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Yes. Thank you very much, and good morning. Welcome to our Trading Up 2024. Thank you very much for the interest in Shelly Group. As usual, I will lead you through some highlights I will lead you through financials and some strategic points, and Dimita will take over the product part that is quite interesting this time. So just as a typical reminder, we are a smart home company. We are doing everything in the home, everything for industrial customers, from energy monitoring to automizing [indiscernible] Why is Shellie an interesting investment case? We are in a positive market that is constantly growing. Although in the last year, the market was not growing in the typical speed a little bit below, I will come back to that in a minute. We have a well known brand in that market. Our technology is well advanced compared to competition. We have the right scale. We sold in total more than 20,000,000 devices since we started with Shellie in 02/2008. We have a lot of upside potential coming from new segments, which we will enter. We have very solid financials. We have a good management team, of course. And ESG for us is not a burden.

ESG for us is an enabler for making more revenue because we are helping companies to fulfill their goals, and that is one of our revenue drivers. So let me come to highlights in 2024. In total, by the end of last year, we have sold more than 21,000,000 devices close to 10,000,000, we say 9,000,000 here in the last twelve months in 2024. We have now Shelly devices in more than 4,000,000 households. And we have 1,850,000 users of the Shelly cloud. Some highlights, some other highlights. Revenue growth happened in all markets above in all major markets above the market growth. We have enlarged our distribution channels. We have increased our ProShares. We are making now 30% of revenue with professional installers. In 2023, it was 20%. We have continued our regional expansion. The DACH team has expanded Nordic's team is fully onboard, and we have prepared more countries to have full teams locally in the countries. We have designed 46 new products. We have launched at light and building last year, that is a bit more than nine months ago, installer finder. And we have have now already more than 900 installers online in that installer finder.

Just to give you a comparison, some competitors doing this for more than ten years have, like, two and a half 3,000. So we are really catching up very fast, and we will roll this out all across Europe. Our premium app has been launched successfully. The first Shelly X products are about to launch or actually have been launched yesterday as a proof of concept. We have visited trade shows, more than 25 trade shows all over the world, the main ones CES in Las Vegas, Leiten Building in Frankfurt, and IFA in Berlin. We have increased our addressable customer base significantly with the 1,850,000 cloud users. The Shelley fan base is growing constantly. We have a social reach of more than 10,000,000 last year.

We have owned Facebook groups with more than 150,000 members and we have third party Facebook groups with more than 130,000 members in a lot of countries. In Denmark, in Sweden, in Norway, in Finland, Netherlands, Spain, Italy, all these are only Shelly Shelly, but not owned by us and not operated by us. And that shows the interest, if in Italy, for example, 40,000 people are talking about Shelly every day in their own Facebook Our community and forum has more than 130,000 users and all the other channels sum up with more than 100,000. But the main point here is in the last year, we grew our revenue with more than whereas the market, following our estimation, and everything that we hear, was growing below 10%. We were outperforming the market once again by four times. So now it should switch. Up, here we go. Our revenue grew in the last year to 106,700,000.0 We already published that we have changed contracts with our main customers. If we would have everything comparable, revenue would reach EUR 109,000,000, but we will continue with these new contracts that will have some impacts on the future revenues and gross margins. I will come back to this at the end.

Our EBIT reached $25,700,000 We have one special effect in the not in the EBIT that is in the net profit actually. We sold our old office building. We made a profit with this of $6.35 ks. Normally, this would be part of the EBIT and would bring the EBIT to 26,300,000.0 In our case, we have sold a complete company that was the wish of the buyer. And this means that this amount is not EBIT relevant. So without that, €25,700,000 with that €26,300,000 EBIT. Our cash is solid with €14,000,000 a little bit more than we expected during the year because we had some increase on the working capital that is still the main driver for using our cash But right now, we feel comfortable with the level of cash that we have. And now let me pass over to Dimitra. He will talk about [indiscernible] Good morning, everybody. Thanks for participating of our quarterly call. I'm happy to share the results for the whole year, not only for the last quarter. As you can see, we're growing not only by revenue, but we're growing very fast also on products released. In 2024, there is a 46 products is updated to their latest version.

There is a new 26 products and there is a completely new one new category. [indiscernible] probably there is more than products in a week which is released or updated. There is now so many companies which can do that. For us, this is some kind of the trend and we're still speeding up, releasing new products, updating the old ones, And you'll see in the next slides what we're talking about. But totally now the company has 122 products until end of twenty twenty four. Just beginning of twenty twenty five, we have a new release for the new product. This one is released. [indiscernible] [indiscernible] Okay. Okay. Then something which is very important. Now in 2025 and 2026, we're in the generation fourth of the product. And if you're looking carefully on the picture, you will see that how the technology, how we upgrading and add the additional technology next to our products? If from the very beginning, we have the WiFi, as a connection protocol, MTP for communication. Now, slightly, we're increasing and just in five years now, we cover almost every smart home protocol which is used in the world. You can see that there is a I now will switch one by one to show the advantages of what we're doing now.

To be more, much more understandable why we do that, but and what we achieved with this technology and generation four of our devices. We're talking now and later just the next five will show you the updates related to our application. Because we're growing our subscriptions and our search subscribers are choosing the premium features of applications. Also, there is a completely new wonk range of the devices. Which allow our device to be used in the city environment, not only for the smart home and building automation, Something about the Shelly X, we just yesterday released the first products made from third parties, but which are using Shelly X as a What for? [indiscernible] And a little bit more about the generation four of our devices. About the premium app, you know that we're starting this one just less than a year ago. Now, the subscribers is increasing, but not only this one, one. We successfully implemented AI features for our customers. Which give them significant and very advantage, which usually is offered for the big clouds and very big companies and also in the in much higher prices we are offering to our customers. The IO modules, which give us the options customers to have a data if there is something failing their houses. [indiscernible] or the fridges stopped working, then immediately our customers receive the notification and they take care for their appliances on time.

We add option there to understand if something is going wrong and there is offline of their appliances and devices in their houses. To notify them that something happens. And also something which is very important, we open a completely new world with virtual devices. Virtual devices, probably the customers can have and control from the Shelly app any kind of the other appliances and equipment, which from any kind of any other supplier [indiscernible] which give them infinity possibilities to manage their houses and to work and to to make a much more sophisticated automation. The next one is the DWARA. [indiscernible] These are two technologies. One is based on the Z Wave, another is based on VORA. But probably this is our old devices to communicate with each other up to five kilometers. Which is open completely new area of the usage of the Shelly devices. [indiscernible] or factory monitoring or street lighting or street automation or city automation And now, this release happens now beginning of twenty twenty five. During the CES in Las Vegas. The devices, the add ons to the existing device, because this is still existing devices and the customer just need to add add on next to them, opening completely new opportunity and we're expecting the huge interest We already have some projects with the municipalities where the device is used For the print automation for city for not only for the city lighting, but also for different kind of the monitoring of the sensors, the air quality and everything, which is best Shelly the shared devices during this using this war add on.

And the same with the wave as you know, we're working not only for the WiFi, but also for the WAF, but we have the WZ devices and we're offering the newest one cranked protocol for the Z Wave devices, which allow devices to communicate for one one and a half kilometers. Each from another. Increase also significantly the use cases for device which we can the customers can use for. And something which is very important we're working very hard last year to achieve to have our first customers. [indiscernible] the first appliances, which is built and made from somebody Shelly, but for communication technology and integration with the whole Shell ecosystem, not only with any other ecosystem, which is using the Shelly protocol, which is at the moment is [indiscernible] using the shared protocols and they're compatible with it. And this is the first device. It's a thermostat, a water valve, to thermostat's water valve and the high duty relay which is now from yesterday they are placed on the shop and everybody can order them. And many more many more products is coming, which is much more bigger, complicated Probably, we need much more time for a little bit more time.

For integration and also maybe a little bit more time for transport these products from the different suppliers to our warehouse. And also for them to leave the products in their own shops.

But probably this is opened the new world of the Shelly which is not, at the moment, is not exposed. And now everybody can use the our chip and module to make us to make let's say, the old fashioned or the new devices smarter, we Not only smarter, but the smartest in the world compared with any other technology. And the JF4, the devices, the generation four, the latest generation of devices, which we presented CES in Las Vegas, the generation four, the main benefit for this generation that we add one more communication protocol to each of the device Now the device is not only Wi Fi booted, but also all of them is with ZigBee building. Which means, and this is the big advantage, if the customers decide in the future to change the infrastructure in their houses and to decide to switch, for example, from WiFi to ZigBee, or vice versa, they doesn't need from Shelly beginning to think about what exactly what device to buy It's for what kind of technology to use because our generation four of the devices, they support all major Wireless protocols which is used widely all over the world. And there's also many other benefits for them because with the Generation four, we've first time we released the WiFi six.

Devices. There is the newest Bluetooth 5.4, and the latest ZigBee Green Power and ZigBee three point zero. Protocol, which is built in each of them. [indiscernible] And for this, this is all the products Basically, I can talk a lot for the products for each of them. But let's now concentrate on the financial update and our strategy for the next period. Thank you, Volkeng.

Yes, very good. Thanks, Dimitra. So very interesting product to come that will help us to fulfill our targets for this year. But let's first have a look back. You have seen that chart at the very beginning, EUR 106,700,000.0 is the official revenue number, 25.7 or with the correction about the building, dollars 26,300,000.0 is the EBITDA of last year, euros 14,000,000 cash on the bank account. That's a solid basis for continuing our journey towards our North Star. That's the €200,000,000 and the €50,000,000 EBIT. In 2026. If you look to the quarters, this is a picture that normally you only find in some books. Because it looks perfect. All over the quarters, we are growing. Don't forget that at the beginning, I told you that the market is estimated to be around 10% or even below 10% in the last year, especially in the German speaking area. Economy is not doing that well. So that's only some information we get from talking to competitors. I have some IDC data but not very solid. But all signals are showing that the market is growing below 10%, still growing, but below 10%. And we are growing in all quarters very fast.

If we look to the EBIT, That should come now when I press here, the EBIT. That's a similar picture with this red dot in Q3 that I would eliminate if I could, but it's it's there. In Q3, we had a small dip in the EBIT margin, just having 20% EBIT margin. In Q4, we had 24.8% EBIT margin. So we are perfectly back on track, if you want, and we reached all our targets with that. So all pictures are solid, and that's just another sign that we have a very solid financials. As well this chart here, that's a regional share. The dark region is losing a little bit internal share with 46.8%. But honestly, if I would have a wish at the beginning of last year, it would look exactly like that. Growing in 36%. Still outperforming the market like four times, rest of Europe growing over proportionally 47.4%, because we have some countries with a very nice development like Italy and Iberia. We have some very good first steps in The UK. UK will be a focus for 2025. With a full equipped local team that we expect to be there in the second half of the year.

And the growth is accelerating in the first half of the year Rest of Europe was growing 37.2% over the full year for 47.4%. So that sees that all the measures that we are undertaking are paying back. Rest of the world, 54.5% still on a very low level. Here, we have very promising development in Asia. We started selling our products in Asia one and a half years ago. And now we see that the interest in Asia is very high as well in China itself. It's very high from end users and in some other markets in that region as well. So that's at the very beginning, but we expect very good development in rest of the world, driven mainly by Asia and, of course, as well by The United States.

The premium app we have estimated at the beginning of the year a revenue from the premium app of 7 and 70,000. We reached 440,000, so we are a little bit below here. But we are a bit above the expectations with the number of users. And that means that if I make all the calculations for this year and the next year, we will reach the targets for 2025 and 2026. The effect here is coming from a longer period a longer trial period where customers pay a little bit start paying a little bit later. And that's the effect that we see here. But nevertheless, if we just take the existing customers, it would not add more, we will have a churn, of course. That means customer that stepped out of the contract, but we will have more than that arrived Even if we take the existing ones, we are close to reaching the €1,200,000 in 2025. So that looks very positive. And don't forget that this is almost 100% gross margin. So revenue is equals [indiscernible] A little bit more in the details. Here in this chart. We have optimized our supply chain. We have as well a very good change in the product mix that has positive impact on the gross margin.

Gross margin with this is above the budget. We have significantly increased sales and marketing spends, mainly third party marketing costs. So big distributors that are spending money for visibility of Shelly products in countries where we do not have an own organization I told you before that that's paying back in revenue. We expect the revenue growth to continue, but we made some changes in our distribution contracts that had an effect on revenue. End of last year that will continue in this year. But it will have as well an effect on the gross margin and the marketing So marketing costs will reduce and the gross margin will reduce as well. In total, the effect is neutral or should be a little bit positive in for us because we are spending or we are controlling more what they spend the money for We spend a little bit less via those channels with more control And whatever we do on other activities, terms and conditions will reflect in the gross profit and in the revenue. The G and A is completely under control. And here, once again, the EBIT without the sale of the asset is €25,700,000 With the sale of the asset, €26,300,000 Net profit, 23.70.6% on a very good level, so 21.6% net income margin is as well an extremely good Number The cash flow, I have already told you at the beginning that we are close to the level of last year with €14,000,000 cash by the end of the year.

We have increased our inventory significantly, so 12,700,000.0 more inventory, dollars 22,000,000 in total. That is something that we will start optimizing during this year, but we expect first effects in the second half of the year, maybe only in 2026, '6, because we want to be very careful not risking revenue. And with all the new product that are coming, old products are still in the warehouse And we will continue, by the way, with the Generation three products over the full year. Partially as well for Generation two products that we can use as fighter models in the market. [indiscernible] having an impact on the inventory, and we just start to optimize that. We have €240,000 higher prepayment to supplier in Asia, dollars 5,500,000.0 in total. And then we have the effect that we already had during the last year. We increased our shares in Shelley Tech and in Shelley Asia. We have R and D investments of €4,000,000 in total. And we sold the asset that had an effect of €3,000,000 positive cash loan repayment, euros 1,000,000 negative cash dividend payment that we did middle of last year, euros €2,300,000 And the equity ratio now is on 81.4%.

That's as well an outstanding good [indiscernible] To the guidance, The guidance, just the achievement 2024 versus the guidance 2024, our target was €105,000,000 revenue. We reached $106.7 Once again, €109,000,000 if we would not have made the changes end of the year in the customer contracts. The EBIT, EUR25.7 million with the sale of the building, €26,300,000 The guidance was 26 So as well here, we are on the spot, everything as planned and promised. The guidance for this year, we start to have a range because it's quite complicated to always talk about a very exact number. We will achieve a revenue this year between €145,000,000 and €155,000,000 then EBIT between €35,000,000 and 40,000,000 And with this, once again, we are perfectly on the way to reach the €200,000,000 revenue and the €50,000,000 EBIT in 2026.

This is a ramp up chart that reflects what Dimitra said before and what he showed before. We expect this year a different distribution of revenue and a different growth rate in the different quarters. In the first quarter, we expect a growth rate of 25%. Only 25% if you look to our historical data of plus 30 or plus 40 or plus 50 because some of the products will arrive in Q2. We have launched the generation four devices at CES. Our distributors are waiting for the products. They will they are in production We have some product launches in Q1, but the major ones will be will happen in Q2. We have sold the first small quantities of locked that's the smart locks, already in this quarter. This was a very small quantity. The new quantities were come, and that will give us a small revenue push in Q2.

As well as all the other Gen four device that Dimitra talked about. And in Q2, in May, we will have a fully operating local subsidiary with a full team in Poland. One of our key markets for this year. And this is a very lucky case for us because we were able to find a a full experienced team, very well integrated in the local Polish market and especially for Z Wave technology beyond the Polish market, with a worldwide network that would really help us to sell more Z Wave devices in all regions of the world and will enable us to be stronger in the Polish market. In Q3, we expect the next version of locks So that means a cheaper version of the lock in Q4. We will have another version of of locks that will be cheaper. We have a couple of key products. We expect end of Q3, the next version of our TRV. That's a main driver for revenue. That's the valve for heating control, the Shelly Strip, will be there in Q3. That is a product that the market is waiting for as well a bit more expensive product than our typical average will drive up the average selling price, but we have very positive feedback from all our distribution channels.

That's why we expect in Q2 the revenue growth to be on 30%, Q4 on 40% with more products. And in Q4, we will onboard one more country, most probably will be The UK that will be equipped with a full country team by then. In Q4, we expect cameras, touch wood. That's a very complicated segment. And we will have the next generation of our Pro devices and we will have one up to two more country teams fully onboarded, and that will lead to revenue growth to 40%. So in total, 45 to 155 revenue, which is no big surprise if we are heading to plus 200 That is the normal level that is in between. So let me sum up 2024 guidance reached revenue target the revenue was above target. Q4 margin higher than Q3 where we had a small tip, so we are perfect The cash level is a bit better than expected. We feel quite comfortable with that. All regions are growing above the market. The market is struggling a little bit, still positive, still very positive compared to some other markets, but struggling with a little bit below 10%. The regional expansion continues We made a strong progress moving from the do it yourself market to the professional market, which shall not mean that we give up the do it yourself market, that's still our home, our base that we want to further develop. [indiscernible] have a wider product range that supports growth and more products to come this year.

Our cloud service and premium app service have additional potentials and that will help us as well to stabilize the profitability. We confirm the 2026 guidance with plus €200,000,000 and plus €50,000,000 EBIT. Hundred million euros revenue, €250,000,000 EBIT, We started measures to optimize working capital. We have since the January 1 a chief procurement officer on board. He starts already to show first effects in negotiating prices and in optimizing further optimizing supply chain, saving some cost on the product side. New product categories that will come and will support 2025 and 2026 growth. That is mainly the locks. That's the cameras planned for the end of the year, and that's maybe one or two other surprises that we have in the pipeline. So we feel quite comfortable with reaching our targets after we have reached the targets always in the last years. So if you want to download the presentation, you can do that here directly from our website, scanning the QR code. Or you can do this from the Montego website. And if you are not yet subscribed to our newsletter, please can hear and do that. And now we are ready for your questions.

Thank you very much for your presentation, and congratulations to your growing numbers and your business worldwide. We are moving on to the q and a session. Please place your questions in our chat box and I will read them out for you. As we have a lot of participants. Please delete your questions from the chat box if it answered terms in terms of content. And we already received some questions The first one is, what is claims to suppliers and other operating income?

That is a claim that we opened to our factory for failed products. We have a very low failure rate, but we did not have an agreement with the factory about how big this should be. But as we have a good partnership with them, we ask them to participate in in the cost for returns, and they did.

And your net working capital as percentage of sales is all time high. What level of net working capital do you expect to hold over the medium term?

So we expect net working capital to go down a little bit gradually And I already said that we are working on that. That we are that we are starting We have a measurement plan in place We've worked through this step by step. That will take some time. We think that we see the first effect in the second half of the year and major effect in 2026 and beyond.

Your advertisement costs increased from six to thirty million Bulgarian left? What is the outlook for advertisement costs going forward?

I've already mentioned of time on the in the last years and especially in the last year, in the second half of the last year to motivate distributors in countries where we have no own organization. To do something for visibility of our products in their local markets. They did that, but we will control this more, and we will have smaller budgets for that that we allocate to them. And we will ask them to have a case by case agreement with us so that this cannot be something that they just put in the prices, which might have happened in the last year in one or the other case. So we will reduce the marketing spends [indiscernible] step by step so that we will see positive effects here in this year. But on the other hand, it paid back So you see that we are growing, that we have a much better visibility We have a good momentum in a lot of countries where we do not have a full organization. Like in Italy, we have right now, we have one person in sales And we see that in the distributor channels, in social channels, influencers, journalists, pick us up and ask a lot of questions because we get a lot of visibility in those countries.

And that's partially coming from these investments. But we want to reduce them a little bit in the next couple of months and one or two years.

Thank you so much for your question.

Verify something. We don't talk about the absolute absolute number of the marketing. Of course, this is the percentage from the revenue. And based on this one, we expect higher or similar amount of the money which you will spend for advertising, but compared with the percentage of sales, that will be relatively which we will try to make it with a [indiscernible] Thank you.

Congratulations on yet another great quarter. Thank you for taking my question. Can you speak a bit more to how the expansion in The UK is proceeding with NetXL?

It's a very impressive ask question. It's going very well. So with MED XL, we have found a distributor that is doing a lot for us. That has the right size for us. So it's not too big, it's not too small. And we have people that are enthusiastic about our products. And they have done already a lot of positive things. We have won an innovation prize in The UK that they helped us to do so. So they registered for that. And we see that the revenue is increasing month by month in a very nice way. So what is missing now is is more people on our side. We have one sales person in The UK. Together with NetXL and one other distributor, we are developing the market. And, and we see that we are onboarding more and more distributors and retailers. As well distributors like HEXEL in in the professional market, Screwfix and a couple of others. So if all this materializes, I see a very good year in The UK. But we are at the very beginning. So we are still looking for our general manager for the country. Around him. We want to form then a team with marketing, technical support, more sales support to stabilize this development over second half of this year and especially 2026, 2027.

But first steps are very promising.

Which region or country in Asia is currently looking most promising? It's China. It's as well Asia, We have we have in Korea, we have some first steps. So it's it's it's not one country that is really standing out. It's as well the visibility that we get because our agent team visited three, four trade shows in different regions with a very good success and very good feedback. But we expect this to be quite strong in, especially in China. Australia and a couple of other regions sorry, a couple of other countries in the region. But it's as you've seen the numbers, 8,500,000 at the very beginning, but we expect that this is one of our potential growth drivers for 2025 and especially 2026 and 2027.

And are there more high price point products as the Shelly x two display and LOQED planned? That's a question to Dimitral.

Yes, probably yes, but there is something which is important about the Shelly X itself. There is a two streams of revenue. First one is from the chips itself. And relatively because the chips and module, this is not the prices The the the the price for each of the module is not so high as as end user product. We could not expect the very very much from the revenue. Even if we sold, for example, a million chips this year, [indiscernible] €10,500,000 revenue from modules itself. But it's most important to us is the second stream.

Part of our partners which are manufacturing the product with Shell X, they're also asking us could we help them with access to our Shelly share also? And we will do that. This is part of our program. But then, we'll have additional revenue, which will quite hard then itself and also the profit will be quite higher than just for the Model one. Because this, we talk about the end user products, which usually the appliances, which usually the end user price is much So it depends how we're looking for But at the moment, we try to make the bot to work at bot directly. And we believe that in both direction, we'll be we'll give their own benefits to make a high revenue and good profit.

Thank you. And can you add some more color on how important partnerships are progressing? You mean with Shelly Hicks? [indiscernible] I think in general, I can ask. Okay. So partnerships on the distribution side are developing very good. So we have a long list of distributors I talked about The UK. So that's not only NetXL and other main distributors. That's as well the below, so the retail channels and the professional distributor channels. We are I think we are now very close to have contracts with Rexel in all European countries. That's at the still at the very beginning, so we are expecting the first orders. But the entrance in the professional market is developing very nice. As well as something that you can see with the development of our installer finder, I'm super happy with 900 installers signed in by the end of last year. And I told you that there are some that have and a half thousand, 3,000, but they are doing this for more than ten years. So this number is very good. We have officially launched this program in the Dak region. We have a lot of participants in The Nordics already. In other regions in other countries close to DACH but we have as well in countries where we have done zero for that, we have a couple of installers signed in.

Like in Portugal, in Spain. And so for everyone who lives in Mallorca, we have a certified installer now in Mallorca. We have, in Australia, we have people that were signing in, and we will roll that program out. And that will open again new channels. So we are really happy we are now with Le Roymerlin in Italy in Spain for a couple of months already. We are we have signed now in France. That will be the next entry point. We have a couple of other distributors in Spain and France. So that's developing very good. And very nice. And we have as well some partnerships on the technology side that are quite thrilling. I think Dimitra can say something about that. Yeah.

I can do Currently, all biggest company, for example, for solar equipment, inverters, panels and everything, they are compatible with the Shell Shelly. And they're asking us to make some special features for them. They want offer their one solution together with us. And then now we talk about the name If you check the Huawei website, you will see that the Huawei energy controller support only Shelly devices as a part of their own equipment to monitoring energy for the house and to automate the control of the devices. Of the households, but based on the Huawei in vector and Huawei SoAR system. There is many other switches that EcoFold sold we have agreement with Yeah. With Zendeskor, with the German SMA, which is the very big probably everybody now is asking us to integrate our software, which is the part of their own solution, which is the very hard driver for the future, especially for this part of the business. And such a partnership. And this is the more and more biggest company. From another side, when we talk about the newest car models. For example, the first one is the Porsche Macan. We just already equipped when you buy the car.

This is out of the box. The car is coming with the Shelly app built in, and the people can control the garage door and not only any part of the car, their home automation directly from the car, the new agreement is there with Stellantis and others car manufacturers, which they're asking for the same features.

And more and more, which means in the more third party can say not only appliance because the car is not appliance, but equipment and heavy and products, our technology is building from the very beginning. And this is going faster and faster, and our integration team during the day, they have many requests that they need to handle them. And to decide which one to prioritize and which one to give access to. Our APIs, Shelly devices and everything. Mean this is one very strong direction.

There's one question directly to the portion I can you just mentioned. Previously, you have mentioned the new Porsche Macan. Who will have Shelly installed. Do you see any significant amount of churn for the premium app when the trial period expires? [indiscernible] I don't think this is related to Porsche Macau. This is everybody can use it. No. Let's say, the premium app will continue going slowly. As we said before, we don't want to push our customers to switch to the premium account at any price and cost because there is no is not usual for the smart home market. If you check the big players, Amazon, Google, Apple, nobody of them charged the customers for the services in their smart home application or displays. But on the same side, they doesn't offer them such features, rich features about the monitoring energy monitoring, data storage, nothing. This is just some kind of the remote control, voice control from their equipment. And this is the difference that we're offering to our customers much more features and we try part of this feature to offer them there is no price. But without pushing them. We want everybody to understand because this is something which we are the the pioneer in the world where we start offering such a service and mix between the the free and premium accounts.

And for us, it's much important to go in there carefully and not to be, let's say, concentrated of the revenue optimization or profit optimization And how we are very happy with that because currently our cloud is almost payoff from the premium customers. Which is our first target and it's already reached.

There's a lot of basic work that has been done Just one example, the rating of our application in the app Store a year ago was around two.

Two stars. Now it has 4.5 stars, 4.6 stars. So there's a huge development. We have optimized our application and will continue to do so. We have now ready or coming an access for installers so that the installer can use the application in the home of of the customer if the customer allows, of course. So that's an easy access to, for the installers. That would drive the professional So there is a lot of things that are going on with the application, and Premium App is just the icing on the cake that will deliver some revenue. But as I already said, we are quite positive that we will reach more than 1,000,000 revenue with the app, which is almost profit in this year.

Thank you so much. And can you break down which market are driving the growth, particularly on the professional side? Any markets that are standing out? How is the development in the Nordic like Sweden, Norway, Finland or The Netherlands? Of instance.

We are not reporting on a country level. And that has a good reason. There's always some ups and downs. The only thing that I want to say here is that we have a North South development. So the professional market is developing more faster in the North Of Europe than in the South Of Europe. But South Of Europe is catching up. That's what we see. Maybe that has something to do with more do it yourself customers, less do it yourself customers, legal situations. But we see that in the North, we are ahead. What we mentioned a couple of times. In the South, we are a little bit slower with the pro developments or do it yourself to pro But that on the other hand, as I said, Italy is our second biggest country and developing very good. In the Nordics, we see good development solid development, with not a lot of problems So that's very solid and very good, and we are happy about that. But we are not reporting on country level. And can you talk a little bit about the revenue model of Shelly x?

Do you charge per Shelly ship sold, or do you charge a monthly fee or a combination of both?

Not monthly fee. Monthly fee, there is a two models. But they are not against each other. First, we charge the customers which want to use the Sharex just one time.

This is including the lifetime usage of the cloud and infrastructure of the Shelly, the walkout, through everything, the future upgrades of the products, this is already built in there. But what is the difference? The Shelly X will also end customers to change a little bit and to connect their appliances, not the manufacturers, I mean, not the customers, not only to our cloud, but also to their One Cloud if there is. Or to their local system. Which means we're expecting half of these devices to be connected to our cloud, but half of them will not be connected from something else. With the end customers which are buying the prices, can use And there's something which is a very big benefit for the manufacturers. This big benefit is that we offer them the part of the premiums, the revenue share the premium services and premium account from the app. Example, if somebody has, attention to any devices and one of them is the powered by Shelly third party device, and these customers paying the premium subscription, then we Shelly on the Echo level We will proportion. We will share the premium subscription revenue from this manufacturer. And at the same time, manufacturers can evolve their customer if their premium customers, to use some extra services with their appliances.

So it's a mixed solution then we charge from the beginning for the once time. But then we give opportunity for, manufacturers to build in their own let's say, extra services, which bring the additional revenue from the end customers to use and we share it with them.

And this is the model right now.

Thank you so much. Your competitor, Playv, has seen a good revenue momentum in the home market Sweden improving from a weak period in 02/2023. From a competitive standpoint, does this have any impact on your sales dynamics in this market?

Yes, it has a positive one. So what we hear from Swedish installers and Swedish wholesalers is that plate is becoming too strong for them. And that's why they look for alternatives. So on the other hand, Blade is a very good company, a competitor that we take very serious but we are not afraid. So the market is big enough. They have trouble to leave or to make the same success outside of Sweden. Even in The Nordics, they have some trouble. And in Sweden, in some of the channels, they are too dominant, which could help us to enter. So we see a good and step by step development in [indiscernible] Playlist is not having a negative impact on it.

Yeah. I can add this I think it's the positive impact for another reason. The plate is only is mostly concentrated on white. We are not. There is no garage door controller, there is no managing monitoring, there is no nothing, so many things which we have in our portfolio. This is good that somebody else is opening the eyes of the customers and opening the market.

As I say many times, if there is no some Chinese companies like Sonoff and others before us, we will not be so successful because the first people need to see Somebody need to to show them what exactly is the Smart Home. Not only to them, also to installers. And I think the pledge is doing Shelly good job to do that in their markets, And customers, many other customers using both technologies. The pledge for the lighting And because this very, let's say, high reputation in these countries, But this is not enough. And if they're looking for any third party solution, then the value is almost the company which everybody recommended has everything else. We just follow this is good.

Two more questions. What is the share of revenue under contract with Freevites revised terms. Can you disclose which regions do they cover What is the period? And if you have planned to renew your after a certain point?

If I understand this right, that question goes in the direct of our the change of our contracts with our distributors. We did this in the last year, in the last quarter. And it's about all regions. So that's just changes in the contracts, how do we name things, how much do we give them for what. And that's what I mentioned during my presentation. That will this year will be applied for the full year. We will have a bonus on target with all of those customers. That will go against the revenue, that will reduce as well the gross margin. On the other hand, we give them less less marketing spend that will reduce our marketing spends in percentage of revenue and it's perfectly under control. So that's all regions, more or less no, not all distributors, the main distributors, and that is perfectly under control.

And just to clarify, both you and your partners will be selling Shelly Shelly devices, Does this mean you will be running inventories of these products How does this impact VC?

Yes. We expect that Shelly, yes. From the very beginning because that's a we have a very big upsell potential. If somebody has already shared a device in their house, and definitely, if there is a third party equipment powered by Shelly, which can be used for different use cases, which we don't cover now. For example, we don't have a special water control, water temperature control thermostat is something which has not existed in our portfolio. Then it's normally we do help and support them to selling their devices to our our existing customers. And of course, some new ones. And this is coming through our warehouse and the warehouse of our distributors. As usual. Yes, this requires some additional investment for the quantity in the warehouse. And the stock but not so much because we can have some kind of a little different deal we can have Payment terms and everything could be much more relaxed because of them, this is not only our products, it's just powered by Shelly. So there is a mix, and we don't expect for this one to have significant impact but there will be something.

It's as well a question how this evolves over time because right now we are in the first steps That's more a proof of concept than a huge business already. I cannot imagine that tomorrow if Bosch Siemens or one of the other big players in home appliances would move to a Shelly chip instead of whatever they have in their devices now that we start to sell washing machines tomorrow. But right now, we have products that are very close to what we do, like the relay you have seen, 25 amps, water valves, and that's products that we don't have in our portfolio and that fit to our portfolio. So if tomorrow, we will not start selling Porsche Macans just because they have [indiscernible] The display.

We doesn't need to have them in our warehouse. Yeah. We have no special Maybe. We have no special prices for shareholders. That's unfortunate.

Absolutely. And what's your outlook for the company for about 02/1930?

If you have seen our presentation at the Capital Market Day last year in Frankfurt, you are pretty much aware. And there are no changes. So we see that the market is continuously growing. We plan to outperform the market as we did in the past. We will not give a concrete number for 2020, sorry, 2020, because that would not be serious. But everything that we have in the pipeline should should help us to continue growing way above the market and then we will see where we are in 02/2030. We will add more categories. We will start monetizing data. But all this is down the road. So that's something beyond '26, '27, And this is additional fantasy to our numbers and our development.

And don't you think it would be better for investors to buy back shares instead of paying dividends?

Yes, that's a very good question. Of course, we have constant internal discussions about dividends because the dividend payment from Western European point of view is something that Investors don't understand. In Bulgaria, it's something that investors want and they plan with. That's why in the last year, we paid a dividend of €2,300,000 For this year, we will see we have the shareholder assembly that will come in June.

And we promised to Bulgarian shareholders to pay dividend on a small level. Buying back shares would be counterproductive. Because that will reduce the free float. And buying back shares is not easy in Bulgarian legislation. So that is something that is I don't know if it's anyhow possible. As far as I think, it's not. Again, at least not in an easy way. And it wouldn't make sense because we want to increase our free float, not reduce it.

What is the PRO device's approximate share of the revenue? Are they mainly bought by professionals or also by DIY?

They are bought partially by DIY. They are mainly bought by professionals. And now I now I have to admit that I don't have the number in my mind. But it's You have to keep in mind that our DIY customers, a lot of them are engineers. So they know what they do. That's why we cannot release it. I would not as a do yourself customer, I would not install an PRO device. I would not touch the central breaker box. But there are a lot of people among our customers that have the knowledge and as well the education and the right to install that in their homes.

So that's why we cannot exactly say what is going where. The share of Pro devices is nice, but it's not the the share of pro device that is defining the pro device sorry, the pro channel revenue because a lot of the installers are installed normal devices behind the wall switch. There is no pro version of that. But it's complicated to say, and I do not have the number now in mind. It's maybe like 10%, but it's just a guess.

Thank you so much. And the question especially to you, mister Kirsch, The last two months with the election of President Trump the world had changed geopolitically because of some of his decisions. Do you plan to change your strategy in The USA and China? Can you give us more details about the development in China and Asia? Thank you.

I think I talked about the development in China and Asia for us a lot. So currently, our main market is in Europe. We do not see import duties coming for for Chinese products to Europe. If yes, we are prepared. We are as well prepared for import duties to Chinese products for The United States. We will come back to this in the next earnings call for the first quarter because we have some concrete things in the pipeline that we will share then too early to talk about that. And I don't want to enter a political discussion We are if import duties on China products for The U. S. Start that will hit everyone that imports products from China. As as all the others. So the prices will go up. And this is not the end of the world for us. So as as once again, Europe is our main market, We have a good development in The United States not a perfect one, But this is not any risk for the company.

And do you plan to take part in the Japan Osaka exhibition?

No. Not to my knowledge.

Next question. Hello. Congrats for the nice results. I have two questions. The team seems like with the scaling up in some European countries, yes, of rest of Europe, will be the biggest regional already in 02/2025, as we have mentioned. What type of revenue growth is expected in this region for 02/2025? And the second one, given the forecast about improving working capital [indiscernible] [indiscernible] FCF in 02/2025 should be on really good levels. What about capital allocation plans? First, I have to ask which region was the question? What growth we expect? In Europe, In Europe? I mean, rest of Europe or I mean, I can answer both. So we expect to continue growing a bit faster in Rest of Europe than in DACH.

But as well in the DACH region, we are at the beginning of our development.

So if we look to some competitors, we talked about Plaid before.

PLATE is doing like €60,000,000 in Sweden.

I mean, Germany is 10 times as big as Sweden. So there is enough room for us to grow in the DACH region. But outside of DACH, because we are at the beginning of the development, the revenue levels are much lower We expect a faster growth than in the DUC region. So in general, euro stays our region that will carry the company. And as well about working capital, we we talked already a bit. So working capital is high. The inventory level is high. We expect to keep it on that level the first half of the year. And then hopefully, measures will will pay back that in the second half of the year, we can reduce it a little bit the main effects we see in 2026. I hope this answers the capital allocation So the main profit goes into the working capital. There are currently no concrete plans about acquisitions or something else where we would need a lot of Thank you so much. And please have some patience. We have like 10 questions ahead. And the next one is, what about Shelley x partnerships? You have four powered by Shelley products on your web shop.

How many more are coming in 02/2025?

I cannot say how many is coming. And also for me, because there is some kind of the NDA and some biggest name in the companies, they don't allow to share that their plans In the appliance to switching to Shalex? For this one, it's hard to say exactly how much the revenue, much products, how many products. Yeah. That's the question which is by considering numbers and could be let's say, correct or not, it's hard to say.

It's too early to to say and to see how this develops. And also, unfortunately, we're not able to share the companies, the future partnerships with [indiscernible] Yeah.

But what I can share is the revenue share and contribution of Shelly X for 2025 is still very low. So we are not expecting huge effects. So that means that the company development will mainly be carried by the by the normal Shelly product, the new products in the pipeline and Chelly X is still in the first period. We are happy with what we achieved so far. We see some first revenues this year and of course in 2026 but this will not explode. This takes time because all the big companies, Dimitra mentioned, that we are not allowed to disclose with whom we are talking, All of them have huge engineering teams. All of them are Shelly careful changing technology platforms Although everyone says we are not happy with what Ettuja and some others are doing, Making this step is kind of a step into a way that has no return. That's why they are all very careful. That will take some time, but in the long run, we think we we can make some big but not in the short term, so not 2025.

Thank you so much. Did you expect professional sales to surpass Geek sales? And what are your expectations for for the next two to three years in percentage in your sales?

So we are not as I said, we are not disclosing percentage of sales of We expect a very slow development step by step. We are not making crazy things. We are building up teams. We have the first product that's more proof of concept for us than anything else. So that's on the way, and that's continuing but too early to have clear targets that we publish. Yeah.

I don't know.

That's could be not so successful, but at the same time, because Shelly there is a some kind of the missing technology which we deliver is not missing. Now, Intel is coming mainly from China. And Twilio, which is our competitor, Just a single agreement with some of the big manufacturers could completely change the picture. And working on that. And if you ask me, but it depends. I cannot we cannot tell what is the expectation because really this is something which is in development and very active development, and we talk with so many players. If you put just the 50% to them on the list, we can say, well, maybe double, triple. Of revenue, but this is this is not realistic. For this one, in time, we will start updating these numbers and everything. But now really, except what we show the first product, there is nothing more to be shared.

So if I understood the second half of the question right, the share of Pro devices [indiscernible] Of Pro devices, I, I would say they are this will step by step grow. So four years ago, we had 100% DIY and 0% pro. Then we started with the first Pro devices. We started to have ninety-ten. Eighty-twenty, seventy-thirty. And so now we see as well that in DIY, we are opening more and more channels and more and more DIY stores like Leroy Merlon and a lot of others show interest. We have listing now finalized with online and physical stores for UBI. And they will roll out beyond Germany very fast. So that's all drivers for the DIY business. So I expect that the shift to Pro will slow down a little bit. So I do not expect 10% more share every year. But of course, we would be happy if that happens on top of the DIY development. So it will take some time three years, two, three, four years, until we reach fifty-fifty or come close to fifty-fifty. Still, again, DIY is the our core and our and we do not want to risk that.

And this is by the numbers because when you're looking at that, even the picture is a little bit different because the Pro devices is much expensive than the the retrofit one. The do it yourself devices. Which mean by best of revenue, the numbers could be changed much quicker than the number of devices [indiscernible] Thank you so much. Congrats on the incredible consistency on impeccable execution. Since Shelly Shelly already notify users about fridge problems, like open doors or malfunctions could be considered expanding into a service that collaborates with issuers to cover risks like leakages, heating or AC failures, and other major appliances breakdowns. This could open up a huge new revenue stream with with recurring revenue and establish Shelly as a leader in comprehensive smart home solutions, Yes. We could imagine a lot. We can as well imagine revenue streams coming from this. But this is nothing that we have in concrete plans currently. So we are starting to have first talks to some insurances about what can we do with this information, but it is very early stage. So that's too early to say. We have as well with some Retail chains, we have very first test [indiscernible] will not lead most probably to recurring revenue, but to revenues to install Shelly devices in their fridges, in their stores, to give them early indication about maintenance.

So when does deep fryer or a refrigerator in a food store needs maintenance because it needs more energy, and that's most probably because the ventilation doesn't work anymore. So there are a lot of things We have to be careful that we are staying focused. We cannot do everything at the same time. And whatever we do, would have would need resources, would need people that will need like six, twelve, eighteen months of ramp up time and would have a significant impact on the EBIT that we promised to all of you. So, yes, we are working on a lot of these things, and especially, of course, in our biggest region in DACH. We start first talks to energy providers as well to insurances We go in other verticals that could open revenue streams. There are a lot of activities, but if we put everything on the table, we would immediately say, let's concentrate on our core business because it's simply too much. The limit is this guy. I completely agree. And probably this is partially the job of our distributors.

And our wholesalers, which they're actively working on the markets and knowing especially the situation of the markets and the players in the market, they're working on that. We help them with everything. Of course, if there's something which we can do faster and then we can negotiate quicker, we can go in that direction. But really concentrating to spending money in completely separate vertical of the business because there is many which we can cover and it's something which is first needed time, they need resources, And really, we prefer to be stay focused on the technology, manufacturing the smart devices which could handle Any case, including the insurance one.

Thank you so much. Previously, you have spoken to the challenges in the past when you have approached professional installers in The US market with do it yourself products, this you have changed now, but can you speak to the challenges you are currently seeing with The US expansion? [indiscernible] One challenge. No, seriously, We are we had a CES with a very good success CES is an international trade show. It's not a purely American trade show, but we had like maybe 70% international visitors, 30% from The U. S. And more than ever before in the last years, we have interest. We have people that know Shelly. We have as well key decision makers that are Shelly Shelly, as we have in Europe. And that's still a step by step development. So we have a contact to an installer network that is that we have talks as well to train the installers to create demand on the market. But it's United States is a huge market. It's a market with a huge potential, but that's part of we have somehow to concentrate. We cannot do everything at the same time. And with the same investment in time and money and resources that we have to put in The U. S, we get much faster [indiscernible] Which does not mean that we are not committed to The U. S. So we are continuing.

It's step. And we still need some more United States tailor made products.

I think I can add that as a company, we are also looking to meet the [indiscernible] And what this means for U. S. Quicker and expensive. That easily we can spend the whole EBIT in United States if we were not enough. But then maybe in two, three years, The United States market will be bigger in five years. It will be a call to the European Another way is not to spend so much money concentrated to balancing the company to be on Shelly really Safest and smartest ways, still not with a very good growth rate. And to work in United States extensively, but without investing so much money, for example, for advertising or hiring the big teams and to see what they can do. Just to following the and this is help us. What we see in CS, I won't say many companies already know about us. Maybe company asking us for the potential partnership distribution channel and everything. But the market is big. And such big companies they are so small. They are doing everything so small. And this is somehow affecting the speed and for The United States. This is the way in which we every time choose not to run into some direction and to spend everything which we can have in that direction and to make a much more balanced approach every mark Thank you so much.

You mentioned Rexel at European scale in term of distribution. Brexel usually on board supplier country by country. Can you give us a bit more context about your relation with Brexit?

Yeah. Nexel is all the other distributors that serve the professional channel, they are doing not only country by country, sometimes they even do region by region in a country. We are talking to them on a country level. We have contract in Germany, Austria, Finland, some other Nordic countries. In Nordics, there are other key players in the in this market that we have signed on already. So they are bigger than VEXEL. We are we have a contract that is [indiscernible] is close to signing for France Italy, UK, so we are making step by step progress, but it's very slow. And having a contract does not mean that we can expect millions of revenue. It needs training for the people. It needs as well further in their local outlets that they have thousands in Europe. So that's a long way and they are a typical Very slow moving channel. That takes everything takes ages. They are so used to always working with Schneider, Legrand, Busch Yeager, ABB and those guys about the last century almost, that it's really tough to change their attitude. But we see some good progress. It took us now two years to sign a contract in Germany.

It was much faster in other regions. And so we expect that in 2025, we see some revenues. But as we as we are not disclosing regional revenues, we are not disclosing revenues on customer base. So we will not talk about individual customers and and revenues we do with them.

And also to revenues, can we expect inventory in relation to revenue fall in 02/2025? Inventory had tripled in 02/2024 while revenues went up 40%. Kindly indicate a ratio to sales that we can expect in 02/2025 and maybe your target going forward.

So we have increased the revenue significantly, so that a lot of our money is going into working capital. And that's what I mentioned a couple of times today. And as well three months ago in the last earnings call. We are working on reducing the inventory [indiscernible] Right now, we have five months of inventory, roundabout five to six. We want to bring this down to at least Four four to five in the first step, and that should be possible by in the second half of this year. And then with further optimization in the next year in 2026.

At the same time, those are the new products coming. The product portfolio is increasing, which means we need to add also these products to be available on the market, then we have to have them in the warehouse, which this is the let's say, the one vessel we need to optimize to optimize the working capital. But this does not mean that, for example, in some situation where it's a huge demand on the huge pre orders, something for devices temporary, we will not have much higher stock than usual. And also the vice versa.

But we do not expect that the stock level doubles again.

Thank you so much. And the last question, especially to heating. Can we expect underfloor heating control systems and heat pump control devices?

We're expecting powered by SHERI heat pump control devices. There is a Three players which we're working, manufacturers, we're working with them. One in Europe, two in Asia, we're just interested in testing the technologies. Probably for this heating season is is over. But Shelly, heat pumps also use power for cooling, not only for heating. And there is a probably we're expecting the cost of 24. It's also for them. And from them and their capacity and decisions. [indiscernible] In the best case, we expect next heating season. They're already there to be powered sharing devices. Which we offer into the market. In that let's say, direction.

Thank you so much. Have received no further questions. And in the face of time, we come to the end of today's earnings call. Thank you for joining and the live conversation. Should further questions arise, Please feel free to contact Investor Relations or us at Airtime. A big thank you also to the gentlemen for your presentation and the time you took to answer the questions. I wish you all a lovely remaining week. And with this, I hand over again to mister Dimitroff for some final remarks. [indiscernible] What I can say Shelly, we've seen a lot of potential, a lot of opportunity. Every day. Not per quarter or annually, but every day. And for this much harder, the most decision is where to go and how to stay focused on the main channels and main products, but we're doing now. Maybe for some of you, good works, slower, but don't forget that there is not so many companies [indiscernible] as a percentage and the speed as we do that. [indiscernible] extensive internal work also and redesigning all the time the company to be able to achieve the results But, yeah, from what we see, everything Shelly, think is going in a very good direction.

Let's say, we can wish you also a good day. And a good week. And see you next time. In the three months.

Thank you. Bye bye. Thank you.