May I now hand you over to Niklas Ustberg, Founder and CEO of Delivery Hero SE, who will lead you this conference. Please go ahead, sir.
Good morning, everyone. Hope you are safe and healthy. And now looking forward to sharing our q one trading update. We had a fantastic development in q one, which took a bit of a hit towards the end of the quarter. Despite some initial negative impact from COVID nineteen, we grew orders with ninety two percent.
Now we're back on track again or even ahead of pre COVID levels in almost all markets. Later on, we will speak more on how COVID-nineteen has impacted the way we operate and what measures we took for the safety of our customers, riders, restaurants and employees. Now moving to the next slide. Never before has our vision been more real. We always deliver an amazing experience fast, easy, and to your door.
We have always been very clear about our vision, and it starts becoming more visible in how we keep innovating. We have accelerated investments outside of our core food delivery business to increase customer loyalty to our service and leverage our platform on customer merchants and riders. Now before going into the financials, a quick recap on our strategic partnership with Vrubar Brothers, which we signed on the 12/13/2019. Vuba is, as you know, the largest online food delivery platform in South Korea, and the transaction is reinforcing our global leadership and strengthening our position in Asia. We are super excited about this partnership and can't wait for it to close.
We do not expect that COVID nineteen will impact the time line of closing the transaction and remain to expect a closing of transaction during h two this year. In the last months, we have been successfully conducting and preparing economic analysis and responding to KFCC's request for information. The numbers in this presentation do not include Buva Brothers. Turn to next slide. In Q1 twenty twenty, twenty, we delivered two thirty nine million orders, resulting in order growth of 92% year on year on a like for like basis.
This was despite strong negative impact from the COVID-nineteen, which totally impacted us with 9,300,000 orders between March. Gross merchant value in 2020 was up 58% on a constant currency basis to €2,400,000,000 slightly higher on a reported basis. Including Vuba, this number would have been closer to around EUR 4,500,000,000.0 with similar year on year trajectory. But as I said, we do not report including Vuba at this point in time, so all numbers excluding Ruva. Revenues continue to grow rapidly with 92% growth for the first quarter on a constant currency basis to five fifteen million euros And then looking on a quarterly basis, here, as you can see on this slide, our growth and performance basis is significant above that of other listed peers despite significantly more scale with exception then, of course, of Alamont on Matron.
We believe we can keep outgrowing everyone in industry for many years to come. Looking back at our early promises, starting with growth. At IPO, we promised above 40% in the short and midterm. As you can remember, the IPO was happening in 2017. So we're two and a half or almost three years down the track.
And as shown, we have continued strong order growth of 92% as well as revenue growth of 92%. In the long term, we are more bullish about our trajectory than ever, but have no new guidance here. With Voova's unique regional insight, we will also be able to specifically execute on the growth opportunity across Asia. On leadership, we keep winning market shares in every region against every competitor in the markets where we operate. In q one two thousand twenty, we reached market leadership in 86% of the markets or or of the countries where we are present.
This was partially achieved by a secure leadership position in one additional market and divestment of two non leadership countries. We keep flexibility of additional investments of up to 200,000,000 with the vast majority not yet spent and is intending to use it opportunistically to extend leadership position where required. As we're now making gross profit per order despite aggressive pricing, additional €200,000,000 gives us tremendous flexibility to invest very aggressively if need be. The transaction with reinforces our position in Asia, and we are committed to invest in the Korean ecosystem and allow VUBA to expand its leadership position there. On technology and product, here, we're making fantastic progress to become a third generation on demand platform.
We believe we are clearly ahead of our competitors here. We consider ourselves pioneers in delivery space. In q one, we reached 52% own delivery share, and we have been used we have been using this as an advantage during the COVID nineteen. Delivery Hero will also support robust expansion into new verticals where we share global best practice, innovate together and create beneficial for all stakeholders with more choice, better service and more technology. And last in the profitability, we are a believer in driving profitability through scale and automation, and we continue to target long term EBIT margin of 5% to 8% of GMV.
Again, we have no urgency to get there, and we are fine if some markets are lower or loss making for years to support achieving our first three pillars. And as previously stated, post the transaction, over 70% of delivery GMV comes from market with profitability. Now moving to our business update. So on the short side, we reached 500,000 contracted rest on our platform in January, making us the largest platform with the widest selection among listed peers or among outside of China. I think it goes among every peer outside of China.
We added 50,000 restaurants only in the last three weeks of March as even more restaurants seek an online presence during COVID nineteen pandemic. Some restaurants are temporarily closed. Thanks to hybrid delivery setup, more than 75% of restaurants still are still active as of today. On speed, we have significantly improved operations to keep customers and riders and restaurants safe and gain trust in the ecosystem. At the same time, we reduced delivery times to below twenty eight minutes globally, and that is a 20% improvement.
On new occasion, over here, labeled as seamless ordering, we accelerated the expansion into multi verticals and added 1,500 partners only during the March, the last three weeks of March. And as of today, we have launched 104 DMart stores in nine countries across MENA, Asia, and Americas. And DMarts, for those who don't know, are small local warehouses that allows for delivery in less than fifteen minutes. It's the concept that we are currently building out. They have historically often been referred to as delivery stores, or cloud stores and sometimes also dark stores.
I'll come back to this later. When it comes to COVID nineteen, we are the world's leading local delivery platform and then stand important role we have is supporting our communities, restaurants, and delivery ecosystem. Here, you see some of the global and local initiatives that were done around governments, communities, and customers. I think in interest of time, I think I'll leave it up for you to to read. On the next slide, you see some initiatives for riders and restaurants and same here.
I'll leave it up for you. But I think these activities have not been without cost, but we are confident that return in form of trust is going to support us in the years to come. So, overall, we are very positive to actually take on or have made those costs during the COVID nineteen outbreak. Moving on to the next slide. So far, we have been mainly a leader in the food delivery industry.
Now we can properly say that we are pioneering in the quick commerce category. This is a category that has truly emerged during the COVID nineteen crisis. I'd like to spend a moment explaining And if you go back then to early two thousand, traditional commerce was dominating all trades. But thanks to Amazon, ecommerce started to gain popularity.
Now people didn't have to visit stores to get things delivered from mega warehouses. Deliveries have often then been done with delivery trucks and delivering or deliveries arriving two to three days after order and in some cases, even next day. Price is key. What we now see in the third generation commerce, QuickCommerce, and that is a QuickCommerce's delivery of product in under one hour and with our demark even in fifteen minutes. But QuickCommerce has fewer items, smaller smaller baskets, and in particular suitable for one person household.
Delivery is often done by two wheelers, and warehouses are small and centrally located. So very different. And then the main difference than ecommerce is the simplicity of fewer items and the speed being more important than price. These are very early days, but we expect that the quick commerce industry to start reaching the s curve probably sometime this or next year, and we'll reach 56,000,000,000 in size in the market that delivery recovers and $458,000,000,000 globally by the 2030. We cover this category both through partnership stores as well as our DMart stores, as mentioned earlier.
And DMart is still very small part of Delivery Hero, but it is growing exponentially. Today, we have 104 stores in nine markets across MENA, Asia and Americas. Food will remain by far the largest category, but other verticals further complement our service offering to our customers. To be able to operate this category profitably, an enormous amount of work and technology has been developed. Everything from inventory management, rider operations, AI solutions for routing, mapping, dynamic pricing, area optimization, time estimates, forecasting, customer personalization, yeah, only to mention a few.
I believe our focus on delivering an amazing experience fast and easy to the door is the right focus and not in parallel trying to solve very different challenges of transportation, which in the future can itself be a much larger industry. But transportation is not for us. We stay very focused on delivering an amazing experience fast and easy to the door, and that focus makes a lot of sense. Then speaking on delivery. In q one, we delivered 52% of overall orders.
We now cover approximately 530 cities globally. Operational improvements and new contactless delivery led to global reduction in delivery time to now being less than twenty eight minutes on average. And we have enhanced utilization of riders by 22% year over year. We even more importantly, we have significantly improved our gross profit contribution for the group, and it is soon to reach the target where it is on parity with that of marketplace. So here, we are proving what we always said that if you operate very efficiently and you keep focused, and we have been doing that for five years, this can be a profitable business.
Now over to Emmanuel for the financials. Manu?
Well, thank you, Nicolas. Good morning, ladies and gentlemen, and welcome to the first training update of 2020. In this first quarter, we the world faced a so far unknown situation in recent time with COVID nineteen with unprecedented consequences in terms of impact and reorganization. Our employees and structure have proven how resilient, flexible, but also creative and inventive they are to serve our customers, to help our partners, and also to protect our riders as well as our employees. This is a real stress test for all of us and, obviously, also for delivery.
And Quite frankly, we are managing this crisis in a very good manner. Despite the impact of the coronavirus, the lockdown, and other curfews that Niklas mentioned before, the company managed to continue its strong growth trajectory. Our reported growth rates are the result of our tremendous efforts that also aim to invest into what we see as a year, excellence of the success of our company, our vision to provide an And given the year the exceptional situation we've been living in the last three months, I'm really proud to see how Deliverio could maintain higher or high customers' acquisition level while supporting governments, also local communities, our customers, the restaurant throughout the year, the COVID nineteen crisis. And continuing into 2020, we are in a comfortable position to develop a high growth growth rate while making positive our unique economics on every single orders executed and continuing to improve it.
And now let's start with our group financials. So first, and Nikas mentioned it, but first, please note that the strategic partnership with VUVA is not reflected in any of the figures until closing of the transaction, which we expect to take place second half of the year 2020. The group orders increased by 92% year on year in Q1 twenty twenty to €239,000,000 despite a €9,000,000 negative effect on orders after mid March driven by COVID-nineteen. If adjusted for all the investments acquisitions, the group has grown by 89% year on year on a like for like basis. Our revenues continue to grow at an outstanding pace with year on year growth of over 92% on a constant currency basis, euros $550,000,000.
Here again and similar to the previous quarter, our revenues on the group level have been impacted by the application of the so called EIS 29 or the impaired inflation accounting for Argentinian operation. I will come back later on in our Americas section. The positive impact on acquisitions of the current situation is expected to expand the market opportunity and also to be beneficial for the the the online food delivery as well as all sorts of of fast delivery service like our pre commerce in the long term. Moreover, on delivery orders increased to 52% of the total orders in Q1 twenty twenty, driven by increased customer demand and city expansion across all markets. And this will be supported by positive unique economics on group level and improving unique economics for on delivery orders across all segments.
As we announced during the previous quarter updates, we will now be reporting integrated verticals as our new segments following the platform business reporting. And I would like to specify upfront that orders are not public content for platform business and their integrated verticals, that revenues for integrated verticals are defined as GMV for the platform business, and GMV for integrated verticals include both the revenues but also the VAT. And, also, given the exceptional circumstances, COVID nineteen update will be shown for each reported segment starting now with the group update on the next page. So the impact from the COVID nineteen pandemic differs from market to market and also has evolved rapidly. In general, we note a steady growth of acquisitions throughout this COVID nineteen driven by expansion of the customer base beyond typical demographic.
We see orders now being 11% lower than 03/11/2020 and almost back to pre COVID levels, but and on a good trajectory. And we can also classify order growth into two phases as shown on on both graphs. The the phase one, where global governance reacting to COVID nineteen with different kind of measures, some with country lock lockdowns and some others with with limited food delivery permission. And then in phase two, we're almost back to pre COVID levels. Overall, we have a we see a positive effect from COVID nineteen except in markets with the with strong lockdown and court use.
We also see average basket size increase, netting out orders near to in effect. Also, we see that most governments have slowly lifted restrictions. And and today, only a handful of countries are are are still under strict copiers, limiting food delivery to certain hours. This is the case of the of the KSA or Saudi Arabia, Kuwait, Turkey, Jordan, Pakistan, and Bangladesh. What we see also in the second phase, we see that safety measures have been applied and also communicated.
We see that local communities are support have been supported through through partnerships and also that we target and we are introduced efficient restaurant acquisition. That's that's that's the point that we see during the second phase. Now let's move to the performance of the four operating segments for for platform business, and and I'd like to start with the biggest segment, Asia. Asia has continued to be a focus area of growth for us in q one twenty twenty. As mentioned in the in the previous training update, we clearly see the impact of of previous investments to improve our safety coverage, customer experience, put faster and more reliable delivery as well as our greater restaurant selection.
And as a consequence, we see a record in order acceleration of 261 in q one twenty twenty to a 110,000,000 in orders generated on on our platforms. This is circa four times the the year on year growth that we achieved in q one nineteen, so a year ago. And this work is mainly driven by early stage markets in APAC, where we see growth of double digits in some markets. And in addition, and as mentioned, the strategic partnership with Voova is expected to to help us to expand our footprint in in in in the region. Asia's GMV increased substantially by a 126 on custom currency to €939,000,000.
And the revenues reached €201,000,000 for q one twenty twenty, growing at 198% compared to q one nineteen on adjusted constant currency basis. The the stronger revenue growth compared to GMV was mainly due to our the increase of our own delivery orders reaching 70% of total orders. And we are further accelerating the rollout of home delivery by focusing on on customer experience and also decreasing delivery times. Beside the Asian food delivery business, we have seen also growth in new verticals, and 16 DMOCs have been successfully launched in Singapore and Taiwan. So now let's move to the COVID-nineteen slides for Asia.
In Asia, we've seen a slight acceleration of acquisition in a few markets during the peak of the global pandemic, while Pakistan and Bangladesh introduced partial cofures, including food delivery. And as a consequence, we see a pre COVID nineteen level for less impacting market and recovery trend for Bangladesh and Pakistan with with orders now being 11% higher than than 03/11/2020 for the for the whole segment. And this this resilient development took place as Asian governments were reacting in a very decisive and fast manner for to the to the pandemic. Now I'd like to move on with our next segment, MENA. In q one twenty twenty, 85,000,000 orders were generated, and this is representing a growth of 31% year on year.
And those figures are representing the significant order loss that we note during the the the COVID nineteen. While we also create strong EBITDA in the first two months of the quarter, the the crisis or corona has impacted our profitability during March as some countries have applied or swung crop years, and and that had not been repealed in some cases yet. The for MENA grew by 28% year on year in Q1 to €957,000,000 on constant currency basis and with a 29% growth even higher on the reported currency basis. Continued revenue progression with year on year growth of 38% in Q1 and on currency basis to $2.00 €2,000,000 Our own delivery business is ramped up to at an accelerating pace and reached now 35% of total orders compared to 27% of total orders in q one last year. MENA platform business adjusted EBITDA is expected to remain higher 2020 versus 2019, and this despite a negative impact up to 50,000,000 from from COVID nineteen core fears.
Also, the platform business, the MENA segment successfully invested into demons and virtual restaurant. We will refer to EASTER as their integrated vertical. And in MENA today, we operate 85 or DMARCs across Turkey, Kuwait, Saudi, and and UAE. Now let's move to the next slide, and and and and let's look at the COVID nineteen impact for for this segment. Given the COVID nineteen emergency, acquisition has seen a strong growth in countries not implementing fuse.
Due to the permanent government restriction implemented locally, such as a twenty four hours car fuse in KSA, we we registered a decrease of 48 in order since since March 11. So similar to to acquisitions, orders are showing sign of recovery. For example, Egypt is starting releasing cautious restriction or or Saudi allowing deliveries on the special permission, Kuwait allowing deliveries after sunset. And, nevertheless, our cost use and significant restriction are still in place for several markets, but also safety measures have been successfully introduced us, like the contactless delivery, which is, for example, the case at St. Louis Station, or we also support local entities by donating meals to the most renewable and and medical staff.
And also here in MENA, we we focus on restaurant acquisition with our targeted sales action. So now let's move to our to our next segment, Europe. So Europe is segment is shows continuously strong growth compared to our peers. In Europe, we generate 25,000,000 orders in q one twenty twenty. This is a growth of 33% year on year.
In other words, we are all growing by far our European public listed competitors, which started growing orders by just 6% in q one twenty twenty, and takeaway pro form a growth being at 16% for the same quarter. Europe grew GMV grew by at 4040% to 321,000,000, while the year the revenues grew by 58% year on year on constant currency basis, €58,000,000. During the quarter, there was an increase of customer acquisitions in more markets, especially Nordics, currently growing faster than pre crisis level. Our own delivery orders are now at 19% of the total orders. And let's let's let now a quick a quick look at the COVID nineteen implication for for Europe.
With the consideration of the of this crisis, Europe saw significant growth of acquisitions in Northern And Eastern Europe as new customer groups are trying food delivery services during country lockdown. And and after an initial drop in orders and and acquisitions, even Greece and Baikon's expressed a sharp increase in acquisitions during the last weeks. There's also acceleration for Nordics and Eastern Europe, while rest of Europe is on track to to reach our pre COVID nineteen level as we see for governance lifting restrictions, like this is the case in Hungary, or we also introduce safety measures, like for our food panda Romania activities, or we support the local communities, like also here donating medical equipment supported by by iFood and the customers in in Greece. And, also, finally, also to foster the target restaurant acquisition, starting, for example, free delivery for home zone areas co sponsored by vendors. And this is what we do right now in Nordics.
And now I'd like to to finish with our with Americas as our platform segment. Americas generated 19,000,000 orders in q one twenty twenty. This represents a year on year growth of 79% compared to the same period in in 2019 and a significant acceleration in q one despite slight negative impact of COVID in March. The year '70 nine year on year growth is a significant acceleration from previous quarters, and still, we continue to operate in a very early stage market, and and we expect this growth acceleration to continue. The GMV grew by 42% in our reported currency, and our constant currency GMV growth has been 48% amounting to 162,000,000.
The revenues grew by 103% on a constant currency basis and amounted €38,000,000,000, boosted by by the investment in our on delivery capacity as well as the the further rollout of our multiparticle offering, including groceries and also other on demand items. On delivery orders are now at 62% of total orders in America. And, however, as of today, three DMOTs have been launched in Argentina, Chile, and Uruguay. Obviously, FX headwinds for for the region are impacting our results in in Europe significantly. And and, you know, further further revenues as well as GMV for Americas, I mentioned before, have been impacted by the application of the the EIS 29 that came into action since September 2018.
The impact of considering Argentina as a hyperinflationary country was negative of €370,000 for for in in q one twenty twenty regarding revenue, but negative 1,700,000.0 in terms of GMV for for the same quarter. Let's look at the the COVID nineteen page for for America. We acquisitions, except in countries important stricter COVID nineteen measures. Order decreased March as government start to implementing COVID nineteen measures. But, recently, order have been stabilizing twenty two year pre COVID nineteen levels and beyond with a with a with a total increase of twenty five percent since March 11.
And the reason for it is that we see is the government lifting restriction, for example, in Panama, or the safety measures are also here being implied and communicated since the case for contactless option via our app, like your for the case in Canada, and as well as local communities that's been supported through partnerships, like social services for the community in Chile. And finally, we undertake key also, like, a a very targeted and and efficient restaurant acquisition. So targeting local key accounts churn in the past to win them back, and that was one of key focus of Peridotia this quarter. And we continue to do so, obviously. So now I'd like to turn over for to our new segment, the integrated vertical.
So as per q one twenty twenty, we introduced for the first time our fifth segment, the integrated vertical. The the segment captures the activities that we are operating as a principal versus, you know, plus two platform where we we are acting as an agent. And I e, where we are we are in in full ownership of virtual restaurant or DMARC, they refer to as their integrated vertical. Well, integrated vertical business did make up to a small portion of the overall business, we expect them to to grow over time with fundamentally different economics to our platform business, and that's why we separate them from their from their other segment. In q one twenty twenty, the segment registered 3,000,000 orders, and the GMV reached 18,000,000 orders while revenue were at 17,000,000 orders.
And looking at their March data results, increase of DMA's customer acquisition, an increase of 218% month on month, and other growth, an increase of 28% month on month continued throughout COVID nineteen pandemic as customers prefer to order from home during times of social distancing. And these acquisitions all acquisitions that we've seen for our integrated vertical occur at close to zero CAC, so no marketing expense required these customers. We also recently note a substantial increase in AOB as these customers become more familiar with using our services. So now I I'd like to continue taking a look at our current cash position. On this slide, we highlight our cash position pre and post the VUBA transaction, which, again, we expect to close in the 2020.
We entered the first quarter with a net cash and liquid assets position of EUR 2,800,000,000.0, and this is excluding the so called Respond cash. The EUR 2,800,000,000.0 includes the proceed of the amount of EUR 2,300,000,000.0 from the convertible bonds insurance and also the equity offering that we raised in January 2020. And if the or after earmarking the 1,700,000,000.0 that these are expected to be paid for for the cash component of the UVA transaction, we will then hand off the q one twenty twenty with a net cash and liquid asset position of more than €1,100,000,000. This cash would be used for for general corporate purposes and also potential M and A activity. We don't expect any major impact from COVID nineteen on this cash position, but we do believe that the strong balance sheet will be a competitive advantage in terms of of proper funding.
Now let's move to the next slide and and our equity value bridge. In terms of impact of the transaction of on our equity valuation, it's helpful to look at our enterprise and also to equity value bridge in more detail. So if you start with our enterprise value, you will you will you would add the the the cash and liquid assets at Amarsh in the amount of point 100,000.0 as I as I just described the slide before, and also add the latest portfolio valuation of other manager mandatory investments in the amount of 728,000,000, of which clearly Rampion Global being the largest. And this results in an increase of 1,800,000,000.0 of the equity value compared to the year enterprise value. And now let's move to the guidance for 2020.
In terms of 2020, we maintain our previously set guidance and continue to expect full year 2020 revenues in the range of between 2,400,000,000.0 to €2,600,000,000 with an adjusted EBITDA guidance for the group of being negative 14% and negative 18 as a percentage of revenue. This this guidance is excluding additional investments of up to 200,000,000 with the majority not spent yet and the that we intend to to utilize to external leadership in selecting markets where required. We are confident that 2020 would be a crucial year for consolidation, and, therefore, we are even more pleased or having the flexibility to act in a in a holistic manner. COVID nineteen related costs will be absorbed in our group guidance, including the negative impact of €50,000,000 on adjusted EBITDA experienced in MENA platform business due to the COVID nineteen cofures. While at the group level, we continue to invest the duration.
It's it's clear for us the EBITDA margin from here is clearly improving as we grow in scale, and we can lever on improving contribution margin. And furthermore, we have we have proven to deliver a path to profitability for two of our platform segments, Europe and MENA. So Europe expects to be to run a breakeven during this year, and MENA adjusted EBITDA to expect even higher in 2020 than 2019. And now I I hand over to Nicolas to to wrap up this presentation.
Thanks, Manes. So to wrap up, 92 year on year growth during q one despite the temporary dip due to some street car fumes. We increased leadership positions to 86% of our countries. We rolled out third generation platform, including grocery, DMARDs, and virtual restaurants. We have been helping local communities throughout the COVID nineteen crisis.
We reduced delivery times to under twenty eight minutes on average, and last now more than 500,000 contract restaurant on our platform. And with that, I'd like to thank you again for your tremendous support. Think this will be another fantastic year for us. And now we're coming up for questions.
Question and answer session. And gentlemen, we The first question we received is from Markus Dibel of JPMorgan. Line is now open, sir. Please go ahead.
Hi, everyone. I guess I have one question on competition. Can elaborate a bit more. In terms of the €200,000,000 spend, how does that relate to competition? Could you tell us a little bit more how you're thinking about when and if to spend it?
What your thoughts are here in this regard? I guess we all read the comments from Uber and other players in terms of their profitability aspirations. Have you seen any major funding issues at some of your competitors? Do you think that funding is is coming down therefore you have an even better position? And, again, how does this square to your thinking how much to spend in in this context?
Thank you.
Right. So well, we're giving commitment that we will win the markets where we operate, and we have managed to achieve that in almost all markets. We now like to make sure that we have the firepower to keep pushing on this path. Additionally, we see also good returns on our investments, and we have been growing several times more efficient than our competitors as you can also see from the financials of some of them. And we know that they cannot burn cash forever.
So we we are ready to attack when the time is right. So in in in essence, we haven't used or only used a smaller portion of this. We still keep it at hand. I think we'll deploy a significant portion of it as I think they will have a lot of opportunities. So probably more opportunistically than than defensively, but we also wanna make sure that we have enough firepower to to to take
And, luckily, we don't have that that many fights. So we might speak about three, four, five, six markets. So 200,000,000 is is a substantial amount that we can deploy if need be. In terms of comparators, I'm I'm sure they will keep I don't They will probably get funding. I think I've had a little bit harder time lately.
We've also heard some players who we've seen some players struggling a little bit there. So that probably does change a little bit, but I think the largest change is not if people have capital or not. It's more the the sentiment that that that you have to prove efficiencies. And I think that is a mantra that we've had for the last few years to operate efficiently such that every year we spend goes into growth, while I think some of of the the the private players have just spent money without looking at efficiencies. And, therefore, they keep on burning money despite cutting down on their aggressiveness.
So so, therefore, we don't really see them as as as as very threatening at this point in time. But we expect that we'll get more efficient, and and and we'll make sure that we have the firefighter to fight it when that day comes.
Okay. Perfect.
Thanks, Marc.
The next question received is from Giles Fawn of Jefferies. Your line is now open, sir. Please go ahead.
Thank you. And the first question, I
guess, is an extension of the previous question around access to capital for your competition. I wanted to come at it from the angle of marketing efficiency. What are you seeing happen to your marketing efficiency or customer acquisition costs? And if you could focus your comments on those regions where you've been facing off against SoftBank backed platforms, that would be really useful, so I guess Asia and Americas. Any change in your marketing efficiency and customer acquisition costs in 2020?
Second question, the multi vertical and the greater and greater greater push into grocery. Now there are still voices out there that says it makes no sense and shouldn't be done. It feels to me that multivertical and grocery is going to be a greater and greater driver of competitive dynamics as we move forward. I'd just be interested in your view. Can a multiversal proposition influence the path to market leadership?
Thank you.
Yes. I I think there has been a clear change. I think also the fact that we have improved our economics, as you saw in our delivery economics in on one of the slides, and this was particular in Asia segment. So we have improved our gross profit, which means that we are improving our lifetime values. So therefore, when we look at our CAC versus lifetime value, we we we feel very confident.
We have probably seen a little bit of a pullback, but we we we we have paid a little bit more attention of where we have our returns and and that making sure that we make investments. But right it looks very good. And in particular then, since March or March, we have seen very positive CAC as as many users have come also for free, to be honest. So we have we have and it is the fact that we have a a strong awareness in the market. It also means that we get a significant portion of free traffic and free users during this crisis.
Then on the multi vertical, yeah, I've heard that it doesn't make sense. I've heard also that logistic doesn't make sense, and I think ecommerce also hard that it doesn't make sense and then still have an Amazon worth worth a trillion. So I think you you over and over, you will hear skepticism, and that's that's okay. And we will just have to prove that that that we can make economics. Having said that, it's not easy to make economics in this business.
It's it's also not easy to make economics on delivery. It it requires years of of operating this. And the same with the multi vertical. It's it's it's very tough. But I think we have found ways, and that's always the way we look at it.
We'll always look at it from a consumer point of view. What do the consumer want? And then the question is, how do we price it and how do we make it work? And I think here, I think we have have good developments, and and we are, of course, yeah, very satisfied with the current development there. We are very happy with the dark stores that we've been launching.
I do think that our focus and, of course, every company have their focus, and I think that's the right thing. We have our focus to deliver an amazing experience fast and easy to the door. We think that it's a large enough focus, but not but it is a focus. I think some players have a focus of doing everything. I think that's very tough, and I think they are not very generic they're synergetic to do driving people and and delivering items.
So, therefore, we think that it's a way too big focus, and then other players are focusing all on food. Everyone is taking their own approach. Our belief is that our vision is what makes sense for us, and we believe that our customers are gonna value us more for that.
And just to put thank you, Nicholas. And just to push you on that last point, if the utility of a marketplace defines the competitive outcome in any given country, do you think, you know, a traditional food focused marketplace can can beat or win out against a multiversal marketplace that also does hot food or or vice versa?
Think it's
yeah. Do they just coexist?
No. I think it it I think it can. I know it's always when you turn on new things, you have to have a very strong team and strong operations to manage multi multi areas, and and it does drive extra complexity. So so I think it can. In some markets, you might kind of groceries and other items might not be large enough to to justify it, and and a good player can can focus on on a slightly different customer segment and and still make a good return on on profit.
So so I think it it can both coexist, and it it can even beat a multivolier approach. I'd I'd rather have a focused a singular focus on food than a a distracted focus on a lot of things. Luckily, I think that we can handle the focus, and we are able to, and we will have a lot of synergies there. I also think that we'll have enough scale to operate both these verticals or these verticals while it it many other players will not have the scale to operate this. So I think there is also a time and a size and a scale in order to do this effectively and and profitably.
And we have that scale and size, and many others don't have that size. And, therefore, I also think it would be tough for them to do multi vertical.
Thank you very much.
Thanks. The
next question we received is from Joe Barnett of Credit Suisse. So
the first area of questioning is around the gross margins of Marketplace versus Logistics. Can you talk a little bit about what drove significant step change in logistics profitability or margin in the quarter? I think you touched on Asia, but any more color you could give around that? As a follow-up to that, how long will it take to get to parity, logistics of marketplace? And what happens when you get there?
Will you look to reinvest any excess profitability from logistics, or could we see, conceivably, logistics margins going above marketplace? That's question area number one. And question area number two, as a result of COVID, you brought in measures to aid restaurants, including delivery fees, and I think in some areas, lower commission rates. Can you help us understand the cost of that, and how and when you get back to a normal fee paying environment? Thank you.
Thanks. Yes. So I'll I'll cover a little bit on the gross profit. So we always had that approach that we price things at where we think that we can make the profit profit contribution parity over a foreseeable future. I used to the the pricing before.
And foreseeable for us was the six, nine months down the track that we saw that we clearly have initiatives in the pipeline that can drive us here. And that's why we front loaded some of our aggressive affordability push last year in particular because we saw that we can get more efficient on our driver logistics and and that's why I've seen a big improvement now in q one because we took our affordability to that level, and then we have kept it at that level while we have actually improved our efficiency before our efficiencies than after. In the past, we we we changed both efficiency, but also reduced the pricing. That's why you never saw that improvement in gross profitability that effectively. But that's that's basically what happened.
So when we reached them, that parity and I first of all, they will not you still have a lot of things to or there was still a lot of work to get there. There's a small difference maybe, but we speak about every single cent matters here. So we speak about even fractions of cents when we work on our improvements and efficiencies. So so even even getting to parity is still going to be some work, but we are confident that we get there. If you overshoot, then we're probably priced too high.
And and we should have taken down pricing, and maybe we'll do take down pricing even further to making sure that we keep that parity because that's where we wanna be. We don't wanna make excessive profit on on on logistics, but we wanna make similar profit on logistics as when we jump to logistics. So that's that's that's the plan. In terms of COVID and the the cost there, so most of the costs have been one off costs when they're more directly related to to COVID. There we are doing a a a giving back thing, which is slightly larger in in during Ramadan to to to have a slight cut in commission during one month.
But that is more of a Ramadan giving back to the community, show that or building on our trust that we have in the region and the relationship we have there. So that's just a one month off cost there. Then, of course, we have more cost COVID costs related to that we have lower order levels, and we make a significant profit contribution per order. So we are taking a significant loss indirectly as long as order levels have not returned to normal. The last few days have been very good, especially since we started Ramadan.
We hope, of course, that the curfews will be over when we get out of Ramadan, but this this this, we cannot plan on. We we will have to see when we get there, and that's why we're putting 50,000,000 expected hit on MENA to to be on the the safe side there.
Thanks very much, Nicolas. Maybe one very brief follow-up if that's okay. With regards to setting that profitability level of logistics equal to marketplace, you spoke about the affordability you you you sort of brought in. As you stand now, knowing more than you did twelve months ago, do you think you did set that affordability at the right level, or do you think it's conceivable that in the next six, twelve, eighteen months, you actually bring in another round of affordability thus driving, you know, growth up because the it is trending above marketplace profitability?
Right. I I do not expect that there will be further affordability cuts or at least not on on on a global level. That could be visible. I think we have also taken it almost as far as we can take it, to be honest. So we have been doing there's a lot of free delivery.
There is a lot of low minimum order values, a lot of lower delivery fees. So I don't even know if you can take it much lower. It would really just be marginal that it's impossible to to to do. So I I do not expect that there will be anything more that could even be done even if we would want to. So from from from this level, we should be fine.
Yeah. And then yeah. Excellent.
Thanks very much. Appreciate
And the next question received is from Andrew Portrose of HSBC. A
couple from me. First of all, a quick one around MENA. Just trying to understand what's assumed within that €50,000,000 impact on MENA this year. I mean, presumably, you can't keep going at minus 50% orders for too long a period. Just trying to understand what sort of recovery you're assuming there when you're calculating that impact.
And the second, just on the impact on the economics of the grocery side of the business, really, on dinosaurs. Could you just talk about how the economics stack up in terms of basket size, gross margin, delivery fees, etcetera, just to help us understand it? Because I can understand why people are skeptical given what you sort of see from most grocery businesses. Just trying to see why you might take a different view on that given the economics that you see from your side.
Cool. Manuel, do you wanna cover the first?
Yeah. Yeah. Absolutely. I mean, so our expectations on MENA, first, as Nick has said, we've cautious because the visibility that we have with MENA is not exactly the same that we have for the other segments. I mean, the other segments, we've seen the restriction lifted by the government.
While in MENA, we are still, you know, experiencing cold fears and lockdown by by the government. So it's quite difficult combined with the Ramadan to see what would be the impact for for for the future. The negative fifteen minute beta is mainly coming from from a reduction of orders, clearly. I mean, you've seen the impact of 48% on on q one already since March 11. So that we are we were assuming that, you know, what could be the worst case scenario.
That's why we're talking about up to 50,000,000 negative EBITDA. We're assuming that, you know, q two will be very special because we have combination of COVID nineteen plus of Amazon starting. We do have some costs related to our effort. I mean, you know, we we make donation. We also increase our operations to support the onboarding of the restaurants, making sure that we onboard them faster.
It's had also some cost on riders because we recruit. But, basically, this this reduction of the EBITDA that we that we are planning today or we are forcing today is clearly mainly linked to the reduction of the orders. When is the normality kicking back or when do we go back to normality? There, this is like an assumption. Probably then during q four, we would see an improvement, but that put we we were pricing in the evolution that we just see today.
As I said, the visibility of MENA is quite different from what we have for the other segments, and we've been cautious. Do you wanna continue on demand, Anastas?
On on the groceries. Yes. So so and then let's let's go with the DMARDS. So if you look at, like, grocery when you are to purchase a principal of items, and are you depending on which item you choose and the selections and and so on, you can have margins anywhere between 2050% on your items. Then it's it's fairly similar to the the fees that we we we have when we deliver food.
So that's that's where we make the margin. Then, of course, we have some cost associated, but we also have some less cost related to it. So logistics is is shorter distances, and the the the picking is is can also be covered through a small delivery fee or and so on. So we can ease so so the simple way of looking at it is that the margin we get from a is equivalent of the margin that we get from a restaurant when we do do do service. And, of course, we have to adjust with delivery fee and other items to making sure that we cover the other potential items and item cost.
I think if I may if I may oh, sorry.
And then if you look at the groceries, then it's harder. And and here, I think it's it's it's a more difficult job to get economics when you when there is someone in between or or a grocery store who also needs to make margin on their products. But they're also here, and they're working directly with the the CPDs. You also have a a possibility of making additional revenue there. Now, Manus.
Just a quick thought. What was the split between perishable and nonperishable grocery within D Mark?
We do not disclose, but we have both.
No. I just I just wanted to to to to comment on the sort of fixed cost that we may have at DMARC compared to groceries. Obviously, you know, our stores are smaller, so we can optimize on the on the cost structure. And their and it's had an impact on on the margin that gets generated in the market, which are supposed to be better than the groceries one.
Thank you, guys.
Hey. Thanks. This is on
the next
little bit short on time.
Maybe the next one okay. And the next one is from Andrew Ross of Barclays. Your line is now open, sir. Please go ahead.
Good morning, everyone. Thanks for squeezing me in. Just two topics to touch on. First one, follow-up on the destores. I think you're targeting around 400 to the end of this year.
Maybe you could just confirm that. But then kind of into '21, how should we think about the ramp of this? Or is there anything you can share with us in terms of kind of how many stores per population you think you need in the market? Any any any kind of work you've done on that would be helpful. And I guess as an extension to that, you know, how much, negative EBITDA is there in the guidance related to these stores, this year?
Thanks.
Well, on on G Mark, that's right.
Please No. Go ahead. I think on on D Mark, yes. So we we the ambitious target is to get to 400. It it's gonna be a lot of work, so so it's it's not easy.
But and it's it's a very aggressive ramp up, and we're doing our best to hope that we get there. In terms of '21, I I do not dare to to to speak out of that now. It it depends very much on the order density that we can generate because we don't wanna open DMARC when we don't have enough order density. We know roughly how many customers we need in a certain area in order to justify how many demarch. Then, of course, if you see that the cohorts and behavior and and that is changing during the year, then, of course, we can build even more demarchs, having a closer proximity to the customer, making even better economics on it.
So so it's it's really around driving scale per DMARDs store. I do not know yet how how much scale we can in order to even even having a closer proximity there. So, unfortunately, I won't be able to answer that. But we we will make we we will have the best coverage of DMAR stores in all markets That is for sure.
And just in terms of the EBITDA contribution this year?
I see you haven't given guidance on the EBITDA contribution, but I think we we gave in the last update an approximate CapEx as well as OpEx for ramping up those stores. We have a similar view today. Emmanuel, anything you can can share with me what we should
call We we did disclose the EBITDA contribution in terms of CapEx. We mentioned around 3,000,000 for this year. We for the overall CapEx, and we stick to the 400 there, marks that we want to to generate to, yeah, to launch this year, '20.
Great.
Thanks.
Thanks.
And the last question for today is Just
one, given the time constraints on if you could give us a comment around the cash balance and the bridge between the €1,400,000,000 number that was given in, I think, in February and the 1,100,000,000.0 now, it would be great. I
mean, like, the bridge that we saw today is the cash flow at the March, excluding rest on money and including our our our assets, like your takeaway share that we still own. That's what's that is what we're presenting today. I must say the bridge, I
don't have it on top
of my head from 1.4 to 1.1. I will have to verify this this this information. Okay.
Great. Thanks. Hey. And, again, I'd like to thank everyone for your trust and support. And I also like to use the opportunity to thank the Deliver Hero team.
I really couldn't be more proud of what you have delivered over the last two months. I know it's been incredibly hard, but the world has never needed us more than now. So thank you very much, and stay safe. Stay healthy.
Yeah. Thank you, everyone. Stay safe. Talk to you soon.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.