elumeo Aktie

Good day, ladies and gentlemen, and I warmly welcome you to today's earnings call of the elumeo SE following the publication of the half year figures of 2025. I'm delighted to welcome elumeo's Chairman of the Executive Board Wolfgang Boye; CEO Florian Spatz; as well as CFO Dr. Riad Nourallah. So the gentlemen will speak shortly and guide us through the presentation and the results. [Operator Instructions] But after the presentation, we will be happy to take your questions via the audio line.

So having said this, Florian, I hand over to you.

Thank you, Sara, and good morning, ladies and gentlemen, and welcome to our H1 2025 financial earnings call. And as Sara has said, together with Wolfgang and Riad, I will guide you through the key developments of the first half of this year, putting a special focus on Q2 as this is the first full quarter after our substantial cost and efficiency program that we executed, as you remember, on April 1 to accelerate our strategic transition to cost-efficient and AI-driven digital video commerce.

And today, I am happy to report that we are starting to see the results of this program. In Q2 2025, elumeo has returned to a positive adjusted EBITDA of EUR 0.1 million after 2 negative quarters in Q4 2024 and Q1 2025. The revenue in H1 came in at EUR 20.2 million, as expected below previous year revenue of EUR 22.5 million. Gross profit margin was at 46.1%, previous year 49.1%, due to the continued pressure of significantly increased gold prices and also an extensive sale we did in Q1 2025. The main decline in revenue, the minus 16% came from our German TV business, which suffered in H1 from a significant loss of cable TV households of major German network operators as we have already presented to you in our full year 2024 call and in our Q1 2025 call. Our webshop returned to a small growth of 1% in H1 with a positive trend, the growth increased to 3% in Q2 2025.

Looking at the selling and administrative expenses, we can see the first effects of our cost and efficiency program. In H1, total expenses decreased by 11% to EUR 10.7 million. In Q2, the expenses decreased by 16% to EUR 5 million. In these EUR 5 million, however, there are still included the restructuring costs. So mainly onetime follow-up costs coming from notice periods of terminated employees that have been released from their duties on April 1, but where the contract is still running.

Now if we look at the expenses, excluding these onetime restructuring costs, we can see the volume of our cost-saving program. The total expenses decreased by 24% to EUR 4.5 million in Q2. The majority of these follow-up contracts of terminated employees will end in Q3 of this year. Only very few contracts will end of Q4. So all of the cost savings will be fully realized and visible by the end of this year. And despite our cost-saving measures and the limited financial resources, our #Juwelo100 growth program with a target to reach EUR 100 million of annual revenue remains fully in force. As already announced with our Q1 figures, due to the reduced investments, the achievement of this target is expected to be delayed by approximately up to 3 years. So we are speaking about the year 2033. A major pillar of #Juwelo100 is our internationalization 2.0, which continues to grow quarter-by-quarter and has in Q2 2025 exceeded an annual run rate of over EUR 1 million of revenue.

Let us come to the last point of our summary, the outlook for the second half of 2025 and the full year. In the first half of Q3, as I'm going to show you later on one of our slides, we continue as planned, to recover from the decline in sales and also the margin, the gross profit margin is improving as expected. And therefore, we can confirm our outlook for full year 2025. Revenue decrease between minus 10% and minus 15%, in line with our restructuring plan. Gross profit margin between 47% and 49% and an adjusted EBITDA of minus EUR 0.5 million to EUR 0.1 million.

So let me directly jump into the key developments of the first half of this year. With this slide, we would like to give you an update on the general market context of H1, especially on the gold price development and the consumer sentiment index according to GfK. In general, the economic context in H1 remained challenging, but you can see that the gold price shown by the golden line, after a strong increase in Q1 stabilized in the second quarter. Also the consumer sentiment, the gray line slightly recovered in Q2, even though it remains on a relatively low level. We're going to see later in our presentation that our gross profit margin that was put under pressure by the massive gold price increase in Q1, started to recover and also to stabilize in Q2. Especially our new fresh product, our Premieres where the current gold price development is strongly reflected in the product cost have improved their performance in terms of gross profit margins.

Regarding our TV business, besides the gold price and consumer sentiment, an additional factor has played a significant role. The ending of the cable TV service charge privilege the Nebenkostenprivileg and as we have already presented in our Q1 call, this has caused a significant loss of cable TV households of 26% from major cable network operators in Germany and in line with this loss, our elumeo German TV business had to record a decrease of active customers of also 26% in H1. At the same time, the impact of the TV revenue has been reduced to 16%, thanks to increased airtime for higher price points and the focus on customers spending a higher revenue per customer.

Regarding our web business, we continue to pursue our strategy of high price points and more profitable customers. We've been able to record a small revenue growth by 1%, mainly by increasing the average revenue per piece by 16% to EUR 85 and improving the revenue per customer significantly by 28% from EUR 225 to EUR 288 in H1 2025. And this has allowed us to bring our webshop back to growth and improve profitability with a smaller number of customers, the smaller number of pieces sold, but more higher spending customers and more profitable price points.

Let us now take a closer look at the second quarter of this year, which started with the implementation, execution and execution of our cost and efficiency program on April 1. In previous calls, we have already presented to you the details of this program. So let me just very quickly summarize it. The program is based on 3 pillars, as you can see on this slide. The first pillar on the left side is the reduction of live TV hours from 15 hours per day to 10 hours per day. The 5 hours have been switched to our fully automated Gamerobot shows that we also use for our international channels.

The second pillar consists in the company-wide implementation of artificial intelligence to increase platform efficiency and to reduce personnel costs in a significant way. And the third pillar on the right side concerns product profitability, a reduction of products with a selling price below EUR 50, decreasing the number of pieces of below EUR 50 by 40%, according to our plan and thus also decreasing all volume-related costs, from personnel costs, in customer service, in logistics, merchandise, QC, article planning, et cetera. So all costs related to pieces.

Overall, this cost and efficiency program has led to a reduction of 50 full-time positions on April 1. So here, we can take a look at effects from the first pillar of our efficiency program. So the switch of 5 hours per day from the German live TV program to the automated Gamerobot shows. Since April 1, our live TV program starts at 2:00 p.m. and goes 10 hours until midnight. And the remaining now 14 hours, our Gamerobot runs the TV show. Yes, so the Gamerobot, just as a quick reminder, is the technology that plays existing video shopping content automatically at nearly 0 production costs. So no presenter, no technicians, no producer, no studio management, no logistics to bring in the jewelry pieces into the studio. So that's quite a significant change.

Now on this slide, we compare the increase of Gamerobot hours with the increase of revenue generated by the Gamerobot. And as you can see, the additional 5 hours correspond to an increase of 56% of Gamerobot hours in Q2. At the same time, the revenue generated by the German Gamerobot has increased disproportionately by 257% to over EUR 0.5 million, contributing this way to bring the company back to profitability.

On this slide, I would like to show you the effects of the reduction of below EUR 50 product. The graph on the left side shows you the development of the average revenue per piece in the last quarters. And Q2 you can see that after the implementation of our cost and efficiency program, it increased significantly compared to the previous quarters. On the right side, you can see the impacts of our new merchandise strategy on the number of pieces sold and on the gross profit. We decreased the below EUR 50 pieces by 44% in Q2. And the effect on the gross profit of these decreased pieces is only at 10%. So in short, we have successfully reduced pieces and all pieces related costs with only a limited impact on our gross profit.

There's another development in our product performance that is quite promising also for the upcoming months. The positive trend of the PPM of Premieres. So let me quickly say what PPM and Premieres mean. And let me start with the PPM, the gross profit per airtime minute. So in our linear TV program, we have a limited amount of time, 60 minutes per show hour. So every minute counts and our TV sales team is trying to generate the highest possible gross profit in this limited time. And PPM is our main KPI that shows the gross profit per TV airtime minute of the different jewelry products. Premieres means fresh product. Newly arrived jewelry from our hubs in Thailand and India that is presented to the Juwelo customers for the absolute first time.

In the past, also in Q1, as you can see on the left side, new products suffered among other factors from the heavily increased gold prices. I've shown you on the first slide. And indeed, you can see how the PPM dropped in the first quarter by 18% year-over-year. I've also in the past, mentioned to you that we have always managed sooner or later to deal with price increases and to pass on increased gold prices to our customers. And also this time in Q2, we managed to stop the decrease of the margin and to return to a small improvement of the performance of Premieres. And it's a positive trend in June. On the right side, the month with the biggest share of Premieres, as this is the Juwelo birthday month, we managed to increase the profit per minute by 7%. So of course, it's just the start of the recovery. But in this development, we see a good sign also for the rest of the year on our path to improve product profitability in a sustainable and lasting way.

In Q2, our webshop has recorded a growth rate of 3%, driven by optimizations of 2 main KPIs. The active customers increased the revenue per customer by 24% and to EUR 246 per active customer. And regarding the new customer acquisition in Q2, we continue to focus on less new customers, but more profitable new customers. And you can see the results here, we managed to increase the customer lifetime value. So the margin of new customers, in this case, after the first 60 days by 16% from EUR 55 to EUR 64.

So let's come to the development of our expenses in H1 on the left side and Q2 2025 on the right side. The decrease in cost mainly comes from the following 2 points. Number one, a reduction in volume for all sales channels, meaning less pieces and less pieces-related costs and less customers and therefore, less customer-related costs. And second, as I said, the systematic implementation and actual use of artificial intelligence in all fields of the company, from the newsletter generation to product images, beauty shots, et cetera. The main cost reductions have been realized in personnel costs and in the volume of 50 FTEs. We immediately released the employees from their duties. And as I said, many contracts are still running. They have the notice periods, and they are still included in the expenses in the EUR 10.7 million for H1 and the EUR 5 million for Q2.

And therefore, to give you a full picture, we adjusted these costs, and you can see that expenses decreased by 17% without onetime restructuring costs in H1 and 24% without restructuring costs in Q2. And as I said, all of these costs will be fully realized this year, most of them in the third quarter.

Yes, in summary, after 2 negative quarters, elumeo returned as planned in Q2 to a positive adjusted EBITDA. And let me point out once again that adjustments are mainly these onetime restructuring costs. There are no adjustments for development costs for Juwelo and no adjustments for any AI developments we are currently doing.

So as I said, we also want to give you a little outlook on the third quarter on the first half of Q3, you can see this on the right side of this chart. Comparing the data to the planned full year data on the left side. And data being shown until yesterday, so 11th of August. You can see that from Q2 to Q3 to date, all KPIs have improved. The number of pieces sold has been further reduced from 24% to 31%. The revenue has improved, has recovered to minus 8% in Q3. And the margin, and I think this is a really interesting KPI as a result of the higher PPM of Premieres and an increase of the gross profit margin has improved from minus 21% in Q2 to minus 6% in Q3 to date. So of course, please keep in mind that this is just a preview.

Based on the first half of Q3 and of course, there are still some time ahead of us and many challenges ahead of us, but I think these KPIs can give you an insight on the good progress that we are making, and we are happy to see this positive development taking place as we have planned and projected this.

Let us take a look at the most important project of #Juwelo100, our AI-based internationalization 2.0. And as you know, the AI multi-language platform records existing German live TV shows then translates them and adapts these shows to all foreign languages that we define and distributes the local languages shows internationally via our Gamerobot system for automated shows. Despite the limited financial resources, we continue to be on a good track and to grow quarter by quarter. With our international channels in Spain and Italy, we managed to grow 18% to Q1 and 9% to Q2 2025, exceeding, as I said in the introduction, an annual run rate of more than EUR 1 million.

Regarding the next country, you know that it will be Poland. And today, I can also announce you the launch date, the start date. It is planned for the 1st of October. In Q4, we are planning to launch an additional AI channel in another non-euro country, making again use as for Poland of our new multi-currency back-end. So 2 new channels ahead of us.

And regarding customer retention of our international channels, we can continue to report that customer lifetime value, so the accumulated gross profit per new customer over time is continuing to grow very nicely. In the golden line in the chart, you can see the international customers after their first month, they make an average gross profit per customer of EUR 87 which increases to over EUR 200 after the first 6 months, and which is a similar development of the highly profitable customers of the German TV.

So in our view, this is all the more remarkable as the international shows are being generated at much lower cost than our German live TV production. And it shows that customers come back on a regular basis to our AI shows and have a similar high buying frequency compared to the German live TV customers.

With our TV program in our international channels, we are currently reaching 23% of European households. So the growth potential remains very high. And as I said, financial resources are currently limited. So we have to be careful with our investments, but the strategy of #Juwelo100 did not change and the internationalization 2.0 remains a core pillar of the strategy. Okay. So I would now like to hand you over to Riad for the financials.

Yes. Thank you very much, Florian. Let us take a look at the financials. And as planned, so the revenue decreased by minus 10% in H1. And due to the gold price, so our gross margin is a little bit under pressure, but within the range. So this is also the reason why the gross profit decreased. The total expenses sold decreased by 11%. This is the result of a very effective cost efficiency program, which we established, and we see really the performance of it. Overall, to H1, our adjusted EBITDA was at minus EUR 0.5 million as in the expected range.

Let us take a look at Q2. The revenue decreased by 18%, driven by the restructuring, but the gross margin has stabilized compared to the previous quarter. It is within the range. So overall, gross profit decreased as planned, driven by the restructuring. And here, we see a very positive effect, total expenses decreased driven by the restructuring program and adjusted EBITDA is positive at EUR 73,000. This is a very good result for us.

Let us take a look at the Q2 bridge and the FX from EBIT to adjusted EBITDA. We started with an EBIT with minus EUR 0.6 million, driven by depreciation. We have an EBITDA of EUR 0.5 million. The main aspect of the adjustments is the restructuring costs. And this amounts nearly to EUR 0.5 million which results with the legal and consulting fees and the stock options to an adjusted EBITDA, which is positive at EUR 73,000.

Let us take a look at the outlook. The outlook we confirm for 2025 and relay the basis for profitable growth. The revenue decrease will be at minus 10% to minus 15%. Adjusted EBITDA at minus EUR 0.5 million to EUR 0.1 million and the gross profit margin in the range between 47% to 49%.

Yes. Thank you. Let me take -- also like give me some minutes for personal view. Yes, unfortunately, I decided to go a new way for myself, for a new opportunity. And of course, after 5 years, this is not an easy decision. But nevertheless, for me, the decision stands. And I would really like first of all, to thank -- to give a great thank you for the opportunity, for the great time I had and also for the successful time I had, first of all, to the Board, of course, to Wolfgang, which I had really like a good relationship, to Boris also who is close to me and who really supported me, and we had very good collaboration and also like to the other Board members to Christian Senitz and to Susanne Ries, we had really like a very good collaboration. Of course, also to my colleague, Florian Spatz, who is in front of me, so where we -- we really had very interesting financial and strategic decisions. Overall, to the Board and also like to my colleagues, thank you very much. But of course, overall, also to elumeo in whole, thank you very much. It's a great culture. It's a great team with very interesting and very driven individuals within every team and every department. And for me, it's also like a very good feeling that I could give -- hand over to Marc, who is right now in a position where he starts with an Q2 with a profitable result. Really, thank you very much for the great time I had and only the best wishes from myself to elumeo.

Okay. Prior to us entering into the question, let me make a quick reply to that. I think we have to say thank you. You really chose a time for your journey with elumeo that was fairly challenging. You entered into elumeo and straight after that the COVID pandemic broke out, we had to move everything into home office immediately. After we had survived the COVID pandemic, the war in the Ukraine broke out with the effects on margins that we all have seen throughout the last 2 years. And you have been a very stable pillar in guiding elumeo through these turbulent times.

And we all thank you very much for your really significant contribution throughout this time. Thank you very much, Riad.

Thank you, Wolfgang. Thank you very much.

Also from my side, of course, and I think I'm speaking on behalf of everyone here. Thanks so much for your outstanding contribution over the past 5 years. As Wolfgang said, quite a challenging time. And it has always been real pleasure working with you. And I think despite all the challenges, I had a good time. I hope you had a good time as well. And for the future and the next chapter, I really wish you all the best and all the success.

Yes. Thank you very much, Florian.

[Operator Instructions] And having said this, we received the first virtual hand from Mr. Frey.

I would basically start with where Wolfgang and Florian ended and where we have all thanks for Riad for all his insights over the past, the always nice collaboration and all the best for the future. Sorry to see you go. But as you are still here for a couple of months -- weeks, let's dive into some questions. Probably, first of all, I really liked that Q2 shaped very much up like you planned. But probably some clarification on the sales. I think in your ERP system, you sometimes have the -- or showed it this time as well, this slide on the current performance. And in the Q1 call, you had a slide which basically pointed us to something like 15% decline until mid-May. Now we arrived at 18%. So technically, this would signal a slowdown. But I suspect this is more a different presentation without returns or something like that. So probably you could shed some light on how the sales development was within the quarter. And if I'm right about this technicality.

So I think you mean this chart, Mr. Frey, right?

Yes, exactly. So I think you had something like 15% until mid-May. Now 18%. Just to make it clear, if I'm right or not.

Exactly. So this is basically data we take from our internal ERP. It can sometimes very slightly differ from IFRS data as IFRS data shows shipped revenue. And here, we show the actual revenue as we achieve it day by day. Regardless of the fact if these products are shipped today, tomorrow or if it's a creation product that gets individualized might be shipped only in 1 or 2 weeks. And in July, the Juwelo birthday, we always have quite a significant amount of creation products that get shipped a couple of weeks later. So that might be 1 reason. And indeed, you're right, this can cause some different aspects. And I think when I presented in our Q1 call, we had only a few days or weeks at the start, we had last year very strong July, a weaker May.

So probably this might have caused a little bit the reason why the minus 15% in revenue turned to -- became minus 18%. But yes, again, also for Q3, that's the actual data. I don't see why this should change much. I see this positive trend, and I also see the reasons for these positive trends, which in my understanding, are not like onetime things, but stable and lasting improvements. So I hope that we can continue to see these positive figures. But of course, it's just the first half of Q3 and there is the second half of Q3 ahead of us. And I think in these times, it's extremely difficult to predict how gold prices, consumer sentiment and everything else is developing. So I'm very careful in saying it will be exactly like this. Our idea was really to give you an insight into our view into the machine room and to say, okay, this is the actual current data, to give you an idea why we are confident about Q3 and why we can say, okay, everything is developing according to plan.

No, understood. It's clearly, well, going from minus 18% to minus 8% is clearly way better than I hoped for, honestly, for the start of Q3. So hope that continues. That directly leads to my second question. So if you look at the better performance of Premieres, was there any change of design or something like that or a general approach. And it's always hard to keep track on generally signed trends looking just at the offering that I had a suspicion that it probably looks like you had more elaborate designs which were a bit more, well, it looks like more bang for the buck in terms of material content, you need to produce these pieces. But look, nevertheless, pretty decorative and nice. So was this something which you see in your data or just on your design changes, what you did here.

Yes. So of course, this is based on different effects. So on 1 side, simply the fact that we have been able to pass on price increases to the customers to increase the percentage margin again, and that's also with existing designs, the case. But I agree with you after our restructuring program on April 1, of course, we decided to shift also a little bit in price points and to make sure that we put a special focus on higher price points and higher brands where we also develop new designs and then it always takes some while. So usually about 3 -- about several weeks until these designs come in and can have their effect. So maybe June would be one of the first months where really new designs came in, and this can also have a certain influence. I would not say that we drastically changed designs. So I would not say that this is a major factor, but definitely it also plays a role.

Yes. And leading on that one, the gross margin increase, you now saw in the second quarter. How much of that is just less discounting sales and how much is already the better performance. And well, by that account as June was basically the first real month, so probably we should expect more in terms of gross margin.

Exactly. This is why I created the slides because, of course, we don't give discounts on Premieres. We give discounts on products that have a longer journey already with us. And here, we see the discount-free effects of new products, and therefore, this increase in terms of profit per minute. So it's really about new products.

Great. And obviously, you've been very successful in your cost cutting. And if I'm now looking forward, you -- well, you showed us this EUR 0.5 million in restructuring costs for the second quarter. I saw that correctly, you adjusted severance payments, legal costs mainly and some of the cost of contracts which have been ended, but where you still need to pay the employees, is that correct? If we look at basically the cost savings for Q3, we should probably expect something like EUR 300,000, EUR 400,000 lower running costs and also restructuring costs probably moving -- converting basically to the legal costs? Would that be a correct approach?

So most of the cost is indeed -- most of the costs contained here in this restructuring cost is cost of contracts still running that will end in Q3, not all on the...

Not all on First of July.

Exactly. Exactly. They will run into Q3. So I don't -- I'm not sure if you will see the full effect in the whole Q3 numbers because this would mean that all contracts end beginning of Q3, but most of the contracts will end within Q3 and only a few in Q4 and if I'm not totally wrong, all contracts this year. So our full cost effect will be realized this year.

But I think it's fair to say -- well, it's virtually guaranteed that we see an improvement in adjusted EBITDA also well, if you just -- we look at your run rate on a sequential basis for the third quarter as well. So that would be my first take. And probably if we look at your gaming robot or game show robot that's obviously a pretty impressive improvement. Can you remind us what percentage of the performance of your moderators that would now represent. So how much are we down from a manual approach roughly...

Okay. I get it. So it's slightly above 50%. So it's quite impressive that we make more than half of the revenue with the automated shows. Of course, it depends on the time. It depends on when we look at it. The morning hours definitely are not so extremely relevant for the total revenue we make and there sometimes the Gamerobot manages to achieve the same revenue like presenters. And then coming more towards midday, there's a clear difference. And in the afternoon, of course, we always prefer to have the live shows. Also, we need new content for the Gamerobot, of course, right. But yes, exactly. That's a little bit -- it depends really on the time. But for the morning shows, this has definitely been an important improvement and an important factor in getting back to profitability.

Yes, a really strong validation of the strategy. And probably lastly, on -- can you remind us a bit about the current status of your legal disputes with the cable networks? And where do we stand here?

Let me reply to that. Unfortunately, this call is being recorded. Unfortunately, cable net operators are also able to listen to calls. So I will be slightly vague on that. But what I can say is that we are progressing very nicely on this front and that we will have an update on this and the expected outcome before the end of this year.

Well, sounds good. Well, I did not expect this.

As I said, this puts us in a difficult position because obviously, on 1 side, we are obliged to be very transparent to all of the investors at the same time. On the other hand, I cannot reveal my entire litigation strategy in a public call because then I can just as well send it to cable net operators directly. We have invested a substantial amount of time and effort over the course of the last 4 months to really make sure that our claim is very stable, very hard and very defendable, and there is nothing that has shown up in the course of these months that would lead us to the conclusion that we should not move forward with this.

Yes, exactly what I wanted to hear. I did not expect to get a strategy because that you would put your -- endanger your position but it's reassuring to hear and I wish you all the luck that you need in legal matters anyway for...

Yes. I should add that I would have hoped that we could move faster on this front. I can say that there's quite a few parts that need to be coordinated and that has slowed the process down a little bit. But at the same time, this results in a higher probability that the outcome will be positive for us.

There was -- in the chat there was a question by [indiscernible] and since we are running out of time a little bit, let me really dive into this question really fast. I think the call is limited at 3/4 of an hour. Riad's contract ends at the end of the year, and we have already appointed an interim Head of Finance, Marc Münch, who will start on the 15th of August. So for a couple of months, we will have the double cost and then we return to the same cost. And that is mainly due to the fact that we would like to have a very stable and very organized transition period. So that in this difficult time of the restructuring, we do not run, let's say, uncovered on that front for quite some time.

And then -- let me go to the question on Poland. We will start with a budget of roughly EUR 20,000 in broadcasting costs in Poland. And we expect, based on the current contracts that we will be able to broadcast 10 full hours on all of the windows that we have and on some of the windows, we will broadcast by 24 hours. On the revenue expectation in the first 3 months, let me put it this way. We hope that in Poland, we will, as in Spain and in Italy be able to recover the broadcasting investment in revenue within the 3 months. So that towards December, we will run at something like roughly EUR 20,000 to EUR 40,000 in revenues generated throughout the shopping window in Poland. But that kind of the outcome of these windows is very wide. You know that we have started in France with great expectations, and we've stopped it because the expectations were not fulfilled. At the same time, Spain continues to exceed our expectations. So the area in which the real revenues fall is very wide and therefore, we are a little bit hesitant to make a prediction on that.

All right. Thank you so much. So dear participants in view of the time we need to come to an end of today's earnings call. But thank you so much. We appreciate your participation and you showed interest in the elumeo SE. So from our side, I wish you all a lovely remaining Tuesday. Have a good summer time. And I hand back to Wolfgang some final remarks, which concludes our call for today.

Well, I think I should hand back to Florian, who has done all of the call. Thank you very much. And Florian, you have the floor.

Also from my side, thanks for your time today, for your continued interest and your continued trust in our company. Maybe we see each other at the [indiscernible] in a couple of days, otherwise for the Q3 call. Thanks a lot. Have a nice day. Take care, and bye-bye.