Ladies and gentlemen, thank you for standing by. I am Yota, your Chorus Call operator. Welcome, and thank you for joining Allegro Group Earnings Call and Live Webcast to present and discuss the second quarter two thousand and twenty-four results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. Anyone who wishes to ask a question may press star, followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. You may also type your questions on the webcast screen. At this time, I would like to turn the conference over to Mr. Tomasz Poźniak, Investor Relations Director. Mr. Poźniak, you may now proceed.
Thank you, Yota, and welcome to all participants of our call. Let me now introduce the presenters of today. Roy Perticucci, the CEO of Allegro, who will guide you through the business highlights of the second quarter, and Jon Eastick, our CFO, who will elaborate on financials and the outlook for the third quarter. As usual, our results presentation is available for download from our investors webpage at allegro.eu. You may also download the slides from the link available on the webcast. As a reminder, today's presentation and discussion contains forward-looking statements. Our actual results could differ materially from the expectations expressed in such statements. Please make sure you review the full disclaimer on slide number two. Also, please note this presentation and the Q&A session are being recorded and will be available for replay on our website at allegro.eu.
Now, I would like to hand over to our CEO. Roy, the floor is yours.
Thanks very much, Tomasz. It's my great pleasure to join you again, my ninth time since becoming the Chief Executive of Allegro. We've got another set of great results for Q2 2024, and I should sort of state upfront that we either met or exceeded our guidance on all measures, and also stayed within our midterm guidelines in terms of spending on various initiatives. I think overall, we've made solid progress on quite a number of our priorities. Group GMV grew by 11.1%. That's 2.2 percentage points improvement quarter- on- quarter, and that reflects steady gains in both active buyers and also in GMV per active buyer inside Poland. That strength in GMV performance was further strengthened by improvements in the take rate.
These are changes that we made earlier this year. In Poland, the take rate has risen by 1.3 percentage points to 12.5%, and advertising continues to go from strength to strength, increasing almost 30% to 1.7 percentage of GMV. That translates in total revenue performance for the group, improving by 12.5%, and for Poland, a very solid 23.8%. I should hasten to add at this point, first of all, that international is contributing for the first time since the Mall acquisition, positively to quarter-on-quarter GMV growth, and also this is the first full quarter where we... Sorry, first quarter where we increased the full results, quarterly results, for allegro.sk, SK, our Slovak version of the marketplace.
The top-line acceleration, combined with investments, resulted in a disproportionate growth in Polish adjusted EBITDA performance, up 35% year-on-year, and 31.5% for the group as a whole. We've also made great strides in continuing to manage capital expense effectively, which rose only 4% year-on-year, to a total of PLN 128 million, and we enjoy cash conversion of 83%. That's up 4% versus last year. Together, these resulted in reducing our leverage from the 2.6 x we had in Q2 last year to the one time we have today. As I said when I just opened, we've stayed within our mid-term guardrails.
In terms of adjusted EBITDA share, CapEx, it was 12%, and the international expansion was 18%. I should also add that the board is reviewing our capital structure policies in this year's planning round. The next slide and the priorities list should be familiar to all of you. I've taken you through this a number of times now. I should say here that I will be taking you through progress on selective priorities. First off, I think it's our priority to make shopping easy and safe, simple also for merchants to sell. We've enjoyed great growth, disproportionate growth in supermarket and health and beauty categories. These have been long-term priorities for us. They are growing at 1.5x overall GMV.
We are also now moving, also in Poland, to a product-based view. This transition will extend for most of the remaining part of this year, in our Slovak and Czech versions of the site. We already have a product view, so that means by the end of the year, we ought to be fully lined in terms of a simpler shopping experience, in all three national markets. The shopping campaigns also were boosted by a greater deal supply from merchants, which means that overall participation of our own 1P operation declined in those campaigns. Increasingly, our customers are loyal.
We've added over a hundred active buyers in Poland in Q2 alone, and the participation of those buyers was supported by the successful extension of Smart Week in May. We've had the strongest Q o Q Smart subscriber growth in over four years, with a total number of users crossing the six million member milestone. I should hasten to add, we're particularly pleased with our eight by eight offer, which has encouraged people who may have already been familiar with our program to really try it out for a longer period of time. And of course, we are also running a number of above-the-line marketing campaigns to attract attention to some of our higher shopper frequency categories.
The marketplace, in terms of the proposition for merchants, we are doing more and more work, not only for classical merchants, the ones who've been working with us for the better part of twenty-five years, but also brand owners, with the new brand protection conditions, which underline and strengthen our support and protection against counterfeit products. A hundred and fifty-three thousand merchants have joined the marketplace. That's up 10% year-on-year, and we are also getting better and better using social media to attract the attention and interest of customers on social media. We continue to invest in the new engines that will support future business performance. As I have already mentioned, advertising continues to go from strength to strength.
We've made some improvements to the algorithms that boost the ad relevancy and increase the click-through rate, which results in a higher click per... or as a cost per click. The fintech solutions are also continuing to develop. We've now crossed two million users of Allegro Pay. We've originated, just in the quarter, PLN 2.7 billion of loans. That's up 37% year-on-year and has grown the share of Allegro Pay financed GMV to almost 14%. That's up 1.9% year-on-year. With despite all that growth in lending activity, our own loan balance remains relative to the strength of the growth, relatively constant, increasing only 8% year-on-year to PLN 314 million.
That's also, I think, aided by the fact that we have an additional partner, who buys loans and takes them off our balance sheet. Customers also, I should hasten to add, are very satisfied with their experience, virtually one-click application process to gain access to a short-term loan. Given the impact of Smart and the impact and the degree that Smart has brought transportation costs on to our P&L, we continue to make great efforts to either slow or contain the unit costs of delivery to customers. We've launched, I think, a truly exciting program called Allegro Delivery, which combines over eighteen thousand out-of-home points via two partners, our own Allegro One courier system and also Orlen Paczka.
And I'm quite confident that further partners will join in the course of this year and next. Allegro Delivery simplifies the shopping experience for customers by enabling a customer simply to choose whether they want it delivered to their home or office or to a locker of their choice, and we make all the decisions in terms of what route a parcel takes from a merchant to the customer. We've also extended our One Box coverage. We have 3, 800 One Box APMs in Poland, and we have now opened 140 One Box APMs in the Czech Republic as well. That will be very useful in Christmas, whereas last year the boxes, the existing box network was quite constrained.
Allegro One, our own operation of managed operations, has grown twice for the quarter. International operations is really two stories. One is our new asset light marketplace. We've made solid progress in Czechia with the first full quarter from Slovakia. There are over two and a half million active buyers, of which nearly three-quarters are new to Allegro Group. Smart paid subscriptions in the Czechia continue to grow at a double-digit rate, reaching over a hundred thousand paying customers, also in Slovakia. We have fifty-three thousand merchants participating on the Czech and Slovak marketplaces.
That's an increase of just up to 17% quarter- on- quarter, and we see also the participation of local merchants growing steadily at 50% quarter- on- quarter and as they start to gain share. Of course, selling internationally also adds complexity potentially for the merchants who are selling in now three markets instead of just one, and we have launched a series of automatic pricing tools, which enable them to manage these prices in a nearly seamless way. Overall, our attention is focusing on shopper frequency. We have healthy traffic. We have a large number of shoppers, particularly in the Czech Republic, where we've been now for over a year, and our attention is shifting more and more to encourage shoppers to visit us more and more frequently.
Of course, there's a second story, and that is the original legacy sites within the Mall segment. And we have been quite successful, particularly in the case of CZC, of drawing down our inventory, eliminating age stock, and overall sizing the inventory relative to the sales that they're currently enjoying. We've also simplified the range for CZC, and we're getting ready to sell exclusively on the marketplace, either as merchants on the marketplace or within the dedicated CZC shop in shop. We've also, as part of the resizing, had two rounds of staff reductions in both Q2 and Q3. I should add, in addition to that, we have repurposed a number of the staff working from Prague to support the marketplace in different ways.
We should also say that the consolidation and move overall to the marketplace and shopping channels will enable us to now shut down some of the legacy systems. And of course, given our vision of having a single set of processes supported by a single set of software, this will bring further shopping efficiencies in the... Sorry, operating efficiencies in the quarters to come. Operational excellence has also been a theme that I've talked to you about a number of times, and I've just alluded to also our great work in consolidating and simplifying our IT applications landscape. And we expect to make, again, considerable progress both this quarter, next year and Q1, next year.
In people, in culture, we have a lot of sort of great developments. As part of our celebrations over our twenty-fifth anniversary, we released an Allegro Economic Impact Report, and that report also indicated that nearly 1% of the country's GDP is supported by the business that we generate, and that also supports the employment of about 140,000 people within the country. We published also the 2023 ESG report, and we used this report as a dry run to ensure that we'll be able to fully comply to the CSRD requirements for the 2024 version. This is the second year that we are celebrating a AAA rating on ESG by the MSCI.
And of course, we continue to work on improving our reporting, as well as our performance, on the metrics covered by the other major agencies. We've also set up, and are currently being, certified on the gender pay gap, supported, by a well-known accountancy firm. And with that, I'm going to pass over to Jon, who will take you through the financial results.
Thank you very much, Roy, and hello, everyone. It's great to be with you today. As usual, I'm gonna take you on a tour of the financial results of Allegro, and I'm pleased to say it's another excellent set of results for Q2. So as usual, I'm gonna start with Polish operations. You have, on the current slide, you see the key KPIs all set out for you. But let me start with some more detailed comments on the following slide. Let me start with the economic context that we're seeing in Poland. The second quarter, we actually saw a pretty significant improvement in GDP results for Poland. We actually crossed 3% in terms of year-on-year GDP growth. But in contrast, the retail sales figures were not so good.
They fell back a little bit from 5.6% in Q1 to 4.9% year-on-year growth, both nominal terms, for the second quarter, but despite that, as you've heard from Roy, we were able to accelerate our performance and accelerate our GMV growth, and you can see where that's coming from in these two KPIs. 100,000 additional customers added in the quarter to get to 14.9 million active buyers at the end of June, 4.3% progress over the course of the last 12 months on the buyer side of things, and I think more importantly and more significantly, acceleration in our progress on GMV spending per active buyer.
You can see a clear trend there, looking at the quarters, 2.1% improvement Q o Q for Q1- Q2, and landing at PLN 3,870 per unit of spend on an annualized basis for each and every one of our active buyers. So the growth lever coming from spending in particular. Putting those together and moving on to GMV, as you've heard, 11.6% growth for the Polish business, 1.6 percentage points better than we achieved in Q1.
And with over indexing of our key focus areas, supermarket and health and beauty, which are growing 1.5x faster than the overall average of the rest of the categories. That translates to PLN 15.1 billion GMV for the second quarter alone, and our last twelve months GMV has now moved on to PLN 57.6 billion, with an overall increase of 10.1% over the last twelve-month period. It's important to look at the trends around items sold and average selling price. In particular, you can see acceleration in items sold to 12.5%, so slightly ahead of the GMV growth, which of course means a lower average selling price, down by nought point six percentage points.
But if you now take into consideration the over-index growth in supermarket and health and beauty with their lower ASPs and neutralize for the different category mix, you actually see now that ASP on a category-by-category level was increasing in Q2 by 0.8 percentage points. So it's not really strong growth, but it is growth, and that means that the trading down that we've been seeing over the previous quarters has basically reached an end. The progress is perhaps not as fast as some of the macroeconomic analysts were predicting, but we are starting to see growth in ASP again. So moving then to revenue, and as usual, revenue growing faster than GMV, this time around 24% growth for the quarter, PLN 2,345,000,000 of revenue.
The major drivers being the marketplace and advertising. Take rate on top of the GMV growth means the marketplace grew 24.8%, and advertising, as you've heard, even better than in Q1, almost 30% growth, PLN 57.5 million better than a year earlier. Looking at the take rate, I remind you that the take rate increases and the co-financing increases that we made back in Q1, in February, are intended to be the only major changes to our rate cards for 2024. In our number for Q2 of 12.53%, you've obviously got the full quarter impact of those changes that we made in Q1. And if you go back a year, we made the changes in two steps. We did it in Q1, and again, we made increases in Q3.
Yeah, so in Q2, we're getting the cumulative impact of those two sets of changes. That'll be important later on, and it's also important to note that these increases obviously have to cover all the cost increases that we expect to come through during the course of the year. It means higher salaries for employees, increases in delivery charges from our delivery partners, to name a couple of areas, so moving on and looking at adjusted EBITDA, this was really yet another excellent quarter when it comes to progress on adjusted EBITDA, up by 35% year-on-year.
We landed at PLN 908.3 million for Q2, and the margin in terms of adjusted EBITDA to GMV still above 6%, slightly below Q1, but still above 6%, and significantly above our mid-term guidelines of between 5.4% and 5.75%. Now, if you look at the bridge, you can see that there's about PLN 458 million of monetization and engine growth, as well as GMV, across those three pillars on the left-hand side of the bridge. And that's enabling us to make targeted investments in certain areas and continue to absorb delivery expenditures, as you can see on the right-hand side. Let me start with Delivery. PLN 133 million higher than a year ago and versus PLN 96 million increase in Q1.
Of that difference, which is what? Just over PLN 35 million , about PLN 10 million of that is actually related to the scale-up of our Allegro One and Allegro Delivery businesses that Roy was describing. We're our business model in these services is that of principal rather than agent, and that means that it's time that we start booking the revenues gross and the cost gross. So we've actually made a correction of the presentation in Q2, and that's added PLN 10 million on the cost side and the equivalent PLN 10 million on the revenue side for those services, and that's within the cost of delivery. When it comes to more routine items, slightly more volume over unit cost increase in the growth of cost of delivery.
In terms of cost, 5.5% on average, being helped by the fact that courier continues to go down in the mix, following MOV changes made all the way back in 2022. And we're absorbing the scale-up costs of Allegro One within those figures. We're spending more on marketing, as you heard from Roy earlier, focusing on various USPs and encouraging use of some of our higher frequency categories, defending our position against new entrants in the market, PLN 54 million higher spending. SG&A actual spending was flat QoQ, 12% up year-on-year. We're investing in the team. We did our annual pay round in April.
And one thing that's going down significantly are bad debt expenses as a result of our change to using a fee netting regime that we implemented over the course of the last year. Capital investment, you can see on the following slide, as you heard, we're still very focused on the returns on investment. Growth was only 10% year-on-year, at PLN 112 million . Most of the growth is coming in the capitalized development costs. That's a combination of growing the tech team, paying them more than the year before. That was up 14%. The hard CapEx, broadly flat year-on-year, but we are expecting more spending to come through on the delivery projects, particularly in Q3. So that's Poland, and now let's move on to the Mall segment.
You've already heard at length from Roy, the huge amount of activity that's going on around turning this organization around to be a contributor to the group overall. Just a reminder, our objective is to finish all of these changes by the end of 2025 . Starting with the GMV, the pivot that we're making towards only focusing on profitable selection and getting ready to sell purely as a merchant on the marketplace, means that we're continuing to reduce the amount that we're selling in the Mall marketplace. The GMV was down thirty... Sorry, the Mall segment, I should say. The GMV was down 35.9%, but 7 percentage points of that was simply the exchange rate headwind coming from the stronger zloty, so PLN 444 million of GMV.
And despite that decrease, we were able to cut our overall costs in adjusted EBITDA by 13% year-on-year to PLN 58 million loss for Q2. And some of the items in the bridge are quite interesting. The GMV decline only translates to a PLN 34 million lower gross margin than in the prior year, and that's been completely offset by the growth in our logistics business. And also repurposing of staff to work on the marketplace of projects, either at the international marketplaces or also on the Polish business, using the great team that we have there in the Mall business. So that's bringing PLN 34 million of inflows, less marketing spending, because we're selling less products that cost too much to market, 17 million savings.
The other SG&A is slightly higher, but that disguises the headcount reductions that we've implemented. Within that, there's also group recharges for all the new platforms that are starting to be rolled out into the Mall segment. Moving on to international, starting from slide 22, where you see the top of the funnel for our new marketplaces. As you heard, we now have within these numbers, allegro.cz, which has been running for over a year, and allegro.sk, which had the first full year in full quarter impact in the second quarter of 2024. Looking at the funnel, active buyers, as you've heard, 2.5 million customers, it's a fantastic result. We're really proud of this.
Traffic move, moving up, and items sold moving up very similarly to active buyers on a sequential basis. They're going up 24% and almost 30%, respectively, and I think it makes sense to look back slightly two quarters, and you see that we've reached the same levels of traffic and items sold as we were enjoying in Q4, when we had the very, steep seasonal growth in demand, so we've caught up to the peak that we achieved in Q4.
That's translating into 34% sequential GMV growth to PLN 355 million for Q2, and the adjusted EBITDA, and that compares in itself to Q4, PLN 410 million of GMV, which means, in short, that there are less discretionary items in the mix in the second quarter, less Christmas spending, in other words. But PLN 355 million of GMV. The adjusted EBITDA -PLN 87.3 million, 24.6% - margin, slightly worse than in Q2, - 3.5 percentage points versus Q2. But that's totally natural because it's including the absolute start-up phase of the Slovakian business, to get the flywheel moving with it and announcing our presence with an ATL campaign. So that's the international business.
As usual now, let's focus in on leverage, which is laid out for the group as a whole on the twenty-sixth slide, and as you've heard already, it was another quarter of significant deleveraging. The progress on EBITDA in particular, and the excellent cash conversion is producing this 0.34%, sorry, 0.3% of a turn progress, Q o Q, all the way down to 1.04 leverage at the end of June. We do expect the progress to be a bit slower from here. EBITDA won't be increasing as quickly as I'll describe in a moment on the guidance slide, and also, we can expect higher costs of borrowing in the second half of the year.
Although we've now unlocked the lowest margin available in the grid, unfortunately, those hedges that we implemented in 2020 in the middle of COVID at extremely low interest rates have now rolled off at the end of Q2, and we're now having a more normalized cost of borrowing closer to the viable rates that we see in the market. And just to reiterate, the management is doing analysis around options for capital allocation policy, and we'll expect to discuss those with the board during the annual planning round. And we'll report back when those discussions have concluded. So with that, let me move on to the Q3 2024 outlook. And as usual, I'll start with the Polish operations.
Q3, when it comes to the marketplace, has looked quite similar to Q2 in that we've made further progress. We have managed to accelerate again our GMV growth relative to Q2, and this has also been achieved with a pretty lackluster retail sales figure, which so far we only have the July number, but it wasn't a great print, and yet we are still managing to grow. This quarter, though, is a little bit a story about our eBilet subsidiary, a company that we don't talk about all that often, but it's Poland's leading ticketing company.
This time last year, eBilet, which in a normal quarter represents around about 1% of our GMV, had an amazing quarter because they were selling as the main distributor of the Taylor Swift concerts that actually took place a few weeks ago, actually, in Poland. But they were selling those tickets in Q3 last year. And there's also a very important Polish star called Dawid Podsiadło, who sells out multiple stadiums on an annual basis, but last year did many more stadium concerts than he does in a normal year. Those two things together equated to about double the usual GMV for eBilet, and that equates to a 1% headwind on our GMV growth for Poland as a whole.
Okay, so that means that the GMV outlook is 10%-11%, likely to be at the higher end of that range, but it would have been nearer 12% without this windfall effect from eBilet. When it comes to revenue growth, as I mentioned, we're now lapping the Q3 increases from 2023, so therefore, the overall growth rate of GMV drops, sorry, revenue drops slightly to 16%-18%. And our adjusted EBITDA is the growth there is slowing to 11%-13%, and this requires a little bit more explanation from my side. First of all, the monetization effects.
You know, we were flagging right from the beginning of the year that all the changes were brought forward into Q1, and that over the course of the year, we would be absorbing increases like salary costs and distribution cost increases from our delivery partners, and that is what is actually happening. So the monetization is gradually rolling out of the numbers, is the first point. The second point is that a lot of the progress that we made on Fit to Grow last in the 2022-2023 time frame had already been reflected in our margins by the time we reached Q3 of last year. So that is also rolling out of the growth.
And then finally, we're spending more on marketing, as you saw on the earlier adjusted EBITDA bridge, to grow our frequency, our engagement with our shoppers, and also defend our position against new market entrants. So 11%-13% growth for Q3. When it comes to CapEx, as I said, a little bit higher for Q3, PLN 140-150 million behind the DEX projects that we have up and running. So moving on to international. We're looking at 3%-6% decline in GMV for the third quarter. This is a combination of slightly slower growth on the international marketplace than we saw in Q2.
We've got a lot of initiatives running to build on the large subscriber base that we have and really focus on the frequency of shopping of those subscribers, but it will take a bit of time for all of those initiatives to come through. And on the Mall side, we continue to purposefully contract and refocus the organization as we pivot to being a merchant on the marketplace, and in particular, this is the key quarter for CZC to right-size itself and get ready to sell 100% on the marketplace from Q4. So 3%-6% lower than in Q3, than in Q2. When it comes to revenue, obviously, the retail sales of Mall are much more significant than the take rates that the marketplace charges, so therefore, revenue dropping much quicker than the GMV.
Adjusted EBITDA, because of these special sellouts that we're doing, we're expecting it to be slightly below the level we saw in Q2, PLN 150-160 million loss. Finally, the CapEx is gonna tick up a little bit in Q3. We're installing APMs in the Czech market, and secondly, we're preparing the Hungarian marketplace to be launched later in the year. That's the outlook, and I'd like to wrap up the formal comments at this point, hand it back to Tomasz. Thank you all for listening, and we'll go through the Q&A.
Thank you, Jon. Thank you, Roy. That completes the presentation, and we are ready now to take the questions from participants. Yota, you may proceed.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star, followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from the line of Tiron, Cesar with Bank of America. Please go ahead.
Hi, good morning, everyone. Thanks for the call and the opportunity to ask questions. I have three questions, if that's okay. The first one, I wanted to ask if you can give some examples of the initial success that you're seeing in Hungary and Slovenia. Second question, would be to understand better the incremental cost, which you are expecting in Poland in Q3, that would lead to a slight erosion of the margin. And then three, I wanted to ask if there is scope for Mall to break even. I'm not asking for international, but really just for Mall. Thank you so much.
Cesar, thank you very much for the questions. The first one, I'm not quite sure I understand the question because the Allegro marketplaces for Slovenia and Hungary have not yet launched. Hungary, we're working on at the moment. The others for the southern part of the Mall footprint are projects rather for next year. So I'll take a follow-up on that in a minute. The second question was around where the incremental costs are coming through, if I understood correctly, in Q3. Half of the story, frankly, is around the monetization, okay? Because we made all the increases in Q1, which means that we've been running above, let's say, target margin level through the first half of the year.
And we flagged this very clearly back in Q1 that the 6% that we've been booking as our adjusted EBITDA to a GMV margin was above the medium-term expectation that we have, right, which is 5.4%-5.75%. So half of that picture is the fact that we start to lap the Q3 increases that we booked a year earlier, which won't be repeated this year. The other significant item is marketing on the marketplace. We are expecting to spend more as a percentage of GMV. There are other things going through the numbers. For example, we made our annual pay round increases in April, so we're gonna get a full quarter of impact in the Q3 numbers. And you know, those are really the most sizable items.
Obviously, the delivery cost will continue to go up. We're continuing to scale our own delivery capabilities, which means that we're accelerating in terms of volume. The marginal cost is coming down, but rapidly, and the average cost even faster towards the levels where we get to positive contribution from the activity, but we're not quite there yet. Yeah, so these costs are still coming through. So these are the things that have an impact, but the adjusted EBITDA is still growing, you know, by 11%-13%. Yeah, so it's still growing very healthily. Oh, sorry, and then the final question was around Mall.
Yeah, the medium-term outlook that we issued was that by the end of 2025 , we want this business to be making a positive contribution to the marketplace business. Now, that really comes from two things. First of all, their own trading with a cost-efficient structure using the same systems that we're using across the rest of Allegro should be more profitable than their sales have been hitherto. Part of that is also around reducing the SKUs and focusing in on the more profitable items, but it means lower GMV. The second aspect is that those sales are going to be on the Allegro marketplaces, not off the Allegro marketplaces on their own front ends.
So those, the costs of running those front ends go away, and they start to contribute much more strongly to the performance of the Allegro marketplaces, because they're known brands, they're loved brands in their home markets. They'll only be available on the Allegro. They can offer much faster delivery, and than the Polish or the international merchants. And we expect them to systematically grow their GMV once they're really totally focused on the marketplace. Now, that should help to drive engagement and trust on the part of the Czech and the Slovak consumers and the others around the region in due course. Helping to drive the frequency overall will translate into even better growth overall for the marketplace. Yes?
So in those ways, we expect them to make a positive contribution to the core business, which at the end of the day, is the marketplace model.
Great, thank you. Sorry, I meant to ask on the new launches, do you think there will be in terms of funding, is it gonna be the same impact as the two ones that you've already done?
We're following this guideline that we've issued, right? We've said that we're not going to spend more than 20% of our Polish EBITDA on growing the international business. And the way that should play out over time is that gradually the amount we need to invest in supporting the Mall business is gonna decline, and we said that we would get rid of most of that loss by the end of 2025. And as the launched marketplaces get closer and closer to breakeven, that will mean we'll need less and less money to support those marketplaces, and that will then leave headroom within that 20% to start the launches of the new marketplaces, right? So in other words, Hungary, in other words, Slovenia, Croatia, which is still ahead of us.
In due course, if we're on track with building a profitable international business, we'll go further afield.
Great. Thank you so much.
The next question comes from the line of Reshetnev, Roman with Goldman Sachs. Please go ahead.
Hi, and thanks for the call. Just a couple of questions. So the share of your Polish EBITDA reinvested into Polish CapEx has been tracking fairly below your guidance of up to 20%. Do you plan to accelerate your investments in the coming quarter? And what do you consider the key areas of these reinvestments? And basically, I also know that Allegro One lockers reach just 3K versus 3.5K as of you know end of 2023. So does this lower CapEx spend relate to somewhat weaker than initially planned local rollout?
Finally, if you could provide the latest update on what you observe for Temu expansion and market share in Poland, and do you see them stepping in any of your international markets? Thank you.
I think already two quarters ago, we said that we were, at that point, probably already approaching the lowest point in terms of capital expenditure, so I do think our CapEx will slowly rise in some areas as we start trimming the company more for growth, but I think it's... I can guarantee you, it will stay within some of the guidelines that we've said, so I think we've got a very good playbook for launching into new countries, and you can see that we've gotten both faster and much more efficient in opening up a new country.
To be very frank, within our existing six-country catchment area, the transition to a marketplace everywhere enables us to resolve other cost challenges that we have by consolidating onto a single application landscape. I think those are the sort of key things in terms of CapEx. It's a modest rise. It's actually taking place later than what we originally signaled, because, again, we were signaling already two quarters ago that it would be relatively low. But I believe it is still going to continue to be quite moderate increase.
I think looking a little bit under the hood about how we're managing the delivery CapEx, we're still quite focused on utilization of the lockers that we already have. So, we're making tremendous progress on that, and that then translates into big improvements in average cost for our own locker network and the efficiency of the courier rounds that service those lockers. We're also able, I'm very happy about the fact that within Allegro Delivery, we've now got access as well to roughly six thousand, I believe it is, Orlen lockers, which to all intents and purposes, are now effectively integrated into our network.
And without having to spend the CapEx, you know, they are also part of the network that we have at our disposal for doing proprietary or principal-based deliveries, which I was referring to when I was talking about the accounting. So going forward, as these opportunities start to roll out or roll off, we'll start to look further afield and probably start to build more lockers and move a little bit faster. Yeah. So that's why we have that 20% boundary, 'cause we don't want to cross that 20% level. But as you rightly pointed out, there's still plenty of headroom for us to accelerate further.
I'd add something here, just as a reminder, for those of you who haven't heard heard us on previous calls. I think we've been emphasizing for quite a while now that we have developed a very rigorous and disciplined capital expenditure review. We've decidedly shifted, I think, from the historical build it, and they will come to have they come, and are they using so much of the capacity that we really need to add it on. Therefore, I would actually treat investment in infrastructure, our own infrastructure, as a signal of two things. One is that we have got the current utilization at acceptable levels all the way through the network, and that we haven't found another more attractive alternative among our various suppliers.
So it's a needs must, and part of the need is that this is the best alternative, and the other is that we can't get the capacities anywhere else.
[audio distortion] Would you re-ask the question? I'll try and take that one. Hello?
Excuse me, Reshetnev, Roman, are you done with your questions?
[crosstalk] No, there was a third one regarding Temu, which I believed is actually sort of what are the current trends with Temu? What is the effect? I think is what it was, but we wanted to verify.
Okay. Well, I can take that one. Yeah, the Temu trends are fairly similar to what we've talked about in preceding quarters. They are making progress in terms of app downloads in particular. You can see progress in traffic, and in particular, you can see that they continue to spend heavily on marketing. They're present in internet marketing, and banners as well as buying traffic. When we look at our monthly gain and loss reports, which give us some estimates of transaction shares, but not GMV shares, we see moderate progress. But honestly speaking, when you take the Chinese marketplace platforms together, so Temu, AliExpress and Shein, it's still only adding up to mid-single digit transaction share. Yeah.
So they're progressing, but not all that rapidly. And we continue to see Temu, in particular, as very good at what they're doing, but what they're doing is a very, very different shopping mission to Allegro. Temu is a place to go and see what they're selling at a very attractive price today and perhaps buy it. Allegro is where you go because you need something, you need it tomorrow or in two days time. You know it's going to be at a good price. We've got just about everything you can imagine that you might want. You know that you can rely on Allegro to make sure that the quality of the delivery and the quality of the product and the performance of the merchant is what you expect. Yeah?
You know, it's a very different mission, and our mission is clearly much more every day and a much bigger mission than the discovery mission that Temu currently has.
Okay, that's clear. Thank you very much.
Once again, to register for a question, please press star and one on your telephone. The next question comes from the line of Potyra, Michal with UBS. Please go ahead.
Hello. Morning, everyone. Just one question from me. If you could please provide what is the current penetration of Allegro One in delivery, and perhaps also your own lockers in that mix, and perhaps also if you could maybe add some color, is the unit cost... delivery unit cost lower for you when you're using your own delivery framework? Thank you.
Let me take the last part of the question first. The marginal cost, I would say, the incremental cost, as we scale up Allegro One, is already below what it's costing us to pay another operator to deliver. But the average cost is still higher, you know? So we haven't yet reached the point where the scaling up will result in incremental EBITDA margin benefit, but it's coming closer and closer. And as you heard, the volume growth was over 2x compared to a year earlier. So the business is growing very, very quickly, both on the locker side and on the courier side of the operation.
We don't give out specifics for obvious reasons around, you know, the exact shares of what we're doing ourselves versus what we're doing with our delivery partners. You know, it's very sensitive, competitive information, so we don't disclose that.
Okay, thank you. But any kind of color, how material is that, please?
From a cost perspective, you know, there's some disclosure around that in the financial statements this quarter. Approximately in both this year and last year, about 80% of the cost of delivery that you see in the accounts is related to agent model deliveries, which means where Allegro is not involved. But as I said, the volumes are doubling in the meantime, right? So, that will give you some indication of how fast the unit cost can be coming down.
I'm gonna add one thing. I mentioned earlier that we have a very disciplined CapEx approvals process. And the point of Allegro Delivery, of our own courier operations, is about choice. And we only need to develop that choice if we're not able to find cost-efficient and high-quality service from our carriers, carrier partners. And we like working with our couriers. I think some of them are quite strong and reliable. So the question about share is almost not material. The question is: how much progress are we making on keeping our unit cost increase in terms of cost per parcel contained while continuously improving the service?
Understood. Thank you.
Ladies and gentlemen, there are no further audio questions at this time. I will now give the floor to Mr. Poźniak for any questions from our webcast participants.
Thank you, Yota. We have a few questions. Let me address the ones that were not answered or already asked through the audio. The first one comes from Stefani Spasenoska, from Goldman Sachs, concerning the outlook. As with one percentage point, GMV headwind from eBilet. Is that the impact for the full quarter, last two weeks of September? And even adjusting for it, the Q3 looks conservative, implying deceleration versus Q2. What are the drivers for the sales season, autumn sales season from late September to early October?
Okay, I'll take that one. Thank you for the question. As a matter of sort of reporting policy, we're using round percentages when we're guiding. So I think you can assume that you're gonna be much closer to the top end of that 10-11% range than the bottom. I think that's the first point. And that implies that without that eBilet headwind, we'd have been more around 12% than 11%. Yeah. When it comes to the last two weeks of the quarter, that's still ahead of us, mainly it's because we're in the autumn season, it's very, very weather dependent. It depends on whether we start to get the, you know, the autumn shopping season coming through in the numbers, or we don't.
That's quite a big piece of variability, which is very hard to predict, even though it's only a two-week period. Obviously at the moment, the weather's been quite a bit colder, and we've had these terrible floods, which, you know, obviously tends to imply that there's a bit of autumn shopping going on. But whether that will continue, the weather's warming up again at the moment, so we have to wait and see.
Thank you, Jon. Our next question is from Dominik Niszcz, from Trigon. And the question concerns whether our adjusted EBITDA guidance for Q3 accounts for any costs associated with the launch of the Hungarian market.
In the Q3, and in fact, even in Q2, there is within the international marketplace, there are very small amounts of start-up costs included in the SG&A component, mainly, or in the CapEx component, of the results for the international marketplaces. So it's not material at this stage. When we do launch, obviously, there can be a bit more spending coming through.
Thanks, Jon. Next questions come from Mr. Nishant Mehta from J.P. Morgan Chase. They also concern the first one concerns the Hungarian market. What gives you confidence to start expanding in Hungary as early as this year, as opposed to waiting for Czech and Slovakia to ramp up before entering a new country?
I'll get this one. I think there are two ways to answer this question. I think the most important one is the faster we migrate off legacy systems and move to one application space, the faster we will get our control, our costs overall, outside of Poland, down to a rate that we want to have. So, I think the full integration of what used to be called Mall Group simplifies our operation. It reduces the amount of staff we need, and overall, should give us greater efficiency, you know, particularly around the SG&A lines. And the second is, quite frankly, Hungary is a proportion of our total group sales, is relatively small. So, we don't actually need a particularly strong performance out of Hungary to match what we currently do.
But the benefits of moving off a very old legacy code base and then to a common one gives all sorts of operational efficiencies further down. And then we have a choice. I was about to kick in earlier. Our launches are relatively quick now, and so efficient, that most of the expense in running a new country is discretionary. It's not only, but is mostly the marketing spend that we need to do to build the business. And we can prioritize that as and when is needed. So it gives us, I think, quite a bit of flexibility as well.
Thank you, Roy. And the second question from Mr. Mehta is, what is the share of next day delivery for Allegro Delivery? I think we can here wrap it up. Basically, the introduction of this solution is with the purpose that it does not impact the delivery experience from our customers, so it matches the overall picture when we deliver more than 80% of our packages within 48 hours.
I would say certainly within Poland.
Yeah.
We'd like actually all of our deliveries next day. Of course, that also depends on merchants dispatching on the same day that they receive the order, and having progressively later pickup times from couriers at merchants. So that's not always possible, particularly for customers placing an order after about 5:00 or 6:00 P.M., because quite a lot of them don't have access to pickups that are after that. And the performance expectations that we have are customer-facing, and therefore, fairly consistent. In fact, are consistent across the various couriers, including our own.
Thanks, Roy. And the last question that we have not addressed during the call today is from Mr. Wojciech Konopa, from Generali. The question concerns what's the strategy behind productized offering listing? Seems like we're moving somewhere between 3P 1P models.
I'm not actually sure that would be a fair description. What I would say is, traditionally within Poland, not even across Europe, but traditionally within Poland, the marketplace has always listed every single offer. But I think there are multiple examples of other marketplaces in other markets, where they've always had, or at least for quite a bit of recent history, a product view. What I mean by that is, the marketplace tries to surface the best offer amongst multiple ones in the buy box when you have a product view, and if the customer wants to root through and go through, they can actually see if there is another offer, which, regardless of what the price point is, overall may be a better choice for them.
What I would say is, a product view is particularly important for outside of Poland, because something you did touch on, which is, if most of the shopping experience in a particular market is with 1P specialists, they're used to only seeing one product, and having a myriad of offers of the same product, can actually cause quite a bit of, for lack of a better expression, cognitive overload. So by compressing that, trying to surface the buy box, the best offer, while still giving the option to dive deeper if you want, I think is something that most customers around Europe, and certainly in those countries where they have less experience with marketplace, is what they expect.
So, I think that's true, and frankly, I think that's also true with Polish customers, now that we also have that opportunity here. There are some people who've been shopping with us for decades, who enjoy scrolling through pages upon pages of the same product with a different offer. But actually, I think a very large majority of them like the simplicity, which we've said also in our mission statement, which is: We want to make shopping simple for customers.
Thank you, Roy, and this exhausts the list of questions that concern the today's presentation. Thank you very much. Yota, you can close the presentation now.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephones. Thank you for calling and have a good day.