Good morning, and welcome to the Birkenstock Fourth Quarter and Fiscal Year 2023 Earnings Call. Please note that all participants are in a listen-only mode, and the call is being recorded. Following the presentation, we will conduct a Q&A session. The company has allocated 60 minutes in total to this conference call. At this time, I would like to turn the conference over to Alexander Hoff, Vice President of Global Finance. Please go ahead.

Good morning, everyone, and thank you for joining us today for Birkenstock's fourth quarter and fiscal year 2023 earnings call, which is our first earnings call as a public company. Earlier this morning, we announced our latest fourth quarter and fiscal year 2023 results. As a reminder, our fiscal year ends in September. You may find a supplemental presentation connected to today's discussion on our IR website, birkenstock-holding.com. Before we begin, we would like to remind you that some of the information provided during this call is forward-looking and accordingly, is subject to the Safe Harbor provisions of the Federal Securities Laws. These statements are subject to various risks, uncertainties, and assumptions, which could cause actual results to differ materially from these statements. These risks, uncertainties and assumptions are detailed in the morning's press release as well as our SEC filings, which can be found on our website at birkenstock-holding.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. In our call today, all revenue growth rates will be cited in constant-currency basis, unless otherwise stated. We will also reference certain non-IFRS financial information. We use non-IFRS measures as we believe that represent the operational performance and underlying developments of the business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with the IFRS. Reconciliations of IFRS to non-IFRS measures can be found in the morning's press release and in our SEC filings. Joining us on the call today are Oliver Reichert, Chief Executive Officer; Erik Massmann, Chief Financial Officer; David Kahan, President, Americas; Nico Bouyakhf, President, Europe; and Klaus Baumann, Chief Sales Officer. Following our prepared remarks, we'll open the call for your questions. With that, I'm very happy to hand over the floor to Oliver.

I would like to welcome everyone to the call today, and I'm happy to discuss fiscal '23 and fourth quarter results. On today's call, I will share a quick recap of Birkenstock equity story we presented during the IPO and some highlights regarding our fiscal '23 performance. Next, David, Nico and Klaus will give you an overview about their respective regions. Then, you will hear from Erik and Alexander with the review of the financials and our initial outlook for fiscal '24. So, let me begin with a brief overview of our equity story. We are aware that it's not easy to compare Birkenstock to any other listed company. Our business model is unique in many ways. We are the inventor of the footbed. We are in the footbed business, offering a functional benefit to consumers that never goes out of style. We are guided by a simple yet fundamental insight. Human beings are intended to walk barefoot on natural yielding ground, a concept we refer to as Naturgewolltes Gehen. Our purpose is to empower all people to walk as intended by nature. We are a brand backed by a family tradition of a quarter of a millennium with the resilience and its relevance and credibility of a multi-generational business, which supports a strong heritage and drive the premium feeling of the brand. For us, 2024 is a very special year, in which we celebrate our 250th tradition anniversary. We are a universal brand, catering to all people regardless of age, gender and geography. We have a growing global following, exhibiting high engagement and brand loyalty. For instance, U.S. consumers own 3.6 pairs on average today. And 90% of our buyers come to us through unpaid channels. Our total addressable market is the global population. Our products cover a broad…

Thank you. In the Americas, we achieved a revenue growth of 20% in fiscal '23, making the region the largest contributor to overall revenue growth in 2023. Due to our brand strength, Birkenstock outperformed a generally flat market with retail partners who have seen overall challenges in both traffic and conversion. We know retailers are seeking to shift investments to the highest-performing brands. This is an opportunity for us to increase our share and drive top-line as we are one of the true must-have brands. And while we will take this opportunity to grow with partners, we will do so without compromising on our profit led product allocation strategy. We chose to remain very disciplined in B2B channels so that we leave a significant unrequited demand and ensure scarcity across all retail partners with healthy inventories at retail. This approach led to B2B revenue growth of 16% in fiscal '23. Using our engineered distribution strategy, we have steered greater inventory to capture more of this consumer demand in our own DTC channels where the profit per pair sold is the highest. DTC revenues grew in fiscal '23 by 26%, on a level far above B2B, which leads to a further expansion of DTC penetration. During fiscal '23, we have also gained significant penetration in our closed toe shoe silhouettes, which supported the ASP increase. Closed toe performance is approximately three times higher in our own channels compared to B2B which shines the light on the growth potential not only in DTC, but also in B2B. In our fourth quarter, revenues increased by 40% primarily driven by a strong B2B quarter with 73% growth. We experienced strong consumer demand in spring and summer, which even gained further momentum in the back-to-school retail season. In Q4, we took advantage of the macroeconomic situation to execute what we term land grabs, in white spaces, particularly shoes based on our heightened leverage in sandals and clogs, maintaining strong sell-through and healthy inventory at retail. In addition, we made significant inroads in expanding our distribution so that the benefits of our footbed may be front and center in running specialty shops. This is a new initiative and brings the benefits of our footbed directly where the most discerning consumers purchase their performance sports products and whereby this consumer can benefit from Birkenstock as a recovery item as part of their athletic lifestyle. The mantra we use is, run Birkenstock repeat. And this helps us ensure the benefit of our footbed leaves a growing revenue base to complement purchases made by some who may buy for fashion-led reasons. Please note that by and large, we do not extend distribution other than in some specific doors where we believe an end-user may be underserved. Here run specialty sport recovery is a good example. Let me now hand over the call to Nico to discuss Europe's performance.

In our Europe segment, we have cemented our strong position in a challenging market environment, which is driven by consumer caution and increasing sales promotions due to material inventory levels. This strength is built on our disciplined engineered distribution model to manage scarcity, resulting in strong overall sell-throughs and superior full price realization. For Europe, fiscal '23 was a successful year in terms of business transformation with the significant volume shift from lower quality distribution into higher ASPs and higher profitability. We increased revenues by 18% with revenues significantly outgrowing units. Our B2B transformation in Europe is now completed. We have significantly increased our distribution control by converting further distributor markets of Belgium, Netherlands, and Luxembourg to own distribution and by further rationalizing our wholesale partner portfolio with a stronger focus on strategic partners and new distribution in the premium sneaker segment, both supporting our premium brand positioning. Our recently taken back markets; France and Scandinavia both operating as owned distribution markets since fiscal '22, are well set-up both delivering over proportionate growth. These transformational efforts resulted in 15% revenue growth for B2B. Simultaneously we saw great progress in our DTC transformation towards higher quality and stronger member centricity. In fiscal '23, we closed a substantial part of our legacy retail stores and took strategic investments in our membership and analytics capabilities. We experienced consistently strong consumer demand in our own channels with record-breaking sales in both retail and online throughout the summer. Fiscal '23 DTC revenues increased by 24%, significantly outperforming B2B and thus resulting in further DTC penetration. Fourth quarter revenues in Europe were up 5%. The single-digit increase was impacted by shipment timing effects and B2B partner termination effects following our wholesale cleanup. In fiscal '22, we experienced shipment delays in the first half of the year, leading to an exceptional revenue level in the second half. This elevated sales level in Q4 of fiscal '22 has been the base for Q4 of fiscal '23. Furthermore, we phased out the biggest terminated wholesale partners in fiscal '23, which has impacted Q4 '23 results. By taking out these timing effects, revenues would have grown double-digit in Q4 of fiscal '23. DTC revenue growth in Q4 was 20%, slightly impacted by store closures in Europe following our transformation and our closed toe shoe penetration in Q4 increased significantly. I'm handing over to Klaus for APMA discussion.

Our APMA segment showed the highest growth rates of all segments in the fiscal year '23 with 27%. APMA entered into the acceleration mode after a successful distribution cleanup. All over the region we are with teams on ground to drive future revenues. Within the channels, DTC is the growth backbone in APMA. We managed to double the DTC revenues in fiscal year '23 by capitalizing the growing demand, adding webshops in different countries and opening own retail stores in India and Japan. We managed to implement premium distribution through partner stores all over the region. We grew in underpenetrated countries like Greater China marketplaces more than 60%. India digital grew more than 70% and Japan digital more than 50%. So let me remind you, at this stage that our DTC expansion is not at the expense of B2B growth. It is all incremental. Despite distribution cleanup, B2B grew double-digits at 12%. We focused on mono branded partner store openings and upscale customers to more premium products by following our global segmentation strategy of placing the right products in right places or adding exclusive products to our own channel. In Greater China, we recently appointed Tiffany Wu as the Managing Director to drive brand equity and sales in the region. With this new appointment, we aim to further strengthen our expanding footprint in the most dynamic APMA region, in the growth region with the largest untapped white space potential for the company alongside with India and Japan. So, having said that, let me hand over to Erik who will review the financial figures in detail.

As outlined earlier, we achieved remarkable revenue growth of 20% in fiscal 2023. Our fourth quarter tied in with this performance and came in with growth of 22%. Gross profit margin for fiscal '23 was 62.1%, up 180 basis points compared to fiscal '22. Let me remind you that last year's number was unfavorably impacted by EUR24.4 million of expense, reflecting the effect of applying the acquisition method of accounting for the transaction in '21 to inventory valuation and subsequent impact on cost of sales. When adjusting this fiscal '22 effect, gross profit margin slightly decreased 20 basis points from 62.3% to 62.1%. The decrease was driven by inflationary costs for raw materials and labor. In fiscal '22, we took an early sales price increase ahead of the anticipated cost inflation while cost of sales inflation mainly hit us in fiscal '23. However, the unfavorable cost of sales inflation effect in gross margin was largely offset by favorable effects from an increased DTC penetration and further sales price increases. Gross profit margin of the fourth quarter increased by 140 basis points from 64% to 65.4% due to a strong ASP increase following an approved product mix and a slightly higher DTC penetration. Adjusted selling and distribution expenses represented 29.8% of revenues in fiscal '23, up 190 basis points compared to prior year. The increase was primarily driven by higher costs in relation to the above average growth of DTC revenues and cost inflation. Adjusted general administration expenses represented 5.4% of revenues in fiscal '23, down 70 basis points compared to prior year, providing operational leverage. Our fiscal '23 adjusted EBITDA of EUR483 million was up 11% compared to fiscal '22. With 32.4%, we again achieved top tier EBITDA margins. The margin decline of 260 basis points compared to prior year…

Birkenstock is a cash flow generating business which provides us optionality in terms of capital allocation. In fiscal '23, we achieved cash flow from operating activities of EUR359, up 53% compared to prior year. The increase is primarily driven by a strong operational performance as well as a lower inventory increase compared to fiscal '22. Inventory increased 11% which is approximately half of the revenue growth rate, providing us an improved inventory to revenue per share. We are extremely focused on inventory health, especially as we grow. Let me remind you at this stage that we hold approximately EUR100 million of raw materials and semi-finished goods as we have the production in-house. Within finished goods, the largest part relates to core and nonseasonal products which we sell for many years or even decades. The majority of finished goods is already contracted or allocated against customers. Accordingly, risks for allowances are low while the inventory gives us flexibility to react fast to an increase in demand and to generate additional sales and gain market share. Net cash flow used in investing activities was EUR101, primarily driven by the production capacity expansion. Our strong cash flow generation allowed us to completely pay for that capital expenditure out of operating cash flow. In addition, we repaid loans and borrowings of EUR53 million in fiscal '23 while increasing our cash position. As announced in early November of 2023, we continued our deleveraging process post-IPO and utilized the net proceeds together with cash on hand to repay existing debt. We early repaid $450 million of the U.S. dollar terminal fee and EUR100 million of the vendor loan in the first quarter of fiscal '24, which reduced leverage to below 2.5 post-IPO. Now turning to the future. We will provide guidance on a full year basis…

Certainly. At this time, we'll be conducting a question-and-answer session. In an effort to get as many questioners as possible, we ask that you please limit yourself to one question. [Operator Instructions] The first question today is coming from Edward Yruma from Piper Sandler. Edward, your line is live.

Hey. Good afternoon, guys. Thanks very much for taking my question. I guess, curious on how you feel about inventory on a SKU basis. It seems like you've had a lot of very popular SKUs, like the Boston, particularly in the U.S. So kind of curious how you feel about some of your hotter SKUs right now and kind of inventory levels in the channel. Thank you.

Hi, Ed. Thanks for your question. Yes, a topic we have been discussing before. Inventory compared to revenue came down in '23 from 36% to 20% -- to 30%. So you see, we are constantly working on optimizing this. Still, as you know, more than 70% -- 75% are already allocated to customers and most -- more than 75% is timeless and carryover products and fillets. So nothing I'm worried about. And I'm very positive with the inventory level we have. As a company that's producing our own goods, we always want to be in the position to deliver D2C, which we will grow. So we need inventory. We will increase inventory, but still we optimize it constantly.

Thank you. The next question is coming from Matthew Boss from JP Morgan. Matthew, your line is live.

Great. Thanks and congrats on a nice quarter. So, Oliver, could you speak to maybe the broad-based strength in demand that you continue to see across geographies? Have you seen any change in top-line momentum through holiday or your December end first quarter relative to the more than 20% constant currency growth that you delivered in the fourth quarter? And just how would you rank white space category opportunities in 2024?

Hi, Matthew. I would say you've seen the growth rate in Q4, which is 22%. So we can't see any kind of downside here for the Q1 and the full year. So as you know us, we are price conservative. We try to be very realistic here. You may have heard about the inflation increases again in Germany, and so we are a bit -- very careful in this segment to be on the right side and not too, let's say, optimistic. But the demand for purpose-driven brands are unbroken. It's a bit of a difference to the desire-driven luxury brands. I think they're much heavier under pressure. We are not. We see growth everywhere. Your question about the upcoming territories like APMA, the white space, as we said before in the road shows and in the testing the water sessions, we don't see any significant impact on our business in '24 because we are just about to start this. And the investment in retail and in the right partners and develop this regions carefully is the leading guidance here for us at the moment. They will kick in later, you will see, and then they will generate much more growth and they will carry much more EBIT as they do today.

Thank you. The next question is coming from Louise Singlehurst from Goldman Sachs. Louise, your line is live.

Hi. Thank you. Hi, Oliver and Erik and team. And thanks for taking my question. If I could just ask about the factory and in terms of how that's gone, I think it opened in September. It's obviously very important for the volume increase for the year ahead. And it'd be interesting to know just how -- where you are in terms of expectations and any learnings since September. Thank you.

Hey, Louise. We -- as you know, the new factory in Pasewalk and the refitting in Goerlitz and some refitting in our factory in Portugal in Arouca will give us in the next years the opportunity to double the capacity. So that's really a big moment for us to really grow the capacity. And of course, as we said it before, you see some negative impact on our margin within the '24 numbers because of this Pasewalk one-off effect. And to be super honest, we see also some pressure from inflation coming in '24. As you know, we are very sensitive, but our customers are very loose with our pricing power. So we have enough leg space to further increase pricing and helping digesting the one-off costs through this factory improvements and further investment in our capacity. So we are on track here, and this will give us a completely different situation from '25 onwards. So we expect that this growth preparation will be heavily digested within '24 and then you will see a quick recovering of margins and efficiency and hopefully less inflation as well.

Thank you. The next question is coming from Michael Binetti from Evercore ISI. Michael, your line is live.

Hey, guys. Good morning, and congrats on your first quarter out of the gate here. I just wanted to clarify one comment from before on fiscal '24. Did you say, as we think about the cadence of the year a little bit, I know you're guiding on an annual basis, but did you say to look at the 22% constant currency growth rate in fourth quarter as a good way to think about how the revenues grow early in the year, in the December quarter, and if that was right? And then to the question about the new factory coming online, could you speak to what you think we should -- how we should think about the pace of unit volume growth building as we move through the year into the comment you made about later in the year, you'll start to see some of the effects of the new factory ramping. And then, David, if you wouldn't mind for a second, tell us about maybe a little bit about what you referred to as the land grabs in America, please.

So, that's a lot of questions. Michael. I will start with the beginning. We do see a unit growth, of course, within '24. This will give us some movement to improve our distribution model. Coming back to your Q4 numbers and the outlook in Q1, I mean, it's really, what? We are conservative, but we were not disconnected to the reality. I mean, our growth rate in Q4 is 22%. Okay? So why should this drop so dramatically? I mean, the full year guidance is between 17% and 18%. But the truth is we are kicking in on a level of 22% in Q4. And yes, this is not dramatically declining, and we are very positive about our Q1 already, but we're talking about a full year guidance. So, as you know, on the conservative side, being rookies in this segment of IPO presentations and communications, we want to make sure that we're on the right side. And that's why we're sticking with our guidance of -- for the full year guidance of 17% to 18%. Okay? And then hand over to David to give you a bit of a color of the U.S. market and yeah.

Thanks, Oliver. Thanks, Michael, for the question. Land grab is a term we use where we really aggressively take some share. I mean, what we're seeing in the U.S. right now is, it's almost a little counterintuitive. But the more challenged the consumer spending power has been, really the better it's been for the brands that are really in high demand. And like Oliver said, what we're seeing is this incredible shift right now in shopping patterns, from general shopping to real intentional purchasing, where people are searching out those products, brands, experiences they really want. And obviously, Birkenstock is one of those few that's benefiting. And when we had an opportunity in the recent months to take some share and to provide, especially our retail partners, with a brand that is selling through at near record levels of full price realization, we took that opportunity to fill some more shelf space.

Thank you. [Operator Instructions] Next question is coming from Dana Telsey from Telsey Group. Dana, your line is live.

Hi. Good afternoon, everyone, and congratulations. Oliver, David, Eric, as you think about ASP and units sold and even by region, how are you thinking about [Technical Difficulty]

Thanks for the question, Dana. We have taken price increases over the past few years on an ongoing basis on our core products. And what we're seeing is the consumer response to leather to more higher priced products has been far beyond our expectations. It's exactly what I spoke about. There's incredible intentional purchases where consumers are brand fans, are searching out products. And it just so happens to be that some of those products, especially the closed-toe ones, are obviously at higher average selling prices. So the consumer who has come to our brand by way of our core products, as you know, we average 3.6 pairs per consumer. They might come to us from a core purchase, and then their next purchase, and their next purchase and their next 3.6 purchases may be closed-toe or clogged products that just happen to be higher average tickets. So we're seeing no price compression whatsoever. And we're actually seeing a growing demand for our higher priced products, which are just resonating with the consumers.

Hey, Dana. This is Nico. Maybe I can also add a bit color from the European perspective. So in Europe, over the course of the last two years, we have increased pricing weighted average around 25%, which is really significant. And for us, pricing just generally across the group is a seasonal exercise. So every season we look at the entire portfolio, the entire collection, and look at input costs, look at the COGS, and then also look at what equity we have for each and individual product and what can we charge for that product. So we are currently selling in autumn winter '24. We sold in spring summer '24, for Europe, again, a significant price increase in that season, and that's going to continue. The price increases that we have done so far did not result in any negative impact from the consumer perspective. So the demand remains unchanging, remains unbroken, and that's quite special for us as a brand across the globe.

Thank you. The next question is coming from Paul Lejuez from Citi. Paul, your line is live.

Hey. Thanks, guys. Curious what surprised you, if anything, on a regional basis, both positive and negative, and maybe how does that shape? How you're thinking about growth by region in F '24? Maybe if you can talk about which regions will come on the higher end of that 17% to 18% growth rate that you guided to versus the lower end or below? Maybe if you could provide by region. Thanks.

Thanks for your question. As you know, the big two geographies; Europe and Americas are more or less growing on the same speed, which is very encouraging, because it shows that even in the traditional markets, we are growing very, very strong. You have to keep in mind that our capacity is still very limited. That's why we didn't have enough product to further on the unit side, further push more into the APMA region. So that's why APMA as a region is only growing by 27%. But in the near future, once we have Pasewalk up and running, and the improvements in the other factories in Goerlitz and in Arouca in Portugal, then we will be able to fulfill much better the very, very strong demand in China and the APMA region as a whole. Klaus can give you some color on this after my explanation. One thing, and you asked for downsides, to be super, super honest, we underestimated the inflation effects. So if you try to understand the bridge from '22 numbers with a 35% margin going to our outlook, which is conservative, please have this in mind, our conservative outlook for '24, we come to 30%. So the bridge from the 35% to the 30% is -- we didn't manage enough price increases in '22. They were fully in our books in '22. That's why we had this outstanding margins. Then the inflation on '23 kicked in and we lost more or less like 2.5% due to this inflation impact. And we cannot adjust the pricing between the years. So we need at least like 10-12 months in advance to prepare ourselves for price increases. That's what we're doing this year again. So the inflation will be and that's really like the question mark here for the '24 numbers, how big will the inflation come back again in 24? We know that Pasewalk will digest some of this margin. So just roughly from '22 to '23, we lost 2.5% due to inflation margin points, or 250 basis points. And the inflation will further cost us -- our calculation at the moment, 120 basis point in '24 and 120 basis point, the idle cost of Pasewalk or the whole factory rearrangement set up. Right? So Klaus will follow up with some China -- Chinese numbers.

Hello, Paul. Klaus here. Just for your question about positive and surprising effects, the expansion in Greater China or in APMA gives us also a big trust because we're taking over the DTC and we are having more own stores running, which are really overperforming and driving not only the business also, the ASP and obviously the rollout will continue. Also all the campaigns we are running in Greater China are doing very, very well. So with the growing capacities we have, I mean, we can constantly supporting that demand and delivering to the countries, but it's very positive.

Thank you. The next question is coming from Randy Konik from Jeffries. Randy, your line is live. Randy, your line is live. Please check your mute button.

Can you hear me now?

Yes. Go ahead, sir.

All right. Sorry about that. Thank you. I guess question back to David. You talked about a flat market in '23. Just want to get some perspective on your thought process on the market overall for '24. It sounds like you're thinking a little bit more challenging. So maybe just spec -- give us a more -- a little more specific there of how you're thinking about it. And then as you think about just the opportunity from a wholesale perspective, what's the opportunity you're thinking through from a door count expansion potential, if at all? And then how are you thinking about what's gone on with order patterns? Are the accounts on the wholesale side kind of taking on more SKUs, more units, volume of existing SKUs? Just give us a little bit more flavor of how you're seeing the overall market in the Americas this coming year, as well as different opportunities for door count and order growth. Thanks.

Sure. And just to start, just a reminder, it's not demand-driven from the wholesale side. Everything we do is completely allocated from our side. So it really becomes more of a self-fulfilling prophecy. What I would say is the U.S. consumer, I've said before, is somewhat fragile, but is resilient. And it is a bit counterintuitive because the more the buying power of the consumers has been constrained, the more it's been focused on those products that they most covet and demand. And we are one of the few real key intentional purchases that people are searching for. And I think they're searching with even more vigor than ever before for those few brands that are really important to them. So we can really manage and dictate a lot more of what you see at wholesale than you've ever seen before. Having said that, we're not going to compromise our discipline in any way. There's no real significant door count expansion except where we think we may have some underserved markets or underserved end users. But suffice to say, everything we do, will still be done with the highest level of maintaining relative scarcity and a bit of what I would say, unrequited demand, which becomes, quite frankly, a demand flywheel. I mean, the more that we do put into the market, the higher the demand keeps expanding. So I'd say we're expanding but with extreme discipline. And we're also based on the incredible momentum we've had in direct-to-consumer, we're fluid. Even in the middle of a quarter, in the middle of a month, we're able to steer available product wherever we think that the highest return and the most benefit will be. If you look at some of the numbers from the past few quarters, that reflects real-time movement of inventory to capture demand where we think we can best manifest it.

Thank you. The next question will come from Simeon Siegel from BMO Capital Markets. Simeon, your line is live.

Thanks. Hey, everyone. Happy New Year. So congrats on a really strong gross margin this quarter. Can you speak to maybe the drivers there a little bit more? And how to think about that across the year ahead embedded within the guide? And then, just if you can remind us within B2B, what percent of sales now are driven by distributor versus more traditional wholesale in any way to think about the distributor model going forward? Thanks, everyone.

Thanks for the question. Simeon. This is Alexander and I will take that over. So our Q4 this year is up a little bit and is influenced by positive as well as negative effects. We saw a really strong ASP. The colleagues from the sales side already touched on that. We see great performance in our higher price point products. DTC penetration is a little up. We took some pricing. We had some American share which was over proportional, especially in DTC and all that drives gross margin. Then we had some negative effects on the FX side because last year there was roughly parity U.S. dollar versus euro. That gave some headwind, but overall an increase in gross margin. This 65 is clearly also coming from strong DTC penetration this specific quarter. So this is nothing what we guide for the future. I think we also touched on that '24 number where we see some kicking in effects from the capacity expansion. So clearly we will see that in combination with the inflation, which will bring some slight headwind to gross margins.

On the distributor piece -- hey, this is Nico. So for Europe, as you know, we -- traditionally we were pretty distributor heavy market. Along our transformation plan, we exited many distributors. In fact, we've come down from ten distributors to five over the course of the last two years. The remaining distributors, big distributors, are Italy, Turkey and some smaller distributors around Greece. They will remain as we look forward into the next two, three years. In Italy, it's worth mentioning that we do own our own DTC. So the DTC channel is owned by us and the distributor is serving the wholesale part simply because we believe Italy is quite complex in regards of distribution and we are very careful with entering a market. The recently transformed distributor markets for Europe are Benelux. We just opened our office in Amsterdam and are set up there. The recently taken back markets generally are over proportionately performing well, delivering overproportionate growth in regards of top-line.

Speaking for APMA, the remaining distributors we work with is Australia and Taiwan. Obviously, with Australia, we have a long relationship. It's a very good distributor, and -- but all above, the distributor share is also coming down.

Thank you. And the next question is coming from Sam Poser from Williams Trading. Sam, Your line is live.

Thank you, guys, for taking my questions. So I just want to clarify two things and then -- I have three things. One, David, have you seen any -- what kind of change have you seen in the underlying U.S. demand for your product? And then how are you managing that?

Sam, thanks. I use the term the demand flywheel and it really makes a lot of sense. The more product we continually put into the market, as long as we do it in a disciplined manner, leads to more demand. So demand is not a finite measure. Demand keeps going up. The higher we increase our top-line revenue, the more demand keeps outstripping it. So we're learning more and more about how infinite that demand really is, especially as we start to connect with different end-user groups. And that's why that example of like, the same shoe just used in a recovery environment opens up a whole new end use for us. That's the perfect example we gave of how exponential the demand really is.

Thank you. That does conclude today's Q&A session. I will now turn the call back to Oliver Reichert for closing remarks.

Okay. Thank you for joining us in this call. Overall, we are very pleased with our fiscal '23 results. Thanks to the team. We have never been better positioned for both near and long-term financial performance. We believe that once we develop our capacity that we will continue our path also on the margin side, this will definitely be the case. So you shouldn't worry about this. Our outlook overall is very positive and hopefully, you will join us in our Q1 call and then you will understand what I'm talking about. So enjoy the day. Have a nice day, and thanks to the team on both sides. Thank you very much. Bye-bye.

Thank you. This does conclude today's conference. You may disconnect at this time and have a wonderful day. Thank you for your participation.