Good evening, everyone in Europe, and good afternoon, everyone in the U. S. Thank you for joining this call on quite short notice. But for obvious reasons, we won't be we weren't able to give you a longer heads up for this. But given the news we have put out a short while ago, we wanted to at least give you the opportunity to hear some context around this from Niklas and Emmanuel and offer a chance for you to ask questions.
We trust that you have all received both the a top notification and also the short slide deck that we prepared. If not, you can find both on the IR section. And you are, of course, also welcome to get in touch later on if you have any more additional questions that we might not be able to take in the call because we have something like 30 minutes or so only. But now and without further ado, let me hand the call over to you, Nikkad.
Thank you, Daniel. And hey, everyone, hope you are doing well. I don't want to take too much of your time today, but mainly just making sure that we answer any questions you may have around the ad hoc in regards to KBC written approval and accounting implication of our share price appreciation since the end of 2019. To begin with, we have received a written decision of the KPC on the transaction with BUVA yesterday and it confirms what has been published by the KPC as a summary of the decision on December 28 already. We have the conditional clearance to close the transaction with Bubba on the condition that we will dispose how to live here in Korea within 6 months.
As mentioned before, we are free to find any appropriate buyer for our great asset in Korea and we will now put in every effort to make sure to find the best possible buyer. I'm also happy to confirm that aside from the behavioral remedies applicable to the operations of Jogyo, which was already published on December 28. There are no further remedies that come with the conditional approval. Therefore, while we continue to be unhappy with having to let go of Yogyal, we are extremely excited about the potential we see we are very eager to start as early as possible and the objective is for the closing to take place during March. Hence, in a very short while from now, we started to collaborate with a great UHWA management team in shaping the future of food delivery and quick commerce in the Asian market.
At the same time, And of course, also the reason for this call, we will very likely have to do an impairment on the goodwill that is generated as part of the transaction. Before Emmanuel go or will give you a short run through the framework, let me emphasize that this is only due to the fact that the share price of delivery here has increased by 171% compared to the 20 days volume weighted average price that was the basis for the agreement we stroke with Bwuba in December 2019. The operative business of Bwuba has continued to develop strongly and accelerated towards the year end of 2020 and this partially driven by increased COVID concerns. With that, let me hand over to Emmanuel before we'll be available for your questions. Emmanuel, please?
Yes. Thank you, Niklas. Good evening or good afternoon also from my side. As Nikka, as I said, I'm happy to explain the context of the potential impairment. So I'm sure you're all familiar with the deal terms of this transaction, but let me give you a quick reminder on Chart number 2.
So the valuation we set at that time of signing value Bubba at €3,600,000,000 on a cash and a debt free basis, which was equating to about 0.6x the expected 2019 GMV. It was agreed to pay around €1,700,000,000 in cash and about €1,900,000,000 in delivery of shares. And based on the 20 days volume weighted average price at the time, which stood at €47.47 this equated to a fixed number of around 40,000,000 shares. Here that many of the owners of WUVA would have liked to receive an even larger proportion of the purchase price in shares and not in cash, but we have been able to limit the share component at the stated levels. Nikas has already presented the current status of the transaction, so I can basically keep this year.
The next chart shows the very strong development of our share price since the end of 2019. It was not only the significant intraday jump that our share did after we communicated the transaction, but also the further stormy trees during 2020 and especially in the last weeks of the year. But we and I think that many of you are very happy with this strong support from the market of the market and the value that seen in delivery already today. But at the same time, this is simply on the back of the higher share price and the current spending increase in the value of the consideration, what we do need to be transferred to the sellers of Bouvard, that we will likely face the necessity to do an impairment upon closing on the transaction. Now let's move to the short number 4.
So using today's closing share price or yesterday's share price, sorry, also EUR 128.65 for the share component that is part of the short the purchase price and having the €1,700,000,000 in cash, the value of the total consideration amounts to around €6,800,000,000 And given the requirements of the FIS and in line with the valuation of proceeds of the auditors have to apply basically to an impairment of up to €1,400,000,000 The reason that we cannot give you a final number is that whenever we like it or not. The ultimate number will depend on the final share price on the delivery of your shares on the day of closing. So to make this clear, this is no average share price to be applied. We will just have to use the closing price on that very specific day. I know that, again, most of you will, of course, know this, but as numbers of shares to be issued is fixed, the impairment obviously doesn't change the dilution effect on our shareholders at all.
And also, this is, of course, no cash effect associated to the impairment or with impairment. So as Mikael has mentioned already, the underlying business remains strong and the outlook for the new bar business has even improved compared to the basic of our transaction in December 2019. So we are really looking forward to joining force with Bouba to make sure of the tremendous to make use of the tremendous opportunities that we had that we have ahead of us. And now before we go into Q and A, let me use this opportunity to mention one aspect regarding the trading update of Q4 of last year 2020 that we are going to publish next week Wednesday. The Bouva transaction will not be closed by then.
We will not be able to integrate the Bouva budget for 2021 into our already to our house already by next week. And this is simply for this fact that we won't be able to give guidance for 2021 next week. And hence, we will also not do a conference call for the Q4 trending update, but rather at a later point in late March or early April when we will be in a position to discuss our outlook for this year. So we are already looking forward to this. And as we are super optimistic for 2021, that would be another very successful year for 'twenty for delivery year.
But for now, Niklas and myself are happy to be available for any questions you might have. Thank you very
much. Ladies and gentlemen, at this time, we will begin the question and answer session. And the first question is from the line of Andrew Gwynn of Exane BNP Paribas. Please go ahead.
Hi there. Good afternoon. Good evening, Ian. Two questions. So firstly, could you just share some of the assumptions that you sort of used to justify the book value, maybe not the exact assumptions, but more the kind of framework.
I think many people would still be of the view that you paid quite
a low
price. And connected to that, are you able to share any of the kind of latest financials for WUWA? I don't know if you still got a GMV figure in mind or loosely. I think consensus is probably looking for well, actually, you tell me where you think consensus is for Google. Thank you very much.
You want to ask, Ramon?
Yes. So for the first part of the question, we're using a classic DCS approach that you will be required to do according to the IFRS 13. So business plan that we have provided and then also actually the classic DCF calculation. I agree with you that the purchase price, I think, is very attractive. Unfortunately, if I may say so, our share price did so well over the last year since we announced it to the market that the component, the share price component gain on value and gain on size.
And looking at the DCF calculation and the total amount that we will pay according to the including the share price is driving this impairment that I mentioned before. I think it's very important to keep in mind that this impairment doesn't have any impact on I prefer to repeat this, doesn't have any impact on the dilution of the shareholder structure nor have any kind of cash flow impact. This is really an ERS treatment, which is completely linked to the share price evolution. And I may add here, if you look at the graphs, let's assume for a second that we will have been we will get the KFTC approval faster and be closing the transaction earlier like June 2020, then such an impairment will probably not happen. So this is really clearly linked to the share price evolution that we've seen.
And today, I'm not able to I'm not able and also not allowed to give any kind of details on Bouva numbers yet, as I mentioned before, nor can we incorporate this in the 2021 budget number. So I'm afraid we will to wait a little bit. But as Niklas and myself, we said before, the business has done very well also in the last quarter of 2020.
Sorry, just to clarify on the comment on guidance. You're not even able to comment on the range of numbers that are in the market. Is that correct? Maybe not.
That's correct. Right now, I'm not allowed to try to give any kind of comment on that.
Yeah, that's perfect. Thanks very much. Thanks, guys.
Maybe I should add that we did share our approximate numbers in Q3 trading update on what the combined business would be. I think some people have then back calculated what does it mean for GOOVA. I think you can assume that those numbers are pretty spot on. And those indications also indicated that the business has continued to do really well. And with the current market environment and COVID and all of that, things have not gone worse.
But business has done significantly better than we expected back then when we acquired the business. Of course, the price that we set or the manual set, the price that we set internally and also discussed was above what we paid, of course. But it's but we have, of course, not adjusted for the fact that whole market have understood that food delivery is a great space. And therefore, we'll have this impact from our share price. And I think in general, the market multiples have gone up.
But of course, that doesn't affect the VOBA value that is not what is being used necessarily.
Okay. It's a nice problem to have, but thank you for
The next question is from Andrew Ross of Barclays.
First one is follow-up on that point, I think you said in Q3 that we were growing kind of mid-60s. So just to be totally clear about your language, you're saying that It's grown more than mid-60s in Q4. And if there's any way you can quantify that even directionally, is it a bit more than mid-60s or a lot more That would help. And then the second question is to come back on the process of finding a buyer for Yogio. You said there were no restrictions around that.
But maybe you can give us a bit more color in terms of how that's going to work. And I guess if you had a scenario where one party, Let's say a bit 2 times more than another party. Can you really turn down that high bid if you don't want to sell to them? It would be helpful just to understand that type of situation might play out? Thanks.
Right. So I cannot give a lot of details. I think that assume growth sounds like a good assumption or a good based on the call that we had. I mean, we should also keep in mind that Korea has not been as impacted from COVID restrictions as, for example, Europe, where growth has gone Peru and the same with U. S.
Where growth has been massively impacted COVID. If you look at Asia, COVID has been pretty well and there has not been the same type of lockdown and so on as we've seen here. It's also not it's probably been Anders overall, I think, has been a good year, but I think it's more that this online business has done really well, but with a slight tailwind from COVID. That slight tailwind might have been slightly more towards the end of the year. But therefore, I would assume also in your position that has been slightly maybe continued improvement throughout the year.
So I wouldn't expect any material from a material deviation from their weather stand. But it has not been worse, but rather slightly better throughout the year. That helps. And the second question, did I miss the second question there?
Yes, there was a buyer process. You wanted to I mean, I can I can't cover that? So Andrew, I mean, like as we discussed, I think, like in Q3, we don't have any kind of restrictions in terms of or the profile of the buyer means like it doesn't I mean like, you know, monetization in terms of geographic whatsoever, nor do we have to take the highest bid if you wish. So from my understanding so far, no limitations. We will have to do a fair process that we will be to start shortly.
But in terms of limitation restrictions, we're not aware of any.
And of course, we have to look at all aspects, not on the price. There might be other dimensions things that we have to take into account, deal certainty of buyers in the process and and so on. So we will evaluate all those aspects and based on that, we will decide who we think is the best buyer to take further into the process.
Very helpful. Thank you.
Thank you. The next question is from Adrian du Saint Hilaire of Bank of America. Please go ahead.
Yes. Good evening, everyone. So two questions for me, First, Emmanuel, can you just please confirm what the new book value for Wuhua should be? Just to make sure that my math is correct. And secondly, can you discuss how the competitive landscape in Korea is currently developing?
It seems like Kupping is making a big, big forays. So what has changed between the moment you announced the acquisition and now in terms of competitive dynamics and market share?
So unfortunately, I can't answer you this first question right now because as I said, the overall exercise of valuation will change with the development of the share price. So only on that specific day on the closing date, we'll not be able to tell you with precisely what would be the valuation. So today, it's just we want to inform you that there is a risk, a potential risk of impairment due to the development of the share price, but only on the closing date we will be able to do so and to give you the right number. So we will have to wait until we close the transaction. You want to cover Kupa?
Maybe I'll take maybe I'll
take maybe
I'll take maybe
I'll take maybe I'll take
maybe a second. I think on Kupa is a tough comparator. They have been a tough comparator throughout the year and will continue to be a tough comparator also this year. And so we take them very seriously. I think on the good part, the market is growing very fast.
Bubba is growing very fast, I believe significantly faster than coupon in absolute numbers at least. So we don't see necessarily that the environment has gone either worse or better. It is highly comparative market with Coupang challenging us and we will do our best to making sure that we'll have a better offering. And I think so far this year, I think Wuhua has done a great job. And I think in Q4, they kept on doing a good job and
expectations are high. Understood. Maybe Emmanuel, sorry to follow-up on this, but if we assume a €1,400,000,000 impairment then, would you be able to answer the question?
You mean on the valuation, I guess? Yes. I prefer to wait until
we get the closing. Understood. Thank you very much. Thanks.
The next question is from Sam Lorenz of Arete. Please go ahead.
Hi, good evening. So as you look for a buyer for what could become your competitor in the market, are you tied into any commitments within the conditional clearance with regard to continued spend within Yoyo during this time period leading up to any potential sale? Thanks.
Correct me if I start answering something, I'm not glad to answer, Daniel. But I believe in the written decision that is accessible for other parties, there are some limitations to how we are going to change our how we operate as a company. So we have to keep running the business as is as we are not allowed to make any drastic change just to marketing spending or any other material decisions. Yes, so that's how we're going to run it. It is, as I mentioned in Q3, it's profitable businesses will continue to be a very profitable business or increasingly a profitable business despite if we keep marketing levels as they are right now or if we would have done something differently.
Yes, so some restrictions to how we operate it.
John confirmed that.
Thank you.
I think if I look into the Question queue, this was the last question already. So we'd like to thank you again for dialing in on such a short notice. And again, if you have any more questions later in the evening or obviously tomorrow, the next date, where to find us and Investor Relations is happy to be available. And with that, I think, Nicolas Emanuele, we would wrap the call up. Thank you very much.
Thank you everyone for dialing in and taking the time this evening.
Yes.