Hello everyone, and welcome to Mytheresa Investor Call. Please note that everyone is joined on mute to avoid any background noise. You will have the opportunity to ask questions to our speakers later during the Q&A session. If you'd like to ask a question by that time, please press star one on your telephone keypad. Thank you. I'd now like to turn the call over to Michael Kliger, CEO. Please go ahead.
Thank you, operator, and welcome everyone to this investor conference in respect, of course, to the announcement that we as Mytheresa made this morning. We will provide with our short presentation an overview of the transaction and particularly the strategic benefits that we will derive from it, and then we'll open it up to your questions. Let me start by highlighting the four key elements of what this allows us to do. Number one, we believe it's a great market opportunity to now actively participate in the consolidation of the industry. We have established ourselves as a leader. Our recent results have been strong, and we continue to see fantastic growth opportunities in digital luxury. Number two, we have a clear vision. What we want to do with the amazing assets within the YNAP.
Together, we create a large-scale digital online platform based on the combined GMV of the last twelve months of EUR 3 billion. On the luxury side, NET-A-PORTER, MR PORTER and Mytheresa allow us to go after the market with highly differentiated and complementary offerings based on brand identities that are distinctive and assortments, marketing, and customer touchpoints, but we will leverage a joint infrastructure, particularly on Mytheresa's technology platform. The off-price business of YOOX, NET-A-PORTER, and The Outnet. We clearly see the need to separate it from luxury. We see the complexity of the infrastructure at YNAP as one of the root causes of the issues, and as we have a platform to bring on NET-A-PORTER and MR PORTER, there is a unique opportunity to separate off-price, give it a much more leaner operating model that will drive growth and profitability.
The third highlight is that YOOX NET-A-PORTER represents significant value and highly valuable assets of brands, equity, customer base, brand loyalty. These have been the pioneers in our digital sector, and with EUR 2 billion GMV on the NET-A-PORTER and MR PORTER side, EUR 900 million GMV on YOOX, significant sales, and the last key message is, of course, our ability that we have demonstrated for our own business in terms of operational excellence and management of large-scale projects, to bring that to the business of YOOX NET-A-PORTER, so these are the four, we believe, highly valuable components of this transaction. The transaction itself was set out. We acquire 100% of YOOX NET-A-PORTER. Richemont sells us the business with EUR 555 million in cash and no financial debt. In exchange, Richemont receives 33% of Mytheresa's fully diluted share capital as of closing.
In terms of governance, Richemont will have the right to nominate a member to the supervisory board. But Richemont will be a financial shareholder. There are no operational ties included with this deal. Richemont will have one seat out of eight, and it's a financial investment for Richemont. The deal is, of course, pending customary closing conditions and regulatory approvals. We expect regulatory approvals to be available as of the first half of 2025. The market opportunity is significant in digital retail. There has been turmoil, there has been challenges over the last eighteen months, but it has not changed that most analysts, most market researchers predict a doubling of digital luxury until 2030. So there is a huge opportunity to now create a player that can really leverage this huge growth, in particular, since other players have exited the market.
With EUR 3 billion GMV in a market of digital luxury that is estimated to be around EUR 70 billion, we are still facing a highly fragmented industry. Mytheresa has established itself as the clear leader in this. With our EUR 900 million GMV, we are a significant scale. We grew on average 19% CAGR since 2019, fiscal year 2019. We had on average an adjusted EBITDA margin of 70% from fiscal year 2019 to fiscal year 2024. 39% of our GMV is represented by top customers. We have close to 900,000 active customers, a leading AOV of 700 EUR. We have grown in the last twelve months, our net sales by 14%, and in the U.S., we grew over the last six months, reported six months, our net sales by 27%.
Industry-leading stats that allow us, with this strength in operational results, but also in financial results and in terms of balance sheet, to now take the opportunity to actively shape the structure of the industry. We will bring unique components to this deal, which gives us full confidence that we can turn around the business. We have a proprietary e-commerce tech stack that we developed, designed, and went live with it last April. Fully scalable, highly performing, ideally built for luxury e-commerce, a unique position to be in. We have completed other large-scale IT platform migrations over the last five years, including successfully launching a new ERP. We have developed our own proprietary marketing performance tools to optimize for expected lifetime value. Unique asset that we have been with our algorithm, developing since two thousand and seventeen.
We have proven abilities and operations with our one warehouse that delivers to the world at industry-setting speed. And we have strong brand relationships based on our business of focus on full price and high-end customers. And we have proprietary data analytics tools that, combining the 900,000 customers with the 1.4 million customers at NET-A-PORTER and the 2.2 million customers at off-price, to create an enormous, very rich data pool to develop algorithms from us. So again, the logic is to bring together the brands of luxury, but retain their distinctive brand identities through marketing, assortment, services. They will leverage one infrastructure that provides us efficiency and synergies, but more importantly, allows us to invest in innovation that can be used by multiple storefronts.
But there will be individual and separated storefronts to cover a much broader base of the market with highly profiled brand identities, because we believe you can only win in this market if you have a clear profile of yourself. And the off-price side will sit on a separated tech structure that allows us to optimize for its very streamlined needs and operation needs. If you compare Mytheresa and NET-A-PORTER and MR PORTER, in terms of positioning, Mytheresa is fully focused on the high end. We have consistently grown our AOV, consistently grown our top customer share. We are highly curated with about two hundred and fifty brands in womenswear, and that is the position we continue to drive with also a very strong base over half of our business in Europe.
NET-A-PORTER and MR PORTER have a broader portfolio of brands focused on luxury, but including the accessible part of luxury, including the aspirational customers, including emerging and new brands that don't fall into our portfolio. It's high-net-worth individuals, but also luxury curious customers, and they have an enormously strong footprint in North America. So a differentiated approach to the market, and we will ensure that this differentiation, if anything, becomes even clearer and even stronger. But these different storefronts will sit on a joint platform for HR, talent, finance, data analytics, technology, payment infrastructure, because that can be leveraged across the separated storefront. So to summarize, the strategic rationale for the acquisition of YNAP, number one, create a global digital luxury platform across multiple distinguished brands. Second, multiple brands will allow us to cover the market with differentiated positioning, including differentiated brand portfolios, customer and geographic focus.
Number three, this makes for a strong value proposition toward luxury brands based on depth and breadth of customer reach through this combined platform. Number four, shared infrastructure, including Mytheresa's technology platform and operational best practices, will facilitate greater efficiency, but also driving higher growth and profitability. And lastly, and not least important, we see high potential for synergies and joint administrative services, integrated customer management, and leveraging the enormous data pool for future AI innovations. And with that, I hand over to Martin for further remarks.
Yeah. Thanks, Michael. If you look at NET-A-PORTER and MR PORTER forming the luxury group, they truly possess exceptional brand equity and high-end customer base with an authoritative editorial voice, and these are the pioneers in the industry. And also, if you look at their KPIs, so NET-A-PORTER and MR PORTER, EUR 1.2 billion GMV, and active customer base, 1.4 million . 1.4 million active customers, if you compare that to the 850,000 customers of Mytheresa, highly attractive. Also, the geographic split, NET-A-PORTER, MR PORTER, 46% in the U.S., so very strong footprint in the U.S. Also, a very comparable focus on the high end, on top customers.
Their top customers, like 3% of top customers make up to 35% of overall revenue. So also very strong focus on top customers. NET-A-PORTER and MR PORTER, on the bottom line, they are profitable at adjusted EBITDA level, with a low single-digit EBITDA margin. Off-price, YOOX and The Outnet, very valuable properties, long experience, enable luxury treasure hunt shopping, through true global player with differentiated localization. Off-price, EUR 0.9 billion in GMV and 2.2 million active customers. The integration of YNAP will leverage Mytheresa's operational excellence, proprietary technology, and proven ability to execute large-scale projects, exactly what Michael referred to. We will leverage the unique assets that Mytheresa has as one of the best operators in the industry.
An e-commerce tech stack that is proprietary, developed, is scalable, and we have completed the large-scale IT integration there. We Michael talked about the best-in-class customer satisfaction, with Net Promoter Scores more than 80%. Mytheresa is a global operator with shipping excellence and then superior delivery times and return handling and a proven ability to capture global online luxury opportunity, with, as you know, in the last six months, + 14% net sales growth. We have preferred brand relationships and a leading access to exclusive product and brand experience, and AI-driven customer data analytics capabilities that enables marketing efficiencies and track records of CAC reduction over time. So unique assets, and what is also highly relevant for this deal, Mytheresa has demonstrated its ability to seamlessly execute large-scale projects.
And with Project Gecko, last year, we finished a large-scale migration to a future-proof platform, considering all assets in the IT Stack, Storefront, CMS, PIM, OMS. It is highly scalable, fully tailored to luxury needs, and Mytheresa has a tech team of 60 in-house developers, which will obviously be very useful in shaping that road ahead. In summary, this transaction is a unique opportunity to shape the future of online luxury. It combines the resources for becoming the leading global multi-brand luxury group, and with a clear aspiration from today, EUR 3 billion, to develop a EUR 4 billion GMV business with more than 8% adjusted EBITDA margins in the medium term.
It creates significant value upside for all stakeholders, our customers, the brands, the shareholders, our employees. And, also with that, I'd like to reaffirm full fiscal year 2025 guidance, that we put out a couple of months ago, anticipating possible growth. And with that, I will hand it back to Michael.
Operator, I don't have any phone anymore.
Hello, the handover...
Hello?
Is next to Michael.
Hello? Can you hear me? Thank you, Martin. As you can hear, we are truly excited about this deal, as management and as the supervisory board. We are, of course, pending regulatory approval. Until then-
... These businesses operate as completely separated companies, and we will therefore refrain from any detailed operational commentary. But other than that, we are very happy to take your questions now.
Thank you so much. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. That's star one on your telephone keypad. Our first question comes from Matthew Boss from JP Morgan. Your line is now open.
Great, thank you, and congrats on the deal.
Thank you, Matt.
So maybe, Michael, just to start off, could you elaborate on the market share opportunity and the expansion of your total addressable market that this acquisition provides? And then separately, if you could just speak to the advantages of size and scale as it relates to brand relationships and partnerships over time.
Happy to do so. So as you heard from Martin, combined, this group will represent, based on last 12 months data, EUR 3 billion GMV. If we take the total digital luxury market on Bain & Altagamma, it's a EUR 70 billion market. Out of that, probably EUR 40 billion is multi-brand, we assume. So we are still a very small player. And what is even more important, the market is growing. The market will double till 2030. So we need to double to maintain market share, and we want to achieve that. We want to be the leading player, global leading player, and so the market opportunity is extremely significant. But we always believed, and we continue to believe, that market share revenue targets don't matter as long as you can't tell why should customers buy from you?
That's why we believe so much in very precise and highly profiled identities, and therefore, we believe growth is even more opportunity with growth if you approach the market with different storefronts, with different identities that can go after different marketplace, market segments. And so this is the key additional component that we add through this acquisition. And of course, we do synergy potential. We see most of all, huge potential in having a much broader understanding of customer behaviors through this deal. Again, 900,000 customers combined with 1.4 million customers, combined with 2.2 million customers, that's the largest database of luxury buying customers. In terms of brand relationships, I think, yes, scale matters, but what we always stress, relevance matters.
With this acquisition, we become even more relevant to the key luxury brand operators because we have a broader audience, but we go deeper because we address different audiences with different offerings, and that has been a great success for us, and that is also the future success. If we can demonstrate that working with us as a group, there is more opportunity because we're not going to cannibalize, we're not going to merge into one brand, but we will offer the positioning that is on Mytheresa, and we will offer the positioning that is on NET-A-PORTER, and it will speak in different ways to different customers. The size of this combined entity is such that this huge part of the market is still open.
That's where we feel, in addition to high quality operations, customer reach, relevant customer reach is the currency that brand partners look for.
Great. And then maybe just a follow-up from Martin. If you could just expand on the potential cost or revenue synergies following the combination, and just any way or how best to think about EBITDA margin targets for the portfolio longer term?
Yeah, happy to do so, Matt. I mean, always bear in mind that Mytheresa comes from a very strong base. As you know, in the last five years, Mytheresa achieved an average adjusted EBITDA margin of 7%, and our target, our medium-term target for adjusted EBITDA margin, is 8% or higher. So we already come from a very, very strong profitability base, and obviously, this deal is also on driving growth acceleration, and customer reach. Obviously, there's also significant synergies to be expected. We will focus more on that, obviously, after closing.
It is, as Michael said, reducing complexity, leveraging our infrastructure, IT simplifications, and overall to leverage the unique assets that we talked about in the call on operations, on technology, skills and CRM, sourcing, and so this will be on both sides a great journey for the combined group.
Congrats again. Best of luck.
Our next question comes from Grace Mooney, from Morgan Stanley. Your line is now open.
... Hi, thank you very much. I have three questions, please. I guess the first one would just be on the off-price business. Could you maybe just elaborate further on some of the issues you've identified with this business and what the separation you have in mind means in practice or on a more operational level? I guess just more broadly, your confidence in operating an off-price business model, just given Mytheresa's expertise historically, has been more on full price and having a very much curated product offering. Then my second one, and, Michael, you kind of touched on this already, but just on the brands, like any initial feedback you can share from brand partners on today's announcement, and in particular, their reaction to operating both now a full price and off-price model under one company.
And then my last one would just be on talent or management, like how you see the management or reporting structure working with the new portfolio, given you now have, like, many brands versus just one brand or platform previously. And if there are any areas where you envisage the need to invest in talent to support the new structure? Thank you very much.
Let me start with the last one. I mean, again, we are premature to comment on actions, thoughts, ideas that are only relevant and can take effect after closing. So we will not comment on management or management structures. I mean, what I can tell you, we always believe in investing talent, and we see huge opportunity, growth opportunity with this transaction, and so we will need excellent talent, and we have the highest respect for the talent at NET-A-PORTER, MR PORTER, YOOX, and these have been pioneers in digital luxury. They have set the way for many of us, and so I'm very comfortable on that front. On the what do we mean by separating and what is the root cause? Off-price and luxury are quite different businesses in terms of buying logic, in terms of pricing strategy, also in terms of SKU depth, SKU breadth.
What we believe is not working is to have an infrastructure that serves both these businesses at the same time and tries to create synergies between quite different business models, both of them successful in their own right, but quite different, and so we believe that that is not the right approach to support the businesses. If they are different business models, they need different infrastructures. That's why we believe there is an opportunity to create a joint infrastructure for MR PORTER, NET-A-PORTER, and Mytheresa, because it's the same business model, differentiated in positioning, but same business model. The off-price is a separate business model, and if you look into the historic figures of Yoox, when it was publicly available, this was a high-growth, almost double-digit EBITDA business.
We believe with a much leaner and focused operating model, separated from luxury, with its own infrastructure, processes, and governance, it will return to even higher profitability and growth. That's what we intend to do, and therefore, the plan is to make off-price much more profitable and much more higher growth than it is today. That is what we mean by separation. It's really untangling the joint infrastructure that was created over the last years. Luxury off-price has a role in the market. Outlets have a role in the market. Many big brands have their own outlets. The [Engelhart Group] has invested recently into outlet property, so or it was the LVMH. I don't know whether it's a group or whether it's part of the investment firm, but they invested in outlet property, so it's part.
As long as you don't want to mix it operationally, it plays a good role in the portfolio, and that's how we view it.
Okay, very clear. Thank you very much.
Thank you. Again, if you'd like to ask a question, please press star one on your telephone keypad. We will pause for a brief moment while we wait for the questions to come in. As of right now, we don't have any pending questions. I'd now like to hand back over to the management for their final remarks.
Thank you. Of course, we will continue to update you on the progress regarding the transaction. Again, we are pending regulatory approval, but in the meantime, we also take the opportunity to reconfirm the guidance for Mytheresa. We will completely focus on our day-to-day operations. It's a clear message to our teams. We have great opportunities still to capture this year and are looking forward to assembling again for our Q1 fiscal year twenty-five report in November. Thank you very much.
Thank you, everyone, for attending today's call. You may now disconnect. Have a wonderful day.