A warm welcome from our side to this strategy and update call or meeting today. Thank you for being here in Frankfurt in the central hub here in Germany, and also a warm welcome to our virtual audience, which is hopefully attending in a huge amount in our conference call today. Today, we would like to present you the current figures of our group and also to give you a deeper insight perspective on how we grow this year and what kind of current acquisitions we did in the last months and also today. Let's start with a short overview.
The Platform Group bridges the gap between local retailers and global customers. We bring tradition and innovation together, helping businesses grow while preserving their roots. With our software, we make local offline products available and bring it to customers in Europe, the United States, India, and China. Retailers thrive, communities flourish, and worldwide customers connect with the products they love.
Today, we have some executives here in our room and also available for our digital audience. First of all, my person as a CEO, Bjoern Minnier as a CFO, Nathalie Richert , she is the Head of Investor Relations, and also Christoph Wilhelmy as a COO, and Frederic von Borries as a CPO. This is our short agenda. We don't want to spend too much time for introductions. We just want to directly start with the update to our group. Then we follow up with some far more information about the segment optics and hearing. This is our latest segment, which we started by July this year.
At the end, we also give you some more deep dive information about strategic projects regarding TPG Pay, that's a payment project which we announced by the beginning of this year, and also give you some more information about our M&A activity and the outlook for this year. Let's start with the TPG update. We compromised, I think, some good information for you. Today, we also announced that we increase our next year guidance, 2026, in terms of the GMV. You'll see a long-term stable growth rate in the GMV and also in the revenue. Our revenue will climb up to at least EUR 1 billion next year. This year, we also confirmed our guidance with EUR 735 million in the revenue for the group. Our EBITDA and our EBITDA margin is also increasing.
You can see here, we have a range of EUR 54 million-EUR 58 million as a guidance for this year. We are quite optimistic that we can achieve it, and we already increased it several times this year. Also, for next year, we expect EUR 70 million-EUR 80 million with the EBITDA. I think this is quite a very good development from our side. The earnings per share ratio is also increasing. As you can see here, we took the estimation of the coverage analysts, and I think they can also see this development in a pretty good way. I think we can skip that. Our strategy is basically focusing on being the number one platform group in Europe. For some people, it's a little bit strange because some people ask us, what are you really? Are you more software? Are you more e-commerce? What are you really?
We will give you some more updates and information on that. How we want to achieve that, we have three strategic goals. First, we never want to rely just on M&A. We always have to get organic growth. Additionally, we do M&A when we think the price is fair and when we think the industry is attractive for us. Second, we always should have a balanced organic and inorganic growth rate. Third, we want to expand to 30 industries by the end of this year. Here you can see how we do it. We acquire small companies or mid-sized companies. We invest a lot in our software platform, and we also increase our number of partners. This is on the right side, a very important point because we are very much focused on Germany, Netherlands, and Austria. We really want to change that a little bit in the future.
How we do that, we explain to you today. The question of what we are is basically we have three things in one. Actually, we have three different focus topics. One is that we are an e-commerce specialist. We have 35 platforms in 28 industries, and on these platforms, more than 15,000 partners selling products there, and we have more than 6 million customers. How we do that, we have 45 people just working on the online marketing segment and make, I think, a pretty good job for performance marketing. The next thing is the platform pioneer. We enter three to six new industries every year because we think we have a platform, we have a software model. What is the next industry where we can enter with this specific skill set?
We think that M&A actually is not the only, but I think a quite efficient way to enter into a new industry and also to ramp up the business there because we always acquire directly good people, people with knowledge and a network in the industry. I think this is quite a good way how to do that. I think we have, after more than 30 acquisitions, I think we have the right knowledge and skill set how to integrate these small companies into our group. The third thing, quite important, is the software, of course. We have a proprietary, flexible, and capital tech stack, and also we connect this tech stack to the ERP systems in each industry. If we started with the shoe industry 14 years ago, and when we started with that, they had six local ERP systems.
We connected all of them, but that was just the starting point. Today, we work in 28 different industries, and this is, until today, a big challenge, to be honest, to connect these local ERP systems because they are not always cooperative. They are sometimes from the '90s, so it's not technical up to date, and it's sometimes a big project to connect these systems and to build up these interfaces. In this segment, we have 55 software engineers to do that. Here you can see our segments. Our segments are already five. Last year or at the beginning of the year, we had four segments. The fifth segment came up by the end of June or by July, where we announced that we enter into the optics and hearing industry. For Germany, we look for the Akustik and Optik Geschäfte.
I think this was quite a good acquisition because we had a hybrid approach. A hybrid approach means we have an online platform where we sell products online, and we bought local stores. Currently, we have 30 local stores to cover at least the most important places here in Germany and to offer our customers a direct experience for correction lenses. Because to be honest, correction lenses are still 80% offline business, and I think it will not change very soon. Also, in five years, most people will go to the local optician to get the correction lenses. If you buy just sunglasses, then it's easier to make it online. Also, we announced today that we acquire three companies in the pharmaceutical sector. We bought these three platforms, and we announced it today. That is the reason why we changed the name of this one segment.
First, we announced that it was service and retail goods. We had this title for more than four years now, and now we will change it slightly to pharma and service goods because pharma is getting a bigger segment here. We try to give this importance also into the name of the segment. What else has happened in this year? You have realized that when we started with fashionette two and a half years ago, we invested into the luxury industry. The luxury industry is quite interesting because it has a big crisis. When you see big companies like Burberry, like Kering Group, and so on, their stock prices went down, and there's a crisis in the luxury industry, this is very attractive for us because when everything is a hype, we would never invest into a hype industry where everybody wants high prices.
We think this is the right time to invest here, and that's what we did in the last 12 months. We acquired fashionette nine months ago. This is one of the biggest players, platforms for luxury watches like Rolex and so on. We acquired Winkelstraat last year. Winkelstraat is the biggest luxury platform in the Netherlands. They are very successful and have a very good and young team there. Also, we acquired this year Joli Closet. For the men, it's not so interesting, but for women, they are one of the biggest players for vintage luxury products. For example, Louis Vuitton, as you can see here, though these bags maybe are two, three, four years old, but you can buy them for quite an affordable price. How is our growth model? Our growth model is always that we want to increase the number of partners.
That means if we get more partners like local retailers, we can increase the number of products. If we have more products, we can directly get more customers because customers go on Google, they look and search for a product, and when they find a product in the Google search field, they click on our page. This is a backbone of how we have our growth cycle and why we can also grow in stagnating markets. It worked pretty well in the last 14 years, and we also want to continue with that. On the right side, you also see our growth rate. For example, in the first of this year, in 2025, we have almost 60% organic growth rate and 41% of non-organic growth rate because of acquisitions.
The backbone is our IT system, but Christoph will come back later on this system and will give you much more details on that. The best thing on our software is that we can enter with the software into different industries. That's what we want to show you here because you see that we started with shoes 40 years ago, and now we can enter luxury fashion, furniture, car parts, dental supplies, heavy machines. We can really use the software to enter into new industries in a very fast and very efficient way. It's not always easy, and we invested, to be honest, a lot of money into the software in the last 10 years, but at the end, it really pays out for us, and we have, I think, a very good competitive advantage with this software.
From our M&A perspective, in our half-year call, we announced that we will make some more acquisitions. I think we can already say, yes, we did it. The three pharma platforms, we all signed these pharma platforms. The one I come later on that was just signed right now. You see that we also acquired one niche furniture platform. This is based in Berlin. The thing which is still ongoing, but we are not sure if it's working or not, is a B2B platform for the bike industry. We are still negotiating that, but we are not sure if we will get it or not. It's still an open item on our roadmap. Now we change to the financial perspective. First, you can see our stock. When we entered in December 2022, we started with EUR 4.5.
Now we are around EUR 9, sometimes a little bit more, sometimes a little bit less. Compared to the German stock index stocks and other indices, I think we can be quite happy about this development. Maybe more important than the stock development is the average trading value. This is pretty much increasing. You can see the numbers here. Starting with September 2024, we had on average 500,000 shares in a month. Now we came up to 2 million per month. This is quite a big increase in the daily and also in the monthly share volume. Also, this reflects that this stock is getting more important slightly, but it's getting more traction from investors. Now we come to the financial figures. First, we start with the half-year report, and I hand over to Bjoern. Thank you.
Dominik, thank you. Welcome from my side. I would like to start with a short recap regarding our H1 figures. I'll keep them short because we have presented them already, but just to give you a short recap of what happened in the first half year. As you see, things went quite well. We were able to develop our GMV as well as our net revenue up by about 50%. We have a net revenue now of EUR 343 million in the first half year. You see, we could also increase our gross margin, which went up by 5.6 percentage points. It now is 34.1%. If you look at the white lines, the white lines are regarding the cost. Of course, it is always very important if you grow that you always keep an eye on the cost. Here you can see we did that. We did it quite well.
We were able to reduce our relative cost in the area of marketing because it's all centralized, and we could manage to do the same thing with the HR cost. At least, and believe me, that's already difficult enough, we managed to keep our logistics cost stable. That all boils down for an H1 result EBITDA of EUR 43.7 million reported. We have a very conservative balance sheet politics, so we always deduct our purchase price allocations. This is why our reported EBITDA in our case is lower than our adjusted EBITDA is lower than the reported one, and that's EUR 33.3 million. We can move on to the next slide, please. Two things you are always interested in is, first of all, yeah, we see you have a net revenue that's nice, but how much is minorities? As you can see, minorities do not really play a major role.
It's about EUR 1.6 million in the first half year. The second thing you always ask about is what are the earnings per share? As you see, they also took a very nice development and are up to EUR 1.55 now. We can move on. What I like to show you here is three things, basically. First of all, we already discussed this. We have a tremendous increase in our revenues. This goes along with also a very pleasant increase in the EBITDA. The EBITDA is growing for two reasons. Number one, obviously, because the revenues have increased. As you can see here in the boxes, we at the same time managed to increase our EBITDA margin, and this accounts for 9.7% now. In a nutshell, this year we already had 10 successful acquisitions. I just showed you the cost side. This is how we managed to increase our profitability.
We still see excellent conditions on the M&A market if you look into 2026. We believe that about at the same pace we will continue to acquire new companies and to extend our platforms. We, of course, do our homework and constantly work on our software, so we can onboard new partners even faster, so we can keep up with the acquisition pace. Dominik already told you about the growth of the segments, and we will go into that later. I just also would like to give you a short recap of the balance sheet. First of all, the balance sheet is about EUR 350 million. What you see is that we had a small increase in the current assets, and the reason is stock. The reason is not though that we bought more stock because we are a platform company.
What we did is we acquired companies and they came with stock. Like always, when we transform it into a platform model, then we will sell this stock off again. If you look at the passive side, first of all, you see quite healthy, as I believe, we have an equity ratio of about 50%. What you also can see is that we managed to reduce our payables. I think that's fine for this one. If you look at the debt situation, and that view now still is end of June, here you can see that at that time we had a net debt of EUR 100 million. As you all know, we have been tapping our bond. If you look at it now, the bond wouldn't be EUR 50 million, it would be EUR 70 million by now.
Regarding the end of June figures, it was EUR 100 million net debt. If you look at our 12-month EBITDA, then you will see that we have a leverage ratio of roughly around two. That's a region where we would like to keep it as well. Now you see the magic number at the end. This was for a long time our goal, and next year we will be reaching it. This is the one billion in revenue. You see, we have been constantly working ourselves up the ladder, and with the new acquisitions, we will get or we will cross, we will either get very close to or we will even cross the one billion mark.
The same in relation, of course, is then valid for our EBITDA. We are able, we do not have to, we are able to increase our guidance, and the guidance will now be somewhere in between EUR 70 million and EUR 80 million for next year. I guess this is the number you guys are most interested in. I hand it back to Dominik.
Thank you, Bjoern, for this update in the financials. When we continue with the focus on the pharma sector, I have to give you a short recap on how we started there because we started with a company which is called ApoNow. Nobody will know it here because ApoNow is not something for the end customer, not for private customers. It's just a B2B platform. We acquired this company in 2021, and this small company grew every year. Two years ago, we increased our share in the company, and we decided that we want to expand in the pharma sector. To be honest, it's very difficult because when you buy an online pharmacy, for example, like DocMorris or whatever, they have maybe big revenues, but no profit. Our intention was not to buy something with no profit. We always want to buy companies with profit.
We decided that we want to expand in the pharma industry, and that's what we did. Just to tell you what ApoNow is doing and why we think this is so attractive. ApoNow goes to the pharma company like Ratiopharm, like Novartis, and so on. They go to these companies and say, you have a public page where you show all your products, and in Google, you are ranked number one because you are the manufacturer, you are the brand owner. Why don't you want to sell the product there? The pharma company says, no, we are not allowed to sell pharma products, medicaments there. It's not allowed because in Germany, only the pharmacy can sell products, not the manufacturer. Ratiopharm is not allowed to sell a product to the customer. This company is the solution for this legal problem, and they made a very simple thing.
They called this pharma company, like Ratiopharm, and said, you know what? We integrate our software on your page. When an order is coming in, we will distribute it to a local pharmacy, and we are connected to almost all local pharmacies in Germany, in Austria, and in Italy. When they receive this order, they bring it to the customer. A very simple system that all the pharma products can be ordered online, but will be delivered with local pharmacies. This success model is quite interesting because more than 41,000 pharmacies work with that. In Germany, it's a complete B2B model, so we don't want any private customers, and we have 300 pharma manufacturers there who work with this company. That is a basic background why we started in this industry and why we think it is quite attractive when you find good niches.
When we thought about how we can add some more niche segments here in the pharmaceutical industry, we had three different targets. These three different targets, we acquired them in the last days. Before I show you what we acquired, I'll show you more the strategic picture behind that. When you see the manufacturer here, like Ratiopharm, and when you see the sourcing platforms, like the wholesale companies, and you see the pharmacies, then you see the customer. Right now, we only cover one thing. We have an online platform from the manufacturer, and this online platform brings orders to the customers, but will be delivered by the local pharmacy. Good model, basic model, and profitable model.
The next thing was that we want to acquire a sourcing platform because all the pharmacies, they do not get their products directly from the manufacturer. They get it from wholesale partners, from B2B wholesale partners. We decided that we want to acquire a company here, and this is the first target what we acquired. It is called Pharmosan . I will come to that in the next slide. Also, we bought one educational platform. I'll also show you why. The third thing is that we also want to find a good niche online pharmacy, which is working together with local pharmacies. Right now, when you go to DocMorris , it's not the intention of DocMorris that you want to work with local pharmacies, but we want to be the partner of a local pharmacy. Everything in our mindset is this here.
We always look to local pharmacies and how can we help them, how can we help them to survive, and how can we provide some more additional revenue that they can survive in their local city. The first one what we acquired is a very old family business. Actually, it's more than 60 years old, and it's a family-owned company. It's Pharmosan Group. Pharmosan Group is located in Austria, in Vienna. The founder, he's pretty old already. He's not active anymore, but his son, Thomas, and his other son are also active in the company as the Managing Directors. What they do is very simple. They have huge warehouses where they all offer their products to the local pharmacies, focusing in Austria. They make the daily deliveries two times per day, and they are the best partners in Austria for the local pharmacies.
We have basically now a very good backbone how we can deliver all the products to the local pharmacies. When you go back on the slide, when you get all the orders from our online platform to the customer, they can directly source the product again because it's empty now in the local warehouse of the pharmacy, and they can directly connect all the customer orders with the sourcing platform. That was one thing that was really attractive for us. The next target we acquired is also a very special niche. It's an educational platform. Four years ago, we already acquired an educational platform. It is called Teech and located in Germany. We said, when we want to be a really good partner for our pharmacies, we also want to educate and teach all the employees there. That was the next platform we acquired. It is called Apothekia.
It is located in Cologne in Germany, and they are the market leader for all educational programs for pharmacies. They have no end customer, so it's only B2B business. They are paid by more than, I think, more than 400 manufacturers, and they offer the service for free to the pharmacies. That is their business model. They have thousands, tens of thousands of different customers all over Germany and Austria to provide them with educational stuff. The third one is a niche platform. This niche platform is located in the Czech Republic, and it's called Vamida. They are focusing on niche drugs, and these niche drugs, they are delivered by local pharmacies. There is a strong relation between their products, their supply, and their selling to the local customers. They are only operating in Eastern Europe and Austria. In Germany, they are not really active.
That was an update from the pharmaceutical perspective and why we think that this is an attractive market. After this presentation, we are open for your questions. We also want to give you an update about our optics and hearing business because this is a very important part of our company since July this year. As you have maybe realized, we acquired some companies here, and we started our own platform. This year, three months ago, we initiated myglasses.de. This is a platform where you can buy your correction lenses, where you can buy your glasses or your sunglasses, whatever. This platform has two strategic goals. First, they want to sell glasses online, very simple. Second, they want to make the connection to local opticians because local opticians, it's an 80% offline business in this industry.
When you bring the customers to the local stores, this is a big advantage, and you can ramp up your local revenue with that. What the people, the customers do is pretty simple. They decide for glasses. It doesn't matter if it's correction glasses or sunglasses, and they can directly go to the eye testing in the local store, and we connect the local partners directly to the customers. When you say, I want this kind of glass, you decide it online, and then you can pick it up in the local store and make your eye testing there. That was our initial starting point by July this year. Our focus and our strategy was very clear that we make a hybrid model with that, so local stores and online opportunities. Our focus is only on Germany, Austria, and Switzerland.
What we also said is that this is such a relevant segment in terms of revenue and in terms of profitability that we make an own segment for that. Next year, we expect between EUR 55 million and EUR 60 million revenue, and this will be the highest profitability segment in our company. We have an EBITDA margin of 25% on average, and we think that this is a very good number. Fielmann is around 24%, 23% right now, but Fielmann is more at a discount level, but they make a pretty good job. We have more luxury segment in this industry. To give you a better understanding on what we do there, for example, we acquired Freudenhaus . Maybe it's a little bit strange name, but this is one of the market leaders in Munich. This is their store, for example.
The store is located in the Odeonsplatz in Munich. You can see it's not a typical store. It's really a luxury position, and this store is very famous all over Munich and also in the Bavaria region. This is the kind of positioning we prefer because, as you know, we also have luxury watches, we have luxury clothes and fashion, and now we also want to focus on luxury glasses and luxury eyewear. The average order value, I think it's two times higher than cheap competitors like Mister Spex or whatever. We really focus on a very high customer base here. That is our focus on why we want to ramp up the strategy and why we think that this is such an attractive industry that we establish it as an own segment in our group. What else can we do there?
We just showed you that we have an online platform. We showed you that we have now 30 stores, and we showed you that we want to go to this high segment, to this luxury segment in the eyewear. There's one puzzle piece missing, and this puzzle piece is the ear sector. The margins in the eye sector are 25%, but the margins in the ear sector are even higher. In Germany, Hörgeräte. Hörgeräte is maybe a very old word, but it doesn't matter because we have a growing old population here in Germany and all Western countries, and there's a larger demand and an increasing demand for earring solutions. Our goal the next 12 months is that we want to acquire a company and maybe also an online platform which are covering the ear sector and which will provide us a huge additional profit on that segment.
We also have some negotiations right now with two companies in this field, in the earring field. We think that we will have progress in the next four to five months on this topic. This was also a very important point where we would like to inform you here that we want to grow in this segment, that we want to establish new fields like earring, and I think this is quite a good and profitable decision. Now we move on to the strategic projects. Before we do that, we showed you our financials, we showed you our increased guidance, and we also showed you our perspective on the pharma segment and the optical segment. Before we start, we would like to open this round for some questions. I think we also have a microphone to let open questions here before we start with our strategic projects.
Who would like to start with questions?
We have first questions from the chat if nobody else. You? No? Good. First question is from [Bjoern Fire]. Do you intend to increase the number of shares offered to the public as this would, among other advantages, lead to an increase in the company's stock market value, which could be beneficial for current shareholders?
Thank you for the question. The answer is currently we have 20.5 million shares in the market, and 70% is owned by the Benner Holdings, so my family. Currently, we have no perspective that we want to increase it by a huge amount. What we do is sometimes we increase it by very small amounts because, for example, the seller of Pharmosan Group, the family Mittelbach, they receive, for example, EUR 2 million in shares and the rest in cash. The majority is in cash, but EUR 2 million are in shares. There's always a slight capital increase for these acquisitions. When you divide it, EUR 2 million, it's less, less, less than 1% of the group. These are really small amounts of capital increases.
We have further questions from chat. Next one is from Christian Salas, Cantor Fitzgerald. On optics and hearing, could you elaborate on the capital intensity in this segment? Are you going to acquire brick and mortar stores, or is this going to be an online platform model only? Second, please provide a revenue split in this segment. Is the majority of sales coming from multifocal lenses or sunglasses and contact lenses?
Christian, thank you for this question. A very detailed question. Maybe Bjoern, I think this is a good idea that we split the revenues into the detail and the different products. Why not? In general, we have a segment reporting, and it's always GMV, revenue, and EBITDA. I think this is quite a good idea from Christian Salas that we also integrate that, maybe not in the standard reporting, but on some extra slides. I think it's a good idea. Can you repeat the first question, please?
To buy more stores.
Yes. What we said here is that we want to expand next year. This year, we already have 30 stores acquired, and it was a very good, successful acquisition. Next year, we think that we will acquire, as you can see here, another 25 to 35 stores in the total number next year. We are covered completely with big cities or with relevant cities. Our strategy is not to expand this national storefront anymore. Our intention is after this, we connect local partners because we have so many smaller cities. We have mid-sized cities where we would never buy a local optician, but it's the best way to connect them to our platform. That is our strategic idea. Cover the national stores with, I think, 60 to 70 stores, and the rest is connected to our online platform, and we can work with them locally also.
We have two more questions from Christian. One is for Bjoern. Before that, maybe I ask you. For Björn, the question is, which are the focus areas you are going to tackle in the near term?
Regarding M&A, that is.
Not specified. Christian, maybe you can specify that. Maybe while Christian is specifying, there's another question on sales growth guidance. What does the new midterm guidance imply in terms of organic growth per year?
We intend to keep up the split we currently have, and currently we grow 60% organically, and about 40% is by acquisitions. What does it mean for the future? The question is quite right. So far, you already see this year, in order to reach this split, we have been acquiring 10 companies, and that's pretty much the maximum you can actually integrate in a year. For the future, if you want to grow unorganically at the same rate, that means that the targets need to become slightly bigger. It could be more, but you have the complexity from integrating them all. I would prefer to buy targets that are slightly bigger than they used to be in the past.
Thank you. Christian hasn't specified his question yet, so maybe we get back to that later. We have a few more questions. Next is from [Martin Pelleck]. Will you consider adding more visibility to per platform figures in your financial reports?
What kind of figures?
Financial figures only, he says.
I think we are open. If you have some specific ideas, what kind of figures you prefer, if you could tell us what kind of figures, we can say yes, no, maybe. Without any mentioning what kind of figures, it's a little bit difficult right now.
Maybe that's a good point to follow on this next question. Why don't you give visibility into the M&A details per acquisition, such as historical P&L and price details, paid cash and equity?
Yeah. Basically, what we do is that in our annual report, you see how much we have on goodwill or badwill for each of the acquisitions. What we not do is provide you historical information about these companies because actually, usually we buy family businesses, so they are private-owned businesses, and they don't want that, and they write it in the contract. We always have a confidentiality agreement with them, and I think it's not in their intention. Of course, some data are also public in the German Bundesanzeiger or in other national registers. It's possible, but in general, we do not provide that.
We have two more questions from Nathan. The next one is, how come the non-controlling interest part of the net income is so low if most companies acquired are not fully owned 50.1%?
Can you repeat it?
Yes, of course. How come the non-controlling interest part of the net income is so low if most companies acquired are not fully owned?
Yes. It's true that most companies, we start with 50% or 51%, but it's, I think, a very risk-averse strategy because we get to know these companies in the next two or three years, and if they perform in a good way, we increase our share. We increase it by 30%, 40%, 50%, up to 100%. Usually, after three or four years, we have, in most cases, 100% of the company. When we go to the financials, to answer your question regarding the minority earnings, here you can see the minority earnings in the first half year was EUR 1.6 million. In the total year, we have no real forecast on that, but maybe you should expect around, let's say, EUR 4 million- EUR 5 million in the total year perspective regarding the minorities.
If you take into consideration when we maybe have EUR 50 million -EUR 60 million net profit, I think EUR 4 million -EUR 5 million is quite not such a high number, and it's not so significant in our group.
Next question also from Nathan. Do you strategically target only luxury niches? Is it supposed to add synergies that cross sectors?
Actually, we always look on niches, and when we look on niche sectors, we think that luxury is such a niche sector because we don't want to compete with Amazon. We don't want to compete with Temu or Shein from China. This is a market where you could not win anything. We really try to avoid these commodity markets. Also, food. I mean, everybody's buying food every week to eat and whatever, but we said we don't want to enter the food market because everybody's losing money there. Why should we do that? If everybody in the e-commerce sector for food is losing money, we will not step in. We have some clear perspective on different industries, and yes, we are looking for niches. In the fashion segment and shoe segment, for example, we really want to focus on this luxury segment because this is with better margins.
You have better partners, very selective partners, and we are very happy that we focus on such a niche segment and not on the commodity side for EUR 40, for example.
Next question is from [Noam Shedrid]. Regarding the pharma platform ApoNow, can you clarify the exact business model there? Who is the paying customer? Who makes the initial purchase on the producer's website, like Novartis? Who pays for the product, initiates the purchase, and to whom is it distributed?
Yeah, very good question. Maybe next time I invite our Managing Director, Thomas Engels. He's very used to explain this model because it's really a niche model. Nobody's doing that. I think here you can see a pretty good customer journey. When you are on a manufacturer page, like Ratiopharm or [KripoStart], this is one product which everybody's knowing. [KripoStart], if you have some cold, you get this stuff. Here on the manufacturer page, when the customer wants to buy this product, he clicks on the Warenkorb, and at this moment, he's not making a contract with the manufacturer because the manufacturer is not allowed in Germany to do that. The customer is making a contract usually with a local pharmacy, and the local pharmacy is a contract partner of the customer. What is going to happen? There's a contract. The contract is delivering in an order.
The order is integrated into the system of the local pharmacy, and the local pharmacy says, okay, right now we have time, we bring it to the local customer. If the customer wants, he can also pick it up at the local pharmacy. That is a business model, and who's paying the money? The pharmacy is paying nothing, so it's for free. Pharmacies do not have to pay anything to us. We completely get the money and the revenue from the pharmaceutical manufacturers. As you know, they have good margins, and it's a good partnering model for them because they say we are not allowed to sell anything. Legally, it's not allowed. When we sell now something with this ApoNow system, the local pharmacy gets the order, and they are always now a partner to the local pharmacies and not an enemy.
I think this is a good, attractive way how to combine the local pharmacy with the manufacturer in the e-commerce. I think it's the only possible way how to do that.
Follow-up question from Noam. Also, could you explain on the technical aspect of the integration? Is it using Shopify, a proprietary tag? Does it use TPG Pay?
Yeah. Very simple. All the manufacturers have own front-end solutions. The manufacturers like Ratiopharm and so on, they do not use Shopify or Shopware or Magento or anything like that. They have usually their own web pages, and they are not an online shop, though they have their own solutions. What we do here, we have our own technical solution, our own software, and this software is connected to the front end of the manufacturer. With this software integration, the order comes from the pharmaceutical company to the local pharmacy. That is a software approach, and it's coded. It's delivered by ourselves.
Before we continue with the questions from the chat, any questions here in the audience right now? No? Next question from [Alexander Rihanna]. Thank you for the presentation. How were the pharma acquisitions financed?
Yeah, good questions. Let's have a look on the pharma acquisitions. We have three companies. It's Pharmosan Group, it's Apothekia, and it's Vamida. The most important thing is cash. The most amount of these three acquisitions is just cash payment, and we also have a small number of shares. I think in total, these three acquisitions, it's about more or less EUR 3 million in shares. It's quite a small amount, and the rest is cash. As you know, we tapped the bond, and we can use this part of the tap to invest it into these companies.
Next question is from Sato.
To add this, the closing of these three acquisitions will be by November or December because we have two things. First, we have to get all the legal approvals. Deutsche Kartellbehörden, Austrian Kartellbehörden, they have to approve it. Secondly, we have some definitions in the contract about the closing conditions, so we expect them to close it by December. That means that we also do not have to change our forecast for this year because they only belong for one month into our consolidation, so it's not a huge amount. Sorry for interrupting.
No problem. [Safa Ristska] wants to know 2026 revenue target. Could you please shed some light on what portion of the expected increase is related to M&A effects? From the EUR 140 million increase in the guidance, how much is related to M&A?
Bjoern already mentioned this answer. In general, what Bjoern said is that we have this balanced growth rate this year, and we expect the same organic growth and non-organic growth also by next year. 60% should be organic. This acquisition, I think it is mentioned in the press release, it has a total volume of EUR 130 million. When you take EUR 130 million for the revenue forecast for next year of these three pharmaceutical companies, you can realize how much the additional amount was.
The old guidance was EUR 860 million. You can now add the EUR 130 million. This is how you get close to the billion. The precise answer is in the guidance we give you, the M&A part is zero because we just give you the growth we already know. The EUR 860 million, this is organic growth, and anything else which we do acquire by M&A is not reflected in the guidance numbers. This will come on top.
We have one follow-up question from Safa. Adjusted versus reported EBITDA. Could you please also quantify your expectations for the reported EBITDA based on already completed M&A?
No, because we give no guidance on reported M&A. We only have adjusted M&A as part of our guidance, and we do not provide any guidance on that. Maybe when you calculate it, to the question here, when you calculate it, I think it's not such a big topic because basically, what kind of adjustments do we have? We have EUR 1 million or EUR 2 million for cost or one-time effects. It's not much, and the rest is PPA. In the first half year, we had EUR 9 million or EUR 10 million PPAs.
Close to EUR 10 million.
Close to EUR 10 million, yeah. Also, in the second half year, maybe we can expect the same number. I don't know. It's not finished the half year, so we do not know that, but maybe this could be a good estimation to make the calculation between EBITDA reported and EBITDA adjusted.
Thank you, Mr. Benner. My name is Andrew Teller from AMF Capital. I think I'm addressing the elephant in the room. You haven't mentioned anything regarding artificial intelligence thus far. I'm assuming that's the next step. My question is regarding the two aspects of lowering the costs in HR and online marketing. I'm assuming that's due to artificial intelligence to a certain extent. Can you give us a little bit of an outlook here? What is The Platform Group doing? I know that CEOs are careful in making statements. I think we've learned from Duolingo, but if you can give us a little bit of insights how you guys are making use of AI. Thank you.
This is the right question because this is coming to our next part in 10 or 5 minutes, I don't know. We will directly talk about the AI question there. To be honest, I love this elephant because this brings us a lot of great advantages. It could bring us a lot of cost efficiencies, and also we can increase our automations for marketing, for accounting, whatever. It's really a great advantage. To be honest, I also make mistakes, and last year, my perspective was AI is nice. ChatGPT, I'm using it, but I don't think that the impact is so much. That was my opinion last year. We traveled with our 50 Managing Directors to the United States, to Palo Alto in Silicon Valley, by the spring, so by May or April this year.
We have seen how small companies, how mid-sized companies, and how Google and Amazon are using AI in their daily business and how they integrate AI to really local, and in the hierarchy of a company, the lowest people. That was very impressive for me. This was for me eye-opening, and I think also for our leaders here. We said we have to change something. I have to get away from my former perspective on AI, and we have to implement it into our company. We did it, I think, in a very hard and fast way. We will come to that later. Again, last year I was wrong with my position. I thought this is just a hype, and it's going away, but we changed this mind.
Next question from [Imrana]. What is the expected EBITDA margin in the pharma sector companies? Are all companies profitable?
Yes. In our press release, we announced that it will be in the range of TPG margin, so it will be around 7% to 8%. This is the answer.
Thank you. [Novak Schmidt] wants to know, can you please elaborate on the amount and the timing of liabilities from outstanding put options for the minority shares?
Actually, this value changes every month, so we have no clear number on that. All we can do is that we make for a specific date, like end of December. We always make a cut, and our auditor is consolidating what kind of put options are open and what amount we have to pay at this time moment. In general, there's no general number where we say it's EUR 20 million, it's EUR 30 million. This is not existing because if a company is performing well, this is going higher. If a company is performing bad, this number is decreasing by a lot. This also happened last year where we had this changing of numbers. In general, this is not such a high number. We do not talk about EUR 40 million or EUR 30 million. It's much below. It's really something.
I don't have a specific number, but I would estimate it something between EUR 10 million and EUR 20 million for the next four years. It's affordable for us.
Yeah. One addition would be, of course, if we negotiate an M&A contract, we always make sure we have our call option, but of course, we try to avoid to put in a put option. Not all contracts do have a put option.
Thank you. We have another follow-up question from [Safa Ristka]. Above average margin. Looking at your figures, the margins across the business appear notably strong. For example, profitability in the pharma sector is shown to be above typical levels in the sector. Optical margins are reported as strongly positive compared to many peers, and overall group margins are presented as higher than broader industry benchmarks. Could you provide some perspective on the economic or structural factors that might be supporting these exceptionally strong margins?
I think it's a question of the perspective. If you talk with somebody in the pharmaceutical industry, he's laughing about us and says, come on, you with your 8% margins, so it's bullshit. If you talk with somebody from, I don't know, Zalando, they maybe would say, yeah, it's a good margin. This is what you do there. It's really a question of the perspective. Yes, you are right. Compared to our peers, we have better margins, but you will always find an exception. For example, there is a company which is called Allegro. Allegro is an Eastern European marketplace. It's stock listed, and they have wonderful margins, and they make a really good job, but nobody's knowing them here in Germany. It's not popular or anything known here, and they have margins above 20%.
It's really a question on how you do your business, on how you make your capital structure, and how you have your costs managed. I think we are a very low-cost focused company. We do not have too much headcount in our headquarters, and we always try to save costs. This is our DNA, and I think it's a good DNA to save costs and not to spend too much time and money into any adventure or something or to our headquarter because we think every person who is not directly operational, we have to keep this number very low. I think it's part of our DNA. Would you say something else? I don't know.
You explained it actually when we were talking about the optics sector, and we try always, like with fashionette, for the higher end because the partner has to be able to earn our take rate. This is why we always aim for the high margin business, and we don't do the low margin business. This should explain it.
Yeah. For example, in the furniture sector, Bjoern mentioned it in his slides. In the furniture sector, we have a company which is called MöbelFirst . The average price of each order, it's EUR 4,500. The average person in Frankfurt is not spending so much money on a sofa. You see, this is a very high segment where you only have wealthy people, architects, doctors, entrepreneurs, whatever. When you have such high order values, you can get better margins. We don't want to compete in the low sector.
We have a follow-up question from [Noam]. He asks if you could elaborate on possible allegations of financial engineering around the company's results. What stands behind them, and how does the company intend to prove them false and unlock shareholder value?
I don't understand. Can you repeat the first half of that?
Yes, of course. He says, could you address the concerns regarding possible allegations of financial engineering around the company's results? What stands behind them, and how does the company intend to prove them false and unlock shareholder value?
To be honest, I don't understand. We have no allegations on that.
[Martin] provided more insights into his previous question regarding the previous question about per platform financial figures. Could you provide revenue and operational profit to increase visibility of post-acquisition results?
Yes. Yes, this is a very good idea. What we do is that every year we make one Capital Markets Day, and we always provide you some case studies in this Capital Markets Day. At the last Capital Markets Day, we had every time two or three case studies where we show you how was the revenue, how was the profit before the acquisition, and how it was developing after the acquisition. That is what we're also going to do here, that we will provide you case studies where you can see directly what was the success or maybe not the success, and what was going good, what was going wrong. I think that's the best way.
In the segment report, I think it's not possible because each segment has a lot of companies included, and it's not possible to say, okay, this was before and after acquisition because mathematically it's not working. On the case study basis, absolutely, I think it's a very good idea.
There's another question from [Noam]. I believe it's regarding the structural change from AG to SE. He asks if you could provide some more insight, what the intention was behind it, what the benefits are, and how minority shareholders could be affected.
Yes. Actually, we had some Q&A calls on that, so I don't want to repeat everything here again. If the question is being answered in the best way, maybe you go on our page. We have some explanations about this change in the legal structure, and maybe you just want to recommend to read that. If you want a direct call on that, because it's a big topic, we could talk about that for one or two hours. Maybe it's too big a topic for today, but we had two Q&A sessions with people on that, and we also had our AGM on that topic already.
Thank you, Dominik. Right now, no further questions from the chat. Any other questions here in the audience? Yeah.
Thomas Stevens from [ Benguem]. Y ou have a lot of affiliations. You service them with service from the holding. Can you explain the financial model, how you support those companies?
Yeah. Let's go back to this. In our group, we have 113 people currently in the operating divisions and 26 people in our central divisions. Usually, we have one slide which is explaining in much more detail on what these people do. Basically, in the central division, we have the HR department and the payroll department. We have our people from finance there, accounting, and also our legal and lawyers team who a re working for our subsidiaries.
On the left side, on the operation divisions, we have software, we have marketing, we have business intelligence, we have the AI team, and we also have our video and public affairs team, and they are working for all our subsidiaries. When you look a little bit more on this slide here, you see the most two important things are marketing and software. The most people in the operational division make the marketing for all our portfolio companies, and the second big thing is the software. They deliver new software releases for our subsidiaries, and they make sure that they have brokers in their development, in the front end, in the back end, and that they can work with that.
This is quite important for the companies, and when we enter a company, we usually say we don't need your external provider for software, we don't need your internal accountant, we don't need your one person for HR, it's not necessary anymore. We can realize this cost effect, so we run down the cost for these things because we already have it in our central holding, and this is one of the biggest cost effects which we can provide when we come into a company and change the P&L to more profitability. Of course, in Germany you have to charge some amounts to the holding because otherwise the finance and the financial authorities would have a problem with you, but maybe you come from the question like other finance holdings do that, they charge a lot of management fees and so on, and they get millions into their P&L.
In our company, it's not working like that. Our average portfolio company pays EUR 7,000 per month. They pay on average. We have some bigger companies with EUR 20,000, for example, and small companies with EUR 2,000, for example. This is the range where usually the portfolio companies pay their intercompany payments to our holding, and we do not make profits with that. It's not the intention to get money from them and to get huge balance accounts in our holding. No, it's really the intention. We give a good service for them, we run down their costs, and we cover the most of their value chain with our people here, and this is the intention. We only do it because of the German finance arm that they are not having a problem with us in this case.
If you look at it and if you see that, for example, the marketing costs are less than 6%, then you probably know that this is a very good value for the industry. Usually you would expect to see numbers somewhere between 10% and 15% marketing spend. There are other e-commerce companies that might still use a print catalog. If you do that, you're probably above 20%. The 6% we have, there you can see it's centralized and it works very effectively and very efficient at the same time.
That already explains the outperformance of the markets.
You can make the same assumption for the IT cost. I'll just give you another example. We acquire a company, and often we use Shopify shops, and we have Frederic, how many do we have?
Some.
A lot the other way around, and they just have one. It's just one call with Shopify, and we ask, "Hey, please add the shop of this company to our frame agreement," and then we pay a fraction for it, what the single company used to pay before. This is valid for many other softwares we use as well.
The question is a question of your management style. Our management style was always to keep costs down. When you say, "I want to keep costs down," you cannot double your revenue. It's not working. I don't want to mention any company in Berlin, but they had always the other approach. They said, "Oh, we want to achieve EUR 1 billion," for example. When we want to achieve EUR 1 billion, we have to just spend 20% or 30% on marketing, and then it will work. We make a lot of TV commercials and so on, and when we spend 30%, we will directly go to EUR 1 billion. This is just mathematical, logical. We had this different opinion. We said, "No, we are a family business. We only can spend what we earn, not otherwise."
We do not have investors. We never had an IPO cash out or something like that. We always had to work with the money which we earn, and this is a consequence of that. We said we want to invest the lowest amount for marketing, which is possible, and let's see how much revenue we can get with that. That is our approach. Very basic, very ground approach. Not this idea of just want to get big and let's see how it works. It's a kind of management style.
Thank you, Dominik. No further questions.
Okay, I would hand over to you. Thank you. Before we start with that, I was asked by one of the persons here to explain a little bit on how much we spend for M&A currently. In our cash flow statement, you know how much we spend, and Bjoern also presented it to you. Right now, the valuations are still with three to five times EBITDA. It did not change, also not in the second half year, because we also get a lot of questions about these M&A activities, how much you pay, what is the valuation basis, and so on. For the three pharma acquisitions, it was on that level. There was no change, and we also worked with these numbers. We directly come to your presentation before we make the outlook, but I don't know where your presentation is. That's a good question. Here we go. Perfect.
Yeah, hi. Welcome from my side as well. With me on the stage today is Christian von Hammel-Bonten. He's our Lead Director for the payment part. We hired him. He's an absolute industry expert. Some of you might know him already. He supports us here with TPG Pay and all this stuff that is going on with the payment stuff. Before we go to TPG Pay, I just make a little wrap-up from our last capital markets day, where we already pronounced or I informed you that we will invest a lot in our internal TPG One solution. One amazing part of it is the TPG Connector and also AI enrichment in the TPG One Cloud. Part of this has already been finished. The most important stuff is the TPG One Connector. What is meant by this?
The Connector is for our retailers, a very innovative solution where they just can connect with very, very less amounts to our system. For example, when the customer or the retailer has a Shopware shop or a Shopify shop, they can just enter the ID of the shop and the rest is our system doing. They directly know this kind of information, what is coming from the shops, the feeds, the kind of products, the categories, they can directly automatically map these kind of products for them. This saves them a lot of time for onboarding to our solutions and to get onboard of The Platform Group. One big part is AI in the moment. Not in the moment, it's both in the future. What Dominik said already at the beginning, we were a little skeptical, but we have now our own AI team.
In the same time to this meeting at the moment, our teams are getting trained to AI, different kind of AI solutions. It's a very, very fine moment because it's really happening at the same time. All the employees of The Platform Group get trainings every Friday, not the bank holidays, or it's Tuesday or Thursday today, but they get trainings on different kind of topics they might need to solve in the daily business or, for example, for marketing, how to enrich images, for example, or how to automate processes like standard processes with customer service, how to speed up their work. We have trainings every Friday to different kind of topics, for example, N8N, sorry, as one of the automation processes or how to use AI for testing, for example, for software testing and stuff. We also integrate AI in our AI category mapping.
This means when we map the data from our customers, they have, for example, a specific category, so they have what kind of categories we don't have or we might have. We directly recognize this can be this category. We have a matching of these categories, for example, by 99%. We know this is very, very sure this correct category, what is going to our category tree. After this kind of mapping, you have an outcome of 1% or 2% that you manually need to map. In the past, all the categories needed to map to our categories, which is a long process until the customer or the retailer could sell on our processes. Also, for product data, we sometimes just get a fraction of data, just a title or an image or an EIN. Our tools will enrich this kind of data.
Out of an image, our tools can see, hey, is this a pullover, is this wool, is this synthetic or whatever kind of fabric this might be. Whenever the AI is not 100% sure, they mark it, say, hey, double check it, or when they're sure, they're just releasing it. The last thing is the TPG One Cloud. The TPG One Cloud is a high-performance cloud, which is built for the future already, so that any kind of products we will receive or from our crowd groups. At the moment, we have many, many million products in our group, and we have a centralized PIM system where we can enrich and work with all this data.
Normally, you have millions of different kinds of PIM systems, which is making a lot of work, but we now have a centralized system where we can all enrich these and work with this data. On top, we have a pricing layer with a repricer, so we can check the pricing on the market, what is the best price here. We can define rules, say, for example, always go 5% lower as the best retail price in the market or standard price, so we can define this per product or per specific category. This is a small recap from our TPG One development part at the moment. Now we come to TPG Pay. Last time we promoted TPG Pay to you. This is our own buy-now-pay-later solution. At the moment, we have the internal release and we are waiting for an approval for Shopify.
As we said, we want to go the difficult way first. Shopify is the trickiest company to get an own payment app in. Shopify doesn't like to have other payment providers on their own. It's very hard to get the payment application in. At the moment, we are already in our internal shop, so we could use it already internally. We're just waiting for the final approval. It's in the last steps of the approval process. Everything was fine so far. Some parts of the AI need to be updated after the approval. We added the approval process with a very basic AI. Don't be surprised what you see in a minute. As soon as the approval is there, we can update the AI in the visual, what you design, what you can see.
It can go to the Shopify official marketplace and can be used as beginning in our shops and in the future in other shops. We will show you now a live video from Office 24, where the Shopify app of TPG Pay is already integrated for our own shops. You can just directly buy a product, you select the size, add it to the cart, and as soon as you enter the checkout, you can select just a normal payment procedure. You can select here TPG Pay. You enter your data. As you see, it's a very fast one-check checkout. Here you have entered the TPG Pay app, and then you go to review the order and to the payment page. What is here happening? We show you in a minute. Now you can select on invoice or on instruments.
With just one click and no paperwork, you're finished and ready to go. That's it. Now you have done the sale with Shopify and TPG Pay. Now we come to the timeline of what we have done already. We have the analyze phase. We have built our TPG Payment Cloud. In this Payment Cloud, all the risk checks run, all the communications with the front-end, back-end, the API calls run. We have a very innovative, also AI-driven risk solution we will show you in a minute. We have finished our Shopify Payment app. We are waiting for the final approval. What is coming next is we can integrate in this Payment Cloud more payment solutions, for example. We are now open to integrate other payment solutions. We can also integrate credit card or other payment solutions we want to have.
We made it very, very flexible so that we are super flexible for any other thing that is coming. What is also up for next year or for the next years is our own TPG Pay account. This means that customers have a central account where they can see, hey, I bought something on Hood.de or something on fashionette or Avocados tore. They can see all their orders in one account. They can also use it as an overview, but also to pay their invoices. Now we come to the risk check part that we will hand over to Christian.
Yeah, thank you, Christoph. Yeah, so when we speak about payment, we always have to speak about risk because it's most important, especially when it comes to buy-now-pay-later. Generally speaking, when we talk about risk, we need two different things to prevent fraud, to manage the risk, also the payment default risk, of course, and buy-now-pay-later. There are two things. One is technology and the other one is data. Technology means the core central part managing risk is typically a rule-based engine where we also then apply, of course, AI, not the generic AI, but machine learning because you always need to improve rules because fraud patterns, risk patterns change over time. This is not sufficient. The biggest risk in buy-now-pay-later is not the credit worthiness of the buyer. This is typically manageable. The most risky part is fraud.
You need to identify the fraudulent behavior and the fraudsters which try to, of course, use the solution without the intent, of course, to pay. Meaning what we do is we use a lot of data. We have device identification. Then you take all the data of the customer, the purchase history, the order data, what is the customer buying because it's a huge difference. Then you add and aggregate more data from external sources. For example, if you look at a device, you typically check with other databases, publicly available or special service providers, if this device has already been used in other fraudulent activities or if it's, I don't know, popped up at a certain timeframe in various different e-commerce stores.
Meaning you use all the data you can get, run this through the rule engine to finally, in the end, decide if you approve the customer, the purchase, or you reject the purchase. What looks easy and is done in milliseconds requires a lot of hard work in the background. This is probably one of the most fascinating things within payments. It always looks easy for the buyer, but the complexity is always in the background. This, of course, was a little bit of a deep dive into the machine room. When we go up into the, let's say, more bird's eye view, what are we doing in this TPG Pay? What is the reason behind developing this? Meaning we have seen we have various different shops and payment processes running.
What in the end, of course, makes sense is to have a scalable central platform which we leverage for the payment processing. Offer some form of standard process, and this is the basis. As Christoph already mentioned, most interesting, of course, is the TPG account, meaning getting consumers across all the different shops, all the different stores, offering them an account where they can see more or less everything which they have purchased regardless of what store they have purchased at. This also means that we centralize the data, which is very important then again for the risk management part. It, of course, also offers further services for the consumers and the buyers. This is where we can achieve the customer network effect. Of course, marketing people love this as well, but I'm a payment guy, not a marketing person.
Clearly, if we have the central account, you can play, of course, with the users. This is then up to the marketing department. Last but not least, of course, if we have this data, consolidate the payment processes, build up the solution. We have the key intent to leverage our capabilities, then, of course, to third parties, meaning adding additional payment methods on the one side, but more important, providing this capability mid to long term also to other shops that are in the market, not only within the TPG Group . What do we expect from this? Clearly, different benefits out of this. One of the most important topics when it comes to e-commerce is always conversion, and this is what payment people typically get told every single day from e-commerce shops. Conversion is key.
This is also one of the reasons why buy-now-pay-later is so important in the German market because it's in very different industries the most popular payment method. It gives users a lot of convenience. You can order a lot of products, try them before you pay. Clearly, you have seen a lot of companies in the market in the payment industry growing with this model very strongly in the last 10 years. This is what we expect or hope to achieve. Clearly, also reduce operational costs by centralizing payment processing via one central platform, central contracts to achieve, of course, economies of scale, as simple as this. It's like when we integrate companies, we save on licenses, on software licenses, and other things. The same here, of course, holds true. We save money on payment processing. This is more the operational view on that.
Of course, from a strategic perspective for us, it's also important that we keep the data in our ecosystem. If we provide the data and all the consumers always to third parties, we are sometimes a little bit like a cheap acquisition channel for those partners. They leverage the user data. We are the acquisition channel to give them buyers. That's not what we want. We want to serve our customers directly. This is where having an own buy-now-pay-later and having an own TPG account becomes very important from a strategic perspective. Last but not least, you can imagine, like what Christoph mentioned with TPG One and the connectors, if we get new shops within the TPG Group, we want to be ready and give them the solution right away so that they can immediately benefit from the advantages, higher conversion, and lower operational costs.
I hope that explains a little bit why we do this, what we do, and thank you.
Thanks. Thanks a lot. I will now hand over to Frederic for the M&A part.
Thanks a lot. I would also like to catch up real quick with the AI part, as Christoph mentioned, because AI is not only a buzzword. We say no to this because anywhere, if we jump into any presentation or if we take a look at other companies, they're using AI so much more, especially in presentations. We would like to say, okay, we would like to use AI hands-on in our company and how we can use it. We don't want to present it to anywhere. As we just saw it, we need to also present it because we just need to take a look at it, how we are able to set it up.
As Dominik , first of all, mentioned, we had a little trip to the United States and we tried to understand, okay, how we can use AI in our internal processes, how we can enrich processes, and also we can decrease the manual workload in our teams. First of all, before we start any new project, especially for AI, there are many things, many visions about it. I think we just need to take a look in the daily work where we can decrease the workload. The main part was on our side, as also Christoph mentioned, mappings. We start to map categories. We need to map colors. We need to decide, okay, is the picture what we are receiving from the partner, even a bag or maybe a bike?
This is something what we take a look at it and said, okay, this is the first way and the first steps we need to take on and take a look at it. This is the reason why we started with product data and catalog management. Right now, we also implemented here ChatGPT and multiple other AIs directly via API just to make sure that the manual workload is getting decreased because also if we are integrating new partners, but also new subsidiaries into the group, we need to be more efficient. This is the way how we are doing this. I would like to share afterwards some examples how this could look like.
If we just jump in also to the customer service, especially the first level support tickets, where's my package, where's my refund, when I will receive also the package, or I'm not home today, maybe we can postpone it once a week or whatever. Those are some tickets what is taking so much time and effort in the menu day. We would like to decrease it. This was the first step where we also take a look at it. Not only in customer service, not only at catalog and product management, logistics and returns is the same way. Because if we have the data of the customer and we understand how they're buying and also take a look at our products, maybe if you compare it also to Zalando, often customers are buying multiple sizes just to decide which size fits the best.
This is something where we also can make sure if we're analyzing the data, then we can also say, okay, maybe this shoe, this Italian size, it should be maybe a bit smaller than German size. Those are preferences where we are able to also show everybody in the product detail pages and make a little preferred buy-in just to make a decision, okay, which size should I buy? That way I don't buy like three sizes, return two of them, and decide for just one. The same on pricing and promotions. On our end, we just have analytics between all the different countries, which sizes we have for which articles. It starts from shoes, ends up to also watches at CHRONEXT. We are analyzing, okay, how is the watch market going? Is it decreasing or increasing?
Maybe there are also different key points where we need to take a look at it. Is maybe someone like selling their boutique or whatever? Those are some topics where we need to take a look at it because this depends also on the pricing where we're setting up for our articles. If we would like to sell in the U.S., we need to double the price just to make sure that we cover our customs, but also to be competitive, we need to analyze the market. This takes a lot of effort, as you maybe know, on manual work. This is something where we just have as a support also AI. Always, we're using AI in a hybrid model. We don't rely on AI.
We also have every time a human in a hybrid model just to make sure that also the quality stays the same where we like to expect. Just to jump into one topic for AI photo creation, we need to have a direct photo of the product, but then we can do whatever we want, basically. As you maybe know, Nano Banana is someone, maybe a key for this. They just launched multiple topics that you are able to take the article. You can just place it anywhere. If you would like to switch to summer season, all right, we just set up the scenery, maybe a beautiful margarita or whatever, and then you can just place it back next by, and then you can just start the marketing for this.
All, as I just mentioned, also here, AI is a part of it, but also we need the human work. We still have the photo creation team, photography, because we just need to have perfect photos of the product. Otherwise, we're not able to market correctly. The next step is AI tagging. This is the part I mentioned before because sometimes we have retailers sending us, yeah, sometimes crap content. We have a category that stands maybe, all right, as a bag. All right, a bag could be anywhere. It could be a weekender, it could be a clutch bag, whatever. There are multiple decisions and also attributes we need to list it on multiple marketplaces. Then AI tagging comes in. What does AI tagging do? It takes a look at the product picture and analyzes everything.
It starts from shoes, pants, jacket, ends up to the car in the background, but also the palms at the beach. This is something we need to structurize. The human part comes in and we need to structurize and also develop the structured request. This is called what we are doing here. If we connect an AI, we need to structure the request because we don't want to analyze the background. We want to analyze the product that stands before and also decide on how much detail we want to analyze it. First of all, as you can just see it here, we have so much information in this photo and the AI doesn't know what we would like to see and also receive in our product data feed. Then we start the focus. All right, we would like to have a shoe, but what is this shoe?
Is this a sneaker? Is it maybe bicolor or whatever? Those are some topics where we already integrate on our end because if a customer, or especially on our end, a partner is joining us, boutique retailer, they're exporting us the article data. We just need to analyze it. We need to make sure, okay, is it a bag and what is a bag? Otherwise, we're not able to list it on our internal marketplaces, but also we are not able to list it on external marketplaces. If we're coming to the next topic for AI, what we are right now in the second phase, first of all, I will just give a little ramp up what the different phases are. In the first phase, we would like, or what we already have here, we already decreased the workload. The second phase is how we can also be more autonomous.
The third phase is visionary, so what we can maybe replace in total in the next two years. Site and search navigation. What does it mean? I'm as a customer, if I'm joining a website, I'm looking for maybe at fashionette, I'm looking for a different article. What article I'm looking for? Maybe I would like to join a wedding. All right, wedding, and I'm a man, I would like to take a look maybe at the suit or I maybe need shoes or I need next time a cool watch just to make sure that I'm also pretty good looking, not only on my body but also maybe on my wrist for the wedding. This is something the search requests on websites, they will be more normally speaking. I would not look for watch, maybe I look for, as I just mentioned, for wedding, but also maybe in sizes.
I would just take a look at the sizes. I would like to have, okay, XXL I need, and then I could just receive everything I need for the sizes, starting from suit, ends up with a shirt or whatever. This will be the first part. The recommendations, especially what I'm looking for, are getting better, and I'm analyzing the customer who is looking for which article on our website. Cross-sell and recommendations, especially on product detail pages, there's a bit hard to also make sure, okay, how we can increase the basket of the end customer. If you already buy the product, maybe shoe, how I can make sure that he also buys socks, how maybe I can make sure that he buys a duffel bag for this again, just to make sure that he's also carrying the shoes.
We are able to also here take AI directly into the integration and make sure that we are doing the right recommendations to the end customer and also to increase the basket value, but also the amount of articles what he's buying. Next part, CRM and e-mail marketing. Also here, different topic, but at the end, the same content creation is supporting us in any way. AI is taking over also to analyze the customer, but also to prevent what the customer is looking for, and especially here, which content he needs to be emotionally attracted. Because everybody knows in marketing, you need to have an emotion for the article, and you need to understand, okay, if I'm buying this article, my emotions are maybe a warm feeling or a happy feeling, or I'm feeling more luxurious.
Those are the topics where we try to prevent, not to prevent, we try to predict, just to make sure what the customer is feeling for this product. In this case, we need to generate also the content for this. The AI is supporting us here quite well, making sure that we have the emotional attraction also for the end customer, that he's also here buying the product in total. Last but not least, for landing page and campaign creation, our total team in the shared service center of TPG and also for the support of subsidiaries is already quite big. Especially in the dynamic way we are buying companies, we need to make sure to have the same quality for each of those subsidiaries. One big part is also quite important. The subsidiaries are in a different size.
They come from small and go to big, and it depends on sometimes there are maybe eight coworkers and they end up maybe a few hundred. The more detail we need to jump in with the marketing team, the more support we need. This is also, as I just mentioned at first place, that we need to decrease the manual workload. Landing pages and campaign creation are also supported by us internally in multiple ways to make sure that we are setting up even faster the campaigns and making sure that every subsidiary of our site receives the support we love to provide. What is the main goal from our sides? We would like to go away from the everyday manual decision-making and go to an anonymous data-driven commerce infrastructure. This is the main idea and the main goal we are looking for and driving for every day.
As also Christoph Wilhelmi mentioned, today we have our AI learning session for every coworker. We try not to improve it also on the management level. We try to improve it directly from the bottom up because, especially here, every coworker in our company is supporting us in any way. We just need to make sure to have knowledge transfer not only in a very small circle, but in the biggest circle we can maybe think about all over our company. What I already mentioned, not only AI but also the coworker behind, so the human, is creating in TPG a shared service center. This shared service center needs to be a performance engine.
This performance engine needs to accelerate the business on the one hand, but also increase every quality aspect we are thinking about. It starts from maybe logistic contracts, ends up to product content, maybe a shop redesign because it's not so fresh looking anymore, and the modern design needs to be definitely redesigned. This is something where we started to set up different shared service center dedicated teams just to make sure to also develop those parts because it takes time. Every time we have a new company incoming, we need to decide, okay, what projects we would like to set up. Is it the marketplace project? The marketplace project is not right now implemented in this company, so we need to connect our B2B portal, our ERP system, whatever. Is the marketing not good enough? We need to increase, especially here, marketing traffic, whatever.
Do we spend too much on marketing, whatever? These are the different topics we need to decide for each of our subsidiaries. Our idea was, okay, we need to structurize it because in the last few years, we increased our amount of buyings, especially here in M&A, quite a lot, and TPG is getting bigger and bigger. We need to structurize also here our internal departments to make, okay, we have ones for marketing, legal lawyer, we have especially a marketplace developments, but also on a different level to scale it up with the data intelligence shared across all the brands.
The internal HR department on our end, just to make sure to have also knowledge transfer, so not only in the operational way we would like to increase the amount of revenue we're doing, but also to share the knowledge we have in our company with everybody in our subsidiaries. This is my last slide over here. Technology development, already mentioned, 60 developers across backend and frontend, which is supporting us, especially for TPG One Cloud, Connector, and cross-listing across all our subsidiaries. If I'm jumping to the last point, commercial procurement, this is something we started two years ago.
We requested multiple carriers, we collected every data of our subsidiaries and making sure that we have also here at The Platform Group AG on a group level contracts and that we are collecting also here every data to decrease the cost, starting from carrier costs and ends up to also licenses and PSPs or whatever. All right, just a very short ending, as just expected. Thank you. Thank you very much. Now we are open for questions. Maybe you also come up on the stage and answer the questions regarding AI , regarding TPG Pay, and our software development. You will start with the digital questions, Sven.
I think we had a lot of questions from the chat before, so maybe we give the audience a chance. Any questions in the audience? Nope, the first question from the chat is from Christian Sales. Question, no, that was the previous one, regarding TPG Pay and cross-selling. How many of your total customers are using TPG Pay and how many buy at least two TPG platforms?
We just started now. We developed this TPG Pay and we started by this winter internally for our platforms, and next year for external partners. I don't know if we have an estimation on that, but what would you say?
It's tricky to say. First, we need to start really, and then we can make, after the first, I would say, three months, we can give figures.
Let's talk about it in three or four months.
I think this also tackled the follow-up question, which was about the indication on what the adjusted EBITDA impact from TPG Pay would be for this year.
Nothing.
Nothing, so no further questions from the chat right now.
Actually, in the last Capital Markets Day this year, we mentioned and explained in a, I think, in a good, what's this? Vortrag.
Presentation.
Presentation, our timeline for TPG Pay, and we already announced at this moment that we will be live by winter this year, so October, November, we will be live for our internal shops. Next year, we will open it for external partners, for external online shops. I think we are quite in our timeline and it will have an impact next year, definitely. We have no estimation on the amount, we have no estimation on the revenue, but it will have an impact. We can be quite optimistic that it will be a good impact.
Thank you. We have no further questions in the chat. Any questions here in the audience?
Yeah, you're fine.
Klaus Schinkel, Edison Group. Question on your international expansion. Do we have certain markets or industry in mind already, and how will you expand this? Is this 100% acquisitions?
Thank you for this. Our market, which we think is the most attractive one for e-commerce and software, is the United States. We are not there so far. It's a long journey from not being there to cover this market someday. Internally, we prepared some steps and measures how to enter this market and M&A will be one of these steps. Next year, I think we can announce some activities in the United States, but on a small number and on a very small level because we don't want to risk money there. We have to make sure that we do enter a market without losing money. This is not so easy sometimes. We are preparing this strategy and next year we will execute it. The next question was, is M&A relevant regarding this international expansion?
Yes, it is relevant and it's the best way how to enter it. Your next question was about the industry. Which industry is the most relevant one? I think there are three industries attractive for this. The first one is machine trade. As you know, we have already the market leader for machine transaction. It's called Gindumac and they are already active in the United States, but also active in a lot of other countries in the world. This is the best industry for that, for international expansion. The second industry is luxury because the customers in the United States and also in other Asian countries, they also buy Armani, Gucci, and so on, though they have very similar favorites there. The third industry, and I think this is also attractive for us, is pharmaceutical business.
The problem is a little bit of regulation because when we have this regulation in each country, it's different for pharmaceutical goods and it's not easy to cover that. We do not have an estimation on that, but we think this is a certain industry where we would expand in an international way. Next question.
Next question is from a chat, [Norbert Schmidt]. TPG One Cloud looks like the central node for future success. Did you do any tech due diligence for assuring the scalability of the platform? What was the outcome?
Yes, of course. We make analysis and researches how to scale it, and we are here also in contact, especially with colleagues from the AWS Solutions teams who are directly consulting here. We have really industry experts who are experienced with scaling backbones to very high standards. Christian, maybe you explain a little bit more about your background, for what kind of companies you work for and why you decided to support us with this project.
Yeah, happy to do so. Thank you, Dominik. In fact, I'm working in the online payment industry since probably 25 years. When the first e-commerce shop started, I built the first payment solution. After that, I joined various different companies. My last fixed-term employment was as a Managing Director for PayDirect, AeroPay. I think quite some experience in developing, let's say, payment solutions and building them up and scaling them. Clearly, if we look at scaling, as Christoph already mentioned, we choose the right software stack to make sure that what we develop can scale, making sure we are flexible in the architecture because payment is always a network business. You connect with a lot of various different entities and like I explained with risk management, you integrate various different credit scoring agencies, other technical providers, so many. It's all about connecting.
This is most important when you look at architectures that you have this flexibility and be able to collect everything, connect everything which is more or less around. That doesn't mean you do this, but you should be able to do this in a very fast manner. Just speaking, payment and integration of a payment option in the past when I started was about six months technical work. Nowadays, it's typically two to three weeks. Unfortunately, contract negotiations still take six months. The technology has developed very fast. We are much more speedy today than we have been, I don't know, 20 years ago.
Any further questions? All right, thank you very much for your attendance. Thank you very much for your good questions. I hope you get a better understanding on our strategy and on our strategic goals for next year. Next year, it will be a good year. That's the reason why we increased our guidance for next year. We are quite optimistic internally. I think we have some good decisions made in the last 12 months. We are on a good.