Dr. Dominik Benner, Board Member Marcus Vitt, as well as COO Christoph Wilhelmy. The gentlemen will speak shortly and guide us through the presentation and the results, and will give us an outlook for 2025. During the presentation, we will have a listen-only mode for you, so after the presentation, you have the opportunity to ask your questions if you may have. Having said this, Mr. Vitt, I hand over to you.
Thank you. Good morning from New York. Today I'm in New York, you see, I'm next to the Wall Street, but that's no signal that we go to Wall Street in the next step. It is important for me, it's my 13th day in the company, so that I can give you some information on how I feel the company and how we work together. Our management structure, you know that I come in April to TPG, and before I was 23 years the leader of the private bank, Donner & Reuschel in Hamburg, a very old but international private bank.
I was the head of SIGNAL IDUNA Asset Management for some years, so I'm in the financial business, and I will be one of the players in the capital market because I'm the head president of the exchange in Hamburg, and I can bring my competence and all my contacts to build a better financial structure for our company on the long term. You see here on the view that our management structure acts well within the supervisory board, Stefan Schütze and the team. Dominik is the leader of our company, you know him very well, and Reinhard Hetkamp is the CFO. I'm responsible because I told about me, because I'm the new one for risk management, for investor relations, HR, and I will look to all the activities in our companies we had. I think we go to the next step.
You know the strategy of our company, we create a digital platform for a lot of activities. We are, because Dominik and his family, we established in 1882, we have a lot of partners, international partners, and the company is seated in Düsseldorf. We are working in a lot of towns in Germany and outside of Germany, for example, in Wiesbaden, in Hamburg, Düsseldorf, that's the main activities, in the U.S. and in other countries. We have a lot of platforms in industries. We begin with the shoes business, but we have today a lot of things you will see on the next presentations. We have over three to five million customers, and today it's 26 industries, but we get, I think, each year a lot of new activities to our platform group. First of all, I think I show you how it works in the capital markets.
All our investors are very happy because you see on this chart the long performance. We start two years before, and you can compare the results with the DAX, and we are normally a small mid-cap company, so we can compare it with the MDAX, it's for the medium companies. The MDAX is not run very good in the last two years, but you see TPG has a performance over 80% and the DAX over 40%. Everybody who invests in our shares is very happy that we are doing good work and we have good performance for all of them. You see on the next slide that we have the performance was a very volatile market, and you see that we are on the top of these capital markets activities.
You have over 20% in this year, beginning of January, and I think we are a company you must focus on because we have a lot of, Dominik tells you later, a lot of activities in this year. Let me go to the next slide. Yes, here you see the coverage of all the analysts. I'm very happy to know a lot of them because I work with them in other roles, and you see that we have positive results of the coverage, and I think it's easy to focus this chart. You must buy our company because we are good in diversification of all the activities, and we are very modern in the technic activities of our company. We are a good team. I feel after 14 days, I think that it's a very active team.
We see the focus, what we will do with the next time, and so we invest in every chance with interesting for us. In the last four months, we invest in Fintus Group. It's a financial company that helps to the complicated IT structure of the banks and the financial players, so we can help them to build a modern, best technic platform for their business. We invest in a B2B finance platform, which is in the debt business, very high technic, very easy to, I wouldn't say it's a tinder of the financing of debts, but it is, you can compare it with that, it's a parship, I think. You can bring some players together, and it is easy to contract them. You read in the news information in the last week that we invest in Joli Closet in Paris.
That's a very good company because a lot of people in our business look what is in the fashion, what is in the luxury segment, and Dominik and the team catch them to our company. We have a good idea and possibilities to use all their product context of them and the solutions to bring it to our customers and the customers of our customers. Yes, the next one is Herbert. Herbert is a company, you know them, we talk about it in the last month, and Lyrapet, that's a company in the business of the pets. You know there's a big business, all of them are very happy to have a platform, you can organize everything you need.
Let me know in the beginning of the year at the Capital Conference of Montega, I was there in another role, and I hear what Dominik said, and I was very happy to hear what he is thinking about and what he will do. We come to talk about my future after leaving the bank business, and that was the beginning of together work in future growth of TPG. Let me go to the next slide, please. Yes, after the presentation of Dominik, you will get some more information to the TPG Pay. That is an innovation, an innovation you have never heard before.
We will build a possibility for the clients that are not, we say not green in the payment functions of the credit ratings, but we know from FreshNet how it works to go in activities with these clients, and we got the good results, good provisions, and we can build the possibility for them to buy on our platform. If you build it, Christoph will inform you later, then we have good possibilities to get new clients in this special area. The next step, Christoph will inform you to our GBT1, it's a technic structure to bring all the activities on one platform together, very high performance. Yes, and the last is that Dominik and I are leading the companies now.
All right, thank you very much, Marcus, for the first two weeks, which were quite successful, and happy to work with you together. Now we continue with our platforms for success, with our overview on that. When I just jump in here, you see our long-term strategy. Our long-term strategy is that we want to become the number one platform in Europe. That means we want to have the highest numbers of partners all over Europe and want to connect the most partners like traders, retailers, and manufacturers to our platform. We want to achieve that with organic and inorganic growth and want to make sure that we enter into new industries with our acquisitions and cover more and more industries. By end of this year, we expect to have 30 industries covered by our group.
What is very important to understand is our growth model because sometimes people ask us and say, "How can you grow when the average industry where you operate in, when this is stagnating?" The answer is very simple. The answer is when you start here, we get more partners, that means retailers or manufacturers, and when we have more partners, we get more products. The increasing number of products, it's huge. I will come to that later. You see how many products we get when we connect new partners to our page. With the new products, we get a lot of more customers, and the more customers directly lead to more GMV and to more revenue, and this is a growth model.
Here is the basis and the heart of our company, and this is very important to understand, and I can only underline it every time again that we do not rely on the industry development, we rely on our partner development because with our partners we grow and not with our industry. Here you can see this summary on our partner development. It means when we started at the stock exchange two years ago, we had around 5,000 partners. Now we've tripled this number, so we expect to have more than 16,000 by this year, so it's really a strong development, and we can see that the strategy works out for us, and we increased the number of products, we call it SKU, by 20% compared to last year.
It is quite an amazing number, and you can imagine if you offer 20% more brands, new brands and new products, you get, of course, new customers with that. Our portfolio is quite diversified, so we have four segments by last year, and these four segments are covered with different portfolio companies, but these are all small and mid-sized companies working in the e-commerce sector, and they make a pretty good job. Last year we had all of these companies contributing to our profit, and we also expected by this year that all of them make a profit, and we can work with that for this year. Our core competencies, you already know, are software, marketing, and M&A. That is where we are pretty good in, and I think we can really also increase our competencies here and make it on a better level.
Christoph Wilhelmy, our COO, will come to this TPG software structure later on, so I'll just give you now the financial details. You have seen in our latest presentation by January our previous number, so now they are all confirmed by our auditor, and there are only very slightly changes at the final numbers compared to the previous numbers. All in all, we are more than happy, so we had a quite successful year 2024. Our GMV, our revenue increased by 20%. Our EBITDA increased a lot by more than 40%, and all in all, all the numbers were outperforming our guidance and our internal expectations. We had a positive number also regarding on the earnings per share. The earnings per share have reached EUR 1.7 totally for the continuing operations, and totally also including the discontinuing operations, we had at EUR 1.6 per share.
Here you see the charts regarding the GMV growth and the revenue growth. I think it's clear. I don't want to make a deep dive on that now. What's also important is the numbers regarding the purchase price allocations. As you know, we buy companies, and with some of our acquisitions, we have bad will effects. Bad will effects are positive for us because we do not have goodwill in our balance sheet, and so we really avoid any kind of danger because some impairment tests could decrease our value. Here you see the outline from EBITDA adjusted with EUR 33 million with the purchase price allocations, and we end up to EUR 55.6 million for the EBITDA reported. The adjustments of EUR 1.9 million were by 60% determined by our bond.
Last year we placed a bond, and we had around EUR 1 million costs because of that, and that is the main reason for this one-time effects, which we have adjusted in this composition here. There is one figure we would like to introduce you now, this new, but we think it is very important for investors to understand why we are very efficient in our capital allocation and why we think that this figure is important also for you as an investor. As you might know it from other companies, we determined return on equity and return on capital employed because it is very important to understand that our group is an asset-light group, and the invested money which we have and which we get from our bank partners or from our bond investors, I think it is a very good capital allocation.
When you see these numbers here for last year, we achieved a return on equity of 26%, which is quite above our internal guideline of 20%. When you look on the return on capital, that means our group equity additionally added our debt and minus the cash, you see almost 20% return on capital employed, which is also above our guideline. To compare it with other companies in our sector, we have, I think, the highest return on equity in our industry, so we are quite happy with that, and we expect a further increase by this year.
In future, we will also give you each quarter and each half year and full year these numbers that you can have a full and transparent overview on that and see how good we invest the money from you and how our return on capital and equity is going developed. When we have a closer look on the segments, as you know, we have four segments. We are more or less happy about that development. Means we have a good consumer confidence last year, especially in the Q3 and Q4 in the consumer goods segment. Overall, we achieved EBITDA of more than 7%, and it was the strongest revenue increase in our history and also in the last year. We are quite happy with that, and we added some companies into the sector like NudaFimsten , that's a company in Austria for electronic goods and so on.
We acquired CHRONEXT, a watch retailer for luxury watches. Lyrapet, as Marcus already mentioned, Aplanta, it's a company for flowers, and Avocado Store, a platform for sustainable products. On the right side, you see the freight goods segment, our also very important segment, it's the second biggest segment which we have, and we achieved our EBITDA level of more than 6%, which is okay for us. We are happy with that. The only segment where we are not so happy, as it was also last year, was the industrial goods segment. We saw that we had a poor margin development in 2023. We did some actions regarding the carrier costs, the logistics costs, and also the HR costs, and they implemented it.
The EBITDA was already increasing compared to last year, and we are very optimistic that we have better numbers this year, that we achieve at least 4% EBITDA, and we made one acquisition with Wehrmann Group, that's a platform for wood machines, a very specialized platform, but we are very happy with this company because they make a great job and they have a good growth rate by this year. On the right side, you also see the service and retail goods segment. We achieved an EBITDA margin of more than 4%, and we acquired Firstwire by last year and Fintus Group by this year. Fintus Group, by the way, is a pure SaaS company, so we have a pretty high number of SaaS revenue now in our group. Now we come to the non-financial KPIs. You see the number of orders.
It increased with the same amount as our GMV and revenue increased, so more or less 20%. The average order value also increased quite successfully to EUR 124. The number of customers achieved 5.1 million, and our number of employees reached more than 1,000. This is just because we consolidated new companies to our group. What is the most important thing for our business model? It's always the number of partners, and we achieved by end of last year more than 13,500, which is quite a good number and above our internal expectation. Below, that's also the thing what a lot of people always ask us, how much do you get from organic growth and how much is non-organic growth? Last year, we achieved about 57% of non-organic growth. We have our internal guideline with 50% and 50%, more or less, it's a guideline.
We almost achieved it. It was a little bit more non-organic because we made two big acquisitions with Öger Group and with NudaFimsten , and these are quite big numbers there. It was a little bit more on the non-organic side. This year, let's see, the year just started with three months ended now, and we are optimistic that we also achieve a 50/50 relation on that this year. All in all, when we look back on the developments on Q1, this year Q1, we see that the consumer confidence is higher, and we also see that a lot of EU markets and the U.S. also turned positive after the long post-COVID decline. You see that companies like Zalando, Mytheresa, and so on, they increased their forecasts for this year. We see positive development here. We also see a higher profitability.
Our cost program, which we started 1.5 years ago, is very efficient, and we have a lot of good cost results from that. We think that we can achieve our EBITDA number of 7% this year and will maybe also increase that by someday. The distribution costs and logistic costs were not positive, so we had a negative margin development in that. That means all the carriers like DHL, UPS, DPD, and so on, they increased their costs, and we also took some actions to mitigate that and to reduce it a little bit, but our opportunities are limited in this case. We see excellent conditions for new M&A, so we have a full pipeline for 2025 with new companies, with very fair values, with low values, and we are very optimistic that we get good companies into our portfolio by this year.
Last but not least, our increased scalability because software is the backbone of our company, and we can really fast connect partners with that and enter new industries within less than four months. This is the basis of our success. When we say we would like to enter a new industry after four months, we are ready to do that. We connected our software with first partners, and then we can start with that. All in all, it is a very scalable platform which we established within the last years, and we can grow with that. Our four segments grow, each segment is growing, and this is also important. We do not have one segment which is declining or has some problems. All in all, we have a good view on that, and we see a good margin development.
All in all, this leads us to the increase of our guidance by 2025. Today, we send a talk message to all our shareholders and to the stock exchange that we increased the guidance on this year. The new guidance is a revenue of EUR 680 million-EUR 700 million, so quite a big increase on that. We also see an EBITDA level of EUR 47 million-EUR 50 million, and the GMV also increased to EUR 1.3 billion. The leverage did not change, so we expect the same leverage, and we show you later on this presentation. The number of partners will reach more than 16,000. We are more than optimistic to achieve that and to ramp up the number of products in a huge number. By end of this year, we expect at least 30 industries, but we cover by end of last year, we had 25 industries.
Now, that was the new guidance for this year, and Marcus and me, to be honest, we have been too conservative at the beginning of this year. Reinhard Hetkamp and me, we were too conservative, and we think that now we see good numbers, good Q1 development, and we will see how the year is going on, but we think that these are the right guidance numbers from a very, very positive tendency what we have right now. Our midterm guidance, as you know, we also give you a midterm guidance for the next year where we think this is our minimum revenue level. We expect it to be more than EUR 830 million and a GMV with EUR 1.6 billion. And the EBITDA level will be unchanged between 7%-10%, but this is only from the current perspective.
A lot of people ask us, well, do you calculate new M&A targets in that, or do you plan any upscale with new targets? We say, no, this is just the current status. That means we expect a 15%-20% organic increase by next year. If you buy new companies, additional companies, this is on next year, it will be on top. It could be easily reached that we achieve the EUR 1 billion revenue by next year if we acquire more companies, which are of course not included into this calculation. In the long-term perspective, you see that here we have a constant and stable growth rate in our GMV development. It's the same for the revenue development. We started with more than EUR 200 million five years ago, and now we will achieve more than EUR 680 million by this year.
It's the same for the EBITDA development, the number which is the most relevant one for us. We expect to have EUR 50 million, up to EUR 50 million this year. When we have a closer look on our balance sheet, you see that our balance sheet did not really increase so much. All in all, we are very happy that we have a very stable level with EUR 233 million by end of last year. You see it also on our liability side. There was not such a big change. All in all, we had a reduction of inventory by EUR 90 million, so it's not so much. We had an increase of cash to EUR 22 million, and the net leverage, the gearing is 2.6% as a factor to our EBITDA. Also important, the level of bank liabilities.
We reduced the bank liabilities a little bit by last year, so we only had EUR 59 million, and we got our Nordic bond with two taps last year, and we have a total Nordic bond volume of EUR 50 million by last year. Our equity ratio reached a record level of 42%, so we are very proud of that and can be happy that we have a very solid finance structure in our balance sheet. Just to give you forecast on our debt situation, so basically we expect to have a net cash by end of this year with a little bit more than EUR 100 million net debt, and we expect to have an EBITDA adjusted by around EUR 50 million. It is a leverage of 2.3%, and this is exactly in our target leverage guideline for this year.
When we have a look on the cash flow, we have a very good cash flow development. Right now, we had last year EUR 58 million operational cash flow. We invested the full amount into software and into new M&A activities, so it was completely invested, as you can see here, and we have some EUR 30 million coming from the finance activities. All in all, our cash increased to EUR 22 million by end of last year, and again, we see a very positive development on this also this year. Yeah, last page on this slide is the M&A pipeline. We see good M&A targets coming up to our group and offered to our group. Basically, we see two niche platforms operating here in Germany. We expect to make a closing and signing in the next two months and also a long-term target. It's the optician platform.
It will be done also within the next two months. Our financial calendar, it is published, so I don't want to go on with that, and you can see it online on our corporate investor page. All right, now we hand over to Christoph Wilhelmy to give you a short update on our software development and also on the project TPG One. Good morning, Mike.
We can directly start with the first slide of the overview. This slide you might already know from us. This is the big picture of the TPG One. It shows you how the retailer can connect to our complete system and at the end end up at one of our store fronts, also connect to our marketplace. I will now show you where we are standing at the moment. Next slide, please.
Currently, we talked about in our capital markets also about our TPG One connector and about the TPG Cloud. We are currently partly live with our TPG One connectors. Most systems are live already, but this is due to the fact that we have so many ERP systems that we want to connect to. This is a system that will be growing and growing all the time, but currently it is live already, so it's all on time developed. The amazing feature here is when, regardless of whether you come with a TradePilot account or with a ChannelPilot account or a Shopify account as a retailer, you can very easily connect with a couple of numbers you need to enter.
For example, for Shopify, if you are a retailer with a Shopify shop, you just have to enter your Shopify URL, your API credentials, and you're ready to go. Your products get automatically listed in our systems, so you have a couple of steps until you can go live on our systems. This is helping retailers a lot to connect to our systems very, very fast. The same can be done with the major feed engines like the Google Feeds or a ChannelPilot feed or other major channel feed engines. With just IDs on our systems, you can connect to our system from your feeds. This is very, very fast for the retailers. Also, we have implemented data enrichment for our category mappings. It means whenever a customer, sorry, whenever a retailer is connecting to our system, he connects with their current stock lists.
Our systems are mapping the categories to our categories in a couple of seconds and will enrich the data about what is missing, for example, product descriptions or product titles. It is even able to see out of a picture what kind of materials might be used in this product and will then be enriched in the product data. Also, we want the TPG One Cloud, the major cloud what we call here in the middle, is built out of the PIM and the stock pricing, repricing feature. This is still in the building. At the moment, we are rebuilding our PIM systems. We have already an onboard PIM system, but it is high performance, but we make it this much, much more performant. This is also able to cover this huge amount of millions of SKUs. Next slide, please. This is also where we are working at the moment.
This is our store front. We are working with high-performance store fronts. We built an integration layer. This is a commerce layer, as we call it, which will give us the opportunity to also connect our biggest shops like Avocado Store, Hood Fashioned, or Winkelstraat, which are complete onboard shops to new store fronts. In these new store fronts, we partially work with the Shopify checkout solutions. We do this because Shopify is guaranteeing the most performance checkouts in the industry currently with over 45,000 checkouts per minute, which is absolutely amazing. This is guaranteeing us that we can also cover huge load times like Black Friday, Cyber Monday, or Christmas seasons. We are also integrating or have partially integrated already, not in all shops, but in most of our shops. We started with the biggest shops in retail media.
Here we started with Fashioned and also with Hood so that customers can shortly promote their products and customers or retailers, of course. This means they can book sponsored product ads, customer audience ads, and audience extensions. This means that they can promote their products if they're a brand or if they're a multi-brand retailer. These promoted products will get displayed on a special area or level on our store fronts. This customer can book this with our promotion partner here and can also do it by self-service by booking on specific fees. We also integrate VCAT set bookings. This means that we are contacting our retailers directly and offer them different kinds of solutions like sponsored email campaigns or sponsored banner campaigns or even a branding campaign for their products or their brand so that they can also reinvest their earnings on our platforms.
Next slide, please. One more. We're also working on our retailer portal that our retailers have a better experience when they work with us together. This is a short overview of how they will look in the future. The retailers can in the future have a much, much more clearer overview of what their products are listed on our pages, where they're listed, how many orders they had, what the finances are, what they earned on our platforms. They can print it out, they can export it, and this will give us, or this especially gives the retailers a much smarter way and easier way to work with us together. Now we come to our new project, what we mentioned already in the beginning of the year, the TPG Pay. As you know, we work on our own payment solution.
This will provide for our customers a buy now pay later solution, what we are offering in all our web shops. Next slide, please. TPG Pay means we will integrate all major payment types in these solutions, and especially we will offer pay on invoice, pay on instruments, monthly invoice, and buy now pay later solutions. This means sooner or later we will be our own buy now pay later partner for our customers so they can buy any kind of products with TPG Pay in all our web shops. The amazing thing about this is the yellow customers, what we can see on the next slide. The yellow customers, it is a so-called part of the customer range we have, what is getting at the moment rejected by other buy now pay later solutions so far. It has different reasons.
For example, when you pay a very high price back, it can be that the buy now pay later solutions we have currently implemented say, no, this is too high for us. We cannot offer you buy on invoice or buy on instruments. Due to our customer history and the huge data we have with our customers, we can cover the risk or take care of the risk and can also offer customers who get rejected by other buy now pay later solutions. We can offer them pay in instruments or pay on invoice with our own TPG Pay solution. We are covering here a target group of more than 20% of our current customers, which will also generate an additional income for us. We will take care that these kinds of customers run, of course, risk checks, but of course to internal sources.
The current development of TPG Pay is that we will build an own API for all kinds of web shops, but also we'll build plugins for our major shop systems. We started with the most complex one. This is a tricky one to get. It's a Shopify payment app. We have the approval of Shopify that we are allowed to build this kind of app. We are working at the moment in this development part so that we can release this kind of Shopify app internally first for testing and then release it as planned in late 2025. TPG Pay can later also be published for other companies as well. Here we have a short demo of how it can look in the future. You can select on any kind of products, add it to the cart.
In the cart, you can select TPG Pay as a payment solution. A short window will open when you click the pay now button. You enter a 10, and then you can select the desired payment solution you want to use for payment direct or instruments or in installments up to 36 months, for example. For timing wise, we are currently, we finished the exploration phase. We are in the demo development phase at the moment, and we are planning a first release to our test shops or to our smaller web shops in late summer this year. Also late this year, we will plan to release a complete solution to all our web shops. Thanks. That is all from the software update.
Thank you very much. Now we hand over to the questions from your side.
Thank you so much for your presentation and the update. We will now move over to our Q&A session. If you would like to speak directly to the gentlemen, just raise up your virtual hand. If you've done it by phone, you can use the key combination star key nine to enter the queue, followed by pressing star key six to unmute yourself. For sure, you can also submit your questions in our chat box. We already received the first question from Alexander Riemann. You should be able to speak now.
Hello. First of all, I want to say congratulations on the record results and thank you for the presentation. I've just got three questions. First of all, could you tell us how many acquisitions are still planned for 2025?
Of the four companies acquired so far, which one was the biggest revenue contributor, which led to you increasing the guidance? That is actually it. Those are the two questions, actually.
Okay, thank you very much. I will just go back to the overview on what we did so far this year. You can see that we acquired different companies like Fintus, FirstWire, Joli Closet, HerbertZ GmbH, Lyrapet. All of these acquisitions basically are not big targets. Their revenue is on average below EUR 20 million. It is not a big relevance for us. These are small targets, but strategically very important targets. We expect eight acquisitions this year, up to eight acquisitions. It always depends, of course, if the SPA is working, if due diligence is fine, and so on. I think I will be answering these two questions.
Small targets, not so relevant for the raising of our forecast or the guidance, but we expect another four to five acquisitions this year.
Okay, thank you. If I could have another follow-up, do you plan on tapping the bond again or raising more money for further financing of acquisitions, or do you plan to finance it from cash flow or the remaining cash?
Basically these targets which we acquired here, we all take them without any bond tap. It depends. If you get a big target where we say, this is worth to think about that, and it's so big, we have to think about making a bond tap. Right now, from our current perspective, we see no reason, but it really depends if there's a strategic opportunity for a big target, which is worth to do that.
Thank you very much.
You're welcome.
Thank you so much for your questions. We will move on with the person who dialed in with the phone. Please introduce yourself to us. You can unmute yourself with star key six. Unfortunately, we cannot hear you. We will move on with Frank Lehmann. He has a question as well. Then we come back to you.
Yes, good morning, Dominik and Reinhard. Thank you for the presentation. I have a more conceptual question. You keep on buying companies, and that seems to be one of your core competencies, right, Dominik? That is how you define yourself as someone who assembles small operators on your platform. You are a platform operator, and you look for those ones to add to. Now, in terms of when you purchase them, you also allocate the purchase price determinations.
As a result of these purchase price determinations, you generate other income. Is that going to continue in the way it has been in the past, or is that basically behind us?
Yeah, thank you very much. I think when you have a look on our annual report, which is also published today, you can find it on our page. I did. We made a Q&A part with our head of M&A. I think he gives you good answers on that. I can also answer you now. Please. First, we do not make M&A because we think M&A is attractive. That is not our business. We have a complete different opinion on that. Our opinion is that we want to enter into new industries. Yeah.
For example, if you think that vintage luxury is a great industry, yeah, we are looking if you make a buy thing. We buy a company or if we go it by ourselves and don't make an acquisition. We do both. In our history, usually we made only organically to do it by ourselves. In the last four years, when we saw the valuations go down, we thought that maybe it's better and the better efficient way to buy a company in one specific industry and ramp up a platform on that. For example, with Joli Closet, they have 2,000 partners in the Vintage Luxury Sector, so secondhand luxury. It's a very good basis. It was better to acquire them to pay a fair price, but to work with them now and to expand it. That's a good opportunity.
To answer your second question regarding the PPA effects, we see that, of course, we also have PPA effects. Are they on the same level like last year? I don't know because we have not closed this year, but we expect to have them, of course, in some amount in the double-digit million Euro amount this year. Last year it was EUR 22.3 million this PPA effect. If it's a little bit less this year, I don't know. Of course, we will have some because the PPA effect covers some of our acquisitions where we pay less than the equity what we get.
That concept of paying less than the equity you get, is that a determining factor for the targets you look at, or would you also pay above equity?
I really recommend. It's a funny question.
No, no, no.
It's a very good question. The answer is definitely no. Okay. No, no, no. Yeah. Okay. Because when you have a look on the annual report and the Q&A part of Mr. Minnier, he's our head of M&A, you see that the idea is never to buy a company because of PPA. It's a side effect. It's a side effect where you can say it's nice to have, but it's not relevant for us. We also buy a company for goodwill if we think the price is reasonable and good. It's not a question do we get PPA or not. That is the reason why we adjust it in a negative way. We put it away from our EBITDA because it's not happening every time. It's not calculating. We cannot make a forecast on that.
Right. That's what we do too.
That is what I was basically also looking for, for the adjustment and whether that will maintain or not. Because of course, if you look from the debt side, the EBITDA and the debt relationship are important. It is a question whether you take the debt and do a net debt and then divide it by the reported or by the adjusted one. I appreciate your transparency. Thank you very much. I have one last question, if I may.
Yes, go ahead.
It is the own work capitalized. Is that basically investments in your software or what is that? It is about EUR 6 million a year.
Yes, yes, exactly. It is 90% of software.
Then you invest it in your software. You basically have that book then, and then you write it off over five years. Or how do you treat that investment then?
Yes, exactly.
We have these typical amortization periods between five and eight years. It depends on the software and the layer. It is on average five to eight years. Okay.
Thank you very much for the transparency and for the discussion. Best of luck for 2025. Thank you very much. Bye-bye.
Thank you for your questions. We will move on with Christian Salis. You can speak now.
Hey, everyone, can you hear me now? Yeah. Yes. Okay, perfect. Thanks. I have three questions, please. Two technical ones and one on the 2025-2026 outlook. First of all, could you maybe talk about the operating cash flow a little bit more? What is driving really this decrease or what has been driving this decrease year over year in the financial year 2024?
Maybe could you also talk about the prior year figure because it is much higher than the figure you reported last year. I think last year you reported something like EUR 17 million, and now the 2023 number is around EUR 100 million. What is, yeah, could you just explain that a little bit?
Which number was that? I did not understand.
Two questions. First of all, what is driving the decline in operating cash flow year over year in 2024? Could you also explain why the prior year figure in terms of operating cash flow significantly differs from the figure you have reported last year in the financial report? Secondly, on the tax rate, it is again very, very low. What should we expect here in terms of sustainable tax rate for the next year and the next years?
Final question on the 2025-2026 outlook. You said you're expecting a 50/50 split between organic growth and inorganic growth. The midpoint of your guidance now implies 30% growth year -over- year. If we take your statement, this means you're expecting a mid-teens figure in percent, yeah, of organic growth. That's significantly above the e-commerce market and other major e-commerce players. What is really driving this outperformance, even though you're spending much less on marketing than a typical e-commerce company? Maybe just a quick follow-up, can you give us an indication of what has been the organic growth figure at the start of the year in Q1, please? Thank you. That's it for me.
Yes, thank you very much for this. Maybe I'll share the screen again.
Basically, to answer your last question, I think we really made it clear that we do not rely on the industry development. If you get more partners, like retailers in the industry, you get more products. With the number of products, we increase our revenue, our GMV, and our profit. That is the base of our growth. With the circle, I hope that this is clear. I think it's very clear, but maybe not. We do not care if the market for shoes, fashion machines, or bikes is getting 5% up or down. It's not relevant for us. It is relevant if we get more partners and more products. If these numbers are declining, then we have a problem. Because when we have less partners, you see the whole turn go down every time. This is a dangerous development.
We had it only one time in the bike industry. It was at COVID times when the industry went up like this, and we had a crash like this in the bike industry because all the bikes were sold out. There were no bikes available in the market anymore. That is a nightmare for a platform like us. That is not good. Again, we are not relying on industry development. We rely on our partner development. Your next question was about the development of the capital frustration cash flow calculation. There is one thing I have to mention. These are all the right numbers from last year. Last year, we had two numbers. We had performer and non-performer. This is very important to understand that we decided to better give you an understanding of this in last year. We use both here, non-performer.
Both are non-performer numbers. The reason for that is very simple. Last year, you know that we had this one-time effect in the cash flow from selling cars. This one-time effect did almost not happen anymore, or only in a very small number this year in 2024. This is the only reason for that. If you would eliminate this one-time effect, you see that we have higher cash flows on that. We are very happy on this cash flow development. Again, last year, we had a one-time effect, which was the cars in the Cazoo group. What was your first question?
The final question was on the tax rate.
Oh, yeah, got it. Sorry, the tax rate. Yes, basically, we have a lot of loss carry forwards when we acquire companies. Some of them, I think, have loss carry forwards.
Of course, we use that in a very strategic way. Last year, we had EUR 800,000 tax effectively. Of course, this year will be higher. We have no calculation on that. In an optimistic case, maybe it is double the number of what we have seen last year. I do not know.
Okay. Maybe a quick indication on the Q1 organic growth run, right?
Yes, the growth rate in Q1, we will present you these numbers in a separate call when all numbers are finalized. We see an organic growth rate of more than 50% compared to the total growth rate. We overachieved our internal guidance with a 50/50 split.
Okay. Sounds good. Thank you.
Thank you.
Thank you so much. We have two questions left in the chat box. Let us cover them quickly.
In the H1 2024 report, you reported a negative other result of EUR -23.872 million in the change of equity statement. In the annual report 2024, there's zero other result in the change of the equity statement. Can you please explain the significant switch in the other result in the change of equity statement?
Yes, sure. Together with our auditor, we had a look on the development on the Eigenkapitalveränderungsrechnung. You can see that here. We got some feedback on this issue of other operating income OCIs. We decided to make it in a much more transparent way. There is one guy in the financial industry. He had this idea. We make here that we put everything with the earn-out valuation report here.
When you look on our notes on note 30, we clarified that all cash-based earn-out and all share-based earn-out valuations and their impact are completely booked now in the P&L calculation. That was a feedback from, again, one guy in the financial sector. We think that this is a good idea. We use it now in our audit report here. Now you see the total number. The reason why we had this peak at H1 was very simple. It was one company, which was very strong outperforming the business plan. Just for this peak, our auditor said, okay, we have to calculate that because it's a share-based component. Now last year, we took over the remaining minority shares. We booked it out at the end. We have total negative valuations of earn-out components of EUR 5.5 million by last year.
This is fully in the P&L calculation.
All right. Thank you so much. The last question, can you comment on what would have been the new guidance without the recent acquisitions since you released your previous guidance?
We have no separate number on that. It would be a little bit lower. Again, the targets we acquired by beginning of this year were quite small. They do not have such a big impact on our total guidance.
All right. Thank you. It seems all questions are covered. Therefore, we come to the end of today's earnings call. Thank you, everyone, for joining and your shown interest in TPG. Also, big thank you to you, Mr. Vitt, Mr. Benner, and Mr. Wilhelmy for your presentation. From my side, I wish you all a lovely short week.
I hand back to you, Dominik, for some final remarks.
No, we are fine. Thank you for attending. If you want to have any additional information, just let us know. We always reach out to you with our investor relations page. We are open for one-on-one meetings if you want anytime.