Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the FY 2025 financial results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Irina Zhurba. Please go ahead.
Hi. Good morning. Thank you so much. Good morning, everyone, and welcome to our full- year 2025 financial results. As always, presentation will last around 30-45 minutes, and then we'll allow another 15-20 minutes for the Q&A. As always, you can find the presentation online on Investor Relations website under Reports and Presentations. The speakers with me here today are Tobias Krauss and Benjamin von 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's 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 30-45 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. 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 multi-year transformation. We'll then move into strategy update, discuss milestones of our Horizons view. We will go through four 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 a 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 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 one-time 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 EUR -26 million in full- year 2025. This is the largest year-on-year earnings improvement in the company's history. Critically, our store network reached a point of profitability inflection. 45 stores are now at break even 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 SpexFocus roadmap we laid out. In Horizon 1, 2024, we focused on the structural reset. We exited international offline markets, the Nordics, Austria, and Switzerland. We right-sized 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 four specific pillars: driving AUV through optical services, shifting to a premium lens portfolio, simplifying our cost base further, and achieving profitability inflections in stores. I can confirm that today we delivered on all four. 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. From 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 is structural performance discipline and is now embedded across the organization. Let me take you through the first pillar, service and specifically the two flagship initiatives we launched in 2025.
Mister Spex Switch is our subscription model. Customers on Switch generate an average order value approximately 2.4 x 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 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+ age group, 57% of screenings 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 AUV, and support sustainable margin expansion.
The second pillar of Horizon 2 was our premium lens portfolio, and the data here is telling a compelling story. Our SpexPro private label, launched in September 2024 in collaboration with Rodenstock, now represents 22%, 23% percent 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 AUV development, prescription glasses AUV has grown from 147 in 2021 to 219 in 2025.
In 2025 alone, AUV 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 optical quality, this creates a deferral of position. The third pillar was the structural cost reset, and we executed this with discipline. We reduced total FTE by 19% from 1,021, sorry, 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 two 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 had achieved the inflection point. At the end of 2025, 45 of our 65 stores were at break even or above, compared to just 24 at the end of 2024. This is an 87% increase in a year. Loss-making stores fell from 42 to 20, a 52% reduction.
Store AUV reached 243, up 20%, 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 band. By Q4 2025, just seven remained there, while 25 stores were generating EBIT margins 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 two years. We delivered EUR 22 million of improvement in just one year.
This is also reflecting in the early quarterly EBITDA development. In full- year 2024, quarterly losses ranged from around EUR 5 million to EUR 20 million. In full- year 2025, that trajectory improved significantly with the 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. Twenty twenty-five has established a structurally improved foundation for 2026. With these strong results, we have successfully concluded our SpexFocus 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 omni-channel platform that delivers consistent customer experience and profitable growth. There are four 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. 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 month in the role. The priorities are clear. Understand the performance and drivers, anchor financial discipline, and allocate capital with structure. On performance, we build 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 is applied before commitment and embedded in continuous improvement, not applied after the fact. This key is not just in 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 2025, we completed four margin accretive acquisitions under this approach. Now let me walk you through the financial headlines for 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 EUR -26.3 million, a EUR 59 million improvement versus last year. The resulting EBIT margin of -14.5% was within our guidance range. On cash, the change in cash was 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 +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 remains 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 a 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 two 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're now normalizing the pricing environment and reducing our reliance on promotions. At the same time, we are shifting the product mix toward 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 three new stores in 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 two stores, one in Düsseldorf and one in Hanover 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 two different growth profiles managed with two different strategies, which will be reflected in separate reporting lines. Let me now turn to the guidance for 2026. We are guiding to a net revenue development versus financial year 2025 of 0% to -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 break even 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-EUR 30 million, reflecting our disciplined capital allocation.
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 two 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 of May, we're reporting our Q1 results, followed by AGM on the 11th of June. 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.
At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Cédric Rossi with Stifel. Your line is open.
Yes, good morning, everyone. Thank you for taking my questions. I have three, actually. The first one is coming back to the Switch subscription plan. I was positively surprised by the 2.4x AUV uplift that you highlighted. Can you come back on the drivers that enable you to have such an uplift on the AUV? 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? That's my first question. The second one is regarding your retail store extension. You expect to open three new stores this year.
Are those stores located in cities where you are already present? In other terms, is it just a matter of strengthening the local footprint, or are you also aiming to open stores in new cities? My third question is on the cash position. I was aware of the EUR 12 million-EUR 15 million one-off expenses plus the M&A budget. 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, Cédric. Nice to speak to you again. I will take over the first two questions, and Benjamin will take the third one. What are the main AOV drivers for Switch? Well, first of all, Benjamin just mentioned it, 2026 started very rough, not only for us, but also for the whole sector. The whole sector is down double digits in units and in revenue.
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 it 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. As we saw in the last weeks, Switch is a great downside protection for us. 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 AUV in the whole business, not only having one very expensive pair of glasses, but having a second pair of glasses. 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, not wearing contact lenses and then have a non-glazed pair of sunglasses, but having glazed sunglasses, as we call them. Especially within Switch, we see that we are increasing heavily in this new category, which we saw in the past, but we never really executed on.
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. Let's say older customer, customers with a little more money, they are willing to spend. Nevertheless, they love the opportunity not to have to pay it at a point in time, but have to pay it over 24 months.
A retail expansion, this is an interesting one, Cédric, 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." 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. 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. Once you have two or three stores in a city already and you have a strong team there, you can just pull one or two 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. 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. 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.
If you look at the profitability profile, it absolutely makes sense to double down in bigger cities.
Yeah. Okay.
On the cash position, as I mentioned, we're envisaging a budget of EUR 4 million for acquisitions of independent opticians, and add to that non-recurring costs of EUR 10 million-EUR 15 million, and a top-line development from 0% to -10%. That's mainly what's bringing us down to EUR 25 million-EUR 30 million. At the same time, obviously, we're improving our EBITDA structurally, mainly driven by a gross profit improvement. We see a lot of potential in gross profit expansion, further gross profit expansion from pricing discipline and a higher share of prescription glasses and obviously switch subscriptions.
in the end, even if we look 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. That's how we arrive at the targeted cash position between EUR 25 million and EUR 30 million.
Okay. Very clear. Thank you, 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 warmly thank her for her continuous support and wish you all the best in your future and the others.
Thank you. Your next question comes from the line of Ralf Marinoni with Quirin Privatbank. Your line is open.
Yes, it's Ralf. Good morning, everybody. I've got one question regarding your online business. You mentioned in your presentation that you're going to prioritize high margin private label business, such as SpexPro and to sell premium brands over the volume. In my opinion, just for so premium brands and SpexPro, you need personal advice, and that's in my opinion also the secret behind the success of your store business. How do you handle that?
Ralf, nice to speak to you again. It seems to be always.
Yes.
The same people who are raising questions, so.
Okay.
Nice to see you again. I think that-
Yes, there's a discrepancy between this. I think it's a perfect addition. That's how I would put it. 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. This is where we really double down and execute it perfectly in 2025. 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 as well. The optical expertise part of course takes place in retail.
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, the transit from an eye test to a pair of glasses is more than 60%. Once you have them in the store, they have their eye test, we have all of their data, they receive their pair of glasses, and they know they work, then they are absolutely open to purchase the next pair of glasses if it's not a complex multifocal online.
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. 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. The online business of course by giving so much value volume is subsidizing the gross margins in our value business.
Mm-hmm. Okay. Understand. Thanks. 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-EUR 50 million in the current business year?
Yes, that's correct.
Yes. Okay. I said correctly. Okay. Thank you, everybody.
Thanks, Ralf.
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 I hope to see you and speak to you again. If there are any questions or any other things, please reach out to us and our Investor Relations, and we'll get back to you. Thank you very much.
Thank you.
Ladies and gentlemen, that concludes today's call. You can now disconnect. Thank you.