Ladies and gentlemen, welcome to the Boozt Q2 2019 report. Today, I'm pleased to present CEO Hermann Haraldsson, and CFO Allan Junge-Jensen. For the first part of this call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Speakers, please begin.
Good morning, all, and welcome to our Q2 presentation. If we go to the first slide, the key highlights, I would, yeah, just like to mention that we believe that it's a solid Q2 that we have delivered. The market is challenging and but our customers are happy, have been happy and have ordered with us. So we think it's quite solid, with a 26% net revenue growth, which was brought by Boozt with 21%, and then, Boozt has impressively 156% growth. A very strong growth by Booztled. Another good thing is that the average order value was unchanged, as we saw that return levels, they normalized, in Q2 compared to Q1, and as expected.
We have seen that the gross margin has declined, driven by a quite promotionally driven market. We have had high inventory levels in industry, and also the summer started quite late, which also meant that the end-of-season sale started very, very early this year. Adjusted EBIT margin improved to 5.2%. The early start of the sale drove customers to the site, and there was no reason to pay for that, as we both were able to attract new and old customers through our non-paid marketing channels. For the first half of 2019, we've had 27% revenue growth and an Adjusted EBIT margin of 2.2%.
Also this is why we maintained the outlook for 2019, with a net revenue growth of above 27% and Adjusted EBIT margin improved from 2018. We also announced that, you know, late last night that we have acquired TouchLogic, app and mobile developer, and we create Boozt Innovation Lab. As well as this morning, we announced that Allan, after 9 years, being a co-founder and CFO, will leave the company by the end of January 2020. If we go to the next slide and look at the KPI highlights, customer satisfaction for Boozt.com. As always, these are the most important KPIs, and we can see that customers still are quite happy. And we have a high customer satisfaction.
We get good ratings on Trustpilot with five stars, 5.2, and especially the NPS score is world-class high at 72. So we know that if the customers stay happy, they will come back. And this is also what we see, that both existing customers, old customers, come back at the same time as we attract the new customers. Go to the next slide on the order development. In the quarter, number of orders went up by twenty percent for Boozt.com, and the average order value was flat. For the first half, number of order was up with twenty-six percent and the average order value was slightly down compared to first half last year.
As we have been saying, this was due to the elevated return levels in Q1, and they are now at a level that is more as expected. They are still going up, as they've been for the last five years, but this is something that we expect and that we are in quite good control of. Going to the next slide, which is the cohort development. If we look at the number of active customers, we now have had for the last 12 months, 1.5 million active customers, which is up by 28%, which is quite strong new strong customer active customer growth.
They have maintained the buying frequency, but the true frequency has gone up from 7.2 to 7.7, showing us that we have a strong cohort of customers who are very, very loyal to us. Going to the next slide and looking at our TouchLogic acquisition. The rationale behind us acquiring TouchLogic is for us to accelerate our mobile app development. We can see that our current app users they have above average KPIs, for instance, higher order, higher average order value, and we believe that this acquisition will strengthen our capabilities with an app and mobile web, and also that will it will help us take our app usability and the functionality to the next level.
We have known TouchLogic for quite some time, and they have a quite strong track record of best-in-class app development. The team is based in Copenhagen and will be based in Copenhagen, and they will be responsible for the app performance, app development, and also in prototyping new cutting-edge technology. We find actually that there's quite good cultural fit, and we've had some test projects ongoing since early spring, which is why they would be basically operational from day one. If we go to the next slide, I would like to explain a bit about our platform strategy. Now that we have acquired TouchLogic, we will create the Boozt Innovation Lab, basically to try to keep us staying ahead.
Well, as you know, those of you who have, who have known us for quite a while, we want to be in control, both with regards to everything that touches the consumer as well as our internal processes. This is why we have made the proprietary tailor-made tech solutions to all our core processes. The entire platform is ours and custom-built for our business. We have cross-functional business teams to make sure that we're relevant and that with high productivity, and most of our developers are very close, close to the daily business. The innovation lab in Copenhagen will be a bit detached from the daily business. They will be the ones pushing towards creating the online experience of tomorrow. They will be based out of the Copenhagen office.
They will make sure that we are more kind of progressive in our thinking, daring to take some risks, daring to try something new, and they will be able, we believe, to bring new technologies faster to a platform in what we call this, this fail-fast approach. So we're quite confident and looking quite forward to having this tech lab just close by. Going next to go to the next slide with our new robot management system. When we initially invested in the AutoStore automation, it came with a warehouse management system that was developed by the supplier of the robots. This is quite normal that you have a kind of what we call an EWMS, developed by the supplier.
We have experienced that this has, it has reduced a bit our agility and flexibility, and this is also why we have developed our own robot management system to basically be able to handle the full warehouse management in our own systems. It's been developed internally, it's tailor-made, and it will make sure that we have a very high degree of flexibility and make sure that we constantly improve the customer experience. It has been, this, the new robot management system has been implemented to the new cube, Phase III, that we just installed, so it has been tested very vigorously, live, and we can now see that it works very well.
This also means that the existing or old e-warehouse management system that has been in place for the order cube of Phase I and II will be replaced very soon to a new system. This means that everything that is in the warehouse is in our own warehouse management system and fully aligned with the rest of our platform. We've obviously had some ramp-up costs by implementing both the new cube and the new warehouse management system, and the testing of the system. It's quite difficult for us to quantify what are the ramp-up costs, and it's also why it's a part of the fulfillment costs in Q2. If we go to the next slide, the financial update, I would like to hand over to Allan Junge-Jensen.
But before I hand over to Allan, I would just like to comment on him leaving his position as CFO. I've known Allan since 1998, where we worked together as media planners in a media agency. I asked Allan to join us back in 2011 to help us build the new Boozt and launch the Boozt.com. Actually, back then, it was not really a part of Allan's career plans to do this, but he was actually ready to take on the challenge. And as long as we agreed that it was okay for him to leave when he felt that he was ready to move on. The time is now, and he wants now to pursue a more commercial role.
Allan leaves the company and our finance function in a very good shape, and he has also given good notice so that we will be able to do a transition to his successor. So I'm confident that we will manage that transition smoothly. So I know there is no one like Junge-Jensen, but I'm quite confident that we will find a good replacement. And now I would like to hand over to Allan Junge-Jensen.
Thank you. Thank you, Hermann, and also thank you for the nice words. Okay, as we turn to the next page, you can see that we grew the business 26% in the quarter and a little more than 27% for the first six months. Further, in the middle of the slide, you can see that it's evident that the gross margin is down in Q2, as well as for the first six months of 2019. Despite this decline in gross margin, we have managed to secure an Adjusted EBIT margin, which is slightly higher this quarter compared to the same quarter last year. For the first six months, the Adjusted EBIT is SEK 5 million higher, but 0.2 percentage points down versus the same period last year.
Bear in mind here that the impact from the beauty stores take down the Adjusted EBIT margin with 0.3 percentage points for the first six months compared to last year. If we turn to the next page, here you will see some of the KPIs for the Boozt.com segment. All in all, a very satisfying development with 21% growth, and actually also very important, an average order value, which is unchanged from the same quarter last year. We have continued to see a very strong development in the sports categories and the beauty category. Additionally, in this quarter, we have improved our offering with exclusive collaborations with some of our suppliers, and we are also very happy to welcoming the brand Garnier once again back on Boozt.com.
If we turn to the next page, here are some KPIs for the Booztlet.com segment, and here, growth truly outperformed our actually own ambitious targets with more than 150% growth in the quarter. And once again, it demonstrated that the Booztlet offering has a great future potential in the Nordic area. Despite this heavy growth, the profitability of Booztlet has not come down, showing that we have benefited from very attractive customer acquisition costs in the second quarter of this year. Booztlet is our rising star, and we will definitely strive to support this development in every way possible in the coming months and years. Okay, and if we turn to the next page, here you have the third segment, the other segment, which now includes two physical stores, one beauty store in Copenhagen, and one Booztlet outlet in Taastrup, South Copenhagen.
In the second quarter, we closed down the beauty store in Roskilde, realizing a closing cost of SEK 4.9 million. The like-for-like developments, excluding these costs, are improving in terms of Adjusted EBIT from -SEK 4.9 million to -SEK 3.7 million. And particularly here, the outlet in Taastrup is progressing very positively. The total expected loss for this segment, in 2019 is unchanged at SEK 20 million, including the closing costs of the Roskilde store. And if we turn to the next page, here you see the cost ratio development for the quarter. But, let me direct your attention to the bottom of the page, where we have excluded only the IFRS 16 depreciation impact, and this is done to better compare the cost ratios versus last year.
The first one, the fulfillment cost ratio, is increasing as expected. Hermann mentioned it briefly, but it increases at a higher pace than we had anticipated. Of the 1.1 percentage points in deviation to last year, we estimate that approximately 0.5 of those can be explained by recurring expected increases in distribution and fulfillment, whereas the latter, 0.6, is more or less associated with what Hermann also referred to as one-time ramp-up costs of implementing the Phase III of AutoS tore, including the EWMS. The admin and other cost ratio is, in this quarter, highly affected by the FX exposure, which in our income statement, is classified as other operating costs in this quarter, and in the previous quarter, last year, it was other operating income.
This, together with an increase in the rent for our new headquarters in Malmö and the increase in personnel costs, can explain this deviation to last year. Remember here that our new headquarters can accommodate more than twice the amount of people than we are today. The margin cost ratio is down four percentage points versus last year in the quarter. But despite this leverage, we have seen a growth in the amount of new customers in the quarter. For the first six months, the picture is almost similar for the different cost ratios, so I think that we should turn to the next page. Here you see that our working capital to last month sales more than doubles from 5.3% to 11.2%.
Approximately 1.6 % points can be directly explained to the fact that the quarter this year ends on a Sunday, which traditionally is a very strong revenue day, as opposed to last year, where it ended on a Saturday. In the graphs to the right, we have displayed the growth in inventory and accounts payable versus same quarter previous year. As you can see, the growth in inventory levels end of Q2 2019 is approximately equal to the growth in the net revenue for the quarter. But at the same time, you can also see that the accounts payable dropped dramatically. This is primarily explained by the fact that we have deliberately decreased the purchases of campaign stock in the second quarter this year, but it also indicates that the maturity of our existing stock is slightly older than the same period last year.
All in all, we still consider the stock composition healthy, but you can say that the inventory is to a higher degree financed by us and not our suppliers by end of Q2 2019. We strive to, in the coming months, we aim to reduce the working capital exposure by increasing the inventory turnover, also with the use of BOOZLET.COM Okay, let's turn to the next page. Cash flow and investments. In this quarter, we have only realized a minor part of the total expected CapEx in relation to AutoStore Phase III. The remaining amount is expected to be capitalized in Q3 this year. And you can also see that the CapEx for the intangible assets only increases slightly versus the same period last year.
If you look to the right, the cash flow for the quarter is lowered by the increase in accounts receivable from ending on a Sunday. You can also see that for the first 6 months, we have not increased the cash flow compared to the same period last year, but this is closely related to the working capital explanation, which I mentioned at the slide just before. If we turn to the next page, this is just to reaffirm that given the very strong development in Q2 this year, we maintain the outlook for the full year 2019, both on net revenue growth and on Adjusted EBIT margin development. That concludes our presentation. Now back to the operator.
Thank you. Ladies and gentlemen, if you do have a question for the speakers, please press zero followed by the one on your telephone keypad. There will be a brief pause while questions are being registered. Thank you. Our first question comes from Daniel Schmidt from Danske Bank. Please go ahead. Your line is now open.
Yes, hello, good morning, Allan and Hermann. A couple of questions from me then, and starting with the marketing spend, which was quite depressed in the quarter compared to previous quarters, being down 5%, I think it was SEK 14 million year-over-year or so.
Should we still expect, or I assume that we should expect marketing spend to go up as a percentage in the coming quarters, and correct me if I'm wrong, but could we still expect a structural benefit, so to speak, when it comes to the offline marketing spend, which you said at the start of the year that you would keep flat, and that you've seen sort of a lot of brand building take place over the past couple of years, but then you can leverage off some of that going into the rest of 2019, i.e., that we should see marketing spend come up, but maybe not to the level that we have seen historically. Is that a good assumption going forward?
Yes, hello, Daniel, this is Hermann. The short answer is yes. But obviously, you know, I wouldn't call the marketing spend depressive because I think it's basically what happened at the end of Q2, where we said, okay, you have an early start of the sales season. Then you actually saw the power of the brand and the power of the brand building that has been taking place, that we're still able to attract both old customers, but also new customers, meaning that when the sales started early, a lot of customers came into the market, and we got a very more than our fair share of that. So that was actually quite positive that we could attract. We could have the growth and attract the customers and reducing spend.
This is how it should work, and it proved that this is how it works. You should expect marketing spend to go up again, because we, of course, expect that the situation will normalize. But you know, it's early to say, our ambition is always to keep the offline spend fairly flat, and use kind of the brand building to build the power of the brand, and then reduce the overall marketing spend as a ratio of the sales. So there is not much change, but we, of course, you know, we believe it's we have a high flexibility, and we will use that to act in accordance to the market. Was that an answer, Daniel?
Yeah, yeah. Okay, good. And then secondly, the fulfillment costs and the robot management system that you've developed yourself and talked about, is it correct that those costs were also impacting the fulfillment line, and that you will have to take additional costs also in Q3 for this? And if so, could you quantify if there's a meaningful difference between the quarter, how much it was, and when will it trade? Am I correct in assuming that impacted fulfillment?
Allan, speaking here. Thank you for the question. I think that we have seen the majority of the ramp-up cost in Q2, explained by the 0.6 percentage points. There might be some in Q3, but it will not be at the same level. The 0.5 , as I mentioned, is actually expected to continue on account of distribution, inflation, and also composition in terms of number of items in our basket. So you should expect the 0.5 to continue, but the 0.6 will be reduced dramatically.
Some of it will come in Q3, but, not to the magnitude-
No. Yeah, it's too early to say. It's still in process, but the indication is that it's normalizing.
Yeah. All right. And then just looking at the market then, you've seen peers, we've seen peers to your reporting or the closest peer, maybe significantly improvements in inventory and comments like sort of a good ending to their sales season in July and so on. Would you care to comment anything on current trading July, August?
Yeah, this is Hermann here. I would say that the sales, summer sales went as expected and we're now, you know, the autumn-winter 19 season starts now. So it's very early to say. It looks like the weather gods are with us this year. But you know, it's like it's September, October, November, December that decide for the years. So we are ready and in a good shape, but so far so good. But it's yeah, we expect what we expect. I don't know how to quantify it even better.
But would you agree or would you say that if you look at the Nordic market, that inventories in the market are a little bit more balanced than they were in the second half of last year?
Yeah, I would assume so. There is obviously for Q2 a lot of excess spring, summer inventory in the market. You don't buy as much campaign goods for the spring, summer season, because in the north, it's actually quite short, and the value of the item is not high. So you would typically buy more campaign goods for the autumn, winter seasons, which is also why we've been holding back on the campaign buy for the spring, summer. But in general, I believe that the autumn, winter inventory levels, they should be more normalized as last year was quite unusual.
Yeah, yeah, absolutely. All right, good. And any improvements, you said that other, of course, was improving by SEK 1.2 million, I think, in, in lower losses, and then you're, of course, closing down the Roskilde store going forward. But if you look at the beauty store in Copenhagen, are you seeing any sequential improvements compared to the start of the year?
We are seeing small improvements in Copenhagen. As we've always said, the Copenhagen store is entered into a beauty segment, which is very attractive, where we have seen very encouraging growth rates and a profitable segment. The Copenhagen store is moving. We're doing a lot of stuff, but it's going slowly. And we are quite impatient people, but we are monitoring quite well and closely and are working on reducing the loss going forward.
All right. Okay. Thank you, and, Allan, good luck with your new ventures, and, sorry to see you leave.
Thank you, Daniel. Thank you.
Okay, thank you.
Thank you. The next question comes from Nicklas Ekman from Carnegie. Please go ahead. Your line is now open.
Thank you. Yes, most of my questions were actually asked here by Daniel, but maybe a couple of follow-ups. Firstly, the increased markdown activity that you've seen here in the market, can you talk a little bit about what has been the main drivers here? Is it physical stores or has it been online retailers?
Hello, Nicklas, this is Hermann. Basically, it's the entire market. You have a market that is very unstable because you have the onliners taking a big market share, and obviously, the offliners are fighting back. End season sales, I believe some even start at end of May. What the industry has learned is that you don't want to sit on too much inventory. It's the entire market that is inherently unstable at the moment. It's difficult to distinguish because the physical stores obviously experience that people come in store and say, "I can see that there's a sale going on with some of the big e-tailers," and vice versa.
So, I think it's very difficult to pinpoint that is any specific agent that is driving the market activity.
Can you say anything? I mean, I guess some of this was driven by the exceptional weather last year, given that the weather this year seems to be a little bit more normal. Are you seeing that the inventory levels are decreasing, that the campaign activities are being more normalized, or is this kind of a structural shift where you are seeing continued increased campaigns?
Yeah, it's I again, you know, we actually really hate to talk about the weather, but actually, we probably want—don't remember it, but some of this year started quite late, and April and May were pretty miserable. And of course, you know, you just, you know, you don't want to be the last man standing. So this is also why we saw that sales started early. I believe that in general, inventory levels are more controlled in the industry, but at the same time, I believe that the actors are quite aware that you need to get inventory moving if you have any extraordinary situations.
So we expect that the competitive situation will continue, but at the same time, we expect for the last six months that gross margin will be around 4% that we have been communicating all the time.
Okay. Okay, excellent. And then a question also on the Fulfillment Cost Ratio. It's a little bit difficult to follow this Fulfillment Cost Ratio, given that you had the monobrand business before, now the shift to to IFRS 16. But in general, it looks like this Fulfillment Cost Ratio is not decreasing. It's been, it's been fairly, fairly constant. Can you, can you give us some background on this, apart from the the investment that you've done now in your own, in your own robot system? But, otherwise, when do you think that this the Fulfillment Cost Ratio can start to to come down?
Allan speaking here. Thank you for the question. We can actually elaborate a bit on the increase, which we think are recurring, the 0.5%. Approximately half of that is actually related directly to distribution inflation, which is, of course, a matter of negotiation with our suppliers. And the other half, the 0.25, is related to the fact that also expanding into new categories, in particular, beauty, you see an uplift in the number of items in each of these baskets. And since a lot of the return handling at the warehouse is still very much manual labor-intensive, you will see that the cost per returning a parcel is increasing slowly.
So, we don't think that this will go away also by the fact that we are expanding into the beauty category. So you should expect this at least to continue for the remainder of 2019. And then, of course, the distribution part is a matter of negotiation for 2020. And in the more longer run, as we also communicated when we started to implementing the robots, we have taken the bigger chunk of the savings going from a manual warehouse to an automatic warehouse. But the next big chunk is, of course, if we can do something with the return handling and the efficiencies in the labor-intensive part of the Fulfillment Cost Ratio.
Okay, excellent. Thank you very much for taking my question.
Thank you. The next question comes from Daniel Ovin, from Nordea. Please go ahead. Your line is now open.
Yes, thank you very much for taking my question. So, first starting on the gross margin. So it's obviously down year-over-year, and we know there were some weather and markdown related impact on this, but you also talked about campaign goods, and that there were less buying this year. So as I understand it, the campaign goods is also helping your gross margin. So that decline, was that purely weather driven, or is it also that you had less help from selling campaign goods? That's my first question. Thanks.
It's actually a bit of both, actually. So obviously, the campaign goods might help you a bit in the beginning of the season, because it's huge towards the autumn, winter items. But I think it's a mix. It's difficult to say, you know, what is seasonal or weather driven, what is campaign driven? So it's actually quite difficult for us to quantify.
Okay. Okay, then also a question. I know that in meetings we had, you talked about that you closed risk sharing agreements with a number of the brands delivering to you. So can you explain a bit where you are on this, how many brands are now covered, and how also, to what extent that could impact your operational performance going forward? That's my second question.
Yeah, we have some agreements with the brands where we ask them to kind of take part of the risk, especially now that we're growing and growing this fast in this tough environment. We are actually. We have increased the number of agreements. We don't want to disclose the actual number or the percentage of our buy, but we are seeing a growth, and obviously, this is a kind of a buffer.
Ideally, we want to use them because that would mean that it's been a good season with a very high sell-through, but this is kind of caution if for any reason the, the season does not turn out as expected, then you have this as a kind of a, emergency brake.
Hmm. And just, I mean, do you get the feeling that this is something that apparel brands are doing with most of their resellers, or is this something that you've now gained the kind of scale where you start to work with them in this kind of way? So is this a benefit from becoming larger? What is your view on that?
I don't think I should comment on that. It's... I don't know about others. Of course, you know, being a strong partner of this brand, being probably, if not the biggest, top three partner of most of the brands, obviously it helps that, you know, they want to promote their brand and we want to sell it, and we take the risk, and obviously, it helps being big. That goes without saying. So not that we are bullying, but of course, you know, if they want us to continue our growth, then trajectory, the risk can't be all on our side.
Yeah. Okay, thank you. And then also last question then on the BOOZLET.COM and the off-price market. So as you pointed out yourself, I mean, growth is even higher than what you expected. So how should we really look at this? I mean, is this that the off-price market as such is growing very strongly overall, or is this that you are basically taking a big chunk of that market now by you know, putting some more emphasis on your Booztlet operations? How should we think about this going forward, basically?
I think it's a combination of both. We know that the off-price segment is quite big, and we believe that the off-price segment is not very well served online by peers in the region. We have, I believe, launched Boozt like four or five years ago, and did it kind of. We didn't do it fully committed. Now we're committing because we see that customers like it, and we see that there's a huge opportunity. The synergies with Boozt.com are huge. So we are driving, we are pushing a lot on Boozt. The growth, of course, was higher than expected. But we just see that there's an opportunity.
Also, if someday you will have a economic downturn, that which you probably will have, then we see also it's a very good hedging instrument for the group that we can offer our customers an option in going to the off-price. Probably in a situation where the market will be very heavily stocked. So I think we think it's a very good combination; we are extremely bullish on Boozt.
Okay, perfect. That's all my questions. Thank you very much.
Welcome.
Thank you. As another reminder, to register for a question, it's zero followed by the one on your telephone keypad. The next question comes from Michael Benedict from Berenberg. Please go ahead. Your line is now open.
Good morning, all. I've got a couple, but I can go one at a time. Clearly, there's structural pressures on online players, average order values, but yours was quite impressively flat year-on-year. Can you speak about the sort of positive tailwinds you've seen on that metric in the period?
So, why we're not seeing a decrease in average order value compared to the peers? Is that the question, Michael?
Yeah, yeah. Why you're not seeing a decrease when peers are? Yeah.
Yeah, it's a good mix. Of course, when you have an increased number of basket in the items, then the gross average automatically goes up, and when now that you have return levels going back to the more normal levels, then you will see the absolute value being stable. Also, beauty, even though that it's quite small, it's actually adding on to the basket, and our net average baskets for our combined beauty and fashion basket is actually some 10% higher than using our baskets. So beauty is actually as beautiful, I want to say, as we expected. So this is why we're pushing for the beauty.
So it's a combination of that, our customers are still buying with us. We are adding categories that are add-on to the basket, so that actually works to our favor.
Great. Thank you. And are you able to quantify the gross margin impact from, one, the mix, and two, from the sort of market-wide discounting you've seen?
Yeah, this is Hermann here. It's, that's, it's actually a good question, and obviously, we can see that, of course, the product mix, also the sports, typically with low margin, has an impact, and the sales, but it's not something that, you know, we have some, of course, internal numbers that we're looking into, but it's actually not something that we would like to disclose. For us, it's important to be at, kind of a price follower, be on the market and we act accordingly.
As I said before, we expect that the gross margin will maintain and stay around the 40% as previously announced, and that will be a combination of product mix and campaign goods and season goods. It can go up if it's a good season and down if it's a difficult season. I know it's not an answer, but I don't really want to quantify it anything.
Fair enough. One more, if I may, then. Just the acquisition of TouchLogic and the creation of the Innovation Lab. Would you be able to talk around sort of the tangible benefits you expect to see in the short to medium term, maybe over the next couple of years?
Yeah. Yes, this is Hermann again. Since we launched the company in 2011, we have been quite tight on our financial means. So meaning that we have always been kind of one to few, and being extremely focused on being extremely efficient in the way we work. Sometimes this can come at the expense of new initiatives, taking chances, doing moonshot thinking. And so we've been searching for kind of creating this lab where we could have those crazy ideas, test those crazy ideas, do some live tests, et cetera. So this is going to be an innovation lab that is going to this, especially on the mobile and app arena.
There's a lot of opportunities within the mobile and app area, and we believe that it would be good to have someone that has strong experience, strong track record, and that can maybe do some wild experiments in that way. So, in short term, we will see some improvements in the app and mobile experience compared today. And then, of course, long term, maybe some great, crazy ideas. Again, everything aligned to make the customer experience better.
Sorry, I promise the last one. You mentioned in the presentation, the mobile app users' average order value is greater than the group's average. Is that right? And if so-
Yep.
Could you quantify that?
Yes, we can. We don't disclose that number. Of course, it's not dramatically higher, and it's probably somewhere between 0% and 10% range, but it's higher, and the customers, of course, also are more loyal. But again, this also means that typically the conversion rate on the mobile, the total conversion rate is typically down because people come and go from the app and the mobile during the day. So it's a kind of better interaction and a better stickiness with a strong app and mobile experience.
Great. Thank you. That's all I have.
Welcome.
Thank you. There appear to be no further questions. I'll return the conference back to the speakers.
Okay. Thank you all for a good and quiet call. So we look forward to deliver for the rest of the year, and we see you again in three months' time. Thank you.
Thank you. This does conclude today's conference call. Thank you all for attending. You may now disconnect your line.