Yes, thank you very much, and good morning, everyone. Today we are here in Sofia, Iliyana and myself.

Dimitar is traveling abroad, and that's why he is joining separately, but we are all three together with a bit more place as we had the last time. I start with a typical chart, and I want to add something here to the normal stuff that we are a building automation company, because last meetings showed that we are more understood as a building management company, especially with the new products that we already launched, and the software solutions that we added.

That is much wider than the typical normal understood smart home market that makes one apartment smart. We have more and more solutions that go much wider, and that opens a much bigger market for us for the next years.

That's something important to know that we are more and more building management, energy management, and not that much the smaller things that everyone is selling, some smart plugs and other things. That's an important change and development.

I will run you through some highlights, and at the end, some operational topics. Iliyana will talk about the financials, and Dimitar has a couple of charts about product development and roadmap updates.

That leads to the highlights. In the first half of the year, we have reached our internal targets for EBIT and for revenue.

Our gross profit is a little bit over the target, and that helps us, of course, as well with the bottom line, with the EBIT. Mainly, this is driven by a very good optimization of supply chain.

We have shipped a lot of our products not, as in the future, via airplanes, but on trains and ships, and that is optimizing gross profit a little bit, 1 to 2 percentage points, quite visible, and gives us a little bit of more room to move as well in the second half of the year. Our installer network, you know that this is one of our key KPIs, is growing quite strongly.

We come to some numbers in a minute. Amazon business was a bit an issue in the last 12 months.

We are back on track with Amazon, but we are selling indirect now to Amazon, which gives us a better control over the prices that Amazon is using, and we have calmed down the price situation in the market a lot since we made that move, and we see that we are back on a growing track. We have signed an important new contract with a pan-European broadline distributors.

There are three big ones in Europe, and one is really focusing more and more on building management products, and we signed with this company for all European countries. In the DACH region especially, we have onboarded a new distributor specialized in do-it-yourself chains, because we see that there is a lot of room to move in do-it-yourself, especially in the German market, because the market is still very fragmented.

It's not only OBI, Hornbach, Bauhaus. There are five, six other players, and we want to onboard with all of them, and for this, we need someone who has already contracts and is in those channels.

Our customer base continues to grow. Cloud users continues to grow.

That gives us a lot of opportunities for long-term monetization. We are growing as well in the premium app.

We think in the second half of the year, with the launch of cameras, this will grow faster. Our installer base is very important to strengthen our Pro business.

The important thing here is not only onboarding them. We now have to activate, and we are planning a lot of activities to train them and to motivate them more to use Shelly devices as well in their bigger projects.

I have one more. All key indicators like household number of cloud users, premium app users in the last 12 months grew above 30%.

The important number here: we have now by the end of June 8,600 installers in our installer portal, visible on our website, visible for customers as well. That's in the last 12 months an increase of 237%, and that's a huge accomplishment by all the teams.

As I said, now we start more and more activating them, training them on different levels. As well, we have some nice developments in our application, like mass integration of products, that is very helpful for installers and helps them to integrate Shelly products more in their big projects.

That leads to the highlights and to Iliana.

Good morning from me as well. I will start with the financial headline.

Our H1 performance was pretty strong in terms of revenue. It came in at 68.3 million, which was 26% growth year-on-year.

In terms of operating profit, which is our EBIT here, it was 17.7 with year-on-year growth of 46%. The EBIT margin also improved, and it was 20 26%, which was also an improvement from last year, when it was 22.6%.

In terms of cash, our liquidity position also improved substantially. We had almost 32 million of cash at the end of Q2, which was a 72% improvement year-on-year, and it also added a net cash inflow of approximately 18 million since the beginning of the year.

In summary, all the three key indicators—revenue, operating profit, and cash—moved nicely together in the first half of the year. Breaking down into the quarterly developments, revenue consistently grew in both quarters since the beginning of 2026.

In the first quarter, we booked 33.3, which was 26% growth year-on-year, and in Q2, it was slightly higher at 35 million, with year-on-year growth of 26%. Both quarters were higher than 25% growth, and also the two-year compound growth rate was also running in the high 20s, which is also supporting our guidance for revenue, and it is also a testament to the consistent delivery model that is now successful and it is supported by the same drivers that we've been discussing: the growth of the installer base, the consistent channel execution, and also the growth of the professional installers network.

The EBIT quarterly developments were also positive. First quarter EBIT was 8.6 million, a 29% year-on-year growth.

In the second quarter, it was slightly better, 9.1 million, which was a notable improvement of 65% compared to the comparative period of last year. Both quarters above our midterm target of 25%, we are comfortable that we have the proper foundations to the year-end guidance on operating profit level as well.

The profit margin that is stable around 26% also show pretty good operating leverage, meaning that we are growing the revenues, but the additional investments on the operating cost side are substantially covered by the positive gross profit movements. I will now go over the cash flow developments before I go back to some additional P&L comments.

On the cash flow side, it was also pretty positive first half of the year for us. We started the year with a cash position of 13.7 million, and we managed to realize operating cash flow of 20 22.3 million, which was much better than the same period last year.

It was triple the operating cash flow of the same period of last year. We had substantial investments related to our new production facilities in Bulgaria, and also we continued to intensively invest in our R&D operations.

You see here investment flow of 3.2 million. We also had a modest outflow in terms of financing, which was related to scheduled repayments for leases and existing loan facilities.

As a result, the net increase at the end of H1 was 18.2 million, and our cash position once again almost reached 32 million, which is very close to the bottom of our year-end target for cash, which was 35 to 45 million at the end of December. It is a pretty good and pretty stable balance sheet, as our equity ratio exceeded 80% in the first half of the year, meaning that we are in a good position to further support investments on the R&D side and also the most recent dividend distribution in July.

One note maybe additionally on collections behind the operating cash flow. We managed to collect approximately 73.5 million from clients, which was 57% better than the same period of previous years.

Our receivables actually improved very well compared to December. In terms of receivables, the total receivables decreased by 16% compared to December, and they were 66 million at the end of June.

Breaking down the receivables between the clients' receivables and the advances, they both decreased by 12 and by 38%, respectively, both of them releasing cash to support the operating cash flow in the first half of the year. At the same time, our inventory increased to 24 million from 19.5 at the end of December, which is also an anticipated buildup in line with the preparation for the second half launches and the generally stronger second half in terms of sales.

In terms of days sales outstanding, they fell by additional 21% in Q2, and now they reached 147, which is a cumulative improvement of 45 days compared to last year. In general, the cash conversion reached 255 days, which is also a good improvement compared to Q1, when it was 267 days.

This indicator is also progressing well towards our year-end target that is in the range of 220 and 240 days. Going back to the overview of the P&L once again, revenues increased 26% year-on-year to 68.3 million.

Gross profit increased slightly faster by 39% year-on-year, which is a 5% improvement in terms of gross profit compared to the same period last year. This improvement in gross profit allowed us to cover our intensive spend in terms of sales and marketing and also administration costs.

You will see that sales and marketing increased by 50% and administrative costs increased by 52% year-on-year. On the sales and marketing side, we should note that there is a substantial variable component to that, and it is directly related to revenue.

These are our marketing development funds, which increased substantially this year compared to last year. If we take this out of the calculation, then the sales and marketing would have increased only by 11% year-on-year.

In terms of administration, we continue to see here a steep increase compared to previous year. This was also the situation in Q1, and it is expected to remain in similar levels until the end of the year, until it levels out, because the international expansion and our investments in administration of this expansion started only at the end of 2025 and most intensively in the beginning of 2026.

Now comparing to the previous period, it's a very different situation, and it will take at least couple of more quarters until it goes down to more efficient and sustainable ratios to revenue. Despite the increased marketing spend and the international expansion, our EBIT margin remained stable at 26% throughout the first two quarters of the year, and net income also increased by 51% year-on-year to 15.4 million, with the net income margin improving from 19.

18.9 to 22.6% year-on-year. The earnings per share came in at 85 cents in the first half of 2026 compared to 56 last year.

Also a pretty good improvement in earnings per share. In summary, growth is visible on the top line, but it is also supported by sustainable profitability.

Cash is also looking good and working capital going back to normalized level. Pretty good first half of the year on the financial side.

Passing back to Wolfgang.

To Dimitar.

Oh, to Dimitar, sorry.

Thank you very much. This about the product line and how we doing with the with the R&D.

First, thank you for everybody and welcome on our quarterly call. In the first year In the first half of the year, we released the the the big portion of the project of the products.

We have something which is targeting the first customers, the the entry customers, with our plug-in, which is in a very really affordable price on the market, in the price point under €10. Also on the same time, we're targeting the professionals and the professional customers, as you see, and Wolfgang presented that over close to 9,000 electricians is already part of our network.

This is exactly the target for the circuit breakers, for the fully automated and smart circuit breakers, which we launched first half of the year. We've seen the significant demand for them, and we continued developing in this line also another, as we say, the smart protected solution, which we will continue and more products will be released to end of the year.

This is not the all released products, but this is the main product which we released. The camera, you know the camera is postponed based of the some chip shortage and the price increase beginning of the year.

We rebuild the camera, and will be and is not launched in the first half of the year, but is ready to be launched, is in the mass production now, and soon you will on the market to reflect the results in the Q3 and Q4, end of the year. Also as as we talked about the R&D, there is a a new mini circuit breakers, which is completely capable to replace the existing breakers without additional room in the into the breaker box.

This is our next product into the professional line. The outdoor camera, which is ongoing project, we're targeting this camera to be released end of the year, end of the Q4.

The The for the heating seasons, we have a a new choices, the new TRV, which is will be much more price-efficient than the the existing one. We will extend the range of the locks of the locks, yeah.

Based of this one, there is a more than 20 different products which will be released on the end of the year. We we cannot show them all of them here in the on the presentation.

This is the key products which is not exist before in our portfolio. About something which is interesting, we start talking in our company how exactly the AI affect to the internal development.

We know that currently we extensively working with the professionals to use the AI implementing our devices, integrate them to different solutions, and this is quite successful, and we've seen very high interest and adoption from the from them. Internally, the company extensively using the AI, and as you can see, 70% of the code at the moment is AI-generated.

Our developers is mainly concentrated to make a code review, to prove the AI work, to train the AI to to go better, because we targeting end of the year to reach at least 9- 90% of the code to be AI-generated. This, of course, this is coming with the with much more much better efficiency.

We almost double the the results and the speed of development, as you see, 50% faster reduction time for the products. All documentation is based of the is made by AI.

Also, we working with a local company about the prototyping and simulation of the our future devices, and now this is happening 44% faster than before that, because we doesn't need to do everything from scratch. We can use the AI to simulate the different environment.

We can use many things also from the AI to to help us to improve the reliability of the devices. About the code review, it's it's interesting job, because from one side, our developers make a code review of the code generated from AI, but at the same time, AI helping all developers and make a in-life code reviews and give to to our developers and report to our developers some bugs, security, possible issues, and everything which need to be fixed after after that.

We can say that the very big bunch of the agents is working into the company and to help us to to to speed up the development. For the that that's a number.

As you see, there's another month that about the UI design at the moment and UX design, very soon we we're targeting to have a completely new UI AI-generated application, but not only not only this one. Currently, we developed more than different 10 portals for our customers, and every which is delivering to them the tailored solution for them based of the AI-generated UI and and UX.

Also, we successfully implement AI into the physical testing the devices. This is our first try, the physical AI, which physically testing the devices within the long term in the in different environment.

There is a one big room is completely controlled by AI, and all testings between the devices is happening inside in this room, and everybody can see, because it's the speed is incredible. Currently, we are on the early stage, in only 26%, because this is the physical AI and something is completely new.

At the end, yes, we're working in the physical world. Our device is working in the physical environment, and this is the best way we to test our devices.

Very short, this is this is fully only for the for the second quarter. Now go back to operations and to Wolfgang.

Thank you very much.

Yes, I think I do not have to repeat the H1 results. All numbers are going in the right direction, especially the cash development that has been a point of critic at the end of the year, and we promised to work on that.

We show that we deliver here against our promises. If we go to the regions, we see a quite balanced view on DACH versus rest of Europe, rest of Europe is coming very close to the DACH numbers.

We have made an adjustment here that I have to explain, because if you remember, in the last calls already, I said that we have more and more cross-border shipment, we cannot really just take our numbers from accounting, what did we invoice to a country like Poland, because some products are shipped directly back to Germany because distributors have their warehouses there and the invoice address there. We made some adjustments to take at least the big movements out.

For example, for the Amazon marketplace, the proportion that is sold in Germany is not 100% invoiced to Germany because some of the warehouses are in other regions. If we look at the picture that we see here, we are on a good way to balance DACH and the rest of Europe.

Very important development is what we see in the rest of the world, especially in the United States. I mentioned in the last meetings that we are in contact with a distributor in the US.

We're still not onboarded him, but we have signed a contract now, and we expect the first orders in Q4, and we expect a ramp-up then in '27. That looks all very positive, and in general, the US is on an excellent way, still on a relatively low level, but developing in a nice speed.

Otherwise, we would not reach the average growth in this region of above 60%. That's almost three times the growth speed of the rest of the group.

I would say we accelerate this in 2027 even to a higher speed so that these three regions, at one point, end of '27, beginning of '28, should be completely balanced between DACH, rest of Europe, and rest of the world, to reduce the dependency on one of the regions. The premium app is as well developing in a good speed, above 30% more users, and revenue grew above 70%.

There's still a way to go to the end-year numbers that we have planned with €2 million. On the other hand, with the camera launch, the first cameras will be shipped in August, in Q3, then we have a free trial period for cloud usage, and then we expect that at least part of the customers will not use local storage, they will use the cloud storage, and that should boost the revenue for our cloud services and premium services.

As well here, we feel on a good way. With a wider portfolio of cameras, with the outdoor camera coming end of the year, for the next years, we see that we are in a good direction about this.

We already confirmed our guidance for revenue and EBIT, and for the first time, we have guided as well the cash position, because of the comments from your side end of the year or beginning of this year, we confirm where we are. We still have a way to go, but the way to go is similar than it has been in the last years.

I have to come back to our big proportion of do-it-yourself business that is depending on Black Friday revenues, that is depending on Christmas business. For us, the fourth quarter counts as two quarters, we typically think in five quarters.

On top of this, we will see more effects from our country expansion and from the roadmap that Dimitar has already presented. We feel quite comfortable.

We are a bit closer on the EBIT side, and I think I do not have to talk about the cash position anymore because we are almost there. I would not think that we make the next step already in Q3, because Q3 is balanced a little bit with Black Friday preparations and some other things, but end of the year, we are very optimistic that we will reach what we have promised.

That all looks good. Once again, H2 is really heavy for us and is a very important half of the year, as it has been in the last years.

I already said in the last calls, we don't really like that. We would have a more balanced view over the quarters that we would like much more, because it's easier to anticipate, but the situation is as it is, and we have to manage that.

We hope that in '27 and '28, we will have less product launches that are pushed to Q4 and that everything balances a little bit better out, because this is something that no one really likes. That leads to the summary.

Once again, revenue and EBIT on target. We have a very strong improvement in the working capital efficiency.

We have onboarded more than 1,900 installers in only one quarter. In the first quarter, we already had a very good number with onboarding 1,400, it really accelerates.

We are starting a lot of campaigns and a lot of initiatives to really not only onboard them and to have an address and the number and show them on the website, but to turn them in revenue generators. There are a lot of plans in all regions that started already.

We have new distributor signed. That always causes some trouble, as you can imagine, especially in our biggest region in DACH, because so far, we had one exclusive distributor for this region.

Now we have three distributors for that region. The big player, that's a company called ALSO.

That's one of the top three broadline distributors, plus a smaller company that is specialized on do-it-yourself business. That causes some friction, but we see more positive effects than negative effects, especially if we look a little bit more in the midterm.

Our expansion in new markets, there is some room to grow. Not all markets are performing excellent, but the balance is very positive, as you have seen in the rest of Europe development.

For the second half of the year, the guidance is confirmed. We continue to improve our cash flow, and we are on an excellent way there.

Camera launch is ahead. Dimitar already said that product is in mass production now, and we expect the first deliveries.

The Pro circuit breakers are in mass production now, because the first batch has already been sold. The demand is quite good, and other products will support our second-half revenue development.

The geographic expansion will continue and will as well contribute to the H2 delivery and the revenue. Dimitar talked about what we do internally, but AI as well helps us with making our services much better for customers, and opens a lot of doors, especially in building management, energy management, retail outlets.

We have won first projects in big retail chains not selling the products, but optimizing their energy consumption and monitoring their stores, and we think that with projects like this that we will soon communicate, a lot more will come in the future. Positive outlook, that's the last point, for the rest of the world, United States.

Finally, I would say we have more than just light at the end of the tunnel. It's on a very good way, and we expect especially in 2027 to accelerate the growth there because the foundation is done.

We see as well good development in Australia, still on a small level, but with a very good potential. That's the end of our presentation, and now we have time for your questions.

Good morning, everyone. Some questions for me.

The first one is on the indirect Amazon strategy. Is it correct that you sell your product to third-party sellers which then sell the items independently on Amazon?

That's right.

Right. Okay.

Do you plan on expanding that strategy, i.e., increasing the number of sellers or expand the revenue with the current third-party sellers you have? Do you control things like pricing and availability of these products?

Yeah. First, we decided to move to Amazon marketplace completely, because the Amazon vendor account was a very fast-growing account and a machine way you can easily push revenues, but the price is very high, because Amazon is setting prices however they want, which anyhow, we have a legal situation to respect, which is their full right, but they reduce prices constantly and others are complaining.

Then they come back, and that's the worst point, they come back to us for margin compensation that we were not willing to pay. You all know this situation.

That's why we decided to move to Amazon marketplace. We have our own marketplace account that we are fully controlling and where we are as well able to fully control prices, and we have third-party sellers, three, four, five big ones that we are supporting making the business on Amazon marketplace.

Here we are not fully allowed to control prices because we cannot tell them how they have to sell on Amazon marketplace, but let's say we are in a good cooperation with these guys, and they cannot make crazy prices because simply they don't have enough margin to do so. That is a very good step.

What will happen next is that we have to optimize the way of how to handle Amazon marketplace. There are a couple of ideas.

That's a bit too early to talk about that. How we could do that: are we organizing this more by regions, are we organizing this by product categories?

That's something that we will still develop, and we are working with our Amazon team on the right strategy for that. That will be something that will be implemented in '27 and will give us a better control over this channel.

That is a very important channel that we cannot neglect, but we somehow have to control what's going on there. We are happy with the current development.

As I said, we are back on track, and price wars on the market stopped a little bit, and that is positive for everyone.

Great. Thank you.

My second question is on the products you launched in Q2. You already mentioned the circuit breakers being in mass production.

How was the customer response on that and also on the launch of smart locks and flood sensors? What is the estimated revenue impact you expect in H2 from all the new products you launched in H1 and also the ones who will come in the future?

I will start, and then Dimitrov can add. Let me start, Dimitar.

We are not disclosing revenues by product categories exactly, because we do not want to wake up sleeping dogs. We are quite happy with all the launches, and Dimitar can talk about the breakers.

We typically get small quantities at the beginning. We sell them via our web shop or with some selected distributors.

Feedback was very positive. Our new flood sensors, we have two different ones, they are selling like crazy, and customer feedback is extremely positive.

The door locks, that's a long-lasting thing. We sold some quantities.

We still have to learn our lessons because the doors in Europe are different, the channels are a little bit different. That's not the typical electrician selling a door lock.

That's other channels. Dimitar, you wanted to say something and add, please.

Just about the breakers, yes, that I can say that because we don't talk about the quantities, but usually we doubling the quantity every slowly. We increase the quantities by what happening now, the production of the breakers until end of the year is fully booked, we now looking how to increase the production, because the interest it's coming faster and it's quite big even compared to our expectations.

It looks like the market is demanding for a very long time, and we should continue to working in that direction. Exact revenue, I think we really doesn't disclose it, yeah.

Perfect. Thank you very much.

Yes, hello. Can you hear me well?

Hello. Thanks for taking my questions.

I have three additional ones. First, on the stocking for the important Black Friday week, I call it, what are your impressions currently?

We learned about some supply chain issues. Are you are you currently sure that you will have the the quantities you desire for the, let's say, most important product categories?

What do you expect from from the new distribution partners? Will they do a, let's say, initial big stocking that could help you for Q3 for Q4 revenues, or do you expect, let's say, a soft soft stocking from the new names?

The second one on your production plant in Plovdiv: how's that developing? Is the ramp-up developing accordingly to your plans?

That would be interesting. Then for sure, the elephant in the room: the confirmed talks with Schneider Electric.

Can you can you give us any any information what's going on here?

Maybe maybe I start again. The supply chain, I would say our key products, our bread-and-butter products that we that carried the revenue in the last years, we have already on stock or we are or they are coming without any problems.

That is that's existing product products. For the new products, there is still a question how fast can we ramp up the camera development, or camera production.

We will get the first 100,000 pieces in the next couple of days or weeks, and then we see how fast we can ramp up. There is always a small risk, but we we think that, as in the past, we can control that risk.

On the breakers, Dimitar already said demand is higher than than what we can produce currently, but the problem always is if a product comes late, the ramp-up of production is it can be one of the issues. We think that we feel that we are good with controlling that.

We had similar issues in the last years, and so far, we as well were able to manage chip shortages and and delivery problems and and pricings. Far, we are fine.

On the new distributors, they already ordered the first products. That will not be crazy high volumes, because they will as well see how fast they can can sell out and onboard new customers, because the idea is not that they deliver to the same customers that we had before, retailers or distributors that we had before, that they open new doors.

That is I think this is a very positive impact. There can as well be a negative impact, because if you open new doors, some other doors might close at least a little bit, because someone is is not happy with what we do here, and we need to balance that.

We will be able to say more after IFA, because IFA is very important as well for order-taking for Black Friday, not only in DACH, all across Europe. After IFA, we know how much do we have in the order books and and how will not only the second quarter, sorry, the third quarter, but as well the fourth quarter be.

Dimitar, about factory in Plovdiv and Wolfgang Specht has been with me in the factory, maybe Wolfgang, you can confirm that the factory exists.

Absolutely.

That the machines are there and they are warmed up and they are preparing production. Now Dimitar can add something.

About the first point, just to know that currently the whole electronics market is under pressure. It's under pressure because the AI and because the shortage of the wafers for the chip, some components.

That the last year, for example, the main materials like a copper, aluminium, and everything is increasing twice and sometimes three times. This is make additional pressure.

We fighting with everything, we working with everything. For some devices, we do replacement, something which is hide and you doesn't see, but really we manage over 100 devices per year something to be changed on top of what you see as a new development.

It's very extensively currently work there is going there. If somebody tell that it's absolutely completely sure that there will be no surprises for the supply chain, this is not true.

Or probably they doesn't produce so much and they have everything. For the companies like us which produce a millions, then the supply chain is challenging all the time.

We're sure that we can solve it. We're working on that.

Surprises, of course, could be expected at any time, but this is nothing new. This is for the last 5 years, 7 years is the same, and now is continuing like that.

About the second, about the factory in Plovdiv: yes, is going well. Our plan is to move all not only the modules, but also the all Zigbee devices to be produced in Plovdiv, because these devices doesn't require hand work.

The production could be fully automated. At the moment, we make a trial production for each of these devices.

We expect we to move completely them from China to Bulgaria end of the year, beginning of the next year. Of course, China will be all the time our backup if we need more quantity or if we have an issue with the production here, they could help us.

Initially it's planned like that. For me, is going well, and now we produce 10,000 pieces for each of the Zigbee devices just to train the people there and to see doing it some polishing the production procedures.

About the elephant in the room, first, I thought you'd talk about me, but I'm happy that you don't talk about me, although sometimes I feel like the elephant in the room. Seriously, you're all professionals and you know that, as a publicly listed company, we cannot comment on ongoing things.

We have confirmed, because there were rumors in the market, we have confirmed that we have contact to Schneider, that they have an idea to exchange about possible offer, and that's something that lies on the side of the bidder, what he will finally do and how this process will continue. We are not allowed to and able to comment on that point.

Sorry for that.

Thanks a lot.

Can you hear me now?

Hi. Alexandre Despres from Bryan, Garnier.

I have two questions, please. The first one is on your change of methodology on the revenue geographic split.

I just wanted to know what would have been the growth rate of rest of Europe without the change, to know a bit how much cross-border sales are you making from the DACH region. Then the second one is on the energy costs.

You were telling us, I think, last quarter that you were moving more and more from air freight to train freight to reduce the costs, how is this transition going?

First, cross-border, without this adjustment, rest of Europe sales would be higher, because currently, we see that products are via the distributors that are selling on Amazon marketplace are delivered to Germany and sold on Amazon there. That in Europe, Amazon Germany is the biggest Amazon place, UK is the second biggest, and all the other countries are way behind.

We have distributors that are not receiving the products in Germany, but selling them back to Germany, and that was the allocation that we made. Rest of Europe would be even higher if we showed that and Germany a bit lower because of this significant thing.

We always had some small adoptions, because if you deliver to Amazon, Amazon has warehouses all across Europe and then shipping back to Germany as well. We made some allocations because we got the exact numbers from Amazon, and we use this methodology for now as well.

That's to the cross-border sales and the adjustments. The second question was about the supply chain.

I cannot exactly tell you. We can prepare that for the next quarter.

I think we have shipped round about 1/3, maybe 40% of our deliveries with ship or train in the first half of the year, and we have an increase of or a reduction of cost of goods that is round about 1 to 1.5%. Looking to Iliana, is this make this sense?

So 1 to 1.5% improvement. That means if theoretically we would ship everything with alternative methods, our calculation was it could increase the gross margin by 2 to 3%.

We will never be able to ship 100% with train or ship, maybe 1.5, 2% is what we can reach. It depends as well as how fast do we need the products, because we always prefer to make the revenue instead of having 1% higher margin.

Currently, what I can add, something which we do, we optimize our air freight prices, because we doesn't deliver not with a speed service, but with a little bit slower service. Then with ship, definitely currently we doesn't do anything because time is too long.

With train, for example, the breakers, the EV chargers, the all big appliances which is heavy is coming only with the train. For the small relays, we still using the air freight, but on the optimized prices.

In the future, probably we can do something beginning of next year, but I think now especially for the last quarter, the season of the high sales, this we will be still mainly use the air transportation.

Especially with the new launched products, because otherwise, we would not get them on time.

Thank you very much.

Do you plan to manufacture smart devices for the military industry?

No. I don't know if Dimitar has something in his mind, but not to my knowledge.

No, no, I don't. No, no.

We don't plan to smart devices military industry, no. Not drones, not cameras.

Maybe they could use our door and window sensor for the tank doors or I don't know what. No, no plans.

Thank you.

No. I repeat what I said in the last calls.

We had for one time, we had a long-term guidance about three or four years, and now we will go to the practice that, to my knowledge, every bigger company is using, not giving two-, three-, four-years targets, but one-year targets that we typically will announce at the beginning of a year. Once we know how 2026 is finished, we will give our targets for '27.

Yes. You have seen that in the last year, almost half of our receivables were in the 3 to 6 months maturity bucket, which is to the longer end of that maturity profile.

Now we have consciously changed that, and you will see that this has now reduced to 13% at the end of June. Now the majority of the receivables they sit in the up to 3 months maturity bucket.

This is something that was a part of our working capital improvement. We have substantially increased the credit control in the company, and we are, as much as possible, sticking to the standard payment terms that we have.

The situation that we had in December was very specific, and it was related to supporting the sellout at that period. Now it has been going back to normal, we do not expect that we'll see again such substantial amounts of extended payment terms.

There could be exceptions with reasons, of course, but we are trying, as much as possible, to stick to the standard payment terms and to keep our receivables in the up to 3 months maturity bucket. Right now, we don't have any substantial amounts that are in terms of aging profile that are substantially overdue, this is also being very closely monitored.

You probably have seen that there is no change in the impairment of receivables, the decrease that we have in the accounts receivable, it's not due to write-offs, but it is entirely due to collections. In short, yes, we can expect that this development is sustainable and that there will be substantial focus on this topic in the upcoming quarters as well.

Iliyana has implemented two important processes in finance. One is: every payment term that is longer than the contractual payment term with the customer needs her approval.

The second is a very simple thing: following up if someone does not pay on time. Overdue payments are much better under control than they have been before, and these are the two elements that led to the situation that we currently have, and I do not see any reasons why this should change.

Yes. The contract with ALSO is about all European countries, and they are present in all countries where we are present.

This covering the UK, it covers France, it covers Benelux, Spain, Portugal, Italy. In some countries, they are stronger; in some, they are not that strong.

Italy is not one of their core countries. Of course, they are strong in Germany.

They're as well strong in France and in UK and Nordics. Covers all European countries.

The distribution in France, we have implemented our French team beginning of the year. We expect visible revenues in the second half of the year.

We are onboarding Leroy Merlin now. We are as well onboarding some other distributors.

We can have a deep dive on that in one of the next calls, but contracts are signed, and we expect that ALSO is only one of them. As well, we have contracts signed with do-it-yourself specialized distributors and online specialized distributors, we expect that France is growing significantly and is supporting with this as well the rest of Europe development.

That's rounding issues. We are rounding to 100,000 euros, 100,000 customers, and that is just the rounding thing.

They are not flat. They are increasing, not significantly, but they are increasing.

Over the last 12 months, more than 30%, and so a couple of hundred thousands, and in the last quarter, it was, I don't know, close to 100,000. Just a rounding effect, nothing else.

Nothing to worry about.

You want to answer or I shall answer? I can answer: no, it will not be stopped.

The question was if we will stop with our contract manufacturer in China. There's no plan to stop.

Opposite, we will strengthen the relationship with our partner, because it's a very reliable partner over the years, and moving part of the production to Plovdiv does not mean that we will significantly reduce his volumes. Additional volumes will go to Plovdiv, and over the years, we will see, but there are definitely no plans to stop and there are no additional costs with that.

No. We are reporting in rest of Europe.

We are not reporting in individual countries, and we as well do not want to tell our competitors where we are performing well, which is completely normal. Some countries, we started in January, February; others, we started in November, October, November last year.

We see that a country, just to give you one example, we are performing quite well in Poland. We are exactly on plan.

We have a five-people team there on board now. We started in May last year, and we see that it took nine months for them to find the right ground, to develop new customers.

They have a very nice portfolio. Everything is fine.

Some countries are a bit late. There is no country where I would say currently we are not performing at all.

Some are a little bit behind target, then the question is: was the target too high? There is no country that is in trouble, but we will not go deeper in the reporting than we currently do.

I can add this question. The main cooperation with AI and it's opportunity the customers to integrate our devices in their own infrastructure, no matter what is it, data center or just facility management or city management, no matter the different buildings, monitoring the machines or buildings, facilities, everything.

The AI help us this in that direction, because until now, customers need to use the much more expensive platforms, SCADA platforms, the third-party integrators, electricians, they cannot do that by themselves. Now we're working very hard and to show them that this is completely possible.

They doesn't need technical knowledge to deliver to their clients the products exactly made for them, tailored by UI, UX, statistic, and everything. This is going very well at the moment.

We've seen the first integration, and this is opening completely new market from us. They using everywhere.

Also, we know that many devices using in data centers. It's hard to count them, because currently, we're not project-oriented company.

We don't know for what exactly our device is used. It's a big part device, more than 40% of our device we never seen after we sell them, because they are connected to the isolated from the Internet platforms or in the customer's local solutions.

They are not connected to our cloud. This is the big part of our sales which is going into the different direction which we exactly know, but it's hard to be counted how much is it exactly.

Data center is a bit the magic word currently. Everyone wants to be mentioned together with data centers.

I think we have much more to win on businesses that are much closer to us. Dimitar mentioned city lighting, we have retail projects with retail chains with several of them, Airbnb projects, hotel projects.

That is something that is much closer that might not sound as fancy as data centers, but I think the data center bubble Yeah, we could boost, I don't know, messages around and say, "Oh, we are used in data centers as well," but our big business is somewhere else currently, and that's much closer to normal life. Because if we see how far away cities are from being smart and lighting smart, we have some contacts to some German regions, and if we show them what we are able to do, they're all completely flashed.

Now that all takes time because they are not moving fast. That's public organizations, but they have nothing.

We don't talk about fancy stuff, we talk about very basic things, and for them, this is magic. This is very close business that can materialize in couple of quarters.

That's much much bigger than data centers for us.

Finally, we will see. We have to balance, and so far, we tried to balance two things: revenue and EBIT.

Now we have to balance revenue, EBIT, and working capital. Far, we do not see big impacts.

We hope that it stays like that, but that's something that is our daily business that we have to manage, all three buckets.

That's a very good question. I will not talk about numbers, and I will not mix up my personal goals with company goals, because that's something that might be completely different.

My personal goal might be to have a very nice boat on the Mediterranean Seas, has nothing to do with, and that's not one of my goals, but it's has nothing to do with the company goals. What we are working on now and what we are not fast enough is to making the new countries scale and run up.

We need to optimize our organization in a couple of areas. We did great things in the R&D structure, in the finance structure.

We see very good developments in marketing as well. Some of these things, from my point of view, are not fast enough, which is not a big surprise, because I'm never happy with the speed.

This is something that we have to do in a good way to continue growing in the speed as we did in the last years. That means we have to build an organization that at the end, and that's what every manager and every CEO has to do, and that is the same for Dimitar as for me, we have to build a company that can survive without us.

I think we did a good job doing that. Four years ago, without Dimitar heading the R&D team, the company would be gone.

Now, Dimitar, correct me if you see that different, at least a big proportion of things work as well if he's not there. This is something that we have to continue building, because otherwise, the risk depending on one or two people in the company is too big.

We need to strengthen our lower and middle management to make them stronger and able to run the company even if something happens with us. That's my personal target for the company, if you want.

Can you cluster them somehow so that we are not—

That would make sense, then we can answer them and can put them on our website.

I can answer. There is a two big customers which will be onboarded very soon.

Unfortunately, as I say before, the biggest customers is not so flexible and they going slower than we expect. Very soon.

I just don't want to disclose the names, but in Q3, to end of the Q3, there will be two big customers, a well-known German names, which will start using the Shelly X modules. Many other, the small ones, as we continue, there will be new biggest EV chargers, there will be very soon, there will be HVAC system which using our modules.

It's coming the battery system which will with the Shelly module built-in. This is coming mainly from China.

Besides the two big names in Germany which will start using our modules very soon.

In 2006, there is no plan for the second half of the year, because we just onboarded four new countries beginning of the year, don't forget that, and we are now present with local organizations in eight European countries, plus the United States, plus Asia. There are a couple of countries on our watch list that are developing quite nicely without having a local team.

I don't want to mention names here, but that's something that is on our list for '27, not yet decided. We might start in '27, first half, in one or two more countries with a local team.

Once again, not having a local team does not mean that we are not doing revenues. We don't have a local team in Australia, development is quite nice.

We have no local team in South Africa, development is very nice. We have no local team in Greece, development is very nice.

As soon as we see that it makes sense, that revenue reach a certain level and it's better to have a local presence, then we will make that move. There is nothing that is concrete and that we can disclose by now.

Before Dimitar makes the closing remark, please do not forget to send us the open questions.

We will, as soon as possible, I don't know if we manage today or tomorrow, we will publish them on our website next to the presentation and next to the video that you can see about today's presentation. Now I hand over to Mr.

President.

Being on our site, I've seen these questions. We will answer them.

Most of them is related to the some markets, expansions, and everything, how is going the US, the question which is usually regional, we don't in details, but we will try to do to the best and answer for us in details as we can. Thank everybody for this.

I know there's many questions which we have, and at the end, we cannot answer. By the way, to be honest, for many of the questions, we cannot answer still because the everything is in process into the company.

It's about the development, we've seen it's going well. We solved the all challenges which we facing as a fast-growing company, which is most important for us.

What I can say, I think currently we expecting to continue delivering until in the future as also the same with the same speed or similar one as now. Thank you very much for everybody.