Mister Spex Stock

Ladies and gentlemen, thank you for joining us, and welcome to the Mister Spex First Quarter 2026 Results Call. [Operator Instructions] I will now hand the conference over to Anke Bernesowski, Investor Relations and Mister Spex. Please go ahead.

Yes. Good morning, everybody, and a warm welcome from our side as well. With me today are Tobias Krauss, our CEO. He will lead you through the strategy update of the company; and also Benjamin van Schenck, our CFO, who will give you an insight into the Q1 '26 financials. With this, I now hand over to you, Tobias. Thank you so much.

Thank you, Anke. Good morning, everyone, and thank you for joining us today. I am pleased to present Mister Spex's Q1 2026 results. This is the first quarterly update since we concluded our spec-focused restructuring program and entered into the next horizon. Over the next 30 minutes or so, we will walk you through what we are building structurally, how Q1 performed financially and where we stand relative to our full year guidance. I will begin with a strategy update, covering the foundation we have built and the operating model we are now scaling. Benjamin will then take you through the financial update in detail. We will close with our 2026 guidance and then open up for Q&A.

So let's get started. As you know, in 2024 and 2025, we completed a comprehensive restructuring of the core business. The core business is now on a solid foundation. We exited unprofitable international markets, rightsized the store network, completed a discount Cocks and structurally reduced our cost base. With the next horizon, we now focus on building a scalable and resilient operating model on top of that foundation.

Let me briefly ground you where we stand today. Mister Spex is built on four pillars that together form a differentiated position in the optical market. The first is optical expertise. This is at the heart of what we do. We employ more than 120 qualified opticians across our network. Since launching the eye health check, we have conducted over 8,000 screenings, and premium classes now represent 26% of our sales. We have expanded our service from product sales into preventive eye health care. The second is customer convenience. We offer a curated portfolio of around 80 brands, our home trial service and the Mister Spex switch subscription model.

The goal is to make every step of the customer journey as simple and as accessible as possible, whether that journey starts online or in a store. And we will double down on this in the next horizon. The third is our digital native DNA. We have been building the business for 18 years, and we have served 8 million customers through our online platform. That heritage gives us a technology foundation and a data asset that traditional opticians simply do not have. And the fourth is our store network.

As of Q1 2026, we operate 66 Mister Spex stores, work with more than 250 partner opticians, and we have completed 4 bolt-on acquisitions of premium optical stores. Stores are where we bring our expertise to life and where we build lasting customer relationships. Together, these 4 pillars form a strong foundation. And importantly, these -- they position us exactly where the market is heading. Let me illustrate this. A recent report by Stifel identified a range of disruptive trends reshaping the optical and eyewear markets.

I want to highlight four, that are because they illustrate where Mister spex is already well positioned. First, subscription. Customers are moving from one-off purchases towards recurring models, shortening the replacement cycle from approximately 3 years to 1. We are already addressing this with Mister spex Switch, where customers rent instead of buy, gaining easier access to premium products and driving significant higher AUV. Second, health care. Eyewear is becoming part of the preventive health and the total addressable market is expanding from approximately $143 billion to $360 billion. Our iHealth check positions us exactly in this space, shifting us from product sales to preventive care and building trust as a retention driver.

Third, premiumization. Premium eyewear continues to grow at 2 to 4 year year-on-year even in a weak cycle. We are actively curating our brand and lens portfolio, prioritizing quality and breadth. And fourth, digital transformation. virtual try-on, online booking and AI-powered advice are reshaping the customer journey. With 18 years of digital native DNA, we are uniquely positioned to adopt these technologies faster than traditional opticians and deliver a seamless customer experience across online and store. The point is clear, we are not building towards these trends. We are already executing on them.

Now let me turn to how we intend to scale what we have already built. When we presented our full year results 2025, we already introduced continuous improvement as the core company culture. We have now developed this further into continuous improvement flywheel, four structural enables that enforce the other and generate compounding momentum driving us towards a scalable operating model. Our flywheel gains momentum not from any single push, but from compounding effects of many consistent efforts in the same direction. That is exactly how these enablers work. Each one feeds into the next, and as they compound, the business becomes harder to replicate and easier to scale. The four elements are the unified stack as our scale engine, artificial intelligence as a business accelerator, operating leverage as our efficiency engine and value creation as the growth driver.

Let me now take you through each of them briefly. The first enabler is the unified stack, and it is the starting point for everything that follows. Today, we still operate on a patchwork of legacy systems across our online and offline. We are now changing that. We are migrating our technology infrastructure to an integrated Salesforce platform. Salesforce Commerce Cloud for our online business and Salesforce Retail Cloud for our stores will replace our legacy systems and create one platform, one data layer and one customer view. Why does this matter? Because it is the technological backbone for all other enablers. Without a unified data architecture, you cannot automate, you cannot personalize and you cannot scale efficiently. Once the unified stack is in place, every new store, every partner and every new service connect seamlessly. And over time, it enables integrated customer relation management and a consistent customer experience across online and offline.

The core KPIs that tell us whether this enabler is working on net sales because they show whether the integrated platform carries the business overall, like-for-like store sales because they show whether existing locations become more productive on the platform and time to market because it measures how quickly we can deploy new features, integrate new locations and scale services across the platform. The second enabler is artificial intelligence, and it builds directly on the unified stack. Once you have a unified data layer, the question is, what do we do with it? Our answer is to deploy AI across core business processes to enable automation, personalization and predictive steering.

Let me make this concrete. In marketing, AI-driven allocation helps us direct spend towards the channels and audience with the highest return, reducing customer acquisition costs. In our product journey, AI-powered personalization and upselling shifts the mix towards higher-margin products, particularly premium lenses. And across customer interactions, predictive models help us anticipate needs and serve customers more efficiently, increasing the value of every transaction. This is how we turn data into a better commercial decision at scale without proportionately scaling headcount. The KPIs that measure progress here are average order value because personalization increases the value of each transaction. Gross margin because AI-driven upselling shifts the mix towards higher-margin products and marketing efficiency because AI-driven allocation lowers acquisition costs.

The third enabler is operating leverage, and this is where the first two enablers reshape our cost structure. The process optimization enabled by the unified stack and AI creates the conditions for structurally decreasing marginal costs. Manual workloads are reduced and resources are redirected towards value-adding activities. As a result, fixed cost structures become more flexible and the organization becomes leaner. Revenue can grow without proportional cost increases. And as the unified stack and AI scale, they will accelerate this effect further. The KPIs here are personnel expenses because they show whether automation is replacing manual workloads, other operating expenses because they reflect the structural streamlining of the organization and adjusted EBITDA margin because that is ultimately the proof that the lever is working.

The fourth and final enabler and the one at the core of everything we do is value creation. This is where it all comes together. The objective is to develop a value-maximizing operating model through structural improvement of revenue quality. Revenue scales with the cost base disciplined, driven by operating leverage. The unified stack and artificial intelligence increased scalability and precision, creating the condition for adjusted EBITDA growth.

As adjusted EBITDA expands, the operating model demonstrates increasing returns. And those returns convert into free cash flow, we gain real financial flexibility. And as the market recognizes the quality and durability of that earnings trajectory, we expect this to be reflected in a multiple expansion. That is the direction Mister Spex is taking, a solid core business and continuous improvement flywheel that compounds our progress and a clear structural path toward a scalable and resilient operating model. We are confident in this path. With that, let me now hand over to Benjamin, who will take you through the numbers.

Thank you, Tobias, and welcome, everyone, on the call. Let me walk you through Q1 '26 financial highlights.

The headline for this quarter is clear. Profitability improved despite a challenging macro environment. Net revenue came in at EUR 40.7 million, in line with our full year '26 guidance. This reflects the continued normalization of our revenue base following reduced promotional activity as well as the discontinuation of 5 unprofitable international online shops, which we closed in the second half of '25. This development takes place against the backdrop of a persistently weak consumer environment. According to GFK, the consumer sentiment remained at a low level in Q1, driven by declining income expectations, rising inflation concerns due to higher energy prices and global turmoil and a weakened consumer demand.

Adjusted EBITDA improved to EUR 1.3 million, which is an increase of 88% year-over-year. reflecting the combined effect of the structural margin improvements and the lower fixed cost base that we have been building over the past 2 years. Gross margin expanded to 58.8%, up 234 basis points year-on-year. The primary driver was a higher share of prescription glasses in total revenue, which increased to 57% from 53% in Q1 '25, supported by the targeted expansion of our lens portfolio. Additionally, Mister Spex Switch contributed positively to gross profit with approximately 13% of store revenue now generated through the subscription model at an average order value of 2.4x higher than nonprescription purchases.

Cash and cash equivalents -- sorry, one slide back. Forgot that one. Cash and cash equivalents stood at EUR 47.9 million at the end of Q1, in line with our full year guidance. liquidity carefully as communicated earlier. The cash position reflects both the disciplined capital allocation and the seasonal.

Now let me break this down at group level. Revenue declined by 9% to EUR 40.7 million. What matters more is actually what is happening beneath the top line. So revenue mix continues to shift towards prescription glasses, which represent now 57% of group revenue, up from 53% a year ago. Sunglasses remained broadly stable, while contact lenses declined to 25% from 29%. Overall gross profit came in at EUR 23.9 million compared to EUR 25.2 million in Q1 '25. This lower absolute number is a direct function of the lower revenue base.

On a margin basis, however, we expanded by 234 basis points to 58.8%, reflecting the higher prescription mix and the premium lens portfolio. Our adjusted EBITDA nearly doubled to EUR 1.3 million from EUR 0.7 million in Q1 '25. Offline outperformance and online efficiency measures are working together to drive this improvement. The structural changes we have made over the past 2 years are translating into results. As we communicated with our reporting the business through two clearly defined segments, each with a distinct role for value creation.

Online is focused on quality over volume. We're now normalizing the pricing environment following the reduction of promotional activities, shifting the product mix towards higher-margin private label and premium brands and reallocating marketing spend towards higher-margin traffic sources. The key objectives for online are to expand gross profit and to build a scalable web shop architecture for the future. Off-line is our growth and margin engine driven by optical expertise.

Stores are where we differentiate, particularly through prescription services, switch subscription and the iHealth check. We continue to see strong like-for-like momentum. The key objectives are to bring more stores into the 10% EBIT target store band and to further increase prescription share. We're also selectively expanding our store network with up to 3 new stores in proven catchment areas and considering bolt-on acquisitions of independent opticians where immediately margin accretive.

Now looking at the online segment in detail. Revenue declined year-over-year by 19% to EUR 24.5 million, which amongst others, reflects the continued impact of our pricing discipline as well as the international web shop consolidation. The product mix is shifting. Prescription glasses now represent 41% of online revenue, up from 38%, while sunglasses account for 16%, down from 17%. Gross profit came in at EUR 11.9 million compared to EUR 40.6 million in Q1 '25. And this lower absolute number, again, is a direct function of the low revenue base. However, on a profitability basis, the quality of revenue is improving. Adjusted EBITDA for the online segment was EUR 1 million, up from EUR 0.6 million in Q1 '25. This is an important signal. Even with lower revenues, the online business is generating improved profitability. The structural cost reductions and marketing efficiencies are paying off.

Turning to the offline segment. This continues to be our growth engine. Revenue increased by 11% to EUR 16.2 million with a like-for-like growth of 7%. Prescription glasses account for 82% of offline revenue, underlying the strength of our optical services positioning. Gross profit rose to EUR 12 million from EUR 10.6 million, supported by both revenue growth and a favorable mix shift towards higher-value products. Adjusted EBITDA for the off-line segment improved to EUR 0.3 million from EUR 0.1 million in Q1 '25. While this is a seasonally weaker quarter, the improvement is encouraging and confirms that the store network is on the right trajectory.

Looking at the store network, the development continues to show strong progress. In Q1 ' 26, 20 stores were -- achieved EBIT margins above 10%, while a further 16 stores were in the breakeven to 10% range. This means that 36 stores are now at breakeven or above. At the lower end, 15 stores were in the minus 10% to 0% range and another 15 stores remained below minus 10%. To put this into context, in Q1 '24, 32 stores were in the deepest loss-making category. We have since reduced this number to 15 despite adding another store to the network. Against the challenging consumer environment, this reflects a resilient performance and demonstrates the structural improvements achieved to date. There remains clear potential for further improvement as additional stores mature towards our target EBIT band.

Let me give you an update on Mr. Switch, our subscription model, which Tobias also mentioned earlier. Switch continues to account for roughly 13% of offline segment revenues in Q1 2026, indicating a stable and sustainably established contribution following prior growth. Our target for Q4 '26 remains up to 20% of our off-line segment revenues. The economics of this model are compelling. Switch customers generate an average order uplift of 2.4x compared to non-switch customers.

Total subscriptions reached 14,000 by the end of Q1 '26 and customer receivables stand at EUR 5.2 million. These receivables are financial lease assets, as you can see on the balance sheet, current and noncurrent, and they will convert into cash over the next 24 months as this is a customer subscription model. Switch was launched offline in May '25 and online in August '25. So we're still in the early stages of scaling this model, but the trajectory is encouraging, and it remains a key driver of recurring revenue and customer loyalty.

Let me now turn to guidance. We're confirming our full year 2026 guidance as communicated in March. Net revenue development of 0% to minus 10% growth versus the last year, adjusted EBITDA margin of breakeven to mid-single-digit percent and year-end cash and cash equivalents of approximately EUR 25 million to EUR 30 million. Current trading is in line with guidance expectations. For Q2 '26 specifically, there are 2 items to be aware of. On the one hand, purchase price payments for bolt-on acquisitions that will total around EUR 1.3 million will impact the cash, and there will be a low single-digit EBITDA adjustment relating to transformation effects and special projects.

Looking ahead at the Investor Relations calendar, our AGM will be held virtually on 11th of June 2026. H1 '26 financial results will be published on 13th of August 2026 and 9 months '26 financial results on 12th November 2026. We will also be attending the EF Equity Forum in Frankfurt next week from Monday to Tuesday, and we look forward to meeting many of you there. Thanks for your continued support. Let me now hand back to Anke to open the floor for questions.

[Operator Instructions]Your first question comes from the line of Cedric Rossi with Stifel.

I have three questions, please. The first one is referring to what you were seeing given the month of April and current trading. Some of your peers mentioned that they were negatively impacted by unfavorable weather conditions in January and February. So I was curious to have your observation on March and April, whether you have seen also some signs of an improvement there. So that's my first question.

And the second regarding the subscription-based model. So very interesting to see the positive trend going on. Do you feel that according to your data, what's the main rationale behind the switch of subscribers when they decided to choose this subscription model? Is it helped by the tough environment? Or is it also your differentiating offering? So curious to have your view on that. And my third question is regarding the one-off impact. So if I heard it correctly, Benjamin, so you were mentioning a low double-digit impact on Q2. So does it mean that the bulk of the impact you were expecting for the full year will occur in the second quarter?

So let me take the first two questions. So regarding fees in retail in Q1 2026. So we have walked through the different phases within these different months. So the year started quite difficult because of weather conditions, as you already mentioned. improved a little in February. And when the war in Iran started, it declined again. So it started bad. It improved a little and then went back down again. So this again shows the resilience of our business model is better compared to many of our competitors who are pure-play retail or offline players.

So as you could see, even though we have a declining revenue in online, we could still, as we say, start the online machine and the drive-to-store machine in order to really push against these trends and trying to keep the frequency of people coming into our stores, especially having eye health checks or eye tests up. So there, again, resilience of our business model is good and is improving. If we compare ourselves to competitors, we need to make sure that we compare things which are comparable. So the best way to compare us to our competition, especially the listed competition, for example, companies like Ferman is to compare our offline business with these businesses since they don't have a large online business. And if we compare these businesses, as you could see from the numbers of Ferman in Germany, they grew by 1.5%. We grew like-for-like by 7% in off-line. So we do not only see that our business model is resilient and is improving, but we also see that our offline operations are very strong.

And one part of this is, as you already mentioned, Switch. So especially in times like this, when we see that customer sentiment is down and people really consider every euro they are spending, it is helping them that they don't have to pay for their glasses in a one-off, but they can pay it over 24 months. So argument #1 for Switch for sure is that it is somehow not as dependent on consumer sentiment as a onetime payment is. Second one, for sure, is the additional services. So customers are asking for the insurance of their glasses. As you know, that this is included within our Switch product. That's number two. And of course, the eye health check, we see a growing number of eye health checks we are executing on.

The topic as part of this whole longevity development is getting bigger and bigger, and we do have it in our stores. We do have it as a part of our Switch product. So this is why another good argument for Switch. And then again, it goes back to the product itself for themselves. Many of our customers, they don't have a second pair of glasses for them. It's very important to have them. And there, again, Switch helps to bring especially younger customers into a second pair of glasses.

And so regarding your third question on the one-off impact. So First, on Q1. In Q1, the majority was related to special projects like the implementation of Salesforce that we're doing there. We're going to see a similar development in Q2. It's not that we're -- that the bulk of the overall transformation cost in '26 will be in Q2. That's not it. We communicated in the last call a total cost of EUR 40 million kind of adjustments for this year. So it's not going to be the majority. I guess it will be roughly comparable to Q1 and Q2.

[Operator Instructions] There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Thank you for standing by. My name is Katie, and I will be your conference operator today. At this time, I would like to welcome everyone to the FY 2025 Financial Results. [Operator Instructions]

I would now like to turn the call over to Irina Zhurba. Please go ahead.

Good morning. Thank you so much. Good morning, everyone, and welcome to our Full Year 2025 Financial Results. As always, presentation will last around 30 to 45 minutes, and then we'll allow another 15 to 20 minutes for the Q&A. As always, you can find the presentation online on Investor Relations website under Reports & Presentations. The speakers with me here today are Tobias Krauss and Benjamin Schenck, who will guide you through today's presentation.

That said, let me hand over to Tobias to begin today's call. Thank you.

Thanks, Irina. Good morning, everyone, and thank you for joining us today. I'm pleased to present Mister Spex Full Year 2025 Results. This is a day that marks an important milestone for our company, not just a set of financial results, but proof that the transformation we set out to deliver. Over the next 30 to 45 minutes or so, we'll talk you through what we achieved in 2025, where we are headed strategically and what you can expect from us in 2026. So let's get started.

Here's our agenda for today. We will begin with a recap of the full year 2025. The key milestones and what they mean in the context of our multiyear transformation. We'll then move into strategy update, discuss multistage of our Horizon view. We will go through 4 pillars of Horizon 2 that we set ourselves for this year. Following that, our CFO will take you through the financial update in detail, revenue margins, costs and cash. We'll close with our 2026 guidance and then open up for Q&A.

Let me start with the full year recap. Full year 2025 was a year of structural improvement. And I'm proud to say that we delivered on major commitments that we made to you. Net revenue came in at EUR 181 million, in line with our adjusted guidance. This is not a revenue growth story yet, and we said that clearly, at the start of the year. The revenue decline is international -- intentional, reflecting our exit from unprofitable international markets and our deliberate discount detox.

What matters most this year was what is happening to the quality of our revenue. Gross margin expanded by 580 basis points year-on-year to 55.6%. That is a structural shift, not a onetime benefit. Every quarter in 2025, we delivered sequential improvement in our gross margin. Our EBIT loss narrowed by EUR 59 million year-on-year to minus EUR 26 million in full year 2025. This is the largest year-on-year earnings improvement in the company's history. And critically, our store network reached a point of profitability inflection. 45 stores are now at breakeven or above compared to just 24 last year.

The headline is simple. The first horizons of transformations are complete. We enter 2026 in a fundamentally different position. To understand where we are today, it helps to look at the Spex focus road map we laid out.

In Horizon 1, 2024, we focused on the structural reset. We exited international offline markets, the Nordics, Austria and Switzerland. We rightsized the store network, closing unprofitable locations. And we begin reducing overhead.

In Horizon 2, which was 2025, we shifted our focus to margin and model reset. There were 4 specific pillars driving AOV through optical services, shifting to a premium lens portfolio, simplifying our cost base further and achieving profitability in selections in stores. I can confirm that today, we delivered on all 4.

I'll take you through each one in the next slides.

With Horizon 3, beginning now, we are entering the next phase of our strategy. On 2026 onwards, the focus is on scaling the platform, deepening customer relationships and embedding a culture of continuous improvement to deliver sustainable profitable growth. The details are coming shortly. The outcome of this journey so far, structural performance discipline and is now embedded across the organization.

Let me take you through the first pillar, service and specifically the 2 flagship initiatives we launched in 2025. Mister Spex Switch is our subscription model. Customers on Switch generate an average order value approximately 2.4x higher than non-switch customers. Since its in-store launch in mid-May and online in August, Switch has already reached around 13% of store sales.

Let me give you some context on who our customers are, because it matters for how we think about Switch. Already today, half of our customers are over 40 years old, and almost every second customer buys a private label product. This is not a young, price-sensitive online first audience. These are loyal established customers who vision, who value quality and who are exactly the profile that benefits most from a subscription model.

Switch is not a product. We are launching it into an uncertain audience. It is a natural next step for a customer base that is already behaving the way we need them to do. Our target for Q4 2026 is up to 20%. Switch is not just a revenue driver. It creates recurring engagement, deepens customer loyalty and reduces customer attrition in a competitive optical market.

The second initiative is the Eye Health Check. Since launching it in May 2025, we have conducted over 3,400 screenings. 17% of these screenings have identified pathological abnormalities, real clinical findings that many of those customers would not have caught elsewhere. In the 60 plus age group, 57 of screening found undetected abnormalities. This proves that the Eye Health Check is a genuine medical service and it is positioning Mister Spex as the optician of your life. Together, these services deepen customer relationships, increase AOV and support sustainable margin expansion.

The second pillar of Horizon 2 was our premium lens portfolio, and the data here is selling a compelling story. Our SpexPro private label launched in September 2024, in collaboration with Rodenstock now represents 22% -- 23% of prescription and sunglasses sales. This is a high-margin product, and it has been a significant driver in gross margin expansion. This also helps us to create more lens options, therefore, provides an opportunity for upselling.

In September 2025, we launched HOYA Premium branded lenses, our top-tier optical quality offer. Penetration is still in the single digits. It is in the early stage, but it is establishing the price headroom and quality positioning we need for the long term.

If we look at the AOV development, prescription glasses AOV has grown from EUR 147 in 2021 to EUR 219 in 2025. In 2025 alone, AOV grew by 20% year-on-year. This is continuous structural improvement. The premiumization strategy strengthens our position as a trusted optical expert. When customers rely on their vision and we consistently build optical quality this creates a difference in [indiscernible] position.

The third pillar was the structural cost reset, and we executed this with discipline. We reduced total FTE by 19% from 1,021 to 827 people. This was achieved primarily through a voluntary separation program in Q4 2025. The annualized savings are over EUR 6 million versus full year 2024. The organization is now leaner with fewer management layers at headquarters and we have made targeted hires in areas where we are building capability, optical expertise, retail excellence and technology.

Overhead headcount fell by 28%. Operations and customer services down by 16%, and the total headcount reduction over 2 years is 250 FTE. At year-end, we had 169 overhead FTE, a structurally lower fixed cost base. This is a structural reduction of our cost base, not a temporary effect. It lowers our fixed cost level and directly improves operating leverage as we move into 2026.

The fourth and perhaps most visible pillar of Horizon 2 was the development of our store network. And I'm pleased to report that we have achieved the inflection point. At the end of 2025, 45 of our 65 stores were at breakeven or above, compared to just 24 at the end of 2024. This is an 87% increase in the year.

Loss making stores fell from 42 to 20, a 52% reduction. Store AOV reached EUR 243 million, up 22% year-on-year. Prescription glasses now represent 72% of store sales, up 2.5 percentage points.

The EBIT margin band evolution chart on the right makes this progress visible. In Q1 2024, 32 stores were in the deepest loss-making hand. By Q4 2025, just 7 remained there, while 25 stores were generating EBIT margin above 10%. This shows that our store network is becoming a structurally profitable part of the business. It will be the key driver of growth and margin going forward.

I want to take a moment to step back and acknowledge what we committed to you and what we delivered. At the start of 2024, we set a target of more than EUR 20 million in EBITDA improvement over 2 years. We delivered EUR 22 million of improvement in just 1 year. This is also reflecting in the early quarterly EBITDA development.

In full year 2024, quarterly losses ranked from around EUR 5 million to EUR 20 million. In full year 2025, that trajectory improved significantly with a full year EBITDA loss narrowed from almost EUR 41 million to EUR 80 million. We said we would fix the earning base, and we did.

2025 has established a structurally improved foundation for 2026. With these strong results, we have successfully concluded our Spex focused restructuring program and laid the foundation for the next phase. This is a team effort, and I want to acknowledge everyone at Mister Spex, who made this happen.

Let us now look ahead. Horizon 3 begins in 2026. And the ambition is clear. We build a scalable omnichannel platform that delivers consistent customer experience and profitable growth. There are 4 strategic priorities for this phase. First, the unified commerce platform rollout. We are integrating our e-commerce and retail point-of-sale systems into a standardized, scalable architecture, creating seamless connected customer journey across every touch point. This transition away from highly customized legacy systems is a key step in reducing complexity and enabling scale.

Second, customer platform expansion. We will leverage our CRM, our marketing and service capabilities to unlock customer lifetime value. Our customers trust us. We need to build on that.

Third, logistics and fulfillment optimization. Simplifying production, delivery and returns to improve speed, efficiency and customer satisfaction.

And fourth, automation and data-driven operations. We are automating routine work with AI and focusing our resources where they create most customer value. This allows us to reduce overhead, increase flexibility and improve efficiency. It is a key step towards a more scalable business with less dependencies on fixed costs. The outcome a platform that can grow profitably online and offline together.

Now let me hand over to Benjamin, who will walk you through the detailed financial results for the full year 2025.

Thank you, Tobias, and warm welcome to everyone on the call. Before we get to the financial headlines for the financial year 2025, let me briefly share my perspective from the first months in the role.

The priorities are clear: understand the performance and drivers, anchor financial discipline and allocate capital with structure. On performance, we built a precise view of profitability, where improvements are structural and which levers have the highest impact. We're establishing a consistent KPI base to steer the next horizon with clarity and accountability.

On financial discipline, every decision must translate into cash. We manage working capital and CapEx tightly to protect liquidity, while maximizing margin potential. Financial judgment applied before commitment and embedded in continuous improvement, not applied after the fact. This key is not just reviews.

On capital allocation, liquidity protection comes first. We deploy cash selectively with a clear return logic and disciplined timing. Uses of cash are tied to explicit value cases and to the sequence that preserves flexibility. Bolt-on M&A is evaluated only where value and timing align. In Q4 '25, we completed 4 margin accretive acquisitions under this approach.

Now let me walk you through the financial headlines for our financial year 2025. Revenue declined by 16% within our guidance range. Germany declined by 10%, but on a like-for-like basis, stores actually grew by 8%, which is an important signal. International business declined by 40% due to the strategic exit from offline markets, which is now complete as well as our discount detox.

Gross margin expanded to 55.6%, which is an increase of 580 basis points. This is a full year of consecutive margin expansion driven by pricing discipline, the discount detox and the shift towards premium lens packages. EBIT came in at negative EUR 26.3 million, a EUR 59 million improvement versus last year. The resulting EBIT margin of a negative 14.5% was within our guidance range.

On cash, the change in cash was negative EUR 14.3 million, which is EUR 37 million better than financial year 2024. We ended the year with EUR 56 million in cash and cash equivalents. Margin expansion and cash discipline are now embedded across the business. The earnings base is fundamentally improved.

Now looking at Germany in detail. Net revenue was EUR 152.9 million, down 10% from EUR 169 million last year. However, the composition matters enormously here. Online declined by 21%, a deliberate consequence of our pricing discipline and discount detox. Offline grew by 8% and on a like-for-like basis, that is also plus 8% growth.

AOV progression tells the real story. The average order value increased from EUR 103 in 2024 to EUR 118 in 2025 across the segment. For prescription glasses, specifically store average order value grew 21% year-on-year, and sunglasses average order value grew by 12%.

Gross margin in Germany expanded to 57.1% from 51.6% last year. That's a remarkable 5.5 percentage point improvement. The wider premium lens portfolio and our discount detox are the primary drivers for this. Germany is demonstrating that it is possible to earn more per customer, not just acquire more customers. This is the prescription led profitability model working as intended.

On international, following Horizon 1, which Tobias discussed earlier, this was another year of deliberate simplification. Revenue declined to EUR 28.6 million following the strategic store exits completed in Q4 2024 and the discount reduction.

In 2025, international is an online-only operation without physical stores. What is encouraging is that gross margin remained stable at approximately 42%. The complexity of running physical stores in multiple markets is gone and the margin quality of the remaining business is intact. The revenue decline in international reflects the deliberate strategic repositioning, not just demand erosion. We made the conscious decision to exit unprofitable physical channels and focus on what works online. International is now a simpler, more focused business and it will serve as a stable platform base as we look at where further international optionality might exist in the future.

Moving on to the full P&L. Gross profit came in at EUR 100.8 million on revenues of EUR 181 million. Gross profit is slightly lower in absolute terms due to the lower revenue base, but gross profit margin expanded from 49.8% to 55.6%. Personnel expenses were reduced from EUR 62.3 million to EUR 56 million, a EUR 6.3 million improvement driven by the headcount program like voluntary separation, we discussed earlier with Tobias.

Marketing expenses fell from EUR 23.4 million to EUR 8.6 million, which shows that this is a disciplined ROI-focused marketing, not a simple cost cut. Other operating expenses declined by EUR 15.8 million from EUR 51.5 million to EUR 35.7 million.

Depreciation and amortization fell sharply from EUR 60.4 million to EUR 20 million. I should note that financial year 2024 included approximately EUR 29 million of impairment. So the underlying comparison is more modest, but still absolutely meaningful. The EBIT improvement of EUR 58.8 million is the consequence of all these actions working together. 2025 has established the earnings base for 2026. These are not just one-off improvements, they are structural.

Now as we move into Horizon 3, we are managing the business through 2 clearly defined units, each with a distinct role. Online, the online business is focused on quality over volume. The priority here is gross profit expansion, not top line growth. After the discount detox, we are now normalizing the pricing environment and reducing our reliance on promotions. At the same time, we are shifting the product mix towards higher-margin products, particularly SpexPro and premium brands.

On the marketing side, we are reallocating spend toward higher-margin traffic, prescription glasses and reduced spend on pricing channels. The strategic objective is to build a scalable webshop, which we will discuss in the quarters to come.

On offline, the offline business is our growth and margin engine driven by our optical expertise. Stores are where we differentiate, particularly through prescription services. We continue to see strong like-for-like momentum supported by the Switch subscription and the Eye Health Check, which support recurring revenue and deepen long-term customer relationships.

In 2026, we will selectively open up to 3 new stores and proven catchment areas with validated economics. In addition, we will consider bolt-on acquisitions of independent opticians, but only where it is immediately margin accretive within the first 12 months. Just a few days ago, we have acquired 2 stores, 1 in Dusseldorf and 1 in Hannover area. We will share more updates with our Q1 results.

Our key objectives for the offline business are clear. To achieve more than 10% EBIT in the target store band and to further increase the share of prescription. These are 2 different growth profiles managed with 2 different strategies, which will be reflected in a separate reporting lines.

Let me now turn to the guidance for 2026. We are guiding to a net revenue development versus financial year '25 of 0% to minus 10%. This reflects the final stage of normalization following the discount detox and international webshop closures.

Let me give a remark that, there is a continued depressed consumer sentiment since already a few years. There are geopolitical changes, which we're undergoing right now. And a large portion of our business is discretionary. Hence, our current trading is in line with guidance expectations, but we need to keep that in mind.

For adjusted EBITDA margin, we're guiding to breakeven to mid-single-digit percent. This represents continued improvement from the 1.7% adjusted EBITDA margin in 2025. The structural cost base and margin expansion are the drivers. Year-end cash and cash equivalents are expected to be approximately EUR 25 million to EUR 30 million, reflecting our disciplined capital allocation and include acquisition of independent opticians of roughly EUR 4 million and non-recurring costs of between EUR 10 million and EUR 15 million.

On Q1 2026, specifically, there are 2 line items to be aware of, which I just mentioned.

Looking ahead at the IR calendar, I'm handing over to Irina.

Thank you so much. On the 7th May, we're reporting our Q1 results, followed by AGM on the 11th of June. And of course, our H1 results are coming, once again, mid-August.

With that, thank you very much. And I'll pass it on back to Katie for the Q&A. Thank you.

[Operator Instructions] Your first question comes from the line of Cedric Rossi with Stifel.

I have 3 actually. So the first one is coming back to the Switch subscription plan. So I was positively surprised by the 2.4x AOV uplift that you highlighted. Can you come back on the drivers that enable you to have such an uplift on the AOV? Is it just a matter of channel mix? Or are you able also to guide customers towards more premium products in stores and so on? So that's my first question.

And the second one is regarding the your retail store expansion. So you expect to open 3 new stores this year. Are those stores located in cities where you are already present? So in other terms, is it just a matter of strengthening the local footprint? Or are you also aiming to open stores in new cities?

And my third question is on the cash position. So I was aware of the EUR 12 million to EUR 15 million one-off expenses plus the M&A budget. But can you also explain the bridge to get from EUR 56 million to between EUR 25 million and EUR 30 million, just to make sure that we don't forget anything material in the cash flow position. Thank you.

Thanks, Cedric. Nice to speak to you again. So I will take over the first 2 questions, and Benjamin will take the third one. So what are the main AOV drivers for Switch? Well, first of all, and Benjamin just mentioned it, so 2026 started very rough not only for us, but also for the whole sector. So the whole sector is down double digits in units and in revenue.

And in the meantime, we outperformed our Switch performance, which basically means that having the opportunity as a customer not to have to pay the pair of glasses at one time, but have the possibility to pay over 24 months is basically creating a great entry point for our customers to buy their pair of glasses they need or they would want to have even though the environment may be rough. So as we saw in the last weeks, Switch is a great downside protection for us.

So number two is that, what we didn't really outperform in the past was to sell a second pair of glasses. Because this is a big driver of AOV in the whole business, not having -- not only having one very expensive pair of glasses, but having a second pair of glasses. And this is where we improved and we even doubled down on this having a second pair of glasses when we started Switch.

A third driver, which we specifically saw in the last month was getting used to having glazed sunglasses as we call it. So not wearing contact lenses and then have a non-glass pair of sunglasses but having glazed sunglasses as we call them. And especially within a Switch, we see that we are increasing heavily in this new category, which we saw in the past, but we never really executed on.

And I think that the third and probably most important driver when it comes to Switch is that, and I mentioned this in the presentation already, is that we are addressing a different kind of customer. So let's say, all the customers with a little more money, they are willing to spend. Nevertheless, they love the opportunity to have -- not to have to pay it at a point in time, but have to pay it over 24 months.

Retail expansion, that is an interesting one, Cedric. Because if you look at our footprint, you would get to a point where you would say, okay, these 66 stores now, they are not enough stores all over Germany. So the network is not tight enough. In order to really fuel our online and lead generation machine, which comes out of our huge online business to fuel these millions of customers or interactions with customers into our stores. So the problem we are facing is, we don't have enough stores all over Germany.

If we look at the store economics, for us, it makes perfect sense to put more density into cities. This is why we decided to have another store in Berlin and we will have another store in Hamburg. The main reason is that we do have teams in place. So once you have 2 or 3 stores in the city already and you have a strong team there, you can just pull 1 or 2 persons from these stores, put them into the new store. They perfectly know how to run it, and they will ramp it up very quickly. And this is what we don't see if we go to another place where we don't have these people in place and have to hire these people for the single store. And this is why I said this is an interesting one. Because if you look at the density of our store network, you would say, let's go into second-tier cities, which, by the way, are very relevant to us in the future. But if you look at the profitability profile, it absolutely makes sense to double down in bigger cities.

So, I think -- so on the cash position, as I mentioned, we're envisaging a budget of around about EUR 4 million for acquisitions of independent opticians and add to that non-recurring costs of EUR 10 million to EUR 15 million and a top line development from 0 to minus 10%. That's mainly what's bringing us down to EUR 25 million -- to EUR 30 million. At the same time, obviously, we're improving our EBITDA structurally mainly driven by gross profit improvement. So we see a lot of potential in gross profit expansion, further gross profit expansion, comprising discipline and the higher sale of prescription glasses and obviously, Switch subscriptions.

But in the end, even if we look at, at least at the lower end of the range, then there is a certain fixed cost base, especially in overhead, which we're trying to reduce, but which is not entirely flexibilized. So that's how we arrive at the targeted cash position between EUR 25 million and EUR 30 million.

Okay. Very clear. Tobias and Benjamin, if you allow me, just -- I know that it is Irina's last call. So I just wanted to take a moment to [indiscernible] thank her for continued support and wish you all the best in your future endeavors.

Thank you.

Your next question comes from the line of Ralf Marinoni with Quirin PrivatBank.

It's Ralf. And I've got one question regarding your online business. You mentioned in your presentation that you are going to prioritize high-margin private label business, such as SpexPro to sell premium trends over the volume. But in my opinion, just for premium brands and SpexPro, you need personnel advice and that's, in my opinion, also the secret behind the success of your store business. So how do you handle that?

So Ralf, nice to speak to you again. It seems to be always the same people who are raising questions. So, see you again -- so I think that...

Is there a discrepancy between this?

So I think it's a perfect addition. That's how I would put it. So having a store network where you have great service, where you have great technology, Eye Health Check, eye test and then having the opportunity with our highly educated store personnel to sell even complex multifocal glasses is a necessity. This is what we mean when we say value over volume. And this is where we really doubled down and executed perfectly in 2025.

Then you have, as I already mentioned, of course, the single vision glasses where you need the same eye test as well, you can sell Eye Health Check to these customers well. So the optical expertise part, of course, takes place in retail, but what we see is that now we do have a shift since we bring in so many people into our stores, and this, as we call it, drive to store, and then have the people have an eye test. And the transition from an eye test to pair of glasses is more than 60%. So once you have them in the store, they have their eye test. We have all of their data. They receive their pair of glasses. They know they work, then they are absolutely open to purchase the next pair of glasses if it's not a complex multifocal online.

So this is why we see that the initial hypothesis of the founders now really starts to work, but we would have had to have the step in between to have the stores with the eye test. So to us, it's a perfect addition. And of course, overall, it gives us a lot of volume with the large suppliers like EssilorLuxottica or Kering or Safilo all the others to, of course, purchase at a low price level, which gives us economies of scale.

So the online business, of course, by giving so much volume is subsidizing the gross margins in our value business.

Okay. Understand. And just another question. Regarding your adjustments, just for my modeling. Did I understand it correctly that adjustments will amount in the range of EUR 10 million to EUR 50 million in the current business year?

Yes, that's correct.

I will now turn the call back to Tobias Krauss for closing remarks.

Thank you all for taking the time. Thank you all for your interest in Mister Spex. And hope to see you and speak to you again. If there are any questions or any other things, please reach out to us and Investor Relations and we'll get back to you. Thank you very much.

Ladies and gentlemen, that concludes today's call. You can now disconnect. Thank you.

Thank you for standing by. Welcome to Mister Spex's Q3 2025 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Irina Zhurba, Director of Investor Relations. Please go ahead.

Thank you so much. Good morning, everyone, and welcome to our Q3 results. As usual, the presentation will last roughly 30 minutes. Following this, we'll allow 10 to 15 minutes for the Q&A. And as always, you can find the presentations, the financials, the reports, the press releases, everything on the Investor Relations website under the Reports and Presentations. That said, today's speaker with me is Tobias Krauss, who will guide you through today's presentation.

That said, let me hand over to him and begin today's call. Thank you.

Thank you, Irina, and good morning to everyone. Welcome to the results call for the third quarter. Well, today is our first touch point view following the announcement that Stephan Schulz-Gohritz has left the company at the end of October, and I'm pleased to welcome Benjamin von Schenck, who will join the next Capital Market communication event.

Today's presentation is quite packed. I will share my perspective on the business after 6 months as the CEO, how I see Mister Spex moving forward and what lies ahead in 2026 and beyond.

I will also provide some context and discuss this morning's press release regarding our M&A transactions and of course, walk you through our Q3 results. Even before joining the company, I was fully convinced by the market opportunity and brand strength that Mister Spex has built over the past 16 years. Once I joined, this conviction only strengthened.

But as we conducted our ongoing strategic assessment and with a renewed focus on true optical expertise, it became clear that while SpexFocus has driven significant improvement, we now need to go even deeper into our operations. The goal is to understand whether everything we do truly creates customer value or as we like to call it internally, whether it contributes to the click, the value-adding moments, the activities, products and services which customers are willing to pay for.

So where do we stand today? 2024 was about Country and Store rationalization. 2025 is about reducing overhead where we've just rolled out a voluntary separation program at headquarters. In 2026, we will focus on optimizing our tech stack and logistics backbone, the final step in completing our restructuring. Next year, we will return to an adjusted reporting view as this last phase will include several cash and noncash one-off effects that would otherwise distort comparability. We'll go into more details on this with our 2026 guidance in March.

In parallel, we are evolving our segment reporting to better reflect our business model, shifting to online and offline channels starting next year. And importantly, 2026 will also mark the beginning of our next phase, rebuilding scale through highly selective margin-accretive bolt-on acquisitions. The first one, which we communicated this morning is a good example, profitable, well-run optical stores that strengthen our local footprint.

The focus here is not on volume, but on quality. Businesses that are immediately EBITDA accretive expand our brand portfolio and add optical know-how. This disciplined approach will allow us to expand efficiently and accelerate our return on growth. The results we see today are not the end of the transformation. They mark the beginning of a company culture and DNA built on continuous improvement and operational excellence.

To summarize, one key takeaway from this phase is need for stronger leadership to drive the next chapter. Based on that, we have appointed Benjamin von Schenck as our new CFO, succeeding Stephan Schulz-Gohritz. Benjamin brings more than 15 years of [Technical Difficulty] digital, retail and media sectors. His broad finance expertise, operational mindset and proven track record in managing transformation and integration make him an excellent fit for our next chapter as we start shifting focus towards disciplined growth and profitability. Benjamin will play a key role in strengthening our financial steering and driving profitable growth.

The quantitative criteria for these bolt-on acquisitions are firm. We require targets to have accretive financial and operational characteristics with [Technical Difficulty]. Specifically, this means revenue above EUR 700,000 and an EBITDA margin greater than 10%, while retaining separate brand identity, customer and employee relationships. This is governed by our rule of 3x 80% across the high-margin categories of Prescription Glasses, Varifocal and Prescription Sunglasses. This strategy allows us to accelerate profitable growth and enhance our margin profile.

Mister Spex is executing a strategy to accelerate profitable growth and enhance its margin profile by optimizing its optical retail mix, building scale in Tier 2 and Tier 3 cities and adding specialized optical expertise. This approach strengthens its position as one of Germany's leading omnichannel optical retailers, successfully combining digital scale with local excellence.

Our First Step confirms this disciplined approach. These asset deals involve the acquisition of 4 profitable well-established optical stores. These stores generate a cumulative annual revenue of approximately EUR 4 million with an EBITDA margin comfortably above 10%, including rent. They will operate in a stand-alone integration model, maintaining brand and operational continuity. Locations include 2 stores in North Rhein Westfalia, Krefeld and Bruhl. Bruhl is the store you can see in one location, each in Berlin and Hanover area. Their experienced local teams will remain in place.

Our focus on profitability is evident in our store network. 35 stores now achieve an EBIT margin greater than 10% in Q3 2025, a significant increase from just 18 in Q3 2024. This success is driven by our improved product mix. The Prescription Glasses' share is at 62%, up from 59% in Q3 2024. The Multifocal share is around 40% and the Prescription Glasses' share stands at approximately 30%. The average order value in our stores reached EUR 192, representing a substantial 20% growth year-on-year. Stores sales still range from EUR 0.3 million to EUR 1.8 million for the 9 months of 2025, which illustrates the potential for further like-for-like growth in the near future.

Let's return to our operational structure and initiatives we are taking to sharpen our backbone. In refocusing our international footprint and thereby reducing our strategic complexity, we have closed 5 of 10 international web stores: Finland, France, Norway, Spain and the United Kingdom. We are continuing operations in Austria, Switzerland, Sweden, The Netherlands and Belgium. The Home Trial was discontinued in all markets, except Germany, Austria and Switzerland.

In streamlining overhead and structures, we launched a voluntary separation program at headquarter in October 2025. This means additional 25 people will leave the company, contributing to an overall headcount reduction of approximately 140 people since the beginning of the year, a reduction of 10% versus the start 2025. 30 of these reductions are in overhead.

In 2026, we'll focus on optimizing our tech stack and logistics backbone. This involves the implementation of one integrated AI-supported IT architecture for ERP, Store and E-commerce, simplifying our operating model and enabling scalable growth with strong efficiency gains expected from 2027 onwards.

With this strategic and operational context established, let us now move to the financial update for the third quarter. Q3 2025 shows ongoing profitability improvements across key indicators. Net revenues for the group declined 18%, reaching EUR 47.5 million in Q3 2025. Germany's revenue declined 11% with like-for-like growth of 10% plus, while International saw a 41% decline due to our strategic refocus mentioned before. This is due to Mister Spex's strategic pricing discipline and not accepting loss-making business anymore.

The core of this improvement is the gross profit margin expansion of 600 basis points, marking the first consecutive quarter margin improvement and resulting in a Q3 margin of 54.7%. This margin discipline and cost control drove a EUR 10 million improvement in EBIT, closing the quarter at minus EUR 4.6 million. Our free cash flow also saw a robust EUR 10.2 million improvement versus Q3 2024, finishing Q3 at minus EUR 7.5 million. This reflects operational improvements and reduced IT and tech investments in legacy systems.

A deeper look at the German segment confirms the shift towards high-margin business. Net revenue in Germany declined by 11% to EUR 40.1 million. However, the segment's gross margin expanded sharply to 55.4%. This is driven by high-margin categories. Prescription Glasses sales grew 17% year-on-year in stores and 10% overall, reaching EUR 19.5 million in revenue. This drove AOV growth of 24% in Q3.

Our offline sales grew by 11%, leading to a strong like-for-like growth of 10%. Note, the Sunglasses category was impacted by a 25% revenue decline, reaching EUR 11.9 million in Q3. Sunglasses AUV still grew by 10% in Q3. This strong margin expansion was achieved despite Sunglass category pressure, highlighting the success of successful discount detox.

The International segment, the figures reflect our refocusing efforts. Net revenue declined by 41% to EUR 7.4 million. This revenue decline is due to the closure of stores in the United Kingdom and the shutdown of Web shops in markets like Sweden, Spain and Norway as part of the SpexFocus program as well as reduced discount activity. Despite this revenue decline, the international gross margin remained stable at 43.4%. The biggest revenue impact we've seen in the Sunglasses category, down 57% and contact lenses down 33% due to the deep reduction in discounts.

Reviewing the P&L in detail. The gross profit margin improved by approximately 600 basis points year-on-year, reaching 54.7% on a gross profit of EUR 26 million. On the cost side, personnel expenses improved by EUR 3.3 million year-on-year, reducing to EUR 13 million. This includes an adjustment for one-off garden leave payments.

Marketing expenses were reduced by EUR 1.6 million to minus EUR 4.9 million year-on-year as the campaign for the subscription service, Mister Spex SWITCH, was launched in Q4. Other operating expenses decreased by EUR 2.6 million to minus EUR 9.3 million due to lower legal fees. The cumulative effect of these savings and margin gains drove the total EUR 10 million EBIT improvement, reducing the loss of minus EUR 4.6 million.

So to conclude, after 3 quarters, we can say with confidence that we've achieved substantial improvements across the business. Profitability is improving. Our structure is leaner and our focus is much sharper. But it is also clear that our transformation is not yet complete. For the full year, we expect net revenue to decline between 10% and 20% with results likely to land around the midpoint of the guidance range, reflecting the continued reduction of discounts and our focus on higher-margin products.

EBIT margin between minus 5% and minus 15% expected to come in towards the lower end of the range, mainly driven by higher IT costs, impairments, the voluntary separation program and management changes. Cash and cash equivalents to the end of the year between EUR 56 million and EUR 54 million, maintaining a solid liquidity position.

Looking ahead to 2026, our focus will shift to completing the final phase of our restructuring. Optimizing our logistics and tech stack, therefore, will also incur a low double-digit euro amount in one-off costs in this last part of restructuring. As of next year, we will transition our performance metrics to revenue and adjusted EBITDA, providing a clearer view of the true operational performance.

In addition, we will update our segment reporting to better reflect how we manage the business moving to online and offline segment starting in 2026. And last but not least, we'll consolidate the 4 optical stores recently acquired, contributing approximately EUR 4 million in annual sales and around EUR 0.5 million in EBITDA on a full year basis.

Three quarters in, the direction is clear. Profitability is improving, our structure is leaner, and we are building the foundation for long-term profitable growth, driven by a company culture and DNA of lean management and continuous improvement.

With that, we conclude the presentation and are now happy to take your questions. Thank you.

[Operator Instructions]

And your first question comes from Ralf Marinoni with Quirin PrivatBank.

I have some questions regarding your acquired stores. First of all, where do you see the potential for synergies? Further on, which multiples did you pay? Maybe you can indicate us the multiples? And finally, can we expect a higher volume of acquisitions? I think that many opticians will see the business -- will leave the business due to their age in the future. So there can be a lot of opportunities to accelerate your acquisitions?

Thank you, Ralf. Nice to hear from you again. So question number one regarding synergies. So of course, we see a lot of synergies when it comes to purchasing since there is a huge overlap in brands, which we saw from the portfolio we acquired and also from our portfolio. So most of the stores have big brands. We do have all the big brands. So there's a lot of synergies putting these smaller companies onto our platform and thereby having better purchasing conditions.

I think number two is and probably the even more important one is that these companies are pure-play offline companies. So they don't really have an online angle to their business. Some of them don't even have an online eye check appointment system. So our target is to push our not only lead generation, but also drive to store machine onto these stores, bringing them new customers, which would probably not be the perfect fit to our store portfolio. So especially when it comes to putting the company onto the platform we already have and even the better platform, which we will build in 2026, will enhance the profitability and growth rates of these small stores.

Question number two, regarding multiples. So in general, when it comes to acquiring these stores, you would look at revenue multiples. These revenue multiples somehow range between, let's say, 0.5 to 1x revenue, very much depends on the size of the businesses and the profitability of the businesses. There are many more factors to this, for example, like team stability. So the larger the stores are, the more staff, of course, they do have and the more opticians you have in the store and you are able to keep them, the more stable the business will be in the future.

So many, many aspects drive these multiples, but there's one clear rule for us, we don't overpay. We do have a very rigid logic at how we look at these stores, and we see competitors acquiring stores very small, EUR 200,000, EUR 300,000, EUR 400,000 in revenue, we would never do this because this would be very, very dangerous.

Your last question, consolidation. Yes, there are many stores out there. Many opticians could not convince their kids to be opticians as well and run their stores. So there's going to be a lot of stores in the market, but we are only looking at high quality because even though we don't integrate these stores from a brand point of view, these stores need to be premium compared to us. And when we speak premium, we speak about this new, we call it, 3x 80% rule, which means 80% out of their overall revenue is Prescription Glasses. Out of Prescription Glasses, 80% is Multifocal. And out of Sunglasses, 80% of the Sunglasses are glazed. So these are the stores we look at, and there's not too many high-quality stores out there.

And I am showing no further questions at this time. I would like to turn it back to our CEO, Tobias Krauss, for closing remarks.

Thanks for attending the meeting. Thanks for your interest in our company, and thanks for your questions. Speak to you soon.

And this concludes today's conference call. Thank you all for attending. You may now disconnect.

Hello, everyone, and welcome to Mister Spex Second Quarter 2025 Results Call. Note that this call is being recorded. [Operator Instructions] I'd now like to hand the call over to Irina Zhurba, Head of Investor Relations. You may now go ahead, please.

Great. Good morning, everyone, and thanks, Aly. Welcome to our Q2 2025 results call. As always, the presentation will take roughly 30 minutes, we'll allow additional 10 to 15 minutes for the Q&A. As usual, you can always find the presentation, the report, the financials all under Investor Relations website. And of course, if you have any questions, please reach out to me directly and I'll be always happy to support you. With me here today, I have Tobias Krauss and Stephan Schulz-Gohritz, who will take you through today's presentation. That said, let me hand over to Tobias to begin with today's call. Thank you.

Thank you, Irina. So good morning, ladies and gentlemen, and welcome to the presentation of Mister Spex results for the second quarter 2025. My name is Tobias Krauss, and I'm pleased to guide you through our latest development today. For the next half, we prepared the following agenda for you. First, I will address the adjustments to our annual forecast, next I will provide a strategic update and explain the charge related to our SpexFocus program. After this, my colleague, Stephan Schulz-Gohritz, will guide you through the financial update. Finally, we will have ample time for your questions.

Let's start directly with the most important point. Ladies and gentlemen, as you can see on the slide, we have decided to adjust our revenue forecast for the full year 2025. In the top box, you can see the change. We now expect a revenue decline of between minus 10% to minus 20% compared to previous forecast of minus 5% to minus 10%. The main reason for this is the challenging market environment with a strong promotional pressure, which are consciously choosing to avoid -- which we are consciously choosing to avoid, excuse me. And now for the crucial point, which is highlighted by the 2 of our graphics, we are sticking to our profitability and liquidity target. As you can see in the middle, in the forecast for the EBIT margin remains unchanged in the range of minus 5% to minus 15%. And on the right, we confirm our target for cash and cash equivalents at year-end of around EUR 65 million. The message of this graphic is clear. We are sacrificing short-term revenue for long-term stability and profitability. We have maintained our pricing discipline, protected our gross margin and strengthened our cash management.

And this strategy is working. Despite the decline in revenue, we have achieved remarkable operational progress in the second quarter. We achieved a positive EBITDA of plus EUR 0.4 million. EBIT improved by EUR 3 million year-on-year. The gross margin increased by over 500 basis points to 53.7%. We also report a positive operating cash flow and a strong liquidity position of EUR 65 million. And strategically important, 46 of our 65 stores are now EBIT positive. Furthermore, our subscription model for prescription glasses and sunglasses was successfully launched online and offline. These successes are the direct result of our transformation program, SpexFocus, the progress of which I will now explain to you using the following chart. This chart visualizes the journey we have undertaken over the last 12 months. It shows the most important milestones and their direct impact. We started in August 2024 with SpexFocus to shift our focus to profit-driven results. This has already led to an EBIT improvement of EUR 6 million in the first half year of 2025.

In September '24, we launched SpexPro, our premium private label for lenses. As you can see at the bottom, SpexPro already accounts for 15% of our net revenue today. In Q4 2024, we focused on cost discipline and restructuring, which led to a 90% reduction in headcount. In May 2025, we introduced our subscription model, which already generates over 10% of store sales. And in June 2025, the Eye Health Check followed, which shows an impressive 64% conversion to order. This chart demonstrates a consistent implementation of our strategy, which is delivering measurable results. Let us look at the concrete financial impact of these strategic initiatives. The figure on the slide proves the disciplined execution and success of our program. In the first half year of 2025, SpexFocus has led to an EBIT improvement of EUR 6 million. This improvement is not a single metric, but the result of a targeted measures in 3 core areas. The largest lever with plus EUR 3 million was the improvement in store performance and lower discounts.

Initiatives like the launch of our private label SpexPro and the Mister Spex SWITCH subscription have significantly strengthened prescription glasses and improved margins. Secondly, the rationalization of our store portfolio has directly contributed to the result. Through the targeted closure of underperforming stores, we have improved EBIT by a further EUR 1 million. And thirdly, organizational optimization through rightsizing and cost cutting has increased the results by another EUR 2 million. It is also important to look ahead. We see further potential and expect a total EBITDA impact of over EUR 20 million from the entire program for the years 2025 and 2026. This bar chart is perhaps the most impressive proof of our strategy success at the operational level. It shows the development of our stores' profitability over the last 6 quarters. Let's first focus on the top dark green bar. This represents our most profitable stores with an EBIT margin of over 10%. In the first quarter of 2024, there were just 9 such stores.

If you look now on the way of the right to the second quarter of 2025, you'll see that this number has risen to 31 stores. This is more than a threefold increase and a record for us. Now let's look at the opposite. The bottom light brown bar, which represents the stores with a margin less than minus 10%. Here, we have achieved a drastic reduction in some periods in the same period from 32 stores in Q1 '24 to just 9 in the last quarter. This means we have fundamentally improved the structure of our store network. Around 90% of our stores are now breakeven or profitable. The drivers for this development are clear: a better product mix through SpexPro, consisting pricing discipline and operational efficiencies. To conclude my strategic update, I would like to show you the results of our most innovative and new product, the Mister Spex SWITCH subscription model. This infographic shows what a value customer base we are building with it. Top left on the performance.

The average order value, AOV, is approximately EUR 570, more than double than a non-subscription purchase at EUR 230. This leads to twice the absolute gross margin. On the right, in the customer profile, we are attracting an extremely attractive target group. 42% are new customers, more than half are over 40 years old and has a strong purchasing power. At the bottom, on the buying behavior. The model drives the sales of high-margin products. 67% of purchases are prescription glasses and half of all customers choose our high-quality SpexPro lenses. SWITCH is, therefore, a crucial lever to differentiate ourselves from the competition and to win high-value loyal customers. Ladies and gentlemen, in summary, we are navigating a challenging market, a challenging market environment, but remain true to our story. The focus on profitability and cost discipline through SpexFocus is delivering clear measurable results. With that, I will now hand over to my colleague, Stephan Schulz-Gohritz, who will give you a detailed insight in our financial figures.

Thanks, Tobias. Ladies and gentlemen. From a financial perspective, the key highlight is that Q2 shows sequential improvements quarter-on-quarter and continues to deliver improvements in the second quarter in a row. Let's have a look at the net revenues first. Net revenues are down by 22%, driven by 2 major factors: number one, increased competition, specifically online; and number two, driven by a conscious decision that we have taken in the management to let go unprofitable business. Overall, Germany then down by 16%. Our offline business like-for-like, however, was running flat. And international was down by 41%. And here, we got basically a double hit, number one, by the closure of our international stores, which happened last year in the fourth quarter; and number two, the price discipline in extraordinary price-sensitive markets. The reduction of unprofitable business, the improved product mix and also the cost reductions under SpexFocus led to an EBIT improvement of EUR 3 million year-on-year in the second quarter.

Overall, the EBIT is now at minus EUR 4.3 million. Also, the free cash flow improved by EUR 1.2 million, supported by operational improvements and reduced IT and tech investments. Cash and cash equivalents are at EUR 65 million, which is a strong liquidity to support ongoing transformation and growth. Let's have a look at our business segments. First, Germany, which is our key market. Germany is down by 16%, specifically online, minus 24%, and our offline business showed a growth of 2 percentage points. Overall, if you look at the categories, we have achieved a product mix improvement. You can see that prescription glasses reduced unproportionately by minus 4%, sunglasses, minus 28% and contact lenses by 14%. And with the margin, product mix improvement, the price discipline and also the introduction of SpexPro in the second half of the last year, we achieved a significant margin improvement of 5 percentage points. Let's specifically have a look at our offline business. Offline was running flat in the second quarter. Specifically, it was held back by our sunglasses business.

It's important to understand that the second quarter is the sun season and specifically sunglasses were performing unproportionately. So that basically led to the fact that the growth in prescription glasses was compensated by the decline in sunglasses. If you look into the prescription glasses, we can say that the store sales grew dynamically by 7% and the AOV even more by 23% compared to the second quarter year-on-year. Sunglasses store sales overall declined by 6%. However, the AOV grew by 8% year-on-year. Overall, we can say that our online business is impacted by price pressure in the market and by our conscious decision to let go unprofitable business. Whereas we can say that the off-line business and the KPIs in the offline business are showing in the right direction. Let's have a look at International. International went down by 41%. As said already, it's a double impact from the store closures, number one; and number two, from the price repositioning, specifically in highly price-sensitive markets.

Prescription glasses was impacted specifically by the store closures and the online business, sunglasses and contact lenses specifically by the price repositioning. And this is reflected in the middle chart here, you can see that prescription glasses went down by 34%, the sunglasses by 55% and the contact glasses by 27%. Overall, however, that led to a significant gross margin improvement by 440 -- 340 basis points in prescription glasses and more than 500 basis points in sunglasses. So then let's have a look at the P&L for the second quarter. Overall, the gross profit is at EUR 28.4 million, which is a reduction from -- by EUR 4.5 million, basically driven by the top line and partially compensated by the higher gross profit margin. Our personnel expenses improved by EUR 2 million. Here, we have to take into consideration that we had garden leave payments of EUR 1 million in the second quarter.

Marketing expenses are down by EUR 700,000. Here, we have to take into consideration that we supported the SWITCH launch in June with EUR 700,000, specifically in marketing expenses. Operating expenses are down by EUR 3.2 million and depreciation and amortization by EUR 1.9 million. That is an overall EBIT improvement of EUR 2.9 million. So now how does this translate into H1? H1 overall gross profit is at EUR 53.6 million, which is a reduction of EUR 4.9 million in gross profit. The gross profit margin overall improved by 480 basis points. Personnel expenses improved by EUR 2.5 million here on the half year. If you look at the half year, we have to take approximately EUR 2 million of garden lease payments into consideration. If we exclude those payments, then we can fairly say that the personnel expenses are down by 14%.

Marketing expenses down 20% or EUR 2.5 million, operating expenses down 21% or EUR 4.5 million. Depreciation and amortization down by EUR 3.3 million, basically driven, number one, by the year-end depreciation and impairments, which led to lower depreciation now and also less CapEx and investments. Overall, this gives us an EBIT improvement of EUR 5.9 million, which is now at -- half year at minus EUR 10.6 million. Another highlight is the operating cash flow, which turned positive last year, minus EUR 0.2 million. Now we are at EUR 2.7 million positive, which is a positive change of EUR 2.9 million. Also, the investment cash flow improved by EUR 1.6 million. Financing cash flow was basically flat.

That gives us an overall improvement of EUR 4.4 million. Overall, we can fairly say that we reduced the cash burn by 40% in the first half of the year. Now let me conclude. Q2 is one more milestone of sequential improvements, building the foundation for sustainable profitability. Our adjusted guidance for 2025 remains unchanged. Net revenues, a decline of minus 10% to minus 20%. The EBIT margin minus 5% to minus 15% and cash and cash equivalents at EUR 65 million plus/minus 5%. Let me look into Q3. Q3 will be supported by another improved product mix with a higher share of prescription glasses versus Q2. However, sunglasses and the online channels further remain under pressure. Thank you for your attention, and now we are opening up for Q&A.

[Operator Instructions] Your first question comes from the line of Amira Manai of ODDO BHF.

I have actually 2 questions. The first one is you mentioned that 46 of 65 stores are EBIT positive versus 34 in Q1, which is encouraging progress. So for the remaining 23 stores, how many are close to breakeven? What concrete measures are you implementing to bring them to profitability? And when do you expect them to reach breakeven? In case that profitability cannot be really stored in some of those stores, are some closures being considered? So the second question is regarding SEC focus. So that it will be an improvement -- will have an improvement of potential more than EUR 20 million for an annualized basis. Could you provide more details on the cost savings achieved so far and what remains to be captured?

So let me take the first one. Thanks for your question. So well, as you can see from the last quarters, there has been a great development when it comes to our store portfolio. So numbers of stores basically remained the same. We reduced one store, which was not profitable and where we didn't see any possibility to turn it around. But the great development of the existing store portfolio is based on many things. First of all, you need to keep in mind that especially compared to some of our competitors or basically most of our competitors, the store portfolio is quite still young. So if the store portfolio is quite still young, you will see a wide range of performance differences between the different stores. Why is that the case? Well, number one is stability of the store, meaning that do we have enough people to run the store?

Are we able to keep these people within our stores? Do they live up to our standards? So there is a very limited number of opticians out there, and there's a huge competition, and we really achieved to win opticians and to win good store personnel. Nevertheless, we are not where we are supposed to be and where we want to be. So one of our main initiatives within the store portfolio restructuring or improvement process is to hire more good people and to keep them. We run a lot of data when it comes to our store portfolio. And what we saw that location and traffic is not as important as the quality of the store personnel. Not to say that you can have a, let's say, second-class location and have top store personnel, and they will turn the store around and achieve great results. And on the other hand, you can have great locations but have a team in training and they will not achieve. So this is why we're pushing very hard for our personnel development within the stores, and this will be a main driver.

Number two is, of course, our subscription model. So the subscription model is pushing a lot of new customers into our stores. And this is very important to us, not only because we have new customers, but the customers have a different purchasing power and purchasing behavior. So the share of PG or prescription glasses is much higher compared to our normal purchases. And even if you look at the multifocal share, it's higher compared to the regular business. So this is a big push to our store portfolio. And number three, Eye Health Check, there again. So we see an increasing traffic coming from Eye Health Check. Why is Eye Health Check so important? Well, first of all, it's giving a lot of new value to our customer, which they did not see from our side before. Number two is that we still see a high conversion of Eye Health Check customers into PG, probably even into our subscription model, which is another different push. So bottom line, we are on it. We need a little more time, but we don't see why we should lose pace when it comes to turning more stores profitable.

The second question was related to SpexFocus and how far we are advanced in the execution of our program SpexFocus. Let me give you a quick overview. SpexFocus at the end was a program where we had different components such as the store closures, such as headcount reduction in the overheads, for example, supply chain optimization, variable cost improvement and other things. If I look at it from today's perspective, the closure of the stores, the international stores is done. We closed down 8 stores. On top with the review of stores in Germany, we closed down 2 more stores in Germany. So from that perspective, this is done. We overall released approximately 260 headcount within a year. So from that perspective, also the headcount reduction related to those measures that we have undertaken is done already. With respect to the supply chain, international warehouse is closed.

This is also done and also the measures under variable cost improvements such as purchasing conditions, such as improvements in the customer service and other things are done as well. With respect to store performance, and this is what Tobias pointed out, we are maybe now at 50%, and there's still improvement potential. So however, are we ready with SpexFocus? No. There is more measures to come. Specifically, we are aiming for more efficiencies, specifically in the overheads, but also in our supply chain. So from that perspective, there is more measures to come. And a second or third comment on the impact. Basically, you have seen that in the first half of the year, we had EUR 2 million of severance payments. basically, the positive impact will show up now in the second half of the year. So not everything that we have done is visible in the first half of the year. Partially, you will see those items then in the P&L in the second half of the year.

And please, Tobias again. Let me add one more information. So based on these efforts, which we made in our store portfolio and the playbook for our store portfolio, which we created, we see a great opportunity for us to open new stores in the near future, not in the same amount we did in the past. So we're going to be much more cautious. But as of today, we feel much more confident to have more stores because we do have a playbook in place, which will push these new stores to profitability very quickly.

Your next question comes from the line of Cédric Rossi of Stifel.

I have 2, please. So the first one is regarding the SWITCH offering. So very good to hear the good progress on that side. Since you are launching the online campaign soon, how you deal from a margin perspective to prevent from any dilutive impact? Because I assume that probably customers will be more -- still more price conscious. They would probably focus also on contact lenses instead of prescription. So how you will deal with the mix in terms of mix strategy and also from a margin perspective? And my second question is regarding marketing. So since probably those campaigns will also imply some additional costs. How can we see the trajectory for the marketing expenses for the second half of the year?

All right. Thank you, Cédric. So number one, SWITCH online versus SWITCH offline. So first of all, contact lenses are not part of our subscription program. So it's just PG and SG. So that's number one. So we will not see any dilution from contact lenses. Just to give you some more information and some more background to subscription. So off-line, as I already said, it works out great. So 45% is the multifocal share versus roughly 35% for non-SWITCH users. So there, we see the shift we would want to see even quicker by selling more multifocal. Customer growth, I already told you, high concentration of users in the age of 45 to 55. That's exactly the target group we're looking for, and we're pushing hard to get even deeper into. Product mix.

So online/offline, especially, of course, we will see a little lower AOV within the online subscription model compared to offline subscription because we, of course, don't see 45% multifocal share when it comes to our online subscription program because it remains the same that in order to sell multifocal, we will have to have the people in stores. Nevertheless, the AOV is -- will be much higher. So as of today, AOV for SWITCH online is EUR 450 compared to EUR 550 in offline. But AOV within the regular online business is EUR 200. So it's more than double AOV speaking about SWITCH online. Last but not least, we didn't really push for SWITCH online yet. So the marketing campaign will start in October because we have another marketing campaign regarding premium branded lenses in September. So we didn't want to compete with these 2 campaigns. That's why we pushed SWITCH online to October. So we're going to see a bigger push in Q4 when it comes to SWITCH online. Regarding your question in marketing, I'll hand over to Stephan.

Yes. Marketing, as I said in the presentation, we spent approximately EUR 700,000 for SWITCH in the second quarter. We calculate another EUR 800,000 in Q3 and in Q4. So I think it's fair to say that the marketing expenses in the second half of the year will be comparable to the first half.

Okay, very clear.

Your next question comes from the line of Ralf Marinoni of Quirin PrivatBank.

My question is about Mister Spex SWITCH initiative. And did you get any comments from the industry and your suppliers. What do they say?

Sorry, but what do they say regarding what exactly?

About your new SWITCH model?

Okay.

I think it's very new and innovative in the industry. So maybe you have got any comments from -- also from competitors or suppliers or whatever, but that would be interesting to me.

So to be frank, we don't have any feedback from our supplier side. I think that, of course, our supplier side likes the program, especially when it comes to lenses because we're pushing for the higher value lenses. So the suppliers with the higher-value lenses, they, of course, benefit from this push. And of course, the higher-value frames as well since as we just discussed, the AOV goes up, and this is, of course, mainly driven by the lenses, but also by the frames. So we see a differentiation regarding the product category and portfolio to a higher value frame. Is that exactly what we would want to see? We are not sure, right? Because, of course, like most of our competitors, we would really want to push our private brands and private label brands because this is where we have the highest margins on. And this is where we are looking at in the next weeks to much more push our own brands when it comes to frames.

Okay, understood.

I'd now like to hand the call back to Tobias for final remarks.

All right. So thanks for joining today. Thanks for the questions. We will be on the road in September. Hope to see you there. As always, if you have any questions, please reach out to Irina. And once again, thanks for your time.

Thank you.

Thank you. Have a nice day.

Have a nice day.

Thank you for attending today's call. You may now disconnect. Goodbye.