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Tonies SE (ETR:TNIE) reported a robust performance in Q3 2024, with revenue reaching €95 million, marking a 21% year-over-year increase. The company anticipates Q4 to be particularly strong, contributing to 50% of its annual revenue. Despite a modest 0.6% rise in stock price, Tonies SE remains optimistic about its growth trajectory, especially in North America.
Key Takeaways
- Tonies SE’s Q3 2024 revenue grew by 21% year-over-year.
- North American market expansion led to a 40% increase in regional growth.
- The company expects Q4 2024 to account for half of its annual revenue.
- Tonies SE’s stock price saw a slight increase of 0.6%.
Company Performance
Tonies SE demonstrated impressive growth in Q3 2024, with a significant 21% increase in revenue compared to the same period last year. The company has expanded its market reach, now operating in over 100 countries, and has distributed 7.8 million Tonies boxes globally. Tonies SE’s strategic focus on North America has resulted in a 40% growth in the region, positioning it as a key market for the company.
Financial Highlights
- Revenue: €95 million, up 21% year-over-year
- Year-to-date growth: 26%
- North American growth: 40%
- Expected full-year revenue: €480 million
- Anticipated adjusted EBITDA margin: 6-8%
- Expected positive free cash flow: >€10 million
Outlook & Guidance
Looking ahead, Tonies SE projects Q4 2024 to generate 50% of its annual revenue, with North America poised to become its largest market. The company is also preparing to unveil its long-term strategy at the Capital Markets Day in June 2025. Tonies SE has set ambitious targets for the coming years, with EPS forecasts of 0.07 USD for FY2024 and 0.23 USD for FY2025, alongside revenue forecasts of 504.51 million USD and 648.31 million USD, respectively.
Executive Commentary
CEO Tobias Mann emphasized the company’s global reach, stating, "We’ve built the world’s largest interactive audio platform for children, now actively enriching children’s lives in more than 100 countries." CFO Jan Midel highlighted the company’s consistent delivery on its promises, saying, "We are continuously delivering upon what we have said."
Q&A
During the earnings call, analysts inquired about Tonies SE’s preparedness for potential trade policy changes and the company’s confidence in Q4 performance. The management expressed optimism about future growth and revealed plans to explore AI integration possibilities.
Risks and Challenges
- Potential trade policy changes could impact international operations.
- Market saturation in key regions may limit growth opportunities.
- Supply chain disruptions could affect product availability and costs.
- Economic downturns might reduce consumer spending on non-essential goods.
- Increased competition in the interactive audio platform market.
Full transcript - Tonies SE (TNIE) Q3 2024:
Manuel Bursing, Investor Relations Representative, TONIES: Hello, and welcome, everyone, to the TONI’s Q3 2024 Webcast. My name is Manu Bursing, and I represent the Investor Relations team. Today, we will walk you through our presentation. And afterwards, we invite you to submit any questions you have via the Zoom (NASDAQ:ZM) Q and A function. On the call, we have our CEO, Tobias Mann and our CFO, Doctor.
Jan Midel. And now over to you, Tobias.
Tobias Mann, CEO, TONIES: Thank you, Manuel, for the intro. I want to welcome everyone joining us for our Q3 update today, where I have another exciting chapter of our growth story to share with you. I’m particularly pleased to with how our global expansion is progressing as well as the continued strength of our core markets. Before Jan walks you through the numbers in detail, let me share the highlights of what we’ve achieved this quarter and why I’m confident about our weeks to come. Looking at our global footprint today, the numbers tell a remarkable story about our market leadership.
We’ve built the world’s largest interactive audio platform for children, now actively enriching children’s lives in more than 100 countries. Since our launch in 2016, we’ve placed 7,800,000 Tony boxes and over 90,000,000 Tonys in children’s hands. But what really demonstrates the strength of our platform is how deeply children engage with Tonys. They spend more than 2 70 minutes with us each week. And in the U.
S, parents and caretakers are so enthusiastic about the experience, they are continuously giving us a Net Promoter Score above 70. Looking at our 3rd quarter performance, I’m pleased to report continued strong momentum across all key metrics. Our revenue grew 21% to €95,000,000 with North America showing exceptional growth of 40%, a clear validation of our international strategy. This puts our year to date growth at 26%, underlining the strength and scalability of our business model. What makes our platform particularly powerful is that over 70% of all Tony boxes stay active, leading to highly predictable figurine purchases, typically 20 Tony’s per box after 4.5 years.
This quarter alone, we welcomed more than 500,000 new Tony box families and distributed 8,300,000 new Tonys, setting us up well for our important 4th quarter. When I spoke to you at our annual presentation earlier this year, I introduced 5 key value levers that would drive our future growth: internationalization, margin expansion, own content, product mix and operating leverage. Today, I want to show you how we are turning this strategy into tangible results through 6 concrete initiatives that demonstrate our execution capability. We’ve rapidly expanded our U. S.
Presence, both in retail and online, consistently strengthened Tony’s as a brand that families trust and love, strategically broadened our reach to older children with innovative products, launched our exciting new La Lardinos franchise, strengthened our leadership team with Ginnie McCormick (NYSE:MKC) as Chief Experience Officer and prepared extensively for what is traditionally our strongest quarter. So let’s walk through them. Let me share what’s driving our international momentum, particularly our strengthening position in the U. S. Market.
I want to highlight 2 strategic partnerships that showcase different aspects of our approach. Looking at Target (NYSE:TGT) first, we are seeing remarkable results from our wholesale strategy. We’ve steadily expanded our shelf presence over time, recently doubling from 4 to 8 feet in their stores. The impact on performance has been immediate. Sales have tripled since this expansion, clearly demonstrating our scaling potential in physical retail.
Our direct to consumer business shows equally compelling progress, particularly through our partnership with Amazon (NASDAQ:AMZN). During their key shopping events, we’ve seen exceptional growth. Both July’s Prime Days and October’s Prime Big Deal Days delivered at least doubled year over year sales across both boxes and figurines. To ensure we can sustain this growth trajectory, we are also strengthening our supply chain fundamentals. I’m pleased to report that new suppliers in Vietnam will begin production, reducing our regional dependencies and making our supply chain more resilient.
This positions us well for continued international expansion across both wholesale and direct to consumer channels. Let me share how we are strengthening Toni’s market position, building on our foundation as a trusted brand for families. We are executing this through 3 strategic initiatives, each targeting a different aspect of our growth potential. 1st, we are expanding our educational content portfolio, partnering with TV star Chekatovy and launching His Clever Tonys, allowing us to address the growing demand for engaging educational content while strategically expanding into the oldest children segment. Our second initiative involves innovative partnership with leading museums, including Museum Kunstpalast and Natural History Museum, where children receive a Tony box as their personal guide, fundamentally changing how they experience art and culture.
The 3rd pillar involves strategic partnerships with established brands from NBA teams to Bundesliga clubs, culminating in our 1st nationwide U. S. Campaign, Discovery (NASDAQ:WBD) Imagination, where partnerships with Disney (NYSE:DIS), National Geographic, Marvel, Paramount and Hasbro (NASDAQ:HAS) demonstrate the true breadth and appeal of our platform. A particularly exciting development this quarter has been our BookToni’s launch, a strategic initiative that expands our addressable market while leveraging our platform’s core strength. We’re bringing carefully selected bestsellers to the TONIES format, working with renowned authors like Tom Fletcher, David Williams, Adam Kaye, along with classics from Ina Blyton, Deaf Pilkey and Adreya Beatty.
This initiative succeeds on 2 key fronts. It extends our reach to children aged 5 and older, while our simplified design approach enables faster launches and improved margins. I’m particularly excited to announce our latest content initiatives, our 2nd major content franchise, the La Lalinos. This launch is based on clear market insights. We know that music and songs for children aged 3 and up are among our most popular formats globally.
The La Lalinos combine music, rhythm and dance in a way that supports child development, following the proven blueprint of our sleepy friends, which have become some of our most successful figurines to date. Owned content like this is central to our strategy for two reasons. It drives exceptional brand loyalty among our customers while delivering significantly higher margins. We’ve also taken an important step in strengthening our management team, welcoming Ginny McCormick as our Chief Experience Officer. Ginny brings over 20 years of marketing expertise and a proven track record in scaling global brands.
This appointment reflects our strategic decision to bring brand, product and content under one unified leadership, which is exactly what Toni’s needs at this stage of growth. Ginny has already made significant impact, and you’ll have the opportunity to meet her yourselves at our upcoming Capital Markets Day. Our 6th initiative, Q4 Readiness, I will address after the finance update. And with this, over to you, Jan.
Jan Midel, CFO, TONIES: Yes. Good morning, everyone, also from my side. I’m very happy to report on our revenues for the Q3 of this year. We’re only sharing revenue updates on a quarterly basis, full P and A only full year and half year. And if you look at the TONIES group development, we go with 26% year over year and that’s exactly where we wanted TONIES to be.
Very happy with that development, particularly as we see all markets and all of these segments growing in line with our plan. Very pleased with the DACH development, which shows the additional potential still growing in mid single digit range. The North American business growing ahead of 50%, likewise, the rest of the world. And this is what Tobias said in the beginning. Tony is just showing once again that our international expansion path works.
We have increased on a year over year basis the share of our international business to 53% and that is testament to the quality and execution of the business. Looking a bit at the product mix, it’s also very important to consider that this year, and I think we have said it quite a few times, the commercial moment of Black Friday and the Cyber Week is later. It’s 2 weeks later. And you can also see that slightly in our product mix effect or product mix here on a year over year basis, in particular in Q3. You can see that Tony’s is growing on the Tony’s mix, so the figurine mix, exactly with the planned annual growth rate of 33%.
We’re a little lower on the Tony box sales. But while that is maybe at a first sight surprising, please consider this. The growth comes majority from the international expansion, where particularly the Q4 and the commercial moment between Black Friday and Christmas do matter. That is when Tony boxes are being set up. That is when we grow our platform.
And that’s also when we will see this year’s growth coming on the installed base. So with these results, we’re actually fairly happy. And looking at the overall product mix, I think there’s some interesting takeaways to draw. You can see on the right hand side that the Tony box share was higher in 2023 on the 1st 9 months. But again, Black Friday was just earlier.
So loadings take place a little earlier, and that’s what you see here. Overall, I think that’s a very good result to also see that we’re doing very well with selling Tony figurines, so have very consistent cohort behavior. And that is also a key ingredient of our profitability that we sell Tony’s figurines. And you can see that on a revenue mix basis here, the share has increased in the 1st 9 months of this year. And maybe looking particularly into the Q3 now, one of always important with TONI’s and we keep repeating that is always consider baselining effects here.
We’ve seen in 2023 an extreme acceleration of the business by growth 46%, 2022 to 2023. So the business has really picked up and therefore the baseline comparison here is to be considered. We’re very happy, as I said, with the Q3 and believe it puts us in a good position for the Q4. And you can see it, the dark market grows, the North American market grows, rest of the world grows. And what you can see here in particular is that you have growth on the Tony side of the business.
This also has something to do with loadings. So for example, if we enter retail partner on a larger extent earlier or later, that can, of course, influence the overall product mix of a quarter. And that’s how I suggest to read the Tony Box figures that you do see here on a year over year comparison. Remember, we entered some significant wholesale partners in some markets in Q3 of last year. So overall, very happy with this.
And also, if I look at the total amount of Tony boxes being sold in H1 versus in Q3, it’s actually a very, very healthy relationship. And therefore, I’m very confident for what is yet to come in Q4. And of course, we also have some visibility on how
Tobias Mann, CEO, TONIES: the business is going. Tobias, back to you. Thank you, Jan. Now let me tell you why I am and we are very confident about the quarter ahead. Q4 has always been our moment to shine.
And this year, we’ve even better prepared than ever. In wholesale, we have taken decisive action, significantly boosting our inventory position to ensure our retail partners’ warehouses are fully, fully stocked. Our direct to consumer channel is primed for success with enhanced forecasting capabilities and a strategic buffer stock in place. We’ve also transformed our internal logistics and deepened our supplier partnerships to handle peak demand flawlessly. Maybe finally, let me share a compelling proof point of our expansion strategy.
Our wholesale footprint in international markets, which is the key engine of our growth, continues to show remarkable momentum. In the U. S, we are building on our successful wholesale strategy, deepening relationships with existing partners while continuously adding new ones. The U. K.
Tells an even more impressive story. We’ve added more points of sale within 1 year than we’ve ever achieved in any other market. Picture this. And in France, we are seeing similar acceleration with our wholesale platform growing rapidly and new points of sale being added continuously. With these achievements in mind, I’m confident in reaffirming our guidance for the full year.
We are clearly on track to deliver group revenue of €480,000,000 with North America exceeding €200,000,000 What’s particularly significant here is that North America is set to become our largest market in the 4th quarter. Thanks to our improving gross margins and operating leverage, we expect our adjusted EBITDA margin to reach between 6% 8%, a substantial improvement from 4% in 2023. And I am especially pleased that our free cash flow will turn positive, exceeding €10,000,000 compared to negative €5,000,000 last year. So to conclude, let me share what we are focused on in these very crucial coming weeks. We’ve planned compelling commercial moments, as I said, particularly around Black Friday and Christmas.
The book Tony’s rollout is gathering momentum, and we are fully committed to making this new category a wild success. We are pushing hard to cement North America as our largest market while preparing for the exciting launch of La Lalle Wings. And there’s one more thing we’re working on, something really exciting that I look forward to sharing with you soon. And with that, I’ll hand it back to you, Manuel, for the Q and A. I’m very much looking forward to your questions.
Manuel Bursing, Investor Relations Representative, TONIES: Thank you very much, Tobias. As a reminder, if you have a question, please use the Zoom Q and A function to post it. And I can see that we already have received the first questions. Are you prepared for another Trump legislation? What percentage of your U.
S. Products is sourced from China? And what happens if Trump imposes tariffs on your products?
Tobias Mann, CEO, TONIES: Yes. I actually expected this question, and thank you for this important question. While we do not disclose specific sourcing percentages, let me share how we are addressing this strategically. North America, as you heard, remains one of our most important growth markets. And of course, we are closely monitoring all the developments happening there, particularly regarding potential tariffs or trade policies or whatsoever.
So what’s happening right now is in any way a new consideration for us. We proactively and also very early started to prepare for various scenarios. And we also started to take the 1st concrete step to optimize and derisk our supply chain. So as I said before, we’ve already completed the onboarding of suppliers, for example, in Vietnam this year in 2024. And we always have the opportunity to shift volumes away from Chinese manufacturers to Southeast Asia, North Africa, Europe.
And maybe as a last point here, it’s also worth noting that clever tonnies and book tonnies are already being produced in Europe. So if I look ahead to 2025 and what potentially can happen, I can reassure to you we have multiple sourcing strategies in place. We already adapted our supply chain structure. We are we designed to mitigate everything with potentially cost impacts, of course. And that’s why I am and we are very confident that we can manage various trade policy scenarios very effectively.
Great question. Thank you.
Manuel Bursing, Investor Relations Representative, TONIES: 2nd question, growth in 1st 9 months has been below your guided growth for 2024. Could you please let us know what makes you confident for Q4?
Tobias Mann, CEO, TONIES: Yes. I mean, I just spoke about that, but I can maybe start by saying I confirm to all of you that our 1st 9 months performed clearly as expected. And from this position, looking at Q4, we do anticipate significant acceleration in revenue growth. And for all of you, maybe for those who join us for the first time, it’s very important remembering that this quarter now typically generates 50% of our annual revenue. So this is absolutely normal and not new.
And we have a very proven track record of delivering Q4. And as I said before, this year, I feel we feel that we are particularly well positioned. So what gives me confidence, we have excellent visibility into our wholesale revenue because we are very, very closely and continuously collaborating with our partners. And as you saw in the presentation, our products will also be available in substantially more stores if you compare this year to last year. And this expanded presence combined with those even stronger and growing execution capabilities put us in a very, very good position for Q4.
And yes, we also need the U. S. Momentum for this. We’re seeing very strong growth across D2C and retail channel in the U. S, as I said.
If I just compare the point of sales, for example, in the U. S, we had 6 1,700 points of sales at the end of 2023 in the U. S. And we are now at about 8,300 points of sales by the year end of 2024. So this is why I am looking confidently in the Q4.
And obviously, we are seeing already the quarter being in full swing that we can get there.
Manuel Bursing, Investor Relations Representative, TONIES: The next one is on supply chain. How do you see supply chain situation now? And can you explain or can you please comment on your inventory levels?
Tobias Mann, CEO, TONIES: Yes. Supply chain situation, as I think I explained this at length already, we’ve been preparing. We’ve been in a very good situation. We have worked with our partners to stock both our wholesaler warehouses as well as the D2C warehouses. We have diversified supply chain, as I explained.
And so from that point of view, we’re in a very, very good position. As I also said, we have clearly worked on our forecasting capabilities and have also now a really, really good view on the stock and on the inventory. So I am very confident that whatever is happening in Q4, we are very well prepared and then we have the right stock at the right places.
Jan Midel, CFO, TONIES: Maybe I can add a few notches also on it. So I think how we’re also thinking about, of course, monitoring all global events closely. Typically, container lines probably still have 1, 2, 2, 3 weeks due to Suez Canal backstop, but that’s all factored in and also from the perspective of where we are right now with our inventory levels. As we build at the peak, we have passed the peak, so inventory is flushing out. And I just want to reconfirm as Tobias said.
We have everything that we need to have a very successful Q4. And now it’s everything that we have prepared for, getting in on the role and showing the executional qualities that we have shown in the past with this.
Manuel Bursing, Investor Relations Representative, TONIES: The next question is also on Australia and New Zealand. You recently expanded to the Australian and New Zealand region. Which region do you see as the next develop or explore?
Tobias Mann, CEO, TONIES: So first of all, let me actually say that we are extremely happy with our expansion into Australia and New Zealand. It is our most successful launch in any new country ever. And this makes us also very confident, and I think this is where your question is coming from, that our international expansion strategy clearly works. And I can assure you that we continuously think about more countries, more regions. But please, I hope you understand that at this very moment, until we really announce entering a new market, we don’t disclose this and discuss it publicly.
Manuel Bursing, Investor Relations Representative, TONIES: Any date of the new Tonybox, will it be in Q3 2025?
Tobias Mann, CEO, TONIES: We don’t really comment on exact innovation roadmap. And with this, obviously, we’ve always announced our product innovations as they happen. I talked about the Book Tonys. I talked about the Clever Tonys and the other product innovations. So please understand that we do not have anything to share beyond what we’ve already talking about.
Manuel Bursing, Investor Relations Representative, TONIES: Where do you see the Tonys share at the end of this year? Are €10 possible?
Tobias Mann, CEO, TONIES: Jan, this is one for you, I guess, as the CFO.
Jan Midel, CFO, TONIES: So I think, of course, we look at the share price. But what is even more important right now is that we focus on the business. I think we need to make sure as a company that we deliver on the targets we’ve set out. And there are a lot of market macroeconomic factors that you all should know. I think this company has shown a great track record in the past years quarters, continuously delivering upon what we have said.
So I’m confident that our performance is will be appreciated, but share price is something hard to predict, which I believe capital markets should form their opinion of. But I’m, of course, very fond of our company.
Manuel Bursing, Investor Relations Representative, TONIES: Where do you have production sites for Tony boxes and Tony’s now? How many per country?
Tobias Mann, CEO, TONIES: Great question. And I think I answered this already, but I’m happy to repeat. So clearly, we are producing out of China. We are producing in Southeast Asia. We are producing in North Africa and we are producing in Europe.
And while we are not disclosing any share between the different countries, I hope I make very clear that we are not depending on any of those sourcing countries, but we are flexible in making sure that the right production country is delivering the right, let’s say, destination country also with regards to the tariffs question that you asked earlier.
Manuel Bursing, Investor Relations Representative, TONIES: Maybe you can walk us a little bit more through the upcoming big market days, like Friday, Christmas, you mentioned before, and that there are not too many days in between, and that might lead to some friction on that important time. What can go wrong here in the most important time of the year?
Tobias Mann, CEO, TONIES: Jan, do you want to maybe take that since you mentioned it already in your finance section?
Jan Midel, CFO, TONIES: Sure. So for us this is I want to say business as usual, right? So we have quite a track record of showing that we deliver when it matters. And I think it’s actually quite interesting if you look at the revenue split that we showed you in this presentation that Tobias guided you through. We’re very known and very experienced in managing a Q4, which is always a huge growth step for the company.
We don’t take it lightly. We prepare. We know we have our models. We have our past tracking statistics. We have indicators from prime days throughout the years, etcetera, which show us that we have potential to scale and replan it.
And secondly, also, we are, of course, ready, right? We work with our partners. Everyone in this seasonality has it this year. So it’s not only Tony is facing a very dense end of the year, but everyone else has it. And rest assured that we are in this case always working with our partners, making sure that we have the right resupply strategies in place that we anticipate the best possible extent and forecast also to the best possible extent what will be on demand, where and what.
But in the end, it’s forecasting and prediction and that can be very right and we typically get it also very right. But we’re also, of course, staying attentive and don’t have just a 3 planned menu, but we stay agile and seize opportunities as they arise. But again, I have a lot of confidence in our teams in the markets, in the global operations, but also in the whole back office function supporting this growth that we’re on a good path. And therefore, time is on, just a few days, and then it will be prime time for tonnies.
Manuel Bursing, Investor Relations Representative, TONIES: In 4.5 years, 20 tons are sold per box. I see on the chart that this is increasing. Do we have a figure for 6 years?
Tobias Mann, CEO, TONIES: No. Yes, but we are not sharing this. I hope you understand this. But we are obviously extremely happy with the development. This is also something, as you know, I’ve talked about the Clever Tonys, I talked about the Book Tonys.
Our clear goal is to extend the age range and have more and more content for children that are 5, 6, 7, 8 year old. And this is clearly working. These Clever Toni’s, these Book Toni’s are anticipated and appreciated highly in the market. Literally, I read every day fantastic reviews now about the Book Tony’s, also about the Clever Tony’s. So I’m very confident that this age group is continuing to extend and expand.
And at one point, I’m sure we’ll be able to give an update on this.
Manuel Bursing, Investor Relations Representative, TONIES: What are your long term goals, let’s say, up to 2,030? How much potential do you see in your products?
Tobias Mann, CEO, TONIES: I mean, this is probably this could keep me busy for the next 30 minutes or so talking about this. But I’d rather actually give you a classic hook here by saying, we are going to present our long term 2,030 strategy during our Capital Markets Day next year, June. And this will be a perfect timing for me, for Jan, for the rest of the group to speak to you extensively about what is coming in the next years and where do we see TONI’s in 2,030 and beyond. I can just tell you, I am extremely excited about what is ahead.
Manuel Bursing, Investor Relations Representative, TONIES: Few quarters ago, everyone was talking about AI integration, and you had some projects to bring AI into Tony’s. Where are you now? Chegg (NYSE:CHGG), PPT, writes wonderful customized bedtime stories for my son every evening. I would love to have them read by Tony.
Tobias Mann, CEO, TONIES: Yes. I mean, we’re all fascinated by AI, and we continue to think about how to use AI. Still, at the same time, I believe, with content the valuable content, that recognizable content will become more important, probably even more important now that content creation becomes easier and potentially cheaper. So our platform in itself will become increasingly valuable in a situation where content creation is so abundant, so to say. The our own AI developments continue.
We are thinking about ways to do this. We don’t really have something to update you right now. My recommendation for you specifically is maybe you combine those great AI stories from Chegg GPT with your own voice, speak it on the creative Tony via the Tony’s app and then you have best of both worlds. A fantastic Chegg GPT, good night story and read out with your own voice to your son. I think that’s isn’t that the best combination?
Are you expecting any significant impacts on
Manuel Bursing, Investor Relations Representative, TONIES: Are you expecting any significant impacts on DACH region in Q4 after the launch of the new product? And what about the other regions?
Tobias Mann, CEO, TONIES: So I’m not sure what after the launch of the new product means, if this means our wonderful Lala Linos, which is very, very a very, very important development for us. There is obviously a huge opportunity for us to repeat the success that we are currently seeing and have been seeing for a while now with Sleepy Friends. And you know that Sleepy Friends within a very short amount of time boosted into the top 5 franchises globally, and we have very, very similar expectations of the Lallalinos. So I’m very confident that not only in DACH but also in other regions, this will help drive growth in sales.
Manuel Bursing, Investor Relations Representative, TONIES: Could you give a number how many boxes you sold on the Prime Big Deal Days?
Tobias Mann, CEO, TONIES: Jan?
Jan Midel, CFO, TONIES: So I think we have not disclosed it on Prime Big Deal Days. It’s not a few 100. I think as reference what we said is on the Prime Day, which was in July, I think we have given that information in the H1, it was 50,000 boxes. So I think the absolute amount doesn’t really matter because for us, it’s more as to the question really on the Black Friday, and I understand the question why you asked it, but it’s more that do we are we actually able to scale to the extent that we see also opportunity to grow our markets? And I’m not saying that I want to scale the U.
S. Business by 2x, otherwise I would have probably had to buy differently. But that just shows that we understand the metrics and that on a year on year basis, the demand grows and we’re actually able to fulfill the demand. That should give confidence that actually able to fulfill the demand. That should give confidence that we know what to do during an important commercial moment like the Black Friday, Saturday, Monday, week, Christmas business overall, respectively.
And probably I want to leave it at that.
Manuel Bursing, Investor Relations Representative, TONIES: How are sales of Spanish language Tonys developing?
Tobias Mann, CEO, TONIES: Jan, I don’t have an exact number, unfortunately. I don’t know if you have. But I mean, let me just say, in general, as we grow in the U. S. Market, we are growing with our Spanish Tony sales.
And this is really, I mean, content that is highly appreciated in the U. S. Market. And so we are continuously developing new Spanish content specifically for the U. S.
But then obviously, that is in place for other regions as well.
Manuel Bursing, Investor Relations Representative, TONIES: And this takes us to our last question. Do you still want to be breakeven in the U. S. In 2024 in terms of margin?
Tobias Mann, CEO, TONIES: It’s a wonderful question for our CFO to end on. So Jan?
Jan Midel, CFO, TONIES: Thanks, Tobias. Well, we have guided for the company to be profitable on adjusted EBITDA on a group level, 6% to 8%. We’ve also guided on free cash flow at greater 10th of breakeven. We have not guided on particular segment profitability. And therefore, I also don’t want to comment on this.
We have, however, a strategy which sees us replicating a highly profitable blueprint in the DAS segment internationally. And what we’ve been able to show you for the full year last year, been a 16% EBITDA margin in the Dutch market. It was 18% for half year 1. So of course, that’s the direction where we want to develop all of our markets. They should all be profitable.
But again, we’re not guiding on specific market segment. And hence, I will not comment on that question if you understand. Thank you.
Tobias Mann, CEO, TONIES: Great. Those are great questions. Thank you, Manuel. Thank you, Jan. I appreciate all your curiosity here.
Let me wrap up and highlight 5 clear messages from today. 1st, our international expansion continues to gain momentum. And the U. S. Execution is really, really strong, plus we are enhancing our supply chain resilience through our new production partners, for example, in Vietnam.
2nd, we are strengthening our market leadership positioning through an expanded product lineup and fresh content that reaches a broader audience. 3rd, we are fully prepared and ready to deliver on the crucial Q4 ahead. 4th, we are accelerating our journey becoming a global icon brand, marked by Ginni McCormick joining our management board as Chief Experience Officer. And 5th, we remain firmly on track to achieve our full year 2024 guidance. So thank you very much for joining us today for our Q3 earnings call.
Very much looking forward to seeing you soon again. Thanks.
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