Good morning, everybody, and welcome again, this time to talk about Allegro, Q4 2021 financial results. Our host today are the CEO of Allegro Group, François Nuyts .
Hello.
Our CFO, Jon Eastick.
Morning.
My name is Michał Kuzawiński, and you should know me already. Let me begin with a few organizational comments before we move on to our results. Firstly, our results presentation is available for download from our IR webpage at allegro.eu. Please ensure you review the disclaimer on slide two of this presentation, and in particular, the comments about forward-looking statements contained in the presentation. Secondly, we will have a Q&A session after the main part of the presentation. This time it will be live interactive session where you will be able to ask your questions after you've clicked the raise hand button and after your name is called. Finally, please note that this call, including the Q&A session, is being recorded and the replay will be available on our website at allegro.eu. Over to you, Francois.
Hey. Thank you, Michał, Jon. Let me start first by welcoming you all to this call. Obviously, today is a bit of a weird day in two dimensions. First and foremost, what is happening in Ukraine. As you well know, Ukraine is our neighbors, and we have plenty of Ukrainians as minority and as our neighbors. As Allegro, as a caring company, we will obviously pivot to what is it that we can do to help. I cannot start this call without mentioning this. The other slightly different news obviously that you probably have seen is the announcement of the start of the succession plan for me.
Here, to be clear, this is just a beginning, meaning we really want to have a world-class succession. What that means, we're announcing it way early to make sure that we can get the best candidates. The company, Allegro, which has so many things ahead, can go from height to height. What that means for the foreseeable future, I'm at the helm with the rest of the management team, the great new members that has joined over the last year and months. We have so much stuff to go through this year.
Actually, great impactful, fun stuff, that will carry on doing this until at some stage, you know, probably towards the late part of the year, we find an amazing successor. I'm sure there'll be questions on this, but let's move to the business itself. Let's talk about Allegro. The 2021, again, was a bit of a weird year. We had all hoped that COVID would be past. It obviously wasn't the case. Hopefully 2022 will be the year where we like put COVID behind. When you translate it to, if you recall, in 2020, we grew by a whopping 54%, much faster than most marketplaces at that stage of maturity, across the world.
One of the reason for that is our marketplace, our MFN network scales much better than anything we've seen. Despite this growth in 2020, in 2021, we managed to grow much faster. Faster, not the 54%, but we managed to add 21% growth on top. This achieves a remarkable CAGR of 37%. Now, what are the drivers? There are recurrent drivers. Those are the things that the team work on day in, day out at Allegro. First is how we manage to increase the choice available to our consumers. We increased it to 250 million, 25%. You do the math. The number of offers we add on a daily basis is just mind-blowing.
Now, a little bit more unusual for a marketplace, the way we manage to do everyday low price in a marketplace environment continues to improve. When we launched the program, Allegro Ceny, for example, we now have over 100,000 sellers participating in the program, which means we not only can match on, how do you say, the short tail, which is usual for a 1P, we can match on the long tail of the product across multiple competitors. We know that in Poland, it's so important. In terms of delivery experience, the parcel that gets delivered faster, more predictably, again, in our MFN networks keep on improving, and we'll cover that in a little bit detail in a minute.
A source of pride for Smart program, which is slightly over three years old now, has now reached 5 million Smart users. That's paramount because that's a key sign of the progress Allegro is making in winning the hearts and minds, right? You only join Smart if you know that your next purchases are very likely to be in Allegro because we're selection, price, delivery competitive. We're also launching a number of seeds. Not sure it's the correct English, but John will forgive me. In the sense of Allegro Pay. If you recall at the same time last year, we were just wrapping up the pilot, right? We were saying, "Hey, there's a massive opportunity here. It's incredibly easy for consumers to use." We're now way past this.
We actually surpassed our expectations for the year, and it's really the seed of a number of other fintech products that will come up in the following periods. The B2B platform continues to overperform the overall business, and that's great because that's another massive entitlement for us ahead. Obviously, international expansion, but that one I'll cover in a minute. Within this, we managed to create from that GMV growth what I love to call massive EBITDA lungs. That's our ability to keep on investing in the business and the long-term growth of the business, whether it's in speeding up delivery, whether it's launching new initiatives around fintech, but we'll cover that again in the presentation. Without further ado, why don't we start the presentation? If somebody can show the slides.
Thanks. Obviously this is kind of a source of pride. A number of the teams have been working on this for quite a while, the launch of our first iteration of the international platform. Those of us here that are deep into the tech engine, it's having a how do you say, a one country, allegro.pl versus having a multi-country requires actually a lot of platform work. There's been a lot of investment from all the teams to make that happen. That's the first iteration where you can flex the shipping countries to all of Europe. You can ship, flex to Euro, you can flex to English.
The reason we started with English is, as a Frenchman, it costs me to say, but if you get the Polish to English node, with a high level of accuracy, your ability to get Polish to other languages is much higher. That's something John is pleased about. For me, this one. But it technically makes sense, that's the most important. Moving to the disclaimer, obviously, but our agenda and how do you say, a presentation ahead. It's a little bit of a different presentation versus usual quarter results in the sense, as usual, I present highlights, John will cover financial results. We'll go and see a little bit how the business stretches. John will cover financial outlook, and I'll cover development plans.
As Michał noted, we'll do live Q&A, which was one of your feedbacks. Starting with the Q4 2021 highlights, you can see that despite lockdown lapping, right, in 2021, 2020, there were the lockdown in November. There was no lockdown in 2021. We managed to sequentially grow the business and accelerate the CAGR, the CAGR we care about, the two-year CAGR because that's our way to smooth our understanding of the business outside of those lockdowns valley. We managed to do this because the number of active buyers grew, which is quite impressive versus a period where there was lockdown a year back. If you continue through the funnel, the improvement in terms of number of subscribers, number of users, is quite impressive.
One of the key metric we take special pride in is the number of loyal Smart consumers which reached over 5 million. What else can I cover here that I haven't covered? The financial results, obviously at 21%, revenue plus 34%, or EBITDA 18%. We'll talk about the targeted investments we're making to grow the business in the following quarter. Obviously the launch of international and the acquisition of Mall pending the regulatory approval now only pending in Poland. Here, as usual, on slide 5, I will not cover this. This is more for you to have one place to get the key data of the business as you look through the deck. Let's talk a little bit about how our marketplace work.
I've covered some of it, so I won't cover all of it. Really the core of the marketplace remains our MFN network, overwhelmingly so. Our ability to make that MFN network work at total scale on selection it normally does, right? That's nothing specific to Allegro. An MFN network adds selection through the hundreds, thousands of sellers much better than anything else. What we prove time and time again is our ability to do the things that normally a 1P engine does better or a heavy fulfillment network does better, our ability to do it in a network basis at least as well.
I mentioned we now have way over 100,000 sellers in our price nudges, which means we can be competitive not only on the front like a 1P does, but on the whole catalog at much better economics. Obviously the way we do delivery by deeper integration with the merchants incentivizes them through sales and nudges, massive uptake, I think it's 7 percentage points quarter-over-quarter. One thing that I know I was dreaming of launching from at least the day I arrived, which was shortly before the Christmas season, our ability to, for example, tell consumers, "Hey, order it today, get it by Christmas," which was a massive help for consumers during the shopping season and drove incremental sales.
Overall, the telling sign is also the NPS that we do this. At 91, it compares excellently with more established incentive solutions. Let's talk about Smart and Allegro Pay. As I was saying, Smart is amazing because it covers the overwhelming size of their selection. We don't need to have it in stock to be able to offer it within Smart free shipping and speedy delivery. It scales amazingly well, and that's why we're able to sustain it at that price point, and we'll cover the economics in a second. We keep on improving Smart, right? We improved the MOV on Courier, and we'll talk about the impact in a bit. We added Allegro Pay benefits within Smart.
Allegro Pay continues to grow amazingly well. Again, here, the acquisition that we did now probably about a couple years ago, which was that FinAi team, to which we've added, obviously, our Allegro team, is really scaling up fantastically well in terms of developing that new suite of fintech across the business. Let's pause a little bit on Smart economics, because I know recurrently, John and I covered that question. Here we always look at it in terms of cohorts. If you're a cohort of consumers that joins in year one, how does your propensity to buy more over a two-year period grows? Here you see that as you join as a consumer, your propensity to buy more is 84%. That's why Smart is so interesting.
They get a great deal, but also Allegro and its merchants get a great uplift in terms of sales. Because the way Smart is structured, it's actually direct contribution by 30%. That's why the more you say consumers join Smart, it's obviously normally at the beginning, it has an EBITDA percentage dilution, but it's EBITDA absolute contributive, which is our key goal recurrently. We're still. I know we're at 5 million, but I love to say even internally that we're still at the beginning, right? We know that a benchmark of about 50% of Polish household is reachable, and it's something we need to work on by keeping convincing more people to try. We know that when they try, they keep it.
Here, one of the things I know the whole leadership of Allegro, from leadership team to board, is very proud of is Allegro. Internally, we call it intense but caring organization, but how much we care about not only our employee experience, our impact on the environment and the wider society. Here are a couple of things I wanted to call out is, first, we released our first extensive international standard ESG report. We obviously have had ESG reports recurrently, but this is the first one that we used an international standard. We also were one of the first Polish companies to join the.
UN Global Compact.
The UN Global Compact, and then also entered into science-based targets, where over the next 24 months, we'll submit our contribution to reducing emissions, in line with the Paris Agreement. This is really the top of the iceberg. There's so many things that teams do on a daily basis to have a positive impact, which is something of pride and also allows us to recruit more people that care. Now, without further ado, when talking about caring, John, up to you.
Okay. Thank you. Oh, you already moved the slide.
Oh, apologies.
There we go. Okay. Hello, everyone, and welcome to the presentation again. As usual, I'm gonna take you through the financials and some of the key KPIs. Let me start with what's happened over the year and in the quarter around our GMV with buyers and spending. If you were to think back to the beginning of 2021, the great uncertainty for Allegro, just like any other e-commerce business, was to what extent would all that extra demand that ran through the system because of the lockdowns in 2020 be sticky and stay with the businesses during the course of 2021.
I'm happy to say that a huge amount of that demand has stuck with Allegro, that the customers have really enjoyed the experience that they had when they came to Allegro for the first time, for all the reasons Francois has been describing. That demand has stayed with us. In addition, we've been able to grow that 21.2% GMV over the course of the year, because we continue to invest very strongly in the inputs of the business, in the quality of the offer.
It's the retail basics, the Smart! expansion, it's what we offer within the scope of Smart!, and the big win for the year, obviously, was the scale up of Allegro Pay, and the benefit that that's been bringing on the top line. You can see it in the KPIs here in that we've been able to retain and actually grow our customer base up to 13.5 million, about 3% year-on-year. Even more importantly, on the spend per buyer side, all those factors that I just mentioned, that translates into 18% year-on-year growth. We're at PLN 3,158 per buyer on an annualized basis as of the fourth quarter. You can see acceleration in the Q-on-Q growth rates in that metric.
Putting it together and looking at the GMV performance, I already mentioned the full year 16.7% growth in the fourth quarter, with the CAGR actually accelerating to 35.6%. This is achieved despite the lapping of a pretty severe lockdown back in November of 2020. Back at the time when people weren't vaccinated, it had a big impact on people moving their demand online. You know, this year, one of the main things, apart from the factors I already mentioned in the Q4 performance, was absolutely excellent execution across the various shopping holidays and seasons. We had the Smart! Week at the beginning of the quarter. We had the Black Week at the end of November.
We obviously had the Christmas season, which we managed to extend with that ready for Christmas by several days, and that helps us as well with our GMV growth. PLN 12.7 billion of GMV in Q4, PLN 42.6 billion of GMV for the group for the full year. When it comes to revenue, the trends are very much as you're used to, outperforming GMV growth quite considerably, mainly behind growth in advertising. You can see advertising's moved on the right-hand side there to 9.6% of the total revenue mix. It's also up to over 1.2 percentage points of GMV as of the fourth quarter.
Looking at the revenue bridge, in particular for Q4, the major driver here has been obviously the marketplace. A combination of that GMV growth and the take rate being up on an average for the year of 0.96 percentage points. It's about 0.4 percentage points for Q4 only because a lot of the monetization initiatives that we started around the middle of 2020 and concluded in Q1 of 2021 with the co-financing for lockers. A lot of that has now been lapped, and therefore the take rate increase in Q4 was about 0.44 percentage points.
The decline in the take rate was something that we've been flagging to you since the very beginning of the year, as those initiatives get lapped, and also because of the seasonality that we traditionally see in the fourth quarter. We finished the year with 9.84 percentage points of take rate. Let's have a quick look at our EBITDA in the fourth quarter, which is unusual for us. It did dip a little bit compared to the prior year. Let's try and understand where that's coming from.
As Francois mentioned, you know, the real lungs of our ability to grow this business is the GMV growth and the monetization initiatives that grow the take rate, and that drives the box that you see on the left-hand side there, so that's labeled take rate. Which is providing the fuel for all the investment that we're doing to keep driving the business and growing the business into the future. As I mentioned, most of that monetization impact came early last year, while the take rate's been drifting down towards the end of the year. When it comes to the investments, the investments have been more back-end loaded. Francois was already mentioning what we've done around Courier and around Smart.
Courier is now 19.6 percentage points of the delivery mix within Smart, which is one of the main reasons for the net cost of delivery driver being at PLN 157 million in that bridge. In addition, we've obviously been investing steadily in growing the team and our ability to innovate across a whole range of projects. You saw the level of activity going on in Francois' part of the presentation earlier across a whole range of different areas. That's driving the other SG&A cost. We do have in Q1 of 2022 the co-financing kicking in that we delayed. We didn't do in the fourth quarter. We left it to the first quarter.
If we had have done it, that would have probably added about PLN 40 million to our EBITDA performance already last year. Then I guess the EBITDA trend would have looked a little bit different, so had we done that. We're very customer-centric in the way we approach things. Taking the full-year view and taking it holistically, the most important thing here obviously is we have grown the EBITDA sequentially within the guidance that we set at the beginning of the year, at 18.2%. That sequential growth in EBITDA year-over-year is one of our key financial metrics when we're trying to plan the business. If you think back to 2019, we were a PLN 1.3 billion EBITDA business.
As you'll see when I get to the expectations, we're targeting to add over PLN 1 billion to that number by the end of 2022, with more sequential growth to come. Just, you know, to recap, the monetization came at the beginning of the year. The investments have been going through sequentially, and we'll get back to that year-on-year growth trend very soon. This slide is just one of our standard ones. I won't dwell on it. You just have the history for the adjusted EBITDA. This slide, likewise, is a standard one. I'm more than happy to answer questions on items between adjusted EBITDA and net profit.
The only thing to call out here, net profit up 160% year-on-year to PLN 1.1 billion zloty. I think a very impressive net profit number. When it comes to capital investment, we're investing strongly in the future growth of the business, just as we are on the commercial side. The spend is up 76.6% year-on-year as we invest in the platform with all those innovations, including being able to internationalize, but also in our big DEX projects around the APM network rollout, and also the first fulfillment center.
The total spending amounts to PLN 407 million for the year, and that's still cash conversion of 80% of EBITDA and 7.6% of revenue. It's still very comfortable spending for us. We're really very carefully managing what we're spending. We were able to achieve our financial objectives and guidance, even though we underspent on CapEx. This is because we're very carefully managing the CapEx investments. On these new projects that we're running, we're being very careful to go step-by-step, milestone by milestone, to make sure that the gains that we're looking for are coming through before we go to the next stage of investment and make sure that we maximize the potential ROI of these projects. We're managing the CapEx quite cautiously as we move forward.
When it comes to the leverage position, we ended the year at just under 1.8x leverage, with nearly PLN 2 billion on the balance sheet. The most important things to call out, first of all, is you heard about the project and the partnership with Aion to take the installment loans that we initiate with Allegro Pay off balance sheet. That is now operational. We received PLN 180 million in the first tranche of loans that we sold during the fourth quarter. The money's back in our bank account. We don't have those receivables on the balance sheet. The ROI of the whole project, Allegro Pay, goes up significantly as a result. We only fund the buy now, pay later loans.
When it comes to the Mall acquisition, we've now got it fully funded. We're ready to pull the trigger whenever we get the approval from the remaining Polish Competition Authority approval. We have all the funding we need to close the transaction. It's also hedged in terms of foreign currency exposure. We've also managed to increase our revolving credit facilities to PLN 1 billion. We're planning to do a bond issue, which we will use to refinance the bridge loan that we have as part of the Mall financing. Lots going on on the treasury side. Okay, that brings me to the last slide of this section before I hand back to François, which is obviously the expectations for 2022.
As we're covering it on this slide, I'll just reiterate that we made our guidance across GMV, revenue and adjusted EBITDA. We underspent on CapEx due to the way we're managing it very carefully, that I just described. When I turn to the 2022 expectations, the numbers you'll notice look actually quite similar to what we were guiding for 2021. I also wanna point out, these numbers are the Polish business, the Polish continuing business. They do not include Mall. We don't know exactly when we're gonna make the acquisition, so it's extremely difficult to estimate what the impact will be on a full year, on a full year basis. Let's start with the GMV.
As I said, similar to this year, we're expecting high-teens to low-20s growth. We're assuming that, month-over-month, the impact of COVID is going to recede. We're not expecting any more lockdowns. We think, therefore, that the usual pattern of a secular tailwind for e-commerce growing much faster than what is a pretty strongly growing general retail sector in Poland will continue through the year. When you combine that with the growth engines that we have and the input drivers that we have across retail basics, Smart, Allegro Pay, et cetera, we're confident that we can hit this kind of growth.
That then obviously feeds through into revenue over-indexing, mainly through advertising, but also because of contributions coming in from the DEX projects now that they've actually launched commercially. When it comes to the adjusted EBITDA, we're looking at low- to mid-teens% growth year-over-year. Again, sequential EBITDA growth, which is one of our financial priorities. In this case, not so much going on on the take rate as there was a year ago, but the co-financing it has been initiated on the first of February. There's a few improvements in take rate that are planned for the near future that you'll also start to see impacting the numbers very soon.
In terms of headwind, the main one that we have to negotiate is the move from start-up phase of the DEX projects into the scale-up phase, where the start-up losses are much more significant. Incrementally, that's gonna be about PLN 60 million drag that you need to reflect in the EBITDA number. When it comes to capital investment, we'll be doubling the amount of APMs we're deploying to around 2,000, bringing the total to 3,000. Growing the tech team, growing significantly investment in the platform, so that's also driving a part of that number. We also have the remainder of the automation phase of the first fulfillment center to complete in 2022. We also have the remainder of the office rollouts that we're doing.
Our two new head offices in Poznań and Warsaw are still being developed more slowly because we're still in an out of office mode. With that, I'll pass back to Francois, who's going to take you through some of the strategic levers that we're developing over the next few years.
Thank you, John. Always when talking about the strategic levers, the first and foremost is how do we continue to scale that merchant fulfillment network. I'm not going to go through all the details. It's more for you to have an idea of the different levers where we're going. What that means is the vast majority of the PLN 100 billion aspiration objectives that we have will still be on an MFN network, because again, it scales so much better in selection. We're providing quite a unique through our tech team, our product team, that we can do all the other things, whether it's competitive pricing, competitive delivery, within this network. That's something that scales extremely well and also a key tool for international.
Now, it's not to say, as I've said many times, that we will not do targeted, assets investment, where it either helps us with consumer experience, improving delivery speed, for example, with international, sellers, or give us optionality in terms of driving costs down. Obviously here, the two example is one, fulfillment, and the other one is APMs. In terms of fulfillment, as John has mentioned, we're doing targeted investments, improving our fulfillment model and what that means, what is the revenue increment, the GMV incrementality from the spinning up of international, sellers and obviously the EBITDA contribution from that model. The APM network, again, John said we'll roll out 3,000. Keep in mind here, we're very consistent.
What we're optimizing for over time is the reduction of the cost of delivery, whether it's through our own network or other third-party network, and obviously the deep integration in terms of user experience with the Allegro platform. How things are going well according to plan, thanks to the amazing teams that we've created. That creates multiple optionalities looking forward also. Now, looking at Allegro Pay and Financial Services, I think I've covered that before, so I'll be fast. This is really a little, not little anymore, a great gem, but still at the very beginning of the journey. The teams that we created and the progress on Allegro Pay is just astounding, but it's just one product.
That one product is actually amazingly accretive, both in terms of GMV and in terms of ROI. You'll see other products coming up from that team over the period. The kind of consumer-facing design that the team comes up with, the type of 92.8 NPS, which is through the roof, is really a credit to our ability to develop sequential new products in fintech. Obviously we have big goals in terms of international. You know, if you recall, a couple of years ago, we started with making our platform international sellers friendly. You heard me say many times, we don't have a business going international if we're not able to have an inbound funnel for international sellers. That works very well.
The next steps obviously was about helping more consumers able to discover the platform. That was the project around of export shipments that we closed, I think sometime mid-year last year. We can see the progress in the number of offers that are eligible for export is astonishing. Now it's about translating the platform to other languages, shipment destination, currencies, and as you've seen the first step. Obviously, I couldn't stop on international without mentioning the Mall Group acquisition. Obviously, Mall covered the financial part of it. Here it's amazing to see that the interaction between the two teams is going very well. Obviously, we cannot integrate until we get regulatory clearance, which hopefully will come soon. We have most of the regulatory clearance. We still have one to go in Poland.
The level of interaction between the two teams is really promising in terms of what it promises to deliver. I want to restress, there is no one-stop shop in the countries where Mall is. The combination of the Mall customer base, the Mall's know-how, and our deep expertise in merchant fulfillment network is really something promising. That's my cue to hand it back to John in terms of long-term guidance.
Yeah, exactly. Thank you very much, Francois. Unusually, I have the final slide of the presentation before we hand back to Q&A, because we've been working hard on our medium-term plan and being able to share with you an updated medium-term expectations today at this meeting. We've been building on all those themes that Francois was just describing in putting this plan together. This is how we see 2023 through to 2026, assuming obviously the 2022 expectations as a lead-in. In this case, we're including Mall using a pro forma 12-month set of numbers for Mall as a baseline in order to calculate the CAGRs that you see here. The total is for the combined group with Mall.
The right-hand column is the percentage point contribution to those CAGRs that we foresee from the Mall acquisition. Okay, so that's the structure. Let me start with the GMV. We expect the combined group should be able to grow in the low 20s over the projection period, with approximately two percentage points of that growth coming from Mall. Now, the main drivers here obviously are the ones we know from the marketplace on the Polish side. This is in particular the retail basics, continued expansion of Smart, much bigger penetration of Allegro Pay over time.
All of this is going to help us keep the growth, plus the secular trend, obviously, with Poland being quite low on penetration relative to some of the more developed economies. All of that underpins the Polish part. On the Mall side. As we transform the business to have massive selection over a marketplace solution, we're expecting to be able to get between 30%-40% CAGRs once we've deployed the Polish marketplace in the mall countries. That gets us a really strong GMV uplift. In terms of revenue, the usual story in terms of revenue running faster than GMV growth in Poland, particularly driven by the advertising and the DEX coming into the mix over time.
Revenue in the high teens%, it's being pulled down in the case of the Mall acquisition, because as you're aware, 90% of Mall today are expecting to grow that nearly as fast as we're aiming to grow the marketplace part, which we're gonna grow absolutely massively. As a result of that, as it grows, as it transforms into a 3P business, we over-index in terms of growth impact on GMV and also on EBITDA, but on revenue, it's actually pulling down the average growth rate.
When it comes to adjusted EBITDA, we feel we can grow the business faster than GMV over the medium term, and we're looking to grow mid- to high 20s%, with 3-4 points of that growth coming from the Mall integration and that transformation into being a marketplace. The rest is coming on the Polish marketplace business. The continued growth and penetration of advertising, which we're hoping that we can accelerate faster over the coming years. Contribution from DEX going from being a headwind, costing us money in the start-up phase, through to making us money in the longer term.
More operational leverage across the combined organization of Allegro and Mall over time. All of that is gonna help us with the EBIT, with the EBITDA margin. Allegro Pay contributing strongly with a very high margin will also help. Smart as well will become less significant as it matures, as it gets towards the targets of penetration that Francois mentioned earlier. CapEx-wise, across the combined business, we've more investment in DEX sequentially over time as the projects roll out, we think will be between PLN 1 billion and PLN 1.3 billion. Some of that money being invested in fulfillment in the Mall regions. When you put all of that together in terms of free cash flow, you'll see that the free cash flow is growing strongly.
We think that the leverage that will move up to about 3x when we acquire Mall later this year, will probably be down in the region of 1x by 2025. We think this is an exciting projection. It clearly takes us to being a PLN 100 billion GMV business, and some, quite some more when you run the math. With improving GMV margins over time, heading in the direction of between 4%-5% margins, around 4.5% over time. Low leverage, very strong free cash flow. We think it's a really exciting vision for the future. With that, I'm gonna wrap up the presentation. I'll hand it back to Michał, and Francois and myself are here to take your questions.
Thank you, John.
Thank you, John. Once again, a reminder to our guests that if you would like to ask a question, please click the Raise Hand button, which you will find at the bottom of your Zoom panel, and await when your name is called. Meanwhile, the first question is coming from Miriam from Morgan Stanley.
Great. Good morning, everyone. Hope you can hear me. Three questions from me. Firstly, just on your CapEx. If I look at the FY 2022 guidance that you gave, actually last year, I think it was a PLN 700 million-PLN 800 million range, and now the guidance is slightly below that, despite the fact you're pushing some of your CapEx from last year into this year, if you could just walk through what's changed with that, or is it just, as you say, that you're being a bit more cautious on the spend there as you ramp up.
If I look at your mid-term guidance of PLN 1 billion-PLN 1.3 billion, if I take out the sort of PLN 300 million guidance you'd previously given for Mall Group, it does imply a bit of a step up for the core Allegro business. Could you just talk a bit more about what you're investing there and perhaps just confirm the split of that guidance between Allegro and Mall Group? Secondly, sorry, that was a bit of a long one. Secondly, just if you could just give a bit more color on just the investment cadence this year between 1H and 2H. Clearly, there's a big ramp up in lockers, so should we expect that to be evenly split between 1H and 2H or a bigger drag in any quarter?
Thirdly, if you could just comment on the competitive environment, how does your selection compare to peers at the moment? Have you done any benchmarking on that? And what are you seeing in terms of price competition, marketing spend as well? Thanks.
I'll do one line on the first part, and then I'll cover competition at the end. There's some change that is to keep in mind what we're creating in terms of merchant fulfilled network is quite unique, right? We're learning as we progress on scaling scales. When we did some forecast on the level of investments where needed, we were being conservative in a way in our ability to scale that MFN. What we keep on discovering is the ability of our product teams, our tech teams of creating deeper integration with the sellers that deliver that 1P experience under that merchant fulfilled network umbrella gets better and better. That gives us a bit of a better outlook. Obviously, there are a number of more drawn.
Yeah. Let me take the other points. Yeah. So it's a super question to help me explain what exactly is in those numbers. So I appreciate that. The two main factors, as you rightly pointed out, that there is some spend that's moved over from 2021. Some of that is locker deployment, because we were aiming for about 1,500. We're a couple of months behind what we originally intended to do in 2021, but nothing important. It's scaling up really fast. Also, some of the office deployment as well, that's moved into the current year.
The most important difference is that on fulfillment, we're still in the process of getting the first fulfillment center really humming and really operational. We still have to finish, in particular, the automation phase, which really scales up the capacity of the facility. We decided that while we still have this on our plates, it doesn't make sense to pull the trigger and start the next fulfillment facilities until we really see how this one runs commercially and how it actually helps us with the goals that we're interested in, which is, in particular, being able to do more next day delivery, make a bit of money from the relationship with the merchants to test the demand, bring in the international sellers, right? We want all that to be working before we do the next fulfillment center.
Compared to last year, there's a second fulfillment center that is not in the guidance. The other important element is that a big chunk of the spending, as it has been historically, is actually the capitalization of development costs. This is basically the number of developers multiplied by the cost per developer, and the great projects that they're working on to you know, to improve the innovative capacity and growth capacity of the business. We've been investing very heavily in the team, as I was mentioning in the presentation. The cost of these people is going up quite significantly. As you know, all around Europe, they're very, very sought after people. That's the big element of the growth towards that PLN 1 billion spend that you are asking to understand.
On the other hand, over the longer term, we do see that there is a limit to how big we need that tech team to be, right? I was mentioning that leverage is actually operational leverage is part of this story around how the EBITDA is gonna start to move up. Part of that is that we will stabilize the size of that team. We just got a very experienced new colleague on the board, David Roberts, who you know has got multi-year experience of running big tech teams. He was at Zalando until recently. We think he's really gonna get the best out of that organization. The last one was competition.
Competition.
Yeah.
I think what your question, Miriam, was around do we benchmark? Of course, we do. We drive our own innovation, but as you all heard me multiple times say, we stay humble and benchmark. In terms of whether it's smart acquisition, consumer acquisition, overall GMV, penetration of total retail, penetration of online, we keep on gaining, and that's a testament to our ability to increase selection, pricing, delivery, and overall consumer experience. I think you had a specific question in terms of selection. Here, you know, the same hold true as in all the previous quarters.
Our ability to remain an MFN network here is amazing because it allows us not only to get all the selection that a normal MFN does, but it also enables us to have those large retailers that you don't see in competitive 1P plus 3P, and they contribute unique selection, unique price points that are uniquely just needed per country. That's something that you've seen, the numbers, right? We've added 1,000 brands. We've added large unique retailers such as Pepco. We sequentially keep on adding in a way. When you do some benchmark, the international selection, notably Chinese, obviously progresses well on Allegro, and that's obviously a competitive tool versus AliExpress or Shopee.
The IM selection is already there. It's something that we'll keep on monitoring, but so far, I think the numbers speak for themselves.
Great. Thank you. There was just one more on just the margin progression this year, how you're thinking about that between 1H, 2H. Is there any particular quarter where majority of the investment-
It was margin progression, not the CapEx progression. Did I?
heard CapEx, but net margin, probably.
Yeah. It's margin progression, the EBITDA.
Yeah, yeah.
If you recall, there was a lockdown, quite an extensive lockdown in Q1 of 2021, which we have to navigate, and that's going to keep the GMV growth below the high teens, low twenties that we're projecting for the full year at the beginning of the year. The growth should start to accelerate once we get through Q1. The monetization initiatives that we're introducing during the course of Q1 will obviously help a lot later in the year. What that means is that you should expect a lower rate of year-on-year in the first quarter with quite a significant acceleration in year-on-year EBITDA growth from Q2 to Q4.
Great. Thank you.
Thank you, Miriam. Francois, in one of your replies, you used the expression MFN network. I think it would be worthwhile to remind our listeners.
Sure.
What this means.
Merchant Fulfilled Network, right? Our ability to deeply integrate with merchants and give them, give consumers an experience that is seamless, which is something that is truly unique about Allegro in the way we develop tech for merchants to do that.
Thank you. The next question comes from Cezar Tiron from Bank of America. Cezar, please unmute yourself.
One good morning or good afternoon. Thanks for the call and the opportunity to ask questions. I have 3, if that's okay. The first one, how do you see your take rate evolving over time, as there are a few moving parts which you discussed, including the co-financing, but also maybe competition? Or another way to ask that question, do you expect marketplace revenue to grow at the same pace as GMV in 2022 or beyond, or should be a bit faster? That's the first one. The second one, what inflation have you included in your budget, at least for 2022? I think Polish inflation is very close to 10%. Have you assumed some kind of normalization on the cost side, maybe in 2023?
The third one would be if you can talk a little bit more on the cost side, mainly the delivery cost as percentage of revenue, which is the key cost which increased the most over the past couple of years. Do you expect that cost to remain, which is mainly driven by Smart, obviously. Do you expect that cost to be broadly stable as percentage of GMV going forward? Thank you so much.
You take any of them?
Mostly you, I think.
Well, let me do the calculation. The take rate, we are assuming that while we'll have that similar sort of pattern as we saw last year in terms of higher at the beginning and then fading later in the year, it should stay higher on a quarter versus prior year quarter basis through the year. We will add revenue, marketplace revenue faster than GMV. Main elements being this co-financing we've just done, a few other elements around optimization really on different categories, you know, as we've described in previous meetings. The second question was about inflation. We are assuming, yes, that the inflation is gonna work through into the selection that we're selling.
Inflation in Poland right now is about 9.6%. Interest rates are moving up, but they're still down around the base rates are down around 3%. There's still some room for that to change. The Polish consumer seems to be very resilient. There've also been tax changes here, which move money into the pockets of the relatively, let's say, lower income segments, which generally results through the multiplier effect in a boost to demand. We're reasonably comfortable on our projections for the GMV growth. You know, another factor is last year here, once everyone was getting, you know, once the vaccination really started, there weren't really any lockdowns after Q1 last year.
This year, we are assuming and hoping and keeping our fingers crossed that, you know, COVID isn't gonna make a return in any really aggressive form. That means we think that what we're used to in terms of penetration growth that we were seeing prior to COVID is gonna return, and that's gonna give us that tailwind in terms of buyers and in terms of spend. Okay. All of that's helping on the GMV side. I think you were asking about 2023. Yeah, we are assuming it will slow down a bit.
It would be part of the leverage that I was mentioning would be that you know the rate of growth in salaries would be able to come down a bit because of lower inflation as we go forward. The final question was, I can't read my own writing. Cost for-
Yeah, absolutely.
Cost for delivery.
On the net cost of delivery. Obviously that was probably the cost that increased the most as percentage of revenue or GMV over the past couple of years and driven by Smart obviously. My question was really to understand how you see that cost item evolving over the next couple of years? Thank you so much.
Yeah. That's a great question. I mean, what we did in the third and fourth quarter, the way Francois looks at the world from a customer-centric perspective, we fixed some defects in the Smart offer around courier. You couldn't always find a courier on an offer when you got to the point of buying the service. We fixed that. Now, pretty much on 100% of offers, there's always a courier offer when you get to checkout. And secondly, we brought the MOV down to the same level as locker. I mean, and we can't really go any further than that, right?
I mean, that is now, you know, an end destination in terms of comparability of what we're offering on locker versus courier. That generated a big pulse of cost increase last year, especially at the back end of the year. As I mentioned, there's almost 20% increase in courier in the mix. Eventually we'll lap that as we get to the back end of 2022. We shouldn't therefore be seeing, you know, these big increases in cost to revenue on that line going forward. By making that change, one of the key things is it's made Smart attractive to some of the holdout customers who really actually like courier relative to locker. That's gonna help us with growth in the number of Smart customers.
As we move through the cohorts, and I mentioned this several times, right? With every new million of Smart users, the absolute amount of GMV baseline, if you go look at that slide 8, you know, the 100 in that calculation of incremental Smart, that amount of money is smaller, and therefore the package costs that go with it is also smaller. As we get towards maturity, the impact of Smart in the overall mix of revenue and cost will slow down. The slack, in terms of growth, is gonna get picked up by Allegro Pay as we grow that as a percentage of GMV.
Just one thing.
Go ahead.
It's not only that customer. Some customers like Courier. It's mostly they prefer Lockers when they have that option. In some part of the countries, you do not have access-
Right.
to lockers, right? Our ability to go and attract consumers in parts of the countries, where density is not quite enough to have a locker network, is tremendously better, thanks to those product corrections we did, which is fantastic.
Thank you so much.
Thank you, Cezar. The next is Paweł Szpigiel from mBank. Paweł, please unmute yourself.
Hello. First of all, I want to have follow-up over this topic of net cost of delivery. I mean, you probably saw that the use of couriers is progressing. Could you give me, you know, a little bit comment on that. How do you foresee coming quarters related to that matter? The second part of the question is about lockers network development. Have you already seen that this development is translating into your numbers? Can you guide us how lockers development could be visible or when could be visible in coming quarters?
Oh, you wanna take it?
I think I can start and then you carry on.
You can take all of it if you want.
In terms of courier, what we tend to see is the stabilization. As John was covering, there's a correction from correcting a product defect. There are many offers that didn't have a courier option. Obviously, if you make that a courier option, some people will choose it, notably in areas where there is no locker. Consumers will then pivot. Consumers that have access to both will be pivot between the two now that they have a choice. Now we do see over time that kind of share of courier stabilizing. In terms of lockers network, we're really at the beginning here, right? We have an install base of lockers. They work fantastically well.
Now, a little bit about the product defect, you know, that we were talking about in terms of courier, now it's how many sellers and how many offers qualify, right? The team is working on this and the uptick is working massively. We need to get that, what is it called? Throughput.
Mm-hmm.
Right? To make both the consumer happy, so they have the wide choice of selection. We know how to do this. It's just there are a couple of steps, technical steps to get there. It also solves the economics, right, as you have higher throughput through those lockers. So far in terms of, you know, what we set to prove of the last half of last year was, to create a super well integrated with our platform locker network that is, significantly, contributed to not only capacity, the user experience, and the seller, of course, and also over time prove the economics that it saves us costs. That's the true goal. Here I can say the team is like, what do you say, ticking those boxes one by one.
As Jon said, at the moment, we're in headwind costs from those lockers. We'll move sequentially to a contribution. All the tick boxes are being put well on track. We did have last year a little bit delayed the launch, but that's normal when you do something innovative.
Yeah. Okay, thanks. The second question will be about the marketing cost. We saw substantial increase in marketing cost in this last quarter, and I want to ask why is that in particular? Is this related to the TV and radio campaign that were pretty visible in Poland, and you put down in your presentation that this rise in marketing cost is related to should result in customers' number of customers increase. But actually, the number of customers is pretty stable, so should I assume that we will see the result of this marketing spend increase in coming quarters?
We start with what do we optimize for?
Yeah.
And then-
Sure.
When it comes to spending marketing, we optimize for two things. The overwhelmingly majority spent on an ROI basis on PPC, right? If we see opportunities at great ROI to spend more marketing money, we do. That drives. It's more efficient in driving sales than consumer acquisition, that part, because the overwhelming majority of those that see that are already Allegro consumers, given the share of voice that we have. It still works. On the other part, the other thing we optimize, you mentioned, ATL is obviously awareness of different products we do, right? To when we create an amazing product, whether it's Smart, whether it's Allegro Pay, we want to reduce the timeline between us launching the product and consumers being aware of it.
That's what you saw us doing some targeted investment to get that utilization of those products higher, normally towards the end of the year. Why does it spike a little bit during the end of the year? It's really a basic retail right. At Christmas, customers are more interested in shopping. If you how do you say? Your opportunity to nudge them and to have them discover new products is that bit higher at much better ROI.
Okay. My last question. Yeah.
Yeah. You were also asking about active buyers. Yeah.
Yeah.
We do expect that the active buyers should start to look more normal than it did last year. If you recall, if you go back a couple of years, 2020 was actually three times faster in terms of active buyer additions than the overall trend pre-COVID. Yeah. You know, we only need to go up a few hundred thousand customers during the course of 2022 to get back to a more typical trend that one would expect when you have increase in e-commerce penetration relative to the retail growth in general, that is more, you know, which is a more common normality. Yeah.
What Francois was describing, that certainly is going to be part of the initiatives that will feed through over time into getting our share of those active buyer growth.
Yeah. Okay. Last question would be about market e-commerce market evolution in Poland in last quarter. Of course, I want to figure out is your market share decreasing or increasing? In your guidance, please, could you give us underlying assumptions about the e-commerce market evolution in coming years? Do you assume that you will defend your market share, or do you assume any, you know, little decreases in your market share?
I'll start and maybe you'll be helpful on e-commerce, and I'll stay true to my deep conviction. We don't compete in the e-commerce market share. We compete in the retail share, right? There's still the level of penetration of e-commerce in Poland has such room to grow when you compare it to other countries within Europe, other countries in Asia. Really our goal is not so much to convince an e-commerce shopper to come to us, they're normally with us already. It's more to convince the offline shoppers to come with us or the large majority of their spending that our current customers do still offline to do it with us.
That's why we do things such as selection, delivery, Smart, Allegro Pay, and we see we're massively sequentially able to get to a higher share of wallet of total retail. Across, I know there is some activity from consumers, from competitors, some local, some international. It's great. It provides, how do you say, consumer's choice. It actually convinces more consumers to shop online, which we ultimately benefit from primarily. We see Allegro here keeping on gaining segment share of e-commerce. Again, the true lever for foreseeable future growth is the penetration of total e-commerce out of total retail. Here there is such a boulevard still in Poland that it's. Yeah. Okay. Thank you very much.
Thank you, Paweł. The next is Michał Potyra from UBS. Michał, please unmute yourself.
Hi. Can you hear me?
Yes, we can.
Yes. Apologies. A little bit fighting with a little bit of infrastructure. I have a couple of questions, if I may, please. A little bit of technical ones. The first one would be about the 5 million subs in the Smart!. I'm just wondering how this is calculated. For example, if there is a family subscription, do you incorporate all of that, or are those just paid subscriptions, the 5 million number? That would be the first question. Thank you.
Yeah. That's a great question. So that 5 million comprises the subscription-paying users. And also, as you know, we introduced last year as a tremendously successful Smart! na Start, which is a kind of a feeder program into Smart! to try it, yeah, where you get 5 deliveries with no subscription that you can use over the course of 12 months, and you only get it once, right, on an account. You're not gonna get it a second time. The conversion into subscription-paying customers has been absolutely super on that offering. So those two together make the 5 million.
When it comes to family, where people with subscription have moved into a family, that's counted, so you can have more than one Smart subscription in a family, although over time, probably they end up with one subscription. We haven't yet actually started trying to count the additional non-Smart users that are signing up to the family. That's not included yet in the Smart numbers. We haven't actually decided how we're gonna handle that yet. If we do it, we'll obviously restate any history, I think.
Thank you very much. My second question is about your take rate trajectory looking into 2022. As you mentioned, you made some monetization efforts like the co-financing and also some pricing changes. If you could give us some guidance, how do you expect the take rate to shape going forward? Thank you.
Yeah, as I said, we expect it will go higher year-on-year, but not in a comparable way to what we saw between 2020 and 2021. In that phase from the second half of 2020 through to the introduction of co-financing on lockers at the beginning of Q1 last year, we added something like 100 basis points of take rate when you went right the way across four or five different initiatives. This year, what we're planning is much less significant. François was mentioning earlier, you know, we still have a lot of runway on Smart in terms of the co-financing that we're collecting from the merchants.
You know, the merchants are getting tremendous volume increase from the fact that we have the free delivery on the site. They understand that. Last year, they were paying mid-teens% out of the total cost of delivery. With what we're just introducing, that is going up to just under a quarter of the total cost. On the take rate side, on the pure traditional take rate side of things, we're not moving it up very much. We are making a few targeted adjustments, corrections, you know, to help merchants make the right decisions that drive our economics well. But it's not gonna translate into a massive increase in the headline take rate. Much less impact than last year.
Thank you. Two more questions, please, if I may. Short ones, I promise. The first one, if I heard correctly, you mentioned that couriers were about 20% of the Smart delivery mix in the fourth quarter, if I listened correctly. Do you have any expectations? No?
Yeah. Not quite. We said that it increased relative to the baseline of a year earlier by 20%. We haven't disclosed exactly what the proportion is between lockers and courier. We've told you how much it's gone up over the 12-month period. It's primarily gone up because of those improvements that we described, yeah. Going forward, it should be relatively stable because we made all the improvements that we wanted to make.
All right. Let me then drop that question because it was about how do you expect the mix to shape. Perhaps we can drop it. My final question would be about the merchants. You know, you were very kind to share the NPS for the buyers and for Allegro Pay, which are both fantastic. I'm just wondering how is the NPS for the merchants shaping given some of the price adjustments you made and given that there is probably more competition for merchants than it was some time ago? Thank you.
That's a great question. It's something that obviously our consumer experience team invest massively in. It's also, if you recall, why we changed the rules of the game, not too long ago, probably two, three years ago, in terms of how long do we take between an announcement and the implementation of changes, right? When you look actually at our Q4, the difference between the launch and what we deliver in the EBITDA, the impact is actually us differentiating when we extend the customer benefits, lower MOV, to when we actually ask for co-financing, which is a full two months later, three months later. That's exactly to drive that, let's say, merchant satisfaction, right? Not to change the rules of the game. It's something that we'll keep on focusing on.
Keep in mind that our stickiness with merchant goes far beyond this, right? It's all the tools, the traffic, the sales we drive for them. Here we see our ability not only to attract new merchants, but also the stickiness of the existing merchants is extremely high. It's something that we measure, obviously, not only because of competitive environment, it's something that is core to our success, and it's something that is going very well. We'll keep on doing our homework to keep on deserving this, of course, like on the consumer side.
Thank you very much. I'm just not clear. Is the NPS up or down for the merchants?
We don't comment on the NPS merchant side. There is constantly some volatility. You can expect that when you announce an increase in Mego temporarily in one direction, and as we improve things, as we've done on how fast we refund for their commissions and on, it goes up. But it's not a number we comment on.
Thank you. That's all from my side. Have a good day.
Thanks.
Thank you, Michał. The next we have Lisa Yang from Goldman Sachs.
Good morning, good afternoon. Thanks very much for taking my questions. I have a few, if it's okay. Firstly, on the midterm guidance, I was just wondering why you're expecting a slightly slower GMV growth than previously. I think lastly, you said you expected midterm GMV growth of about mid-20s. Now you're talking about low 20s, including two percentage point boost from the Mall Group. So I'm just wondering if it is just the view on the e-commerce segment or, you know, your market share? Anything that could explain that would be helpful. Secondly, I know you touched a little bit on the competitive environment already, but obviously there's been a lot of new, you know, players entering the market.
Shopee recently, Amazon obviously launching Prime at a very reduced cost. How do you think your competitive moats have changed, given obviously all the progress you made on Smart, and on next day delivery, et cetera? How do you think your competitive moats have changed versus competitors? Do you still feel like your lead is as strong as it has been? And where do you think is the next focus? Third question is on margin. Obviously we're seeing margin coming down a lot in 2022 versus 2021, obviously for obvious reasons, given the investments. When do you think we're gonna start to see margin stabilizing? Do you think this is something we could see more in 2023 or more 2024?
Finally, sorry for all the questions, it's on the lockers. I know it's very early days, but is there anything you can share with us in terms of, you know, the utilization rates that you're achieving today? When do you expect your locker investments to contribute more positively to your EBITDA? Because obviously, I know you have a contract with InPost. So just, yeah, keen to hear from you in terms of when that will take place. Thank you.
What was the first one?
Um, the, uh, the-
GMV.
The guidance.
Yeah, the guidance.
That's one you cover.
Yeah, sure.
I'll cover competitive moat and then. Okay.
The slightly slower growth in the margin that would be I think partly coming because of the impact of Mall, right? Because of that 1P element in there is part of that. I think the other element there a little bit, obviously, is we're taking into consideration competition. You know, if you think back to the guidance that we issued this time last year, basically, we were still in the situation where we didn't have these extra international well, cross-category competitors at the moment that we actually issued that guidance.
I think, you know, we have to take into some consideration that our pricing power in terms of monetization, you know, is a little bit less than it was when we were doing the previous version of the plan. That little bit of inflation, which has also reared its ugly head over the last 12 months as well, which, you know, is driving labor costs in particular, and that may feed through into also the cost of delivery 'cause there's a lot of labor input in delivery. These elements across, it's a great question 'cause I hadn't really thought that through exactly what was causing that. But I think those are the main factors.
I'll cover competitive moat. Here, maybe what is interesting is, you know, when you don't have a competitor in the country, it's kind of hard to imagine what would happen. We had plenty of scenarios, for one at least. The other one, as all know, was a bit more of a surprise entrance. What has been amazing is actually now that we have the certainty of the entrance, they have done it, is the proven resilience of our business model. That's has been. I wouldn't say a surprise, but it's always, you know, before they launch, it's always hard to fully predict.
Our leadership in selection, in pricing and delivery means that we're able to, despite the entry of some reasonably international size player, to keep on growing in terms of consumer, seller base, use of the platform, a smart user base across the spectrum with actually very limited noticeable impact. That's a testament to all the work the team is doing on a daily basis, making the platform so competitive. It's something we take with all the humbleness in the world, because that's that humbleness is our tools to keep on driving that innovation roadmap. That's why, by the way, we correct things in terms of products that John was talking about very proactively.
That second question, I think was about margin stabilization.
Cool
-and when it will-
Lockers
come through.
Maybe I'll take that one. As I said at the moment, John also said it, we're very much in terms of throughput of our own lockers, very low. That means that in terms of EBITDA contribution, it's not there at all. I think it will be sometime in the later part of this year. When we start having many more offers qualifying, there's a bit of, let's say, integration work we need to do. We'll have many more offers qualifying for our own lockers, and as a result, the throughput will come. At the moment, whether it's the installation cost, the maintenance cost, the cost of the lockers themselves, the overall team progress, it's all on track to deliver on our long-term objectives.
Okay.
Thank you. Actually, yeah, sorry, just following up on the margin question. Actually my first question was regarding more the GMV growth, the midterm GMV growth, which is a bit slower than previously. Just wondering, just the e-commerce market, which is
Oh, okay.
Expect it to be softer.
I thought I'd had it, but-
It was GMV.
Yeah. It was GMV. Yeah, I mean, it's similarly, you know, being somewhat humble around the situation that we have now, that there is more competitive intensity in the Polish market on the one hand, and we have factored that in. We do feel that, you know, when we look at both, you know, as Francois was saying, really the value proposition for the customers, the value proposition for the merchants is incredibly strong. Yeah. It should mean that we think we can outcompete both Amazon and Shopee day to day. You have to win those customers every single day, every single transaction. It wouldn't be humble of us not to factor in a little bit of, you know, share for these two big competitors.
Jon is rightly conservative, and that's a good place to start.
Yeah. Yeah.
Thank you.
Yeah.
Okay.
Maybe just to follow up on that. I mean, we're super excited about the Mall opportunity, obviously, as Francois said, is that they are less competitive markets, and there's so much potential to turn Mall into something similar to Allegro with the deployment of the marketplace across those regions. You know, that's an important contributor on GMV for us in the future.
Michał?
Yeah. This is what I just want to say that we had all the questions already asked. Thank you, everybody, once again, for participating. Thank you for your questions. Yeah, if you have any more, please send them to us. Thank you. Goodbye.
Thank you all, and thank you in a few months. Talk soon.
Thank you.