Good morning everyone, and thank you for joining us for this half year earnings call. We have prepared the presentation, and after the slides we will have Q&A session. In order to ask a question, please use Q&A chat on the bottom of your screen, and I will now hand over to Yehoshua, our General Counsel to start.
Good morning, everyone, and welcome to the Huuuge Games 2022 H1 Earnings Call. Thank you all again for taking the time to join us today. There are several firsts on today's call. You will soon meet our Co-CEO, Rod Cousens, and our Executive Vice President of Finance, Marek Chwałek. This is also my debut appearance as a speaker in this forum. My name is Yehoshua Gurtler, and I'm the General Counsel and Company Secretary of Huuuge. In these calls, we typically review the highlights of our results for the reporting period and discuss our future plans and outlook. Today's call, however, will be slightly different in this respect. As you are all aware, the company is presently undergoing a review of our strategic options. This process is, by its very nature, sensitive and complex, and can easily be influenced by outside factors.
In order to mitigate the risk of prejudicing or influencing the strategic review, and after consulting with the company's advisors, we've made the choice to focus our comments today on the company's results for the reporting period, and with few exceptions, we will refrain from discussing in detail our future plans, strategy, and outlook. In that vein, we will also refrain from answering any specific questions on the review process itself or about our future plans and our strategy. While some of you may find this unsatisfying, it is a necessary step to safeguard the integrity of the strategic options review, which I'm sure you can appreciate. If you have any questions on the approach we've adopted for today's meeting, please feel free to send those to our IR or media team, and we will be sure to address them individually.
With that introduction, I would like to now hand the presentation over to our Co-CEO, Mr. Rod Cousens, who will begin the substantive part of today's meeting. Thank you all.
Thank you, Yehoshua, and it's a pleasure to join the call today in what is my first presentation along with Marek, as Yehoshua referenced. I'm also joined by Jon Bellamy, who I believe is well known to you all as our Chief Commercial Officer, and we will run through the highlights of the last half of year. With that, if I could move to the next slide. As you all know, we're operating in choppy market conditions right now, and the.
If I look at the mobile market in general for the period, I note that there is a decline of 6% year-over-year, and that's obviously creating a very challenging macroeconomic backdrop, which we are navigating and taking steps in order to put ourselves in a very good position to respond and be able to navigate that through that period. What I would say is if you take an overall view in the second quarter, our revenues are at $79 million, which is down from $98 million in the second quarter of last year, mainly as a consequence of the decline in the market and also some product rationalization, which Marek will refer to as he goes through the financials, because our whole approach now is on where we maximize our return on investment and where we spend our dollars.
At the same time, in the same period, we have adjusted EBITDA of $13.7 million versus $15.6 million in the same period last year. You will see that that gives us a percentage, the margin of 17.2% up from 16% in the last year. The activity of our approach is already starting to come through in rapid timeframe, and we'll reemphasize this as we go through the presentation because our focus is on improving our EBITDA margin, not ignoring revenue growth, but mainly steering everything towards an uplift in our EBITDA margin. I would also note that in terms of something that will impact things like that, we have reduced our headcount from 637 in the same period last year to 593.
Another point is, as Yehoshua referenced, the board of directors initiated a strategic options review, which is underway and we're in the midst of it and unable to comment on that. If I can move forward to go from the second quarter to the H1 2022 at a glance on the next slide. One of the major points here is that, you know, as a company, we continue to generate cash. We have a strong operating cash flow situation, and that is in spite of the challenging market conditions that we're facing, the macroeconomic conditions, but we're still able to build our cash flow. In the period, we had $26.3 million of net operating cash flow versus $0.2 million in the same period last year, and Marek again will highlight that as he gets into his presentation.
In terms of revenue for the period, we generated $163 million versus $193 million in the corresponding period in the prior year, and $28 million of adjusted EBITDA versus $26 million in the same period last year. This is borne out in the first half of the year, 17.2% adjusted EBITDA margin, up from 13.4% in the first half of 2021. Our cash position as at the end of June 2022, which again, when Marek gets into the balance sheet, will be evident, is $188 million, and that's after the share buyback program, which was initiated, and also the payments that were due in the acquisition of Traffic Puzzle.
In terms of the share buyback, we acquired 5 million shares in the period as part of the buyback program at an average price of PLN 17.8 a share, and we spent PLN 90 million in acquiring those 5 million shares. In terms of the continuation of this, we fully anticipate that we're heading towards a significant adjusted EBITDA growth for the full year as the impact of our measures start to come through in the second half. I'll move on from there and hand over to Jon Bellamy, who will now give you the business update for the period. Jon?
Thank you, Rod. That's perfect. Hi everybody. Good morning, good afternoon. Very nice to see you again. I'll spend a few minutes just running through the state of affairs for Huuuge Casino, Billionaire Casino, and Traffic Puzzle over the next three or four slides, and then we'll move on to the finance section. If I can begin with the next slide, I'll begin with Huuuge Casino. As a reminder, our core franchises are HC and BC or Huuuge Casino and Billionaire Casino. They remain the backbone of the company. Highly profitable, highly sustainable, and continue to provide extraordinary cash flow over time. As discussed in the last quarterly meeting, we're leaning into our harvesting strategy, and I'm very pleased to say that as of today, HC as a game has the world's number one revenue per daily active user KPI.
It is best in class, and we owe that to our clubs and social feature architecture. These games, as I've mentioned, remain highly profitable, in fact, increasingly so as a percentage of revenue, with quite predictable long-term revenue profiles. The retention of our most valuable sticky players remains extremely stable. Our ability to monetize those users on an increasing basis over time will be key to extracting further value from these games moving forwards. As such, our focus will be on profitability and longevity. Huuuge Casino and Billionaire Casino have been on the market for five and six years respectively, but there's no reason we should not plan for 10, 20, 30 years into the future, within this ecosystem, given the longevity of the cohorts we've seen so far.
August has been our best month year to date for sales margin generation as a result of UA, and we expect that trend to continue into the future. Moving forward. Next slide, please. In terms of upside for these core franchises, it's really about extracting value from our everlasting player base. The users who've been playing our game for months or years already demonstrated an interest such that they are willing to make purchases. Those are the core users for Huuuge. We plan to service those user bases by expanding our VIP program. At present, our VIP program is highly effective but covers only a small proportion of the active user base. We plan to expand this to provide much more coverage of the active user cohort, but also increase its sophistication so the efficacy of the program itself improves.
Secondarily, we plan to expand our webshop. For those who don't know, Huuuge Casino and Billionaire Casino have a webshop that is accessible through mobile and web browsers that is outside of the App Store ecosystem and allows us, by funneling transactions through said store, to expand our margins and the incremental margin additivity of our transactions from our most valuable players. We plan to expand this webshop furthermore, beyond just a portal in which players can make transactions and exchange currency for chips, to a fully playable PC or web browser version of this game, and the go live date is currently scheduled for 2023. Lastly, we're introducing a more balanced and segmented game economy, providing a much more bespoke experience for all players and curating and catering a value for money profile that really fits with each individual player's behaviors.
In mid-2019, we released an update called Scalability. For those of you who don't remember this, that was an economic upgrade that converted our single economy for Huuuge Casino and Billionaire Casino into a bucketed set of economic models, really catering to different groups of players. We plan to take this one step further and move from bucketed economies to individual economies, and that will be a real step change for the game's performance. Okay, with that, I'll move on to the next slide and talk a little about Traffic Puzzle. For us, Traffic Puzzle was a sort of a revenue diversification play. Very pleased to say that in H1 2022, 12% of the company's revenue came from new franchises, the vast majority, of course, being Traffic Puzzle.
We've started reducing UA spend ahead of making architectural changes to the game. We're making further additions and improvements, primarily to drive retention and monetization features through developing a social layer and taking what has worked extremely well from HC/BC to Traffic Puzzle. As part of that transition of knowledge, we intend to take segmentation capabilities and providing dynamic configurations and tools to offer players a highly personalized experience, so no two players have the same experience, but rather an experience that caters to their play and pay behaviors. Lastly, as we touched on very briefly in last quarter's update meeting, we are building out a platform to facilitate a multi-product franchise all within the Traffic Puzzle ecosystem. We're planning to have a technical test or release of Traffic Puzzle 2, which will have a different name at the time in December of 2022.
Soft launch is currently slated for Q2 2023, but all of this sits behind upgrading our architecture such that more than one Traffic Puzzle game can be operated, maintained, and improved from a single code base. With that, I'll pass the microphone to Marek Chwałek, who can handle the financial update for this half 2022.
Great. Thank you, JB. Hello, everyone. Good morning. It's a pleasure to join today's meeting, especially that this is, well, my first time as a speaker in the earnings call. I'll cover the final section of the presentation, starting perhaps from the income statement. Next slide, please. Thank you. As Rod mentioned, we are after another challenging quarter on the global gaming market. According to Sensor Tower, consumer spending on the mobile games declined in the entire period of the first six months of this year 6.6% year- over- year. Our revenue in the first six months of this year is down 15.4% versus year ago from $193 million to $163 million, and this decline is mostly attributable to our core franchises.
The reason why our revenue trend is being even more downward than the market is threefold. First, the quarters of 2021 were two particularly strong quarters in our history in terms of top-line performance, which makes it a high base for the comparison. Additionally, in Q3 2021, we decided to sunset a few game titles which delivered additional revenue in the first half of 2021. Finally, as per Sensor Tower, the recent saturation of the gaming market has been even more severe in the U.S. from where Huuuge generates about 60% of its revenue. However, in this challenging period, we managed to maintain a cost discipline and focus on profitability and operating cash flow generation, as already pointed out by Rod.
A slight decrease in the gross profit margin year-on-year from 69.7% to 70.3% results mainly from amortization of Traffic Puzzle, which started in May 2021 when the game was acquired. It has about $1.3 million lower impact on the first six months of 2021 as compared to the first six months of 2022. Moving on to the operating results section, it's worth noting that our user acquisition marketing campaigns expenses were moderated by about $24.5 million in H1 2022, and $11.7 million in Q2 2022, so by about 33% in both analyzed time periods. The decrease was mostly attributable to our core franchises and reflects our focus shift to maximizing benefits from the captive player base.
The decrease in general sales and marketing expenses was about $800,000, that is 9.1%, for the six months of this year, and about $250,000, that is 5.8%, for the second quarter of this year, compared to the corresponding period of 2021. It can be attributed primarily to a decrease in external services as well as to salaries and related costs, including employee stock option program. Research and development expenses for the first half of 2022 grew by about $1 million, that is 6.1%, compared to the corresponding period of 2021, and was mainly driven by an increase in salaries level and employee-related cost, partially offset by lower headcount in the first six months of 2022.
Regarding general and administrative expenses decreased for the first half of this year by almost $1.3 million, that is 6.4% year- over- year, and it can be attributed mainly to a decrease in employee stock option plan expenses and lower finance and legal services costs, which in Q1 2021 were particularly high as a consequence of becoming and operating as a public company. Operating results for the first six months of 2022 was $21.9 million, representing a margin of 13.4%. This compares to $17.7 million, representing a margin of 9.2% in the first half of 2021.
Finance expense net in the first six months of 2022 was $1.1 million, driven mostly by negative FX rate differences, whereas in the corresponding period of H1 2021, it was $43.1 million and resulted primarily from valuation of preference shares Series C and foreign exchange losses. Our effective tax rate for the first half of this year was 15.2%. To sum up, in the first six months of this year, despite a revenue decline, we managed to maintain a cost discipline, which allowed us to improve our adjusted EBITDA by over $2 million year-over-year and adjusted EBITDA margin by about 3.7 percentage point. Let's have a quick look on our balance sheet. Thank you.
The structure of assets has not changed much between the end of June 2022 and end of the last calendar year. At the end of both periods, non-current assets consisted mainly of Traffic Puzzle game, which net book value amounted to 36.7 at the end of December 2021, and 34.7 at the end of June this year, as the game assets are subject to amortization. At the end of both reporting periods, current assets in about 88% consisted of cash and cash equivalents. The decrease in current assets value is thus mostly attributable to cash and cash equivalents, which I will cover on the next slide. The structure of equity and liabilities has changed mostly due to payment of the second tranche of $25 million for the Traffic Puzzle game, which Huuuge acquired in April 2021.
This payment decreased the value of accounts payable, which at the end of June amounted to $38.1 million, compared to $60.9 million at the end of 2021. Next slide, please. Thank you. Now we can expand a bit on our cash flow position and cash flow generation. On this slide you can see a simplified cash flow statement for the first half and the second quarter of this year as compared to the corresponding period of the last year. Cash generation is among our top priorities, and it is well reflected in our net operating cash flow of $26.3 million in the first six months of this year, compared to $0.2 million a year ago.
Looking on the quarterly results, second quarter of 2022 was a bit weaker than the first one, mostly due to unfavorable FX impact coming from weakening of euro and Polish złotys versus U.S. dollars, which is our group presentation currency as well as from the ongoing fluctuation in the net working capital, such as bonuses payout in Q2 2022, or a decline in user acquisition marketing campaign spend, and thus payables between Q2 and Q1 2022. With regards to investing cash flow in H1 2022, it amounted to -$26.7 million, and was mostly impacted by the payment of the second tranche for Traffic Puzzle of $25 million, as previously mentioned.
In H1 2021, we paid the first tranche of $9.5 million, and it was a key driver for a negative investing cash flow of $12 million in the first half of the last year. Our H1 2022 financing cash flow was mostly driven by a share buyback, in which we spent $16.1 million, and this outflow is fully attributable to the second quarter of this year. In the comparable period of H1 2021, the financing cash flow was largely driven by the IPO proceeds, adjusted by execution of the stabilization option and the loss on a foreign exchange forward contract. What I would like to point out on this slide is that despite cash flow associated with the Traffic Puzzle purchase and share buyback program, the company's cash position improved by almost $8 million year-on-year.
At the end of June 2022, we had $188 million in our bank accounts. Next slide, please. Thank you. The positive EBITDA to cash flow conversion is not just an incident. This has been repeatedly delivered since at least fourth quarter of 2019, with the exception of the first quarter of 2021. Other than in this one quarter, we repetitively deliver positive operating cash flow and our EBITDA is constantly converted into fairly high cash flows. It's worth stressing here that the ratio of the last 12 months net operating cash flow to adjusted EBITDA amounted to 84%. Thanks to that, we feel confident in market conditions going forward. It's also worth looking at our profitability development in a longer time perspective.
Our adjusted EBITDA margin has changed from - 3% to + 17% in 2020 and 2021, and increased even to over 19% in a difficult market, in difficult market conditions of the last 12 months. This well reflects our focus on profitability of our products, continuous optimization of cost-based positive ROI project, and thus creating positive free cash flow, which will be our focus in the coming months. With this, I'm handing over to Rod for the closing remarks.
Thank you. Thank you, Marek. If I could go on to the next slide. I thought I would summarize for you some of our key highlights that, I'd like to draw your attention to and emphasize. The first one, which we're particularly proud of, is throughout this period, we've continued to progress and believe we will continue to progress, given all the work that is going in on this, as the globally number one monetizing social casino business. The numbers are, I believe, enviable and, you know, set the benchmark in the sector.
The other thing I want to stress throughout our whole approach as a general statement is that we're about return on investment, ROI, ROI in everything we do. There's a shift towards optimizing our user acquisition efficiency and maximizing the ROI from the product, and looking at the redemption timelines and channels that give us that maximum return. Once we see the criteria evolving, then we will follow our money if necessary. The other thing we're doing, we know we're living through difficult times, and so our approach to cost is very disciplined, particularly when it comes to our OpEx costs, where we look at this and we break down the cost between fixed cost, discretionary cost, and variable cost.
We're moving more cost from a fixed cost basis, which is now a relatively low percentage of our revenues, to a variable cost basis. That enables us to ride the peaks and troughs of the marketplace and not get trapped by the burden of heavy fixed costs. Again, it's another step that we have taken by being responsible in maintaining what Marek has already referenced in terms of improving margins, improving cash flows, et c. On that point, as you clearly saw, that we do have strong cash generation in the period and a significant balance sheet, which enables us to take advantage of any opportunities that come our way, and we're looking at situations in an adverse market which are more beneficial to us than prior options in an overheated market.
We believe we're in a strong position to leverage that cash as and when it's needed. The company, in general, as I've said, return on investment is our DNA at the moment, and we're positioned for strong year-on-year adjusted EBITDA growth by the year-end, where you will see a continued upward trend on that, and we're laser-focused on achieving it. I'll leave you with that, and thank you for listening to us today. Also hand over to Gabby, who will take and manage any questions you may have. Thank you for your time.
Thank you. A reminder, in order to ask a question, please use Q&A on the bottom of your screen and type it there. We already have some questions. First one, from Michał Wojciechowski from IPOPEMA. What is the current status of Traffic Puzzle? What should we expect from this game in the next quarters?
Sure. Rod, are you happy for me to touch on this, or do you want to comment?
No, I was gonna ask you to touch on it.
Of course.
Yeah, obviously there's been a lot of work done on this, and in terms of the product itself and the redesigning and positioning for the future, which JB will now give you a more detailed position on.
Sure. I mean, as we mentioned, in the nearer term, we expect to see the rollout of our multi-product architecture. This really underpins everything that we do thereafter. In subsequent quarters, we expect to see significant improvements made to the game's social layer, economy, and long-term retention driving features. As all of this happens and significant upgrades are made to these, this game or games, as it may well be by the end of this year, we need to reduce our user acquisition spending ahead of making these changes. In terms of what you can expect, I think that summarizes it about as well as we can.
Thank you. Next question on our EBITDA target. In regard to your EBITDA target and savings in UA budgets in coming quarters, do you plan to decrease both core and new games budgets, or you will focus on one segment?
Okay. As always, we'll be led by the data. We're guided by paybacks, and personally, I don't mind whether those paybacks come through casual games, through social casino games, or something brand new. Wherever the redemption periods are most favorable is where we will spend most heavily. We don't look at a game-by-game basis in this way. We look only at the performance of the user acquisition dollars on a standalone basis. We're not commenting today on future spending plans other than what's already been loosely suggested, though our approach to following the data just hasn't changed.
Thank you. Again, on EBITDA, what does it mean, adjusted EBITDA growth for the full year 2022? Do you compare to $64.4 recorded for the full 2021? This indicates making $36 million adjusted EBITDA for second half of the year, a growth at circa 30%. How would you like to achieve it given the choppy market, decreasing UA, and decreasing revenues? Thank you.
Yeah. Okay. Again, Rod, feel free to complement, but if I can just jump in, I'll say we're not guiding for full year 2022 at this point in time. However, conceptually, we have discussed exactly how we approach this already. Simply put, we will continue to employ discipline with our user acquisition spending, and we will drive value primarily from our social casino games by focusing on and catering to our most sticky and valuable players, and that means taking some of the focus away from driving growth through user acquisition.
Yeah.
Thank you. The next question. You have provided rather uninspiring market forecast for social casino with no growth in the next four years. Do you agree there is no growth for this genre? Should we expect your performance to be similar to the market in coming years? What are you going to do to maintain growth in the future?
Yeah, it's a really good question. Again, we're not guiding for short-term or mid-term at this point in time, though that may change in the future. The market forecasts didn't come from our side of the table. They come from Eilers & Krejcik, who are the leading analysts within the social casino category. We believe the primary source of value generation for social casino games in our portfolio, and potentially beyond, will be cash flow generation. That is where we see the most optimal source of value for these games, and that is the basis of our strategy moving forward with our social casino products. It's reflected by our reduced level of user acquisition at this point in time and focusing on our most valuable players. In terms of future growth, we'll leave the commentary to the analysts who do this best.
Thank you. Are there any promising projects, new games underway that may contribute to the EBITDA growth for this year and next years?
Yes, always. Always, right? We make a point, as we've said many times before, that we just don't comment on early stage games simply because the success rate in this industry for any games company is so low. We, as a policy, wait until games are of a sufficient level of scale to start commenting on that traction. At the moment, we have three or four games that are being developed internally. We're evaluating seven publishing products that are post-testing period already, and yet as and when the time is right to scale those games, and if they do so successfully, we'll be the first to tell you all about it. Yeah.
Thank you. There are two questions about NFTs, blockchain, Web3. How is the blockchain NFT implementation progressing, and can you comment on Web3 initiatives you undertook a few quarters ago?
Yeah, happy to. Ultimately, Anton is driving this initiative extremely closely. The team has expanded a little bit, but I've seen in the last few days some screenshots of what that team is working on. I think it's probably best to leave it to his voice to tell you where we're heading on this because it's a little early at this point in time, and our exploration into blockchain gaming is still very, very fledgling. It's a very small part of the business. However, what we're seeing is pretty interesting.
Thank you. The next question about ROE, in terms of maximizing ROE for the whole company as you mentioned, on maximizing ROE on each particular game, would you prefer to increase buyback and redeem the shares to increase ROE for the whole company or spend cash on acquisitions in the current environment?
I'll let
Since buying back shares would be more value-creative, yeah, that was a suggestion.
Thank you. I mean, we believe in the value creation that we've already demonstrated in the buyback program. I'll let Rod expand on how we intend to treat this in the future, but as a reminder, the buyback process has been paused in light of the strategic review. Rod, any comments on M&A or buyback in the future?
No, other than you've covered. I mean, we have paused it pending this, and obviously, it would be wrong to state any further ambitions while this is going on. You have seen the fact that we initiated a process. It is paused, and I'm sure we'll come back to that at a later date and keep you abreast of everything.
Thank you, and I see no more questions in the chat. Oh, no, there are two more. Hold on a second. Have there been any transactions in the mobile gaming company recently?
In the industry or within Huuuge?
Yeah.
In the industry, I believe.
I mean, yes, absolutely. Mobile gaming transactions are still common, less commonplace than they were in Q1 of this year. February, I think, was the all-time high for dollars transacted in mobile gaming historically. However, in Q2, the deal flow continues, and interestingly, we're starting to see a convergence between publicly traded mobile gaming stock valuations, especially from a multiples perspective, and private company LTM EBITDA multiples. That's good news for us who are sitting on $200 million or $188 million, I think, thereabout, of net cash. And actually, that's a promising sign for how we might be able to use our dollars more accretively in the future. Rod, is that fair?
Yep, that's fair. We're sat there, we're looking for opportunities as it's well known. We scout extensively. I would repeat, we're gonna do smart deals and not stupid deals and value deals, and as JB has said, deals that are accretive to the company.
Thank you. Next question, are you planning to redeem the shares or let it bought back?
Marek.
M aybe I will shortly comment on that. In general, we use treasury shares for the purpose of our stock option program, and given how much we have already bought back, you know, we have sufficient number for continuing our ESOP program in the coming years.
Thank you, Marek. I can see the next questions that are appearing on the chat. Hold on a second. Is the pressure of e-commerce on mobile CPIs lower due to weaker global consumer? Could you in general comment on CPIs?
Yeah. We don't comment specifically on CPIs. However, yes, there is a rapidly changing landscape in the media buying environment. We've seen slightly lesser spend, generally speaking, across our industry, and beyond that, I can't comment because we're not heavily focused on travel and other consumer industries. That said, CPI is only one half of the equation. We recognize that much of that is outside of our control, the media and buying environment, it is what it is. Our focus really needs to be on driving LTVs, the other half of the equation, and we do that by releasing features, improving the economic models of our games, and serving consumers with the kind of content that they love to play. That's where our focus has to be.
Okay, the next question, I believe for Marek, could you please comment on the plans for strong cash position allocation? Also in the current interest rate environment, what's your approach towards cash in terms of investing it in?
I think there are two parts of this question. You know, with regards to our more strategic plan for utilizing the cash, the strong cash position, that's part of our strategic option review, which is currently in progress, and with regards to utilizing our cash reserves, for earning some interest income, this is what we have been already doing. At the end of June 2022, I think the equivalent of $120 million have been deposited on various deposits to maximize our short-term interest and financial income.
Okay, thank you. The next question, could you please elaborate more on the changes you made for in-game shop for social casino games?
Yeah, happy to. Something that we're very excited about, and we started this initiative as a proof of concept earlier this year. While it's still very small in scale, we're quite encouraged by what we're seeing. The web shop, in essence, is a replica of the game's shop in game. If you download the app via an App Store and you take a look at the web shop, or the shop itself in the game, you'll have the opportunity to buy chips and a handful of other things in exchange for real currency, our in-app purchase model. We've taken this, and we've placed it on a web browser, so you can access this via a web browser link. When you do so, you can make the same transactions for similar levels of rewards.
You can exchange currency for chips in a similar ratio via this web shop. What that means for us is that instead of paying the 30% transaction fee that we pay to Apple or Google whenever a transaction like this is made, we pay somewhere between 3% and 5% payment fees, in effect saving between 25% and 27% of the 30% transaction fee. Every dollar that we can transition through this web shop is therefore much more margin additive, and therefore we're starting with our VIP users through word-of-mouth interactions with our VIP agents and recommending that they make payments through those web shops. Again, only a very early proof of concept. However, we've seen enough transactions go through this process and the positive effect on our margin to be quite encouraged by the results.
Okay, thank you, JB. I will wait one more minute for additional questions. Okay. Approximately how big part of buyback shares is going to be used for ESOP, and what will be used for redemption?
Marek, could you comment?
Yeah. Just let me check some numbers, but from what I remember, we have currently 5.7 million of treasury stock, and given our well utilization rate in the last months, I would expect that this to be like sufficient pool for the next two to three years at least.
Thank you. Okay, I cannot see any more questions coming. Hold on a second. From Santander, brilliant results. Thank you. Okay, I believe that the remaining questions kind of refer to the strategic option review, which we cannot answer anyway, so no more new questions for you.
Okay.
I will, yeah, move to Rod's closing remarks.
All right, well, thank you. I hope that's dealt with most of your questions, et c. We look forward to continuing the dialogue as we go forward. You know the people to reach out to in the business. Again, I would thank you for your participation today, and don't hesitate to come back to us if you need to at a later date. Thank you all very much for joining us.