Progress & outlook on jooli. Launched in the Indian market to capitalize on both lower customer acquisition costs and and a trove of data needed to enhance the app's algorithm, jooli has already witnessed a considerable boost in order volume (+560% in December vs. the previous month), aided by jooliPay. While first KPIs are promising, they are not yet meaningful, and hence we do not expect material top or bottom line contributions from jooli before 2026e, leading us to adjust our estimates accordingly.

FY'23e preview & long-term growth. As we expect Q4 sales to be burdened by the muted consumer sentiment witnessed over the last quarters, and hence softer-than-expected revenues from the holiday season, we trimmed our estimates: Q4 sales are now seen to come in at c. € 11.3m (flat yoy), implying sales of € 44.7m for the full year (-3% yoy; eNuW old: € 45.3m), largely driven by a lower average sales price of € 67 (-7% yoy) as customers postpone big ticket items sales, and only partial recovery of items sold to 168k (+7% yoy). While the weaker-than-expected top line will likely be affected by a weaker-than-expected top line, the company's cost cutting program should continue to bear fruit and thus partially offset a lacking fixed cost coverage. EBIT should hence run to c. € -0.13m for Q4'23 (+89% yoy) and c. € -1.2m for the full year (+17% yoy; eNuW old: € -0.8m).

Convertible bond financing. In Q4'23, elumeo was able to secure a favorable 5-year convertible debt financing of c. € 1.2m at a 3.8% interest rate from selected suppliers of the company. The out-of-the-money strike price (€ 4.50) along with the below-the-market interest rate provide elumeo with a cash infusion that should give elumeo room to maneuver and to focus on its long-term growth initiative #juwelo100.

The outlook for the long term remains bright. As the company prepares jooli for a successful roll-out in its European markets, elumeo's core business is well-positioned to capitalize on an eventual recovery of the jewelry and overall e-commerce market, with sales prices and items sold likely to recover to their historical means. Overall, elumeo looks set to grow sales by 7% CAGR to c. € 55m by FY'26e along with reaching a healthy EBIT margin of c. 3% in FY'26e (eNuW), supported by scale efficiencies. Mind you, that positive effects stemming from the jooli roll-out are not reflected in our estimates.

BUY

with a changed PT of € 5.00 based on DCF.