Good morning or good evening. Thank you for joining Shoper's conference call. My name is Tomasz Pokora from Investor Relation company. It's my pleasure to have with us today management board who will discuss the Q4 and full year financial results and key events. After their prepared remarks, we will open it up for your questions. I turn the call over to CEO, Marcin Kuśmierz.
Thank you, Tomasz, for the introduction. Good afternoon. This is Marcin Kuśmierz speaking. I'm pleased to host today's meeting where we'll discuss the financial results and highlights of the previous year as well as the prospects of Shoper and the commerce market in Poland. Let's start. The entire management board is present on today's meeting. Piotr Piechocki, our Chief Financial Officer, Anna Miszko, Chief People Officer, Paweł Rybak, Chief Commercial Officer, and myself, Marcin Kuśmierz, CEO at Shoper. The agenda for today's meeting focuses on the main developments for Shoper in 2022 and, of course, our financial performance during this period. We will also talk about what we achieved in the first three months of 2023, and how we see the market and the development of the market and our growth, of course, in the coming quarters.
Let's start with highlights. Let's start by discussing the financial results achieved, which can be summed up simply, the best results ever. We had fantastic 2022, and we improved all financial KPIs. Very strong revenue growth to more than PLN 100 million, with growth rate of more than 50% and, what is very important, in very challenging market environment. Our high speed growth was mainly driven by the growing popularity of services based or using pay-as-you-grow model and, thanks to focus on larger customers and premium services. What next? Last year, GMV on the Shoper platform grew much faster than the market. This is result of, and this is also great example of our good cooperation with merchants.
For GMV omni-channel, we surpassed very first time in our history PLN 8 billion, while for GMV stores it was very close to PLN 7.5 billion. Growth was 28% or 29% year-on-year, respectively. In a challenging economic environment, we also achieved our highest ever increase in adjusted EBITDA, to very close to PLN 40 million, an increase of 24% year-over-year. Let's remember that we achieved this at the time of high cost pressures, both in terms of salaries but also in all other business costs. Just to summarize, it was truly great year for Shoper, our customers, employees and of course shareholders as well.
The rapid growth would not have been possible without our focus on the most important projects. We have developed the offering rapidly. We implemented hundreds of new functionalities on the Shoper platform and dozens of completely new products. We also invested in partnerships with global e-commerce and new technology leaders. Great examples are the unique partnerships with Alibaba, alibaba.com or Microsoft in field of digital ads. We also focused on the development of midsize companies. We saw their highest potential and their stronger market position. We made a number of product changes to meet their expectations or needs. At the same time, we decided to reduce investments in the segment of the smallest customers and private label offerings, seeing that limited potential will be in the next couple of years for these both segments.
We also made two very good acquisitions. We acquired SEMPIRE agency, which is specialized in positioning online stores in search engines like Google or Bing. We also acquired Selium agency, which supports merchants in foreign sales like cross-border, mainly through marketplaces. There are more than 30 of them across the whole world. What is very important, we also kept costs under control. We worked and we are working on synergies within the group. We looked for and we found some headroom to, or space to increase the efficiency of our work and to reduce costs.
Hello. Paweł Rybak here, and I will tell you a bit about our business development. Last year, we not only strengthened our market position, but also created an expanded ecosystem of e-commerce solutions for small and medium-sized companies. Since the year 2022 is already behind us, and as Marcin mentioned, it was very successful one, I would like to tell you a little bit more about what awaits us in the near future. Just for a small reminder, we continue to develop dynamically in four main pillars that we defined, and those pillars are the pillar of digital ads on Google, Facebook, TikTok, and many other advertising platforms where we generate sales for our clients, earning money from commissions on sales generated by our campaigns.
Finance and payments pillar, where we constantly are developing a portfolio of payment services for our merchants, as well as financing their businesses. Here, Shoper business model is linked to the volume of sales and gross merchandise value across our entire platform. The pillar of omni-channel sales, of course, we have the heart of this pillar is still our software that enables to running your own online store. We also have an integrated SaaS platform to manage the entire omni-channel and international sales process in the most popular stores and marketplaces platforms in the world, such as, for example, Allegro or Amazon. We make money here on subscriptions, depending on the number of products, used sales channels or GMV, while also offering standard consulting models.
The last pillar, that is the pillar of logistics, where thanks to the technological and commercial cooperation with external partners, we have become the most effective solutions for both smaller entities sending several parcels a month and those sending several thousands parcels a day. The revenues of the Shoper group here depend on the number of packages sent using our tools, as well as the final prices of those shipments. As you maybe have noticed, in Shoper we have gathered all the necessary competencies and experience to develop any online business. Our main pillars of activity developed dynamically in 2022, we want to intensify this development for the next year.
So for example, in digital advertising, we are introducing new ultra-modern and top-performing forms of advertising on Google, Amazon, and a new partnership with Microsoft. Above all, we are opening all our forms of advertising to customers from all other platform and beyond under the Shoper Flex Service. In finance and payments, we plan to introduce additional vendors, new foreign payment methods or, for example, dynamic currency conversion management. In omni-channel pillar, we will significantly increase use of artificial intelligence in our software, for example, in the form of GPT-4 chats to generate product descriptions, as well as in advanced sales analytics or processes, other processes automation. In logistics, for example, we will introduce our own courier contracts, new brokerage model, as well as fulfillment services together with our partners.
Just to mention, these changes are only a very small part of our plans to build the competitive advantage of our, for our merchants and the Shoper itself. Thanks to this, we will be able to develop much faster than the market. Marcin already mentioned a small change of our focus to larger merchants, which was visible in the form of nearly 40% increase in average revenue per user in the premium segment in 2022, and will be even greater what we see in 2023, especially since we are also introducing services in the enterprise category for the largest merchants. As you can see here, the chosen directions turns out to be very right, because those revenues are on average six times higher than revenues from standard clients.
This, of course, does not mean at all that we are planning to deal less with smallest entrepreneurs, for which Shoper is very well known and loved by merchants. Still, Shoper is and will be the simplest and most friendly software to run an online store, also for micro entrepreneurs. We can already show today multiple renowned companies that successfully use our software among many well-known producers of tea, chocolates or sportswear. More and more famous brands appreciate our comprehensiveness and credibility. We are currently conducting many negotiations processes regarding the migrations of very large stores to our platform. In the terms of the development of the platform, I will shortly describe our largest IT project, that is the new Shoper storefront.
We believe that stores need to be very beautiful and fast, and that is why in the second half of this year, our merchants, both current and all new ones, will have an access to a world-class graphic design system created both for beginners as well as the most demanding merchants and the IT developers. The main goal here, apart from beautiful templates for stores, is to obtain the most optimized transaction path, and the new storefront will fully support the Core Web Vitals from Google. This emphasize fast and clear online stores that appear on the highest positions in search engines. In the, in this year, we will also take a first big step outside of Poland, because Shoper until now was very national and concentrated on Poland. We started a partnership cooperation with Gomag in Romania.
Our new business partners are the market leader of online stores in this country. In the initial period of this partnership, we will focus on providing digital advertising services to Gomag clients. Of course, we plan to further develop this cooperation based on our experience and know-how. An important element of our strategy started in 2022 and further intensively developed is the online advertising segment, which we call Shoper Flex. Our performance marketing offer is far ahead of what is available on the market and our clients can benefit in it in many ways. We are the only company that can blend virtually all most popular players on the market under one service. This gives a big competitive advantage for merchants. We are able to offer our clients a very flexible and effective hybrid billing model based on success fee.
The new model gives Shoper an access to a much broader addressable market. This will lead to a new stream for revenue and margins, last but not least, it gives us a unique opportunity to quickly establish relationships with users from other platforms, both SaaS and open source. Another strategic point of our development is the official introduction and strengthening of the Shoper Max offer, the most comprehensive service for all businesses combining omni-channel sales, digital advertising, financial and logistic services. Customers will be able to get support in developing their businesses and growing sales at an unprecedented level of quality from a single point of contact. At the same time, there are many benefits for Shoper. We will leverage our product and sales potential, make merchants more loyal by using more services.
This will positively impact the growth of the average revenue per user due to the strong correlation with the generated by our services, gross merchandise value that we generate for our merchants.
Good morning. In this part of the presentation, I will give you a snapshot of our team development. As you have noticed, over the past two years, we have recorded a high employment growth, right? It reached 89% and 52% respectively. These increases were associated with the rapid growth of the business itself, but also by the number of customers and the acquisitions. Most of the 2022 hires were the results of acquisitions we made, Sempire, almost 50 people, and the incorporation of Selium Agency into the Shoper structure. Thus a group of omni-channel and international sales specialists, and also experienced SEO and SEM experts joined the Shoper group. During this period, employees hired directly at Shoper strengthened our key areas, sales and product development.
We are still working on improving the efficiency of individual areas and maximizing the synergy of business and technological processes within the group. That's why at the end of first quarter, our employment rate decreased to 315 employees, and the lower number is related to the first synergies between companies and improvements in the efficiency of individual teams. This decreases does not mean that we will not extend our headcount during the year. If we do this, it will be primarily in the areas directly related to sales, which will also impact our financial results. Our priorities for 2023 in terms of personal policy are increasing the efficiency of our current team and monetizing the investments we have made.
Also, investing in team development directly impacting revenue growth and operating profit, and building a culture that attracts and retains the most talented employees. I want to point out that along with the growth of our team, the proportion of women employed in Shoper Group is also rising, and they already account for 45% of the staff. In Shoper itself, the proportion is even higher, and now it is 51% of employees and is increasing yearly. In 2021, it was 46, and in 2020, 42. Also the representation of women in the managerial staff is stronger, and it is 35% women, and this percentage is also dynamically growing. Ensuring the diversity of the staff is our priority, and we are approaching this subject naturally.
The primary criteria for selecting our employees are their competence, experience, and attitudes, which guarantees us diversity in our teams. Few words about our ESG strategy. Our company does not produce physical goods, but operating online, we significantly impact the world and the people. That is why the pillar of our ESG strategy is education, which enables us to change the world around us, both in micro scale, meaning our employees, and macro scale, our merchants and the environment. In 2022, we launched 2 major educational programs for our employees that develop their technical and soft skills. In terms of activities for our merchants, we launched, for example, ESG Pays Off webinars, which touch upon issues connected with balanced business development.
During these webinars, we discuss market trends and regulatory changes and show some inspiration to our merchants. We are also very attentive to social issues and what is happening in our environments. That's why we actively supported our friends from Ukraine in 2022. We prepared a special offer for them regarding our services, also we offered technical support in Ukrainian. What is more, we donated to a non-profit organization that supports those affected by the war in Ukraine. Few words about ESG in 2023. We base our ESG strategy on the United Nations Sustainable Development Goals, which assume social responsibility in 17 areas. In the coming months, we are going to focus on the following three goals.
Good quality education. In this area, we are going to continue our educational activities aimed at our employees and managers in soft and technical skills. Also, we are going to create the best e-commerce, nonprofit and commercial training programs for our current and potential customers. Another two goals are responsible consumption and production within climate action. As a part of these activities, we are going to educate our merchants and consumers on how to run sustainable business and show how activities related to logistics can have a direct impact on our climate and environment.
Good morning, good afternoon. This is Piotr Buczysko speaking. Let's take a look at the final financial results of 2022. Let's start with the results of the last quarter. 2022 year ended with historically record Q4 results. The value of orders placed by store customers on Shoper platform, represented by GMV of stores, increased by 14%, and GMV of all sales channels provided to merchants by the group, represented by GMV omni-channel, grew by 16%. In both cases, exceeding the level of PLN 2 billion. That all despite unfavorable economic environment in Q4 in Poland regarding the situation in Ukraine, as well as high energy prices and inflation. Recall GMV also supported the growth of take rate indicators.
Take rate of stores reached in Q4 1.71 and omni-channel take rate reached 1.55% level. Let's move on the Q4 revenues. Revenues in Q4 was also record high, reaching nearly PLN 37 million with growth of 37% compared to the last quarter of 2021 year. At the same time, both segments' sales grew rapidly. The solutions segment continued to be a strong growth driver, reaching more than PLN 28 million, with 45% year-on-year growth rate. Revenue of the subscription segment increased by 16%, reaching PLN 8.4 million level. The share of the solutions segment in the last quarter of 2022 reached 77%, growing by 3 percentage points compared to the Q4 of 2021. We look now at the group's profitability.
We had record quarterly adjusted EBITDA of nearly PLN 13 million, with growth of 39% compared to the last quarter of 2021, highlighting the company's very strong Q4 performance. It allowed the company to achieve almost 35% adjusted EBITDA margin. This performance was significantly influenced by keeping costs at the Q3 level and traditionally highest sales in the last quarter of the year. Let's briefly summarize the Q4 results. The highest revenue and adjusted EBITDA in the company's history in Q4. High profitability despite difficult macroeconomic environment, and record adjusted EBITDA, and also adjusted gross and net profits with year-on-year growth of 24% and 25% respectively. Let's turn to the group's annual financial results.
Despite the outbreak of war in Ukraine and its negative impact on the economy and consumer behavior, the GMV of stores on the Shoper platform increased to a record level in the company's history of PLN 7.4 billion, growing by 29% compared to 2021. The GMV of omni-channel, so value of orders in all sales channels provided by the Shoper Group increased to PLN 8.2 billion level compared to PLN 6.4 billion achieved in 2021, with growth of 28%. 2022 was also a year of continued growth in take rates. The take rate of stores rose to 1.66, and the take rate for all sales channels represented by GMV omni-channel reached 1.51, both with strong growth year-over-year. Turning to revenues.
Shoper Group reported record revenue of PLN 123 million. This is increased by 55% year-over-year. This dynamics was only mainly supported by the continued growth of the solutions segment, which revenues increased in 2022 to over PLN 92 million, achieving a very high dynamics at 63%, twice as high as also high the revenue growth of the subscription segment, which grew by 31%, reaching exceeding PLN 30 million level in 2022. The solution segment's share of revenue increased to 75% from 71% a year ago. We take now a more detailed look at the growth dynamics within the Shoper Group's four pillars of development mentioned a while ago by Paweł. Advertising services and financial and payment services were significant growth drivers for the solution segment in 2022.
Both of these pillars recorded very high growth rates compared to 2021 of 76% and 60% respectively. The stores and multi-channel sales pillar developed very well, maintaining almost 30% of growth, and logistics also developed excellent growth of revenues, up by 14% year-on-year. The dynamics of the group's main pillars of growth confirm the accuracy of the chosen growth strategy in the product area and confirm its consistent implementation by Shoper. Let's move on to review the profitability of the Shoper group in 2022. The group achieved nearly PLN 39 million in adjusted EBITDA, and this was no surprise here, I suppose, the highest result ever. Adjusted EBITDA increased by 24% compared to 2021. Margin of adjusted EBITDA was over 31% despite significant investment in staff development in couple of last quarters.
Let's summarize the main results achieved in 2022. The year ended with historically recorded results. Revenues exceeded PLN 123 million, growing by more than 50%. Also the basic profitability indicator, which is the adjusted EBITDA, reached historically highest annual results of almost PLN 39 million and growth of 24%. In order to clean up the other result indicator from one-time events and non-cash costs related to incentive programs, we also introduced adjusted versions of gross and net profits. In addition, in 2021, we deducted here additional additional price for the sales of inSait, which took place in the middle of 2021 and brought to the group one-time profit of PLN 10 million.
In 2022, profits increased by 6%, reaching over PLN 27 million at the gross level and just under PLN 22 million at the net level. Quick look at cash flow. In 2022, the group generated PLN 34 million from operating activities. The main capital expenditures included investments related to the 2022 acquisition of SEMPIRE and Selium, as well as the settlement of portion of the payments related to the 2021 acquisition of Shoplo and Apilo. Remaining investments expenditures regarded mainly the development of the group's IT platforms.
Dividend payment and flows related to the loan to refinance the SEMPIRE acquisition, including part related to its early repayments, had the main impact on the flows from financing activities. This was a summary of the final financial results of the Shoper group in 2022 year. Piotr, for describing so great results from 2022. In the next couple of slide, we will share with you also some view on the market in 2023, especially we are after 3 quarters, and they were looking very optimistically. Let's start with the market outlook because we live in so interesting times.
We are taking an optimistic, but also very cautious view on the development of the e-commerce market in 2023 in Poland. We know that the value is mainly driven thanks to high inflation. We expect the market value growth will be high single digit. Of course, it depends largely on the level of inflation here in Poland. We also observe the interest of many e-commerce players in M&A. Market consolidation process will be continued. It's for sure. We want to be an active, but mainly smart participant of the market consolidation, so we are in discussion with many players, with many competitors. It's too early to share with you what can be the final stage of these open discussions.
We also expect that some e-commerce providers or some e-commerce platforms will slow their growth by not keeping up with the market leaders. We see and we observe that the role of market leaders will be increasing. Again, our view is very optimistic on the next couple of quarters. In the same time, we see that we still see the impact of war in Ukraine or some troubles of the whole European economies. We remain optimistic about our growth in 2023. As you see, we want to achieve GMV growth 2 times faster at least than the market. Our revenue should be 2 times than GMV, we will continue the rapidly expand our offering based on mainly pay-as-you-grow model, like services from segments like digital ads or logistics or finance or omni-channel.
We expect to further improve our take rate due to better penetration of value-added services among our merchants, like payments or logistics. Costs will remain under control, we know that our CFO is taking care of it. We assume that the EBITDA margin will improve next couple of quarters. We see better results in Q1 of 2023 and very good perspective for the next quarters. We are very pleased with the results achieved in December, January or February. We are also pleased with the March results. Of course, we don't present today results from March because we finished the quarter, this quarter just 4 days ago. We are very pleased with the rapid growth in revenue and adjusted EBITDA, we are again growing, like in the pandemic.
GMV is growing by stable 15%, we expect that GMV will improve its growth in the second half of the year thanks to improved consumption. What is very important on this slide, you see that we present very high growth of EBITDA. Let's look on February, 40% year-over-year. In this very specific, very challenging environment, this is really great result, and we are very satisfied with revenue growth. Last two months, you see that this is very stable, over 30%. We still have a chance to attract new merchants to the platform. We still see many potential to sell more services to our merchants or to grow with them and accelerate their growth.
To sum up 2022, we can say great financial results, the best in Shoper's history. We are extremely proud of that. We know that this is great foundation for the further growth in the next couple of years. What else? Very rapid development of product offerings in all major categories. What Paweł presented on today's presentation, hundreds of new functionalities implemented into the platform, dozens of completely new products available to our merchants. We have something like one-stop shop, of course, specialized in e-commerce. We address absolutely most of needs or expectations of merchants existing on the market, not only on the Polish market, because what we shared with you today, we also make first step into Romanian market.
Our offer is for sure the most comprehensive e-commerce offer on the market. What else? Unique partnerships and unique acquisitions. The great examples of partnerships are of course, you know, partnering with Alibaba or Microsoft. You know these brands, you know how strong they are on the market. We also partner with some local leaders, like for example, Wirtualna Polska, the most popular horizontal portal in Poland, we cooperate with them. We use their digital ads platform to generate traffic for our merchants. Again, we had two great acquisitions, SEMPIRE, to be stronger in digital ads market, and Selium, what is very unique, and this is real advantage in comparison to any other platform on the market.
Thanks to access to over 30 marketplaces across the whole world, we address, or we can meet ambitions of our merchants to sell some goods abroad. Thanks to that, we make them stronger, and for them, Shoper is even more comprehensive than in the past. Strong cost discipline. We keep costs under control. You know that the market creates some pressure on salaries, on external costs, we manage, you know, this layer, I can say, in perfect way. How we look at the current year after first two months of 2023? After the strong start of the year, we stay optimistic. I can say, you know, we stay very optimistic.
We still want to grow significantly above the market, so we want to continue investment in the development of product offerings, in particular digital ads, financial and logistics service, services, and of course omni-channel, because we still see high demand from the market and we see that some merchants, they are open to invest more, they are open to, let's say, be more brave with investments and we want to meet their expectations. We will continue to focus on developing larger clients and mainly premium services. The great thing is that this time no longer only in Poland, because again, we will have very soon the first step on the Romanian market, very prospective.
Thanks to partnership with Gomag, we will be able to sell more to new group of clients and to be, let's say, smarter selling abroad. Summarizing a great 2022 and very optimistic view on 2023. Thank you for listening our presentation. Tomasz will share with you our calendar for the next events in the next couple of weeks or quarters. Then, of course, we will be at your disposal for Q&A session. Thank you.
The schedule of meetings with investors in the near future, just in three weeks, we will publish the results of the first quarter, 2023. We would like to invite you this conference. We also encourage you to contact us directly if you have any questions or would like to talk with the Board. Now let's move on the Q&A session. To ask a question, please mark a button with a raised hand. We'll give you a voice or send it through Q&A panel.
We see that we have the first question in chat. The question is of course to Piotr, our CFO, because it's about growth of net income.
Why net income grew only 6% while EBITDA grew 24%?
Of course, in adjusted EBITDA that we are presenting as a main KPI indicator, there is a major difference concerning additional costs that are, as mentioned, non-cost motivation programs. In this 6%, please remember that we invest a lot in our platforms, and there is also other growing up amortization and depreciation.
On that side and also we acquired SEMPIRE, we acquired Selium. They have also impact on amortization and depreciation part, while of course we identify assets on those acquisitions. This is like a major point increasing the amortization level. Stefan, please go ahead.
Yeah. Hi, thank you very much. Well done. Congratulations on the results. We've noticed that profitability has been increasing and it seems that this is something which you focus more on now. In the past you've been somewhat dismissive about the market wanting profitability too fast and kind of saying, "Well, we should grow." Is there a change in mindset there?
Actually, you know, we planned to prepare the foundation for the growth of the company. Please remember that Shoper is very fast-growing company, and was completely in the different point in 2020, just had a year of debut on the Warsaw Stock Exchange. What we identified that we need the resources that will enable us to grow in the future. You know, keeping in mind that in today's economy, fast moving is absolutely the necessity. We had to act fast and that's why this growth of our staff was so fast. Of course, in this growth, also me, Paweł, Ania, and also Marcin joined the company. So that was some kind of planned.
We planned to achieve the level as fast as possible to ensure that all market opportunities we can address. As we earlier said, more or less in the middle of 2022, we reached the point where we had this basis for the development prepared and reduced the pace of growth in terms of hiring. This is simply the result of that. Also, we are much more focused now on utilization of those resources, on ensuring that they're efficient and that our expectations that were accompanied to those hirings were met. This is actually the result why now it, there is no major growth and actually predicted fall of headcount in Shoper.
We still are focused on development of the company and in case there will be a chance for growing in any product part of our portfolio, we'll definitely go there. Of course, we will do it keeping in mind that the cost and this investment must have return.
Mm-hmm. Understand. I mean, I think you implied mergers and acquisitions there and also in your report you mentioned that kind of smaller players might be forced to engage in M&A. Is there something which might be imminent or is that more of a theoretical thought to this stage?
We can say that, you know, many players are very open to be sold or to be merged with, for example, Shoper. Again, we are focused, when we look for something or for someone interesting on the market, that it should be like, you know, missing puzzle. We don't want to create internally some pressure that we are obliged to purchase something or to invest in something. Because we see still a very high potential to grow organically, and this is the main goal for each of us. Of course, if we see some chance that, you know, we can, you know, meet with some attractive valuation or, we see some obvious synergies, we are open to discuss and potentially to finalize something.
This is not main goal for the next quarters and maybe in addition to your first question, of course, we are still oriented on the fast growth of our business. In the same time, we're always repeating that we try to combine.
Very or high speed growth in, and in the second layer, we are, let's say, some conservative company, focused on generating cash. You know that the cost of money today on the market is absolutely incomparable to what we.
Mm
... have seen, you know, few quarters ago. The style of managing of Piotr, but also the rest of the management team, is that we want to keep this company as very stable company and very predictable company.
Mm-hmm
We believe, and this is our track record, that this is achievable to combine high growth, but also, you know, managing this company in very safe way.
Okay, maybe a final question. On Romania, maybe you could say a few words about this relationship with Gomag. I mean, you're at this stage I understand you're delivering a product for their customers, and there's probably some kind of fee sharing for this, right? Are you, I mean, can we expect that more than this happening, you're taking a stake in them or something like this? What should we expect, yeah?
For the time being, no. Although there are some relations on the from the part of ownership, because the same fund also owns a bit of Gomag and a bit of Shoper, so this is how we met maybe.
Okay
From this perspective, not yet any kind of talks about, you know, mergers or acquisitions. We just want to, you know, introduce a very powerful product on Romanian market and earn fees together, Gomag and us.
Mm-hmm.
We are not fall in love in, with Gomag, not yet. We provide platform and some technology or some technical capabilities for them, but as Paweł mentioned, nothing more on this stage. We will see what happen in the future, but of course we like them, but nothing more.
Okay. Perfect. Thank you very much.
Thank you.
Hi, everyone. Is there a way for me to turn my camera on or is this audio only?
I don't know.
Gomac?
Yeah, I think you now can.
In the meantime, I guess you can ask us about.
Okay
almost everything.
Okay. Three questions. Starting with the shift or the pivot of strategy to bigger merchants. If I understand correctly, with smaller merchants, the sales funnel is such that they find you, whether it's through word of mouth or your commercials.
Mm-hmm
... anything like that. What does that look like for larger merchants? Are you trying to switch people away from IdoSell or from an open source competitor, or from something else?
Yes.
Do you source them in a different way?
No, basically, larger merchants that we incentivize, of course, they are somewhere else and we gathered a bundle of services that look very attractive for them. This is a little bit of a mixed pitch that we built a lot of knowledge and a lot of content that incentivize to think about their business from the, let's say, different angle. Of course, we also are building salespeople who directly contact those merchants and just incentivize to talk a little bit for free at the very beginning to see how many different opportunities are there by using Shoper or what maybe they are missing from the perspective of using existing platforms.
The sales funnel is a little bit broader, a little bit expensive of course, you know, the lead generated costs us a little bit more. Still, the profitability of those customers, when they come to us they don't start from the very beginning. They already have customers, they already have GMV, we can offer them a very, very good offer, still, generating good margins altogether, us and merchants that decides to move to us. From the smaller merchants, we also, we were also the most recognized and most renowned company, whoever starts a business in Poland, thinking about e-commerce, we had our own, you know, analysis of that.
More than 50% of people who start a e-commerce business in Poland, they start with Shoper, it won't change. We have lots of, you know, content. We have lots of videos, instructors. Our software is very easy to use. These are the advantages that still small merchants will be starting their business on Shoper. It's just the focus that we go a level higher because we feel confident that also for the bigger merchants we can deliver a very good value and, you know, strong relationship.
Additionally, we don't do any custom-made integrations.
Mm-hmm
... we cooperate closely with some agencies or partners of Shoper to create something unique for selected merchants. You should know, and you should remember that we use the same e-commerce engine and we use flexibility of the platform to meet some merchants' or some prospects' expectations. I think thanks to that, thanks to this approach, we can show better margin in comparison to some players who operate like more integrators than SaaS platforms. We don't compete with Magento or even Shopware because we cover a different part of the market. Of course, we produce some functionalities or some
We prepared some new products to meet some needs of this group of customers, but again, we use the same platform. We use flexibility, high flexibility of this platform.
Understood. Just a clarification on the, on the headcount reduction, the sequential headcount reduction. Is there a seasonal element to that whereby you may have some temporary employees in Q4, or is it completely like for like?
We don't have temporary employees at all. This reduction was connected with the synergies we have made after the acquisitions. As I mentioned, it doesn't mean that this headcount will stay on this level for the next few quarters because we are focusing a lot on sales and probably we will invest in Salesforce in the few next months.
Of course, it's connected purely with the situation of the market and our growth. You can imagine that, you know, the number of employees in next quarters can be higher, but also can be lower. So as Anna mentioned, this is effect of synergies we found after acquisitions, mainly SEMPIRE, Selium. We are focused how we can improve our efficiency, how we can generate more money or improve some KPIs in the company. We don't have any, you know, massive layoffs in the pipeline, so nothing bad happens. And again, we stay optimistic.
I guess, related to that, on capital allocation, are there any, do you see any gaps in the portfolio in the way that you identified, Selium, SEMPIRE as two vertical services that you could bring in-house, or do an acqui-hire or whatever you wanna call it? Is there anything else that is sort of obvious from your perspective that needs a bit of a boost through acquisition or no?
Paweł, go ahead.
Well, we, of course, we observe the whole market and what really, you know, sticks to us, we are in some, you know, discussions, but maybe not, it's not a great time to reveal this. You know, there are many things that we actually right now feel confident to even do it internally. Like, for example, we see that the direct competition is, you know, weak enough that we are stronger by, you know, poaching their merchants on other platform to come to us than rather buy just a company. Because, you buy a company, but you, you buy also some problems that this company had.
That's why we see more opportunity by even, you know, maybe not buying all the merchants, but incentivizing, you know, 20% of the most lucrative ones, for example. This is from the perspective of direct competitors. From the perspective of the product, we managed to introduce many, you know, new cool products, all with partners or by ourselves. Now we are more of testing or, you know, introducing our own products into the platform. Still there are many business opportunities that we see, but we are not sure if we invest or if we partner up right now. There is a lot of fuss, you know, around AI, but there are many, you know, fake companies inside it.
We are, you know, looking where to introduce some kind of, you know, cool algorithms that, you know, supports, you know, growth of sales or, you know, speeds up the business process or content creation processes. This is where we put them in, directly into the platform, which seems, you know, even more logic than buying such a company, for example. We have some, you know, ideas inside. Nothing that would, you know, strategically change the whole, you know, portfolio and four pillars that we have for the time being in Shoper.
Yes, but directly answering your question, of course, we see many gaps in the portfolio as always, because, you know, this is normal situation, thanks to high, you know, pace of changes on the market. In some cases, we should be very patient because, you know, from time to time, we are extremely excited because we see something new on the market or something innovative. Next 3 month, it's You know, don't alive, it's still don't alive, so on the market. We manage our portfolio carefully. As Paweł mentioned, we cover, I can say, 95% what is available and what is important for our merchants and what can accelerate their growth.
From time to time, we should add something. We are very strong in this field, because again, last year or last couple of quarters, hundreds of functionalities added to the platform and dozens of new, completely new products added to the platform. We are for sure on top of the market, you know, adding or managing a portfolio of e-commerce services. From time to time, we should be patient because it is quite easy to burn money, being too innovative. We observe right now, you know, hype with AI and dozens, hundreds or even thousands of new functionalities, platform services products.
Finally, we should have, these kind of products on the platform to help to grow, to make, you know, higher growth of our merchants. This is always question mark, how to manage it.
Thank you very much.
Thank you. Oh, have you got more questions for us?
The very last moment. Okay. Oh, we have additional question.
Yes. Hi.
More questions.
Hi. Marcin. Thiago here. Just wanted to ask a quick question on the move, moving up the ladder in terms of the size of the clients. It has been in the past, let's say, a common, I wouldn't call it a complaint, but a reservation from the smaller clients that as they grew, Shoper didn't follow through with them, and they would have to move to other platforms. I understood that you addressed that for the smaller clients, and then the company moved up the ladder now and is prepared to address even larger clients. Those clients, though, have very similar feedback to the, to the smaller clients, but obviously they're bigger.
Are there limits to the type of services that you're providing the current new set of clients that you would have to invest on in the next couple of years in order to then, let's say, be as comprehensive as your rivals in the market for that subset of clients?
Well, of course, moving up the ladder, like, made us, you know, to, you know, change a little bit of our service directly to the merchants, but also inside of our tech. Yes, that's true that you maybe remember that there were some customers that they met a roof in Shoper in our development that they wanted to change. We moved up this roof by a couple of floors, I would say. This is what changed in the, in the company, and I think we are much more ready, especially it's not about the tech, but also about, you know, the whole environment and being able to connect to external, you know, softwares of accounting, warehouse, managing systems.
This is what we change a lot, and this is how we made an evolution of our software. For the bigger merchants, we just, you know, created, you know, premium support, additional. This was a little bit of our investment and we just, you know that the merchants that grow can grow very, very, very high into, you know, millions of PLN GMV generated per year by one single merchant. We just assume that we will be stepping much, more brave, maybe more brave into the field where we haven't been before, but we don't resign at all from, you know, what we are now.
Understood. Understood. It's, did you see a dramatic reduction on the churn of the smaller clients that would, let's say, reach a ceiling at Shoper now that you were able to perhaps cater to more of their needs? Do you see them not looking to exit Shoper anymore?
Well, we have very, very low number of merchants that churn in the, into another platforms. That's a very low number. That's, it happens of course. There are some, you know, even sometimes, spontaneous decisions or, for example, a store is being acquired by another, company, and they are, you know, forced to change into some kind of software. It happens from time to time. For the time being, it got lower even, so that's good for us. Like 98% of the churn that happens in a, in Shoper, it's, I call it, an eternal churn, so they don't continue running an online store at all.
Understood. Very good. Thank you.
Thank you.
Yeah. Hi. Maybe, trying to get a bit more, I mean, color on. You're showing January and February data, which looks pretty good. Is that what would be representative for the rest of the year, or how should we think for the coming months? What kind of difference to what we see on the January and February numbers should we kind of think about?
I don't know what I can answer after you mentioned that it was pretty good results. You know, improving EBITDA by 40%, it's very nice growth. We can say that we are in line with our plan and what we planned in our budget. Of course, we operate in quite challenging environment, or let's say crazy times, and of course, the Polish economy and Polish buyers, they are affected by high inflation. Of course, it's quite hard to predict something, especially if some companies they try to do the same what they did in the past.
I think that we have very optimistic view on the next couple of quarters because our business is driven by new business, but also thanks to great cooperation with merchants and we accelerate their growth. We have quite nice growth of GMV. They are open to invest in new services. You see because we presented growth in 2022 divided into some categories. We still see high potential, for me, mainly in logistics because we start with from quite low base. We stay optimistic, I can say, because, of course, there are a lot of challenges on the market, but you know us, we are ambitious guys, everything is possible, of course, in positive way.
Okay. Thank you for that. Maybe one more and final question I always ask you that, how do you feel about the stock price, right? I remember first time it fell below PLN 30, there's a lot you guys mentioned that, yeah, this is a very low price and maybe some, maybe, it does incentivize some of employees to buy shares and all this, right? And obviously until very recently I've looked at you. The last week, you've been below PLN 30. Today actually you crossed the line again, which I think is pretty much which I think is maybe due to the somewhat better profitability than what some people were expecting.
How do you look at the stock price going forward?
You know, I see right now plus 5%. We are satisfied after two conferences, with reaction of the market, what we share as a perspective for growth. Being more serious, of course, you know, we see that we have very strong foundations in the company. We know what we have in the pipeline, when we're talking about, you know, upcoming projects or new products, we plan to show to the market. We are convinced that it will be connected directly with the share price.
Because of course we are affected by, let's say new approach for tech or e-commerce companies, and most of them, absolutely most of them, they lost something in their shares last couple of quarters.
Mm.
We are mainly focused on, let's say deliveries on our side. You see that we improve results quarter after quarter, and we believe that we see effect of that in share price. We don't know, of course, that it will be visible next couple of weeks or quarters or maybe years. We are young, we are patient, just stay with us and you will be satisfied.
That's very funny. How old are you guys actually? What is the range?
I can share with you know, because I'm just after my, you know, birthday, so I'm 47.
Oh, happy birthday.
Thank you.
It's You know, I just ask because I just turned 50, end of last year.
This is the perfect time.
I guess I can still consider myself also young, I think.
I can say you this is perfect time, the best one in my, in my life, and, you know, as you see, I have great companions. So, absolutely-.
So-
I'm satisfied.
... I'm quite close to you, Stefan. I will turn 49 this year.
Okay. Great. Good.
I'm the youngest. I'm the youngest, 42 this year.
Okay.
You, you know, Stefan, it looks like, you know, range of our growth for this year.
Mm
you know, I guess, and I believe that we will be closer to Piotr than Paweł, but let's stay optimistic.
This is where the targets come from, you know?
Mm.
Mm.
No, it's good to have a lander as well. Thanks. Thanks a lot for this, really appreciate.
Thank you too.
Thank you.
Okay. If there are no more questions, we will be finished. I remain at your disposal, and thank you for your presence at conference. Thank you. Bye-bye.
Thank you.
Thank you.
Bye.
Thanks.
Thank you. Bye-bye.