right category, just click check and you're done. The next thing is when you, for example, say, "Hey, where do you want to sell your products," when you connect it or contact the fashionette team, "I want to sell my luxury stuff on fashionette." But we see when you upload the products, "Hey, you can also send your products to Outfits24 or to Winkelstraat," for example. The retailer can say, "I want to do this on a global level for all my products," or "I want to go in details to product by product," for example, or category by category. When he goes for the global level, we say, "Hey, your products are good to go for shops." If it's fine for you, uncheck the box, otherwise, just click enter and you're good to go. The same with marketplaces, so the customer, by a click on a button, can say on which marketplaces they want to go out. And we have this solution live in summer 2025. Now we come to TPG PAY. TPG PAY is our new product and are developing at the moment an own payment solution for all our web shops. We're not a payment provider, but we want to have our own payment solution as we saw a very, very good solution on the fashionette side. And we are now building this solution for implementation in our checkouts and also having a separate solution where the customers can log in and see all the orders from different shops. So this will go to all the shops. They have a quick checkout button, but they also will be able to see on their account what's all happening in the past. We're integrating all the kind of payment stuff like Visa, Mastercard, Amex, PayPal, Apple Pay, all these well-known systems. We have already internal risk checks where we also use our internal risk team. And with TPG PAY, we are offering invoice, instruments, monthly invoice and buy now, pay later solutions. So the customer is also able to like the kind of solution that they can move invoices or say, "Hey, I want to split it," or "I want to pay in a day or 7 days." But we will, of course, make it very attractive to pay fast. We are working already on a loyalty program, what we will announce in a later stage of the year, so that the customers get rewarded when they pay early, of course. A very special feature, what we will integrate in this TPG PAY is the yellow customers, how we call them. When you imagine you have 100% of the customers entering a checkout, 30% getting rejected. 20% of these rejected customers, it's depending on the risk checks sometimes. Sometimes it's just that you requested order value. When you request for a Gucci bag, for example, it's EUR 5,000, but the factoring partners offering only EUR 2,000. So we get the results, and we can directly analyze the results with our risk check team. It goes in seconds, of course. And we make our own [ scoring ] with the customers. Do we know the history? Is this a good paying customer? Has he paid all the factoring on time? Or is it always in the dunning process, for example. Although we collect all these data and give an own scoring. So when we know, "Hey, that's a good customer," but just the order value was too high for the factoring, but it's fine for us as we know this customer. We offer this customer our payment solutions as well, and we say, "Hey, we cover the risk. We do it on our own books for a little fee, of course, but you're good to go on instruments or on invoice or on a later payment term." The benefit for us is that, on a longer term, we will, of course, reduce the fees for factoring as we also say, "Hey, this is a perfect customer. We know the history. It's a good paying customer. We don't need a factoring for this. The customer will pay anyway." So we say we save the cost for the factoring and put it on our own books. On the other hand, we can also get this 20x percent into our revenue, yes.

I just want to mention this because this is a real impressive thing because you know the big payment companies, Klarna, Ratepay and all these companies, they make a good job, but they don't want the yellow ones. Of course, they don't want the red ones. They only want the green ones. And when we acquired fashionette, I was very impressed that there's a team which is only handling the yellow customers. So they are not horrible, but they are between okay and a little bit difficult. And when I saw this, I said, "Okay, how many of your customers are yellow?" And they said, "Okay, 20%, 30%." Okay, I said, "This is nice, but why do you make this?" Because they cannot buy the product somewhere else on invoice. They cannot buy the product by a rate payment. It's not possible. And this is the reason why fashionette built up a very loyal customer base, which other competitors do not have because they don't do this. And when we realize that this is a great potential, the yellow customer, we think that we can transfer it to external parties. And that means this project is a step into a new unit, which only will make financial payment services for external parties, for external customers. And that is the reason why it's so important for us and that we announced it today here in this event because we think we can win a lot of shop partners, a lot of shop players in this market who say, "Okay, I need this 20% extra revenue. Classical payment providers like Klarna and so on, they will not give them to me." We have, I'll emphasize this, a default rate, okay, you know what I mean, of around 3.5%. So 3.5% of these customers do not pay at the end for any reason, and we will not get the money, but 3.5% is excellent because at the end, we have a good margin development with this, and we earn a lot of money with these yellow customers. That's the reason why we love yellow customers. But from my perspective, we are the only one in Germany.

And it's very important to say that that's also the reason why we integrate all the payment solutions in our solution, that when they don't pay with our solution, that we know what they are normally using for payments. So we know if the customer pays or uses Amex. And so we learn these customers and we can also build our own scoring behind them. At the moment, it's in development, and we will develop it like super innovative so that you can either use a plug-in, an app. I mean apps like shopping apps not a real stand-alone app, so for example, Shopify app or a plug-in for Shopware, but also a third-party API. So we can integrate our solution easily with your systems in the future. And this is the first screen. You can see how it looks, the experience. I will also show a little demo in a minute what the experience will be. So this is a sample page, for example, where you have a quick checkout or a normal add-to-cart button, you click on it. You end in the shopping cart. You have the credit card for flexible payment types. Then you scroll down to check your order, you add a pin and then you can select how you want to pay. You can either pay directly with your linked accounts for a credit card or your direct debit card or you can say, "I want to pay in 7 days, in 14 days or 30 days or an instrument," so it's super flexible how you want to pay. When you say, for example, instruments, in the background, we check, "Hey, is there a factoring who can use it? Can we take it on our own risk?" So we run through all these little chains, but we, of course, check for, for us, cheapest solution and for the less risky solution, of course. This is our time line. So it's at the moment in development. The first demo, what we will internally use for testing, will be released in March, April. And in summer, we will have the Phase 1, so the release 1. And by the end of the year, we will have Phase 2 stable and ready for everyone. Any questions?

So when you say you take on the risk, do you hedge this risk in any way? Do you offload some of this risk? Or do you take on the full risk with these yellow customers?

Depending, of course, on the customer. But when it's a completely new customer and the risk is too high, we also have a factoring chamber even behind who is offering with Europe-wide factoring banks. So that when even then there's no bank who will cover the risk, we need to check what's the results for rejection. And then we can decide if it's, for us, acceptable, depending on the order value. When it's a EUR 15,000 Rolex watch, for example, we might say, "Hey, you need to go to secure payments." But when it's a well-known customer and we see, hey, he has just ordered Patek Philippe or a Gucci bag, and he's paying immediately, we take the risk.

Right now, we have more than 5 million customers, active customers, here in Western Europe, primarily in Germany. And that means, I don't know how many corona people are here, 60 million, I don't know, but then we already have through our 30 platforms, we have a huge number. But additionally, we also have historic numbers. So we are operating in the e-commerce now since 2012. So we have a lot of more data from customers. And that means we can really ramp up with our small, very special platforms, a customer base where we can say, okay, this customer is reliable. He's yellow, but not horrible. And we can work with them. Of course, 3.5% is failure, then we lose some money, but this is a good calculation now.

For example, Google knows what the customer is searching. Facebook knows what you are like. But we know what you are buying. Very important.

And how much revenue do you expect to generate from this once it goes live?

We have no calculation. It's very strange. When we start a new business, we make no calculation on how big it will be because we don't know that. It can be a very big business, to be honest, because you know Klarna, you know Ratepay, you know all of them, and they are very big. And we only want to target a group which they do not cover. And though we think it's a very big market, but I cannot give you any number because it's too soon, too early. When we have a meeting next year, you will see the number. And maybe also we think about is this the right place for Platform Group for this, or is this a case which has to be exited someday because it's completely separate to our core business.

Okay. And one last question. How do you plan to finance this? Where will the cash come from?

Cash flow.

Cash flow, okay.

Yes, one question.

How are you tracking the customers? Is it IP? Or do they have accounts on the website that you're tracking?

There are a lot of things. Laura, do you want to answer?

So at the moment, we're tracking them, of course, by e-mail or also by session ID, but also internal cookies, but e-mail address at the moment is the most [ used ] case, right?

Yes, name and address. And when we're talking about risk checks, the birth date as well. So for Germany, you need a birth date to evaluate if this is the right customer. But when it comes back to like financing and risk taking over and so on, I usually differentiate or you need to differentiate between customers who want to pay but probably are not able to pay and customers who don't want to pay at all. So you need to have a system in place to differentiate those kind of customers because if we are talking about those customers who are willing to pay, but probably have some, I don't know, private problems and so on, you can still get money out of it, probably after second or third dunning processes or within the depths, the dunning, yes, in the end, within [ cash ] or dunning partners. But for those customers who are not willing to pay, you need to have a system in place who would not allow them to order at all. So there is like another risk part of this payment topic, which needs to be considered.

And I think the fraud team has some measures and some information which it is collecting. One is IP address. The other one is a MAC address. I don't know if you know the MAC address. It is the address, which is connected to your processor of your computer. So we know it from you what MAC address you use. And of course, we also track on how you interact with our online shop. So we track every page you are looking. We track how many products you put in your basket and remove it again. So everything is tracked. Everybody is doing this. We are not unique. So everybody likes and understands the same.

And so you could use information you get from like Chronext, right, from watches, and you can apply it to other platforms as well?

Right. Now we are. When you acquire a company, it's a separate legal entity. And only if you ask the customer to allow this with the checkout and make a double opt-in, that's how you call it, double opt-in, the customer has to click and say explicitly yes to this data exchange, then that's allowed.

But there's potential advantages to the customer, right, they get more financing. And you could pitch to new platforms coming onboard.

We will pitch this project to external online shops, which has no relation to us.

Any more questions? All right. So we come to our last part. I would hand over to Frederic. And as you know, that we sell on more than 50 channels, not only in Europe, also in America and other countries. This is a very important part. And some people asked us before this meeting that we should explain a little bit more, 10, 15 minutes, on how we make this and how we connect these marketplaces and why this is important also for us because when we connect the retailer, we always say we sell on every channel you want, we have all the channels in a contract with us and with very good conditions. And that is the reason why a lot of retailers come to us and say, "Okay, do e-commerce, please, for me. I don't want to do that."

Yes. So as maybe also like Christoph mentioned, we are setting up right now a different integration for each partner. And what does external marketplaces mean? We are selling nearly over 50 marketplaces, as Dominik mentioned. And there is like big marketplaces underneath like Taobao, Zalando, Amazon, but also like very niche marketplaces. And also if we acquire a new company, we are generating additional revenue to each company. A company like Chronext and so on, we are the merchant of record. So it could be possible that we take the product, we are listing them additional marketplaces external, and we are trying to reach new customers without like saying, okay, we need to pay more for marketing spends and so on. And it's quite easy to accelerate the business directly after we buy a company. As we do like on Chronext side, we are selling on Farfetch. We are selling in the U.S.A. for Farfetch or with Farfetch again. And also what that means is it's possible to say also to China. So it's very easy to accelerate the business internationally and to move on. How does it work? We have the possibility, as like Christoph mentioned before, that each partner could just connect to us in our B2B portal with like an AI integration, they could upload their products directly on their own. So it's possible to select, okay, where do I want to sell, what do I want to sell exactly, so my product is maybe a Gucci bag or something like this. Then we are entering everything to our TPG retail portal and everything looks like a seller central. So you're receiving the order directly and can cancel the order. You can just say, okay, I shipped it already. And then we are sending those information directly back, [ ship it ] worldwide. And this is also a very big point. We can enter new markets without building our own shop in a new market basically. And we can see, okay, how does it work? And also in the U.S. market, we started this last year without needing to set up our own shop there because it's quite hard to enter new markets. We need to set up a new marketing strategy to make the brand well known. With like Macy's and also like Walmart and also Amazon in the U.S., it's quite easy to enter the market and see, okay, which products work well, which categories and how is the customer like returning the products. German customers nearly return everything, 60% roundabout is the average in Germany. But the customer in the U.S., their return on average is like 35%, so a bit low. And compared to Taobao, also in China, they are nearly selling everything over there. So if we're selling something through Taobao to external customers in China, it's very easy because we just have a return growth from around about 10%. The rest is sold directly in China again through the local partner. And for this case, I just showed you how does it work maybe for India. Right now, we are just starting also the new project in India, and we're starting with the assortment from fashionette. Because especially in India, every marketplace like Tata Cliq and also like Ajio, they have like a separate page just only for luxury products. So the average product, you can just purchase on the normal platform, but there's always like a lux edition. And for this lux edition, we just set up a flow. And also like how does it work, especially? I just have a quick overview for this. fashionette, just connected to our ERP system, which is totally own developed. Those API connections are connected to a partner, a local partner, which is like it's a different company, which are based in India. And they are the partner for creating the marketplace accounts. But technically, we are integrated in the marketplace accounts. We are taking care of the marketplace listing. We are taking care of the customer support. Written, so everything, what is spoken, is directly taken care by the local partner. And if we sell something through like Tata Cliq, especially here, then we're shipping directly the product to the local partner and the local partner takes care of the local shipments. Especially India, it's quite a big country and it's quite hard to sell directly to the customer, we are taking care of that the local partner is just doing everything for us in this case. But our technical expertise, we're using it especially here for listing on marketplace. But also in the post-merger integration, as I just mentioned, what helps us pretty much is that we can just accelerate the growth directly. We can just add up some revenue, around about 20% directly after 3 months, so basically in 90 days. That's very easy to say, okay, for electronics, we started with eBay right now. And as you maybe know, eBay has like a very certified pre-owned segment, which started last year. And we just make sure that we list each product there just to have an additional revenue growth and not only via our own platform. And those synergies, especially maybe if you take a look at Lyra Pet, what we just acquired this year, they are selling on Amazon as well. They're selling on car front, they're selling auto. But they could also sell through different other marketplaces all over Europe, maybe see this in kind of France and so on. And those marketplaces helps us to sell directly in new countries and say, okay, if the country is working, then we can set up our own shop there and also like our own platform to say, okay, the France customer, they are very important. They like their dog or cat even more than maybe the German customer. Then we can set up the new shop and new platform to connect more retailer all over Europe. Maybe just to summarize it a bit, what makes it very easy for us, the integration has been done once, so we just need to maintain it. So each marketplace, what we just connect already, is directly API-driven. Each category is already mapped. So if you just send a new product to us, nobody needs to do nearly everything. So we just maintain it on a daily base and customers just connect to us and we can just start direct listing your products. And you as a partner, you are live in 7 days, basically. So if the technical integration is done via API or anything else, you are live. The first sales and orders are incoming after 7 days. So as I just mentioned here, that's just a quick summarize for it.

Any questions on that?

Do you have expectations regarding revenue streams from external marketplaces in percentage? So let's say, in the midterm, 10% or 20% or whatever?

As already mentioned, we have no publication on that, but it's not 10%, it's much, much lower I don't know. I don't have the exact figure because it depends. We have platforms where you make exactly nothing with these platforms like machine trade. We do nothing with platforms. Then we have platforms like car parts. We are very active in the car part sector, and this is very important. They make 50% revenue with external platforms. So it really depends. Financial, nothing, so there are no platforms. So I think the total number is completely wrong, but each company is different on this approach. All right. So do we have some external questions?

We have one external question regarding the TPG PAY system. Will it also include Wero, the new payment system?

That's integrating?

Yes.

No, it's not planned. But maybe you can respond to this question, people, when they make a direct call.

Yes, we will record that.

That would be great. Any other questions?

No.

All right. So are there any questions open from your side about the presentations today, about the financial outlook, about our guidance. Please let me know. Yes, here we go.

Yes. Just to specify, so TPG PAY and all these things have not been included in the guidance so far, right?

No, it's not included. Because we have no business plan because it's a new project, and it would not be serious to make a business plan with optimistic numbers when we don't know how big it will be. So we are conservative, and there's no plan for this. Any other question? All right. So in case if you have any other questions which you would like to directly ask at the break and the lunch time, we also have Sarah Millholland here. She is our Chief of HR. If you want to make an application, feel free. And also thank you very much that we have 2 members of our Advisory Board, Dr. Hoppelshauser and Florian Muller. They are here today and also our Head of Marketing, Christoph, is also here. So yes, feel free to talk with them. We are an open company. We have 1,000 people, but 70 people are our leaders, our leadership people. And we always try to have an open communication that they are also here. And yes, feel free to talk with them. Thank you very much for this inspiration, and thank you very much for this good Capital Markets Day here in Frankfurt. And if you have any questions, which you would like to ask after this meeting, you have our contact address from Investor Relations. So Reinhard and me, we always receive these e-mails. And now we would like to invite you for the lunch. Where is the lunch exactly?

The lunch will be direct to the restaurant of the hotel. So just follow the signs.

Follow the signs, all right. So you are the sign, right? All right. Thank you very much, and have a nice afternoon.