Bally's Corporation

Ladies and gentlemen, thank you for standing by. I am Yota Yokoro's call operator. Welcome and thank you for joining Allegro Group earnings call and live QEPTUS to present and discuss the four-quarter 2024 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. Thomas Posniak, Investor Relations Director. Mr. Posniak, you may now proceed.

Thank you, Yara, and welcome to everyone on our call. Let me introduce the presenters of today. Roy Perticucci, the CEO of Allegro, will provide you with the overview of the full year and fourth quarter business highlights. And John Istik, our CFO, will guide you through financials and the management output. Roy will conclude the presentation with key takeaways. As usual, our results presentation is available for download from our investors webpage at Allegro.eu. You may also download these slides from the link available on the webcast screen. As a reminder, today's presentation and discussion contains forward-looking statements. Our actual results could differ materially from the expectations expressed in the 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 a replay on our website at allegro.eu. And with this, I would like to hand over to our CEO. Roy, the floor is yours.

Thanks very much, Tomek. It's my pleasure to present to you for the third and final time as Chief Executive Allegro the annual results, this time for 2024. Before I kick off with the presentation as a whole, I should say that remind all of you that I'm stepping down as the CEO at the AGM in June, and I'd like to confirm again here that the process is well advanced, and every step is being taken to ensure that a new CEO will be nominated in time for a smooth transition. Now on to the annual results highlights for 2024. We crossed the $60 billion Zloty threshold just in time for our 25th anniversary in early December of last year, and we closed the year with an overall $64 billion GMV for the group. GMV grew overall by 9.6%, revenue by 6.7%, and adjusted EBITDA grew by 17.9% to around $3 billion. CAPEX, as we promised, would do, inflected last year and increased by 31% and ended the year at $600 million. Overall, the EBITDA performance, I think, reflects overall the margin progress from advertising growth and continued work on Fit2Grow with some of those savings fully annualizing. The quarter, on the other hand, also delivered very good results versus our guidance. We hit or exceeded all the metrics, with the possible exception of GMV, which was just underneath our lower end of 11%. We delivered 10.9% for the year. That said, I should remind everyone that's a full 2.5 percentage points higher growth than the year-on-year to the end of 2023. So I think some of the concerns that some of you voiced about shopping frequency and conversion did not materialize in the last quarter. And I think that's reflected also particularly in the very strong Polish performance. Overall, we outpaced the retail demand as a whole by two and a half times. And the average annual spend per buyer in Poland exceeded around 4,000 złoty. So overall, quite strong growth. You see here the numbers in terms of active buyers growth, plus 6% for the group, plus 2.8% for Poland as a whole. Very robust improvements, 33 basis points for take rate, and the arrival of advertising income to 2 percentage points of GMV. So very good. I think overall we're reasonably pleased with some of the progress. On terms of EBITDA, I think the lower margin for the quarter at 5.61 reflects one, a seasonally lower take rate for Q4 and marketing investment that rose to 2.8% of GMV. That's 50 basis points up year and year, reflecting increased spend on offensive and defensive activities. I think fundamentally, ladies and gentlemen, we've developed a cash generation machine here in Poland. And John will talk more about this later. By this point, you should be very familiar with our multi-year priority framework. We tuned it, I think, about this time last year. But overall, the priorities have been the same. And I will take you through these one by one. All of them should be, to some extent, familiar to you already. First of all, in terms of easy and safe to shop, simple to sell, we've had very healthy growth in our priority segments of supermarkets and health and beauty, which continue to grow at twice the overall Polish GMV grade. And I think we can be very, very pleased with our performance at Christmas. 99.9% of Christmas orders made it to customers in time for Christmas. and that with a record late Christmas cutoff, which was at 11 o'clock on the 23rd. So I think that actually contributed to some of the uplift in the quarter. And our selection, now we express the products, sorry, we express selection in terms of products is driven to a full 100%, and we have a fully productized view in all our marketplaces. Customers continue with their loyalty. We've reinforced the smart programs in a number of ways. The smart user base is 8.3 million for the group and 7 million in Poland. So robust growth in smart leadership also outside of Poland. And purchase frequency, that all-essential measure that drives all of our GMV uplift. Shopping frequency went up to 22 days. That's up 6.5% for the year. I think one other thing that excites me personally as the chief executive is not only the fact that our ranks of merchants have swelled to 163,000 on the Polish marketplace, the place that's up 10% year and year, but the concept of list once and sell everywhere is being embraced, not only with our experienced Polish merchants who are selling increasing numbers on our marketplaces outside of the country, but also the growing interest of merchants in our newer countries where we've seen an increase, a very strong increase, and particularly enthusiasm given some of the performance of merchants operating in smaller countries gaining access to Poland. We see that many of them have more than doubled the turnover or the GMV outside their home country as they do on their marketplace in their home country. I think it's just showing you that as we have effectively a single marketplace spanning four countries, that there really is some power for growth. Speaking of growth, advertising growth continued to accelerate at 31.3% year-on-year for the quarter. And it's clear to us that there's much more headroom to grow this income stream, which flows straight to EBITDA in the coming years and quarters. We've done a lot of things, I think, to make our traditional products more appealing to merchants, giving merchants more transparency about what return for investment they get. And we're also moving up the funnel of advertising, sort of the mid and upper funnel is what we call it, in terms of advertising that is more focused for awareness and consideration. Awareness and consideration ads are particularly attractive to brands. we believe is another growth segment. And adding to that, of course, is we are using our buying power from marketing off our marketplace and passing that opportunity to buy at more effective rates to our own merchants who want to drive attention from customers not on our platform to make purchases on our platform. So a trend that you've seen for quite a while now We do expect that as revenue growth is going to continue to outpace GMV over the medium term. Allegro Pay also goes strength from strength to strength. We had some debate internally about whether we should actually stack rank us against banks in terms of loans origination. We decided not to share that with you. But overall, I think we are amongst the leading consumer lenders in the country. loan generation over the past two years has grown at a steady 41%. You see that in the middle graphic there. And that's despite the fact that our loan book on our own balance sheet has grown decidedly less than that and is now only at about 500 million Zloty. Of course, one of the key reasons why we wanted to do lending to begin with was this effect for GMV. We've increased the lending limit to 9,040. The enhancement of lending, of course, drives the GMV finance, which has grown by 37%. There are more products on the way here. We have already launched the Visa card, Allegra Pay Visa card, which gives further flexibility to consumers who want to use it and are finding various ways to apply AI to make more and more savvy lending decisions. So before I move on to the next slide, I'd like to say a few words of introduction. I think the key thing is it has always been a topic of questioning and interest of this group about what our plans and logistics are. And I think we can say at this point that we've made some really profound changes to the way we manage the mix, the way parcels are delivered to customers. We now manage just under a quarter of total volume that we originate via our marketplace under our own ship methods. We have two major ship methods, one for two-door delivery into out-of-home, and I'll get to that in a second. The first thing I would say is already in Q4 of 2022, we started playing with a key lever to shift volume from higher-expensed two-door or home delivery to less expensive out-of-home delivery by shifting the minimum order of value from 40 Zloty for both to 65 and 45 for home delivery and out of home respectively. And you can see this in this slide, in the overall mix between two door and out of home, the green line shows how we've made steady progress of convincing more and more customers to use Kudos and lockers. So that's been, I think, one of our early accomplishments. The brandless courier is the simplification both for merchants and for consumers. We take away all the complexity. All of our merchants in Poland are signed up for Brandless and consumers now have a very simple choice of do I want it to be delivered to home or do I want it delivered out of home? If I want it to be delivered to a particular address with the Brandless courier, the customer simply puts in their a delivery address and we take care of everything else. This gives us an opportunity then to optimize the flow of parcels via whichever courier offers the best combination of speed, reliability, and choice. And you see that in the top part of the graph on the right-hand side, since we introduced it in about Q1 of 2024, that an ever-increasing chunk of two home deliveries are now being moved via Allegro, excuse me, by Brandless. We have a similar product for out-of-home. We call this Allegro delivery. Again, this is a simplification both for merchants and for consumers. Merchant signs up for the ship method, and consumers simply select whatever participating locker is most convenient for her. And these are currently... is a service that we first started with our own delivery network. That is the green portion of the slide. You see over time we have steadily increased the amount of volume flowing over, effectively the same number of assets. And once Orlan Paczka joins, we could also shift some volume to them. We expect both of these shares to slowly grow over future quarters. We're very pleased and we've already announced that DHL has also joined Allegro Delivery. So it means that we have more and more choice, at least for the volume that flows via our ship method to arbitrate between the best curry that offers the best combination of speed, reliability and cost. And that discussion of managing volumes flows through, of course, to our costs. If you're running decidedly higher volumes and VOLUMES HAVE INCREASED ALMOST TWO TIMES, ACTUALLY OVER TWO TIMES OVER THE LAST YEAR. IT MEANS THAT UNI COSTS DECLINE MARKETLY AND YOU SEE HOW THINGS HAVE DROPPED DECIDEDLY IN THE 22 TO 24 TIME PERIOD. WE ARE NOW PAYING OR THE COSTS THAT WE HAVE PER PARCEL TO DELIVER IN OUR OWN CAPABILITY ARE RAPIDLY APPROACHING what we pay for our most expensive alternative, and we expect to actually get well below that in the course of this year. Again, I think the lesson here is not to over obsess in what we're investing in our own capability. The point of the exercise is to generate choices amongst the volumes that we manage to get to the place of the best combination of speed, reliability, and cost. But you see in the lower end that actually there are now multiple options that are all cheaper, particularly in APM deliveries that are below what we currently pay to our most expensive supplier. So I think that's I think the key things in this area, I think the really attractive thing is that I think all of the participants in both Brandless and in Allegro delivery are looking for volume. They've made sizable investments. And now it's a question about how can we actually optimize to maintain or improve speed while continuing to make progress on unit costs. And that, I think, is reflected in the graph that I'm showing you right here. There are now an increasing large number of alternative or choices in terms of networks. All of the major players in Poland are making investments in Poland. And frankly, almost all of them are opening much larger networks than we are. And I think that's good for us. It reduces our own investment requirements. And you can see of the three participants in Allegro delivery, We have a total of 16,000 lockers to choose from, which is roughly where InPost was in 2021. All of us are, of course, planning to invest further in the coming year. And we really invite any carrier who is interested to participate in the Allegro delivery program. So I think very heartening progress. I should answer at this point that, Our own plans for expansion are relatively modest, probably not more than 2,500 units, always on this philosophy of sweating the assets. I think you can see by focusing volume on the assets that we have, we have gotten much better progress on speed, reliability, and cost, but particularly cost. And we're not interested in building a network that is not being used. So I think That's pretty much the main things we do there. Of course, we are also investing in our back-end networks in terms of sortation and in delivery, particularly in areas that are maybe not best served by complementary networks. We opened two more marketplaces last year, so three in rapid succession in about 18 months. I think we did quite well during Christmas. GMV was up 68%, really, so more than two-thirds in the quarter. And margins also increased year-on-year by about 6%. And that, I think, is without Hungary I'm really quite happy about because we haven't even invested much in the way of marketing yet. As we said, we were doing a soft launch only, and I find that we're being very well received there. In the quarter, we added nearly half a million active buyers in the international segment. So we now have 3.3 million overall. And as I mentioned earlier, 1 million in smart. We also have a large number of merchants. 70,000 merchants from Poland are participating on the marketplaces in Czechoslovakia and Hungary. That's up 12% for the quarter. And the number of local merchants, so the merchants active predominantly in the czech republic and slovakia has grown by exactly a third quarter and quarter and again that's i think something that i'm personally very excited about because of connecting merchants in our catchment area to customers throughout the country the catchment area we serve now a lot of your questions uh uh have been talking have been been about mall And I think mall is really taking shape as a lean merchant. 10% of a marketplace volume is covered by mall as a merchant. We've shut down the physical stores in their catchment areas. We've also retired the CSNC legacy platform late last year, and we're scheduled to shut down the uh, the mall legacy platforms, uh, in the course of this, uh, this coming month. Uh, and, uh, I think overall that means that a couple of things have happened when we will be able to have a, an identical tech stack in all four countries that we're operating. that is supported or run by the single organization in all four countries, which of course has all kinds of operating efficiencies and cost efficiencies to be realized in the next few quarters. I think one last thing to say here is we're going to pause the international expansion for a while. We want to spend a bit less money We want to focus on shopping frequency, that all important metric, and also do various things that we were started to do in terms of trust and building conversion, really refine the model before we expand further. That doesn't detract anything from Croatia and Slovenia. What we have here is already with Mimovor, say a market leader or a segment leader in their respective countries. And so we're in no rush to further expand until we've really perfected things. And we'll review this again in the second half of the year to see where else we may expand. But South is a very successful standalone, and we'll continue from there. So as a final slide in conclusion, something I've already touched on, David Roberts, our CTO, and his team have delivered over the last two years some excellent work in two, I think, quite important aspects. One is we have a full grasp of both the overview and the detail of our development portfolio. We have much better clarity about what these projects are supposed to deliver and, in fact, are much more able to prioritize the projects we do and the ones that we don't do. And that is also visible in the fact that after two years of hard yards, we have moved to a shared tech stack for the bulk of our catchment area. So very good progress indeed. I feel I should also mention that we're using AI in all kinds of areas, starting with improvements coding productivity, providing lower cost support, both to customers and to others, and improvements in sort of selection, sort of search and selection. So overall, I think very efficient in this area. In people and culture and ESG, this is an area that Barry, our chairman, and actually a number of the subcommittee heads have underlined we maintain our full commitment to ESG and in fact also in the principles of DEI despite the changing aspects of the context and I expect that this will continue in the future and we are ahead of time fully compliant in our annual reports and that reflects to the fact I think also that that fully compliant report has reached less than, I think, 500 pages. So very good overall. And at this point, I shall hand over to John, who will take you through the financial results.

Thank you very much, Roy. And hello, everyone. It's a pleasure to be with you today to take you through the financials, particularly focused on Q4. I'm also going to take you through an extended management outlook And I'll also be covering the new capital allocation policy that the board approved earlier this week. So let's start from the Polish operations. The usual KPIs for the full year and the fourth quarter are laid out on the slide in front of you at the moment. And let's start detailed comments with the two key KPIs that drive our GMV for the Polish market. And as Roy has been underlining, the key focus is around driving loyalty and frequency of our customers, which means that the spend per active buyer that you see on the right-hand side of this slide has been the key growth driver for GMV for this year and all the preceding years in the recent past. We did 7.8% year-on-year growth in the fourth quarter. 2.1% progress queue on queue. And we landed on over 4,000 Zloty for the first time in terms of spend per average buyer, which is really an amazing result. We're really happy. When it comes to active buyers, we also had a good quarter, up 0.8% queue on queue, so 15.1 million active buyers on the Polish market, 2.8% on a year-on-year basis. So putting those two KPIs together, that underpins the 10.9% GMV growth that Roy mentioned earlier. That's 17.4 billion zloty of GMV in the Polish market in the fourth quarter alone. And as Roy said, this was 2.3 percentage points faster than we achieved a year ago. And it's been achieved against the backdrop of a second successive fourth quarter growth where retail sales growth has actually been very mediocre. Nominal retail sales growth was around about 3% for the fourth quarter. A year ago, it was around 2.6%. We've managed to grow 2.3 percentage points quicker than a year earlier. We spent a lot more on marketing, as you've heard. We also invested a lot in pricing, in particular during an extended Black Week in November. We also helped ourselves with very, very late cutoff for the Christmas period. So all of those factors contributing to the faster growth. When it comes to category mix, same as in previous quarters, our health and beauty and supermarket categories continue to over index in terms of growth. The average selling price when mix adjusted is up about 1.14 percentage points for the fourth quarter. So showing very moderate progress queue on queue. Whereas the overall is obviously down because of the over indexing of the lower frequency categories. So then moving on to revenue, we delivered 16% revenue growth as usual faster than our GMV growth. And this has been driven by the usual suspects of our key growth generators, advertising, our logistics services, and our fintech business, all growing well ahead of the marketplace. The marketplace grew revenue 14.1% year on year. 10.9% of that obviously coming from the GMV growth. The rest coming from the increase in take rates, which you see on the right-hand side here. Take rate was up on a year-on-year basis, 0.33 percentage points. It landed at 12.01 for the fourth quarter, down from 12.51 in Q3, and that's really reflecting two reasons. One is the usual seasonality whereby merchants tend to exploit the fact that demand is highest and do less promotion of their offers. And secondly, because as I mentioned before, we've reinvested quite a lot of take rate into having really excellent offers during the black week period in November. Let's move on then to adjusted EBITDA. And I think the first key point to make here about the Polish EBITDA is when you look on a full year basis, we've delivered 3.6 billion Zloty and that's up 21.3%. year on year. So phenomenal adjusted EBITDA for this business. When we look only at the fourth quarter, it's an 8% growth rate. And the reason for the lower rate is essentially because earlier in the year, as we mentioned to you, we first of all started to lap most of the increases that we got from the Fit to Grow program, which either improved margins or reduced reduced costs. And we've also, as of Q3, lapped all of the take rate increases that we implemented a year ago, which means there's essentially not much take rate difference, only 33 basis point difference in take rate, as I just described on the previous slide. So that means that the growth rate on adjusted EBITDA drifts down towards the levels we're seeing in terms of GMV growth for the fourth quarter. But it was still 975 million zloty, 7.7% growth rate. And our adjusted EBITDA margin to GMV is at 5.6%, well within the medium term guidelines that we published originally back in March of last year. When it comes to the bridge itself, I think the key point to look at is the cost of delivery. You've heard Roy talking about the initiatives that we've been running around delivery during the course of 2024. The $113 million increase in cost is very low for a fourth quarter. It only represents a 0.23 percentage point increase when expressed as a share of GMV. going into cost of delivery. And the volume growth that we've seen, which is obviously reflecting the growth in our smart base and our GMV growth, has been more than offset here by a fall in the unit cost of per parcel, 7.7% down year on year. It's coming from many sources. First of all, the volume discount agreement that we had with Impost for 2024 in terms of accounting recognition of the discounts that we received were back-end loaded into Q4. And secondly, the indexation of the long-term agreement with Impost under that deal was also deferred until January. So there was no indexation effect in the fourth quarter. But other factors that have also helped continued mix shift away from courier as Roy was describing earlier and also nearly five times more Allegro managed deliveries as we were discussing is also helping on unit costs. So very important and very strong performance on cost of delivery. Moving on then to investment and as you've already heard We're starting to spend more at a typical level again after the year of fit to grow in 2023. CapEx is up 62.5% for the fourth quarter at 161 million zloty. But I hasten to add that's still only 83.5% or as much as 83.5% when it comes to cash conversion. So a very strong cash conversion in this business. Most of the increase is coming on other capex, so physical asset capex, particularly lockers and other delivery-related investments. Also some spending on IT as we consume the capacity surplus that we had back in the times of Fit2Grow. The development expenditure or capitalized development expenditure is up 30%, almost 92 million zloty. We're still investing in the tech team, expanding our capabilities to run projects in parallel to improve the platform. And obviously, tech engineers very sought after, cost more on a year-on-year basis. It's very important to remember that we're going to stay really focused on return on investment, even as the absolute spend increases going forward. Um, we stay committed to sweating the assets as, as Roy said earlier. So that's the Polish operation. Let me move on now and talk about the, uh, international segment and starting with the marketplaces. So as you've heard, we have three operational Czech Republic, Slovakia, and Hungary. And here we actually had a much better fourth quarter than we were anticipating. So we beat our own outlook fairly handily. Great progress on active buyers, up by 0.5 million to 3.3 million. A lot of the seasonal shoppers that hadn't really been seen on the marketplace in the Czech Republic since a year ago returned to us. We're also seeing increasingly a core group of enthusiasts who are starting to shop more and more frequently. And as you've heard, that is really the key focus over the next few quarters is to drive that frequency and thereby drive GMV. Traffic is up year on year for Q4, 75%, 137 million visits across three marketplaces. Active buyers is 110% up at 3.3 million. The spend per buyer is up 22%, fourth quarter to fourth quarter, 500 Zloty in comparison to the 4,000 Zloty we have in Poland. Not bad for only 18 months versus 25 years. Moving on to GMV on the next slide, 68% progress year on year on GMV, 689 million for the fourth quarter. Revenue growing even faster, 79.5% to 66 million. And we still have a lot of headroom in terms of take rates, which are roughly not much more than half the level that we see in the Polish market at this point in time. And adjusted EBITDA in terms of margin also showing really good progress, down six percentage points from a loss of 26.6% down to 20.5% for the fourth quarter of 2024. We're starting to see good progress in terms of cost per click on the purchase traffic, reflecting improving conversion, reflecting brand recognition for the consumers. So very good performance for Q4 in the international marketplaces. Now let me move on and talk about the mole segment. And as you heard from Roy, we're gradually, or rather now very quickly, finishing the transformation to operate Mole as a lean merchant that only sells on the Allegro marketplace. To do that, we've been, first of all, turning off the CZC own shop, and the Mole store is in the final stages of opening. being closed down. So during Q4, there was a lot of sellout activity for the mole inventory. We've also been pruning the selection very aggressively to try and focus in on higher margin items. And as we said in previous quarters, it's important to note that most of the 1P legacy retail sales of the mole segment were after marketing expenses and delivery costs, etc., etc., not really profitable. So the end result of that is that although we deliberately managed down the GMV really to it by 54% in the fourth quarter down to 400 million Zloty, we still only had a similar loss, uh, 41 million Zloty as we had a year earlier. Yeah. So that really underlines the lack of underlying profitability in that legacy, uh, business, the savings that, uh, we've implemented on marketing expenses and SG&A have really helped. And as Roy has been saying, there's a lot more to come over the next couple of quarters. So that's the international business. You have related summaries on the next two slides, and then we get to the group performance. And as usual, I'll limit my comments here to the situation with leverage. We had a very, very strongly cash generative fourth quarter, which resulted in our leverage dipping down even further, ending the year at 0.77 times our adjusted EBITDA. And this is affording for us tremendous financial flexibility now going forward for investing in the business and also applying our new capital allocation policy which I'll talk about in a few moments. It's also worth noting that we ended the year with over $4 billion of cash on the balance sheet. So with that, let me move on from the financials to the management outlook. And this starts basically with confirmation that the medium term business objectives set in March last year and that Roy's been taking you through earlier in the presentation is rolling forward into 2025. It stays fully applicable. There are no changes to this page and we'll be reporting progress against these different priorities from quarter to quarter. Where there are some differences are in medium term aspirations, whereas the objectives say what it is we're focusing on, the medium term aspirations try to give you a feeling for how the financials are likely to look over a five year perspective, so out towards 2020, 2029. And we split these, we first published these aspirations back in March of last year, and we've made quite a few updates following the recent planning round. These aspirations are split into two categories, growth and profitability on the one hand, and then investment guardrails for how we're using the Polish adjusted EBITDA, which is obviously the key source of cash generation for the whole group. So starting with growth and profitability, the key changes are first of all around Polish adjusted EBITDA margin. We're very happy and confident in the progress that we're having in our growth engines, in all three of them, advertising, fintech, and delivery. And this gives us confidence that we can deliver the GMV growth that we're looking for at a higher margin than we had previously indicated. So we've lifted the range from 5.3 to 5.7 to 5.5 to 5.9 in this version of the aspirations. 5.9 was what we delivered in 2024. So we still have plenty of leeway here going forward. Moving on then to our international marketplace rollouts. As you've heard from Roy, we've taken a strategic decision that we're going to focus on accelerating the shopper frequency and engagement in the three existing marketplaces as a top priority. And we won't consider doing any new launches until we crack this topic and we start to see really accelerating GMV growth because our existing active buyers are shopping more and more frequently from one quarter to another. When it comes to the mall segment, as we've described, we're expecting to complete the transformation into a lean merchant in the first part of this year. That should result in year on year losses dropping significantly in the second half of the year and open the way for a fully cash positive contribution to the group from the remaining assets in 2026. The marketplace we expect to break even within within four years from launch, each location separately. So that means Czech Republic by 2027, the others by 2028. When it comes to the guardrails, overall last year, we were projecting to spend 40% of the Polish adjusted EBITDA, 20 on CAPEX, 20 on the international business. The update calls for now an acceleration of spend, particularly on accelerated logistics projects on the Polish capex. So we're lifting the guardrail to 25%. And this is because we have all the foundations in place now to drive mix and to drive down costs at Allegro One. And when it comes to the international marketplaces, We're over the peak in terms of requirement, 15% we need for 2025. And as we roll out this plan, we should over time, the cash requirements should drop towards zero by 2028. So when you put this together, the Polish adjusted EBITDA should be rising consistently over the outlook period of five years, whereas the reinvestment requirements should be dropping from 40% to about 25% over that time. And that obviously translates into massive free growth in free cash flow. Which then brings us to the new capital allocation policy, which deals with how we intend to manage that free cash flow. So this policy, which the board just approved earlier this week, First of all, starts with the key principles of how we're going to spend that free cash flow. And the first priority is clearly investing in the business within the medium term business objectives that we described earlier to find new projects that will actually enhance our organic growth or increase our margins or provide both at the same time. Money is obviously available. We've got massive flexibility. And that's the first priority. We want to run the business at a modest leverage level and maintain significant liquidity to have operational flexibility. In numbers, that means running at one times leverage for net debt and two times leverage for gross debt. Liquidity at roughly 30% of revenue. When it comes to M&A, we're limiting our aspirations and ambitions to considering bolt-on acquisitions around the existing objectives, and particularly also capability-focused M&A, a good example being the FinEye deal that we did a couple of years ago that created the Allegro Pay engine. So having applied those three sets of conditions, there's very likely to be a surplus of capital in any given year. And if that's the case, as it is this year, we'll be returning that money in the form of share buybacks to our shareholders. We'll make the decision year to year. When it comes to 2025, we've assessed the surplus capital at 1.4 billion zloty. And the board are taking steps to have resolutions ready for the shareholders to vote through a buyback at the AGM. So the final slide for me is expectations for the full year 2025. We're modifying our outlook policy and going back to annual guidance after two years of providing quarterly guidance. The backdrop to this is firstly the increased visibility and timing around the mole transformation and the growth of the international operations mean it's now easier to project over a full year period once more. And secondly, in our conversations with investors over the quarters, we know that many of you would appreciate having annual guidance. And so we're trying to meet that expectation. So let me start with the Polish operations. We're expecting at least nine and low double digit growth up around 11% for 2025. That's between 66.2 and 67.4 billion zloty of GMV. As usual, that will feed through into faster revenue growth. We're anticipating between 14 and 17% growth. driven by those growth engines and take rate increase. Adjusted EBITDA, we're targeting to be around a flat margin, around that 5.9% level. So depending on how it goes higher up the P&L, that equates to between 3.9 and 4 billion of adjusted EBITDA for the Polish business for 2025. The capex increase is between 60% and 90%, most of it going into the acceleration of the logistics projects, between 850 and 1 billion zloty of capex in the Polish business. When it comes to international operations, for the first time, we're splitting the guidance or the outlook between marketplaces and the mole segment. So I'll start with the marketplace. 40 to 50% year-on-year growth, 2.4 to 2.5 billion of GMV. We expect that the efforts around frequency mean that this growth rate will accelerate over the course of the year, averaging the 40 to 50%. Revenue to grow faster, 55 to 65% growth. As I've said, there's plenty of headroom in intake rate. And for adjusted EBITDA growth, A similar size loss on a much higher GMV and a higher incremental GMV year on year with between a 350 and 40 billion and 400 million Zloty investment in scaling the businesses, the marketplaces. When it comes to the mole segment, The reduction in the scale of the business is going to translate into another 55 to 65% decline in this legacy GMV as the business moves to be a purely a merchant on Allegro. Revenue falls just as much as GMV because obviously it's a 1P business with the GMV and revenue being almost the same number. But the adjusted EBITDA loss will be reduced, probably between 20% and 30%. And as I said, the second half of the year should be much better in terms of year-on-year loss progress. The final thing here to mention is the adjusted EBITDA for the group. Because of the progress in international, it means we can look forward to higher growth in adjusted EBITDA at the group level, between 10% and 17%. we're targeting for the polish business and this is the first time we've been able to say this since we embarked on our international expansion with the mall acquisition back in 2022. so that's the final comments from my side i'm going to hand it over to roy for a quick summary of key takeaways before we get on to q a thanks super uh

I think this is a fairly weighty and lengthy presentation. I think in a number of areas we've gone through more detail than is usual. And so we thought it was a good idea maybe to do a brief summary of what we think are some of the key takeaways. I think number one is having a single tech stack in four countries really does have advantages. We can extract the lessons we have in each one of these countries' marketplaces and apply them everywhere. So overall, continually improve this at a rate that is a little bit easier than if you're operating only in a single country. It's the foundation for international growth and for speedily updating the customer experience. I think the second thing is, There is one absolutely vital driver for growth. It's a key leading metric for us. And that is what we call buyer loyalty or shopping frequency. And we know that as we continue to boost this, not only in Poland, but even more importantly, in our international markets or non-Polish markets, we know that growth will come and it will come at a decreasing cost. because typically loyal customers don't need to be reminded to come shop with us. So there's a lot of virtuous progress here. Probably the thing that I've been asked the most frequently about is what are plans and logistics and what kind of progress we're making. And I think you see now that we've made some systemic changes. That means is the more we disperse and reallocate volume, the lower our costs will be, be it with our own network or with our partners. But all of these make sense in the mix to drive for the best combination of speed, reliability, and cost. Finally, we've really created a cash generating machine. That's particularly true for Poland, but I think you see early indications that that cannot possibly be put true also for our new three marketplaces. And we're going to do everything, every effort to continue to make that cash flow strong and reliable. And that flow, we're going to invest in growth. We promised you two and a half years ago, profitable growth. And I think we are rapidly approaching that goal outside of Poland as well as within. We want to keep financial leverage modest. And John has explained to you what the guidelines are there. And we'd like to also give returns back to shareholders where we can with judicious and cautious use of buybacks based on what is available after we've covered the previous things that I've just talked about. So please keep in mind overall of all the many, many things we talked about today that I think really these are the key ones. Of course, I'm sure in a few places tonight someone will be sipping a beer rejoicing that we've returned to annual guidance, and we thank you all for your patience. So at this point, I'm going to hand over back to Tomek, who will guide us through Q&A.

Thank you, Roy. Thank you, John. So we are ready to start the question and answers session.

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 handsets when asking your question for better quality. Anyone who has a question may press star and one at this time. The first question comes from the line of Tyrone Caesar with Bank of America. Please go ahead.

Yes. Hi, everyone. Thanks for the call and the opportunity to ask questions. I have three, but I think they're easy. The first one is really to understand better. You've explained some of it, but to understand better what drives your comfort in increasing the long-term target for the Polish EBITDA margin. And if it has anything to do with the higher CapEx investment and the returns associated with better delivery costs that this will translate into. and also how you factored in competition into that guidance. The second one would be on the long-term guidance for international. And there, what I would like to ask is, how fast do you think the... I mean, so you've obviously guided for 2028, where you said, look, the international is going to be breakeven. But I think now we're roughly run rating at 17% negative of Polish EBITDA as an investment. Should I assume that it gradually goes to zero, so maybe it's 10% or 12% next year, and et cetera, et cetera, I mean, 2026, 2027, or is it basically going to be continuing at this high level of spend for the next two years and maybe just decreasing in 2027? And I think the third question, obviously, you move to the yearly guidance, which is extremely helpful, Is it possible to ask you to make a comment on current trading in Q1, more on the revenue side? Thank you so much.

Okay. Thank you, Cesar. Thank you for the questions. I think these are all more my area, so I'll try and help you. When it comes to the margin, I think there's two key data points to take into consideration. The first one is we managed to run 2024, let's say, hotter in terms of margin than the outlook that we shared in March of last year, so the aspirations that we had for last year. We were talking 5.3 to 5.7, but we came in at 5.9. That's the first thing. So for similar GMV growth, as we had in last year's aspirations, so low double-digit growth in the Polish business, when we look at the progress across advertising, across FinTech, and in particular across delivery, where we've introduced these new brand lists and Allegro delivery capabilities in the last 12 months, we're more and more confident that we're able to run the business at a higher margin for a given level of growth. And that's why we've been able to move up the margin. The question, I think part of the question was relating to the capex. You saw in the slide that Roy presented that because of the way that we're concentrating in dense areas and very judiciously sweating the assets that we've already invested in, we're reaching the point now where our Allegro One operations are getting down in cost to the prices that we're paying some of the alternative suppliers. which means we're about to move into territory where it's actually going to be accretive to EBITDA moving forward. It therefore makes sense to double down and invest faster and keep pushing our capability in that direction, but always being very careful in terms of making sure there's a return on investment on the assets. Second part of your question was around the long-term guidance for international. It's really, I think you need to look at it in two steps. I mean, the 15% is a guideline for 2025. By the end of 2025, the mole cash flow consumption should essentially be finished. So by 2026, that part starts to drop away. And for the international marketplaces, they're basically those margins should be gradually improving towards zero, towards break even from the minus 20% level that we have at the moment over the four year period. So gradually, after a big improvement in 26, it should be fairly gradual through to 27, 28. And the final question was about the current trading. There is such a comment in the management report We've been seeing in the first couple of months very high single-digit for the Polish market and much, much stronger growth, obviously, in the international marketplaces and the mole continuing to contract at roughly the same rate as in the fourth quarter. Obviously, the most important is the Polish. The this 9% growth rate is something that probably will get a kicker right at the end of the first quarter because of the timing of Easter. So we should land pretty comfortably within the guidance. The guidance is 9% to 11% for the full year. Later in the year, we've got a few initiatives around loyalty that we're planning to add to our functionalities that may help with the growth. We also listen to and take into account macroeconomic commentators and analysts who are calling for a stronger consumer in the second part of the year. So those two things together should lead us comfortably towards the objective, which is double digit growth. Hopefully that answers your questions.

Thank you so much. It was very helpful. Thank you.

The next question is from the line of Holbrooke. Luke with Morgan Stanley, please go ahead.

Good morning, everyone. Thank you for providing both annual guidance and more colour on your logistics network today. I think that's really helpful. I've got three questions. My first is just in November, you decided to accelerate marketing spend. and designate more towards social media campaigns. And I think at the time you were saying it was gaining more mindshare against those like Timu. But given the beat in Q4, were your campaigns just more effective during the course of Q4? My second question is just on, you've just mentioned that you were pausing international expansion. Just to clarify, does that mean just not going into Croatia and Slovenia from the marketplace perspective? and focused on existing actives in those existing geographies that you've already got a marketplace established in. And then my final question is, I know Rory said not to obsess over your in-housing of logistics capabilities. But just on slide 15, you do have a significant step down in your unit cost or your cost per delivery versus your highest price supplier. I just want to, what's the confidence behind the improved economics within that? That would be very helpful to understand. Thank you.

Thanks. Thank you very much for the questions. I'm going to take the first one on marketing and Roy will take the two logistics related questions, or the international and the logistics. Yeah, when it comes to the marketing spend, as Roy said, it was both defensive and also offensive in nature in the fourth quarter. We did come in very marginally below the, uh, the guidance, it remains a competitive market with a, with a consumer that's fairly reluctant to spend. Um, and, uh, um, you know, I wouldn't say that we over delivered because if we had them, we would have had a, probably a, a stronger, a stronger GMV than, than the one that we, uh, than the one that we came in on. Um, but, uh, everything that we were doing certainly was working. Um, but as I said, the, the retail environment was fairly, uh, was fairly weak.

Okay. So the pause of international expansion, I think there was a, just can you repeat the question as only say, are we really just pausing for the, the, the two other markets? Was that the question? Why? Or was the, I felt like there was a second half to that question.

Is this just a pause, not going into Croatia or Slovenia with your marketplace, or does it also include basically focusing primarily on your existing actors that you've already acquired, an otherwise far more disciplined approach in the existing markets that you're already in?

Okay, I thought there was something else behind it, but now I got it. Look, this is retail. We call it tech-driven retail. Sometimes we masquerade as a tech company, but really the best we are is a tech-driven company. retailer and in retail, whether it's online or offline, the key thing is flawless execution. You really have to be really, really good at serving the customer and working really, really well with both your suppliers or in our case, merchant partners. And we've had an established way of working in Poland. And we've brought most ingredients of that way of working into new markets. And what we've learned going into new markets, and also because of new entrants in Poland, that there's some tuning that needs to be done. One of those tuning was introducing the product-based view, the productized view on the Polish marketplace. And there are a whole series of other things that we know that we just need to get better at. Refreshing the smart program. and rewarding customers for the loyalty, making it really clear to customers what the benefits say of smart are and shopping with us. And that is really where we were. And we actually promised that we would do something like this, that we wouldn't go into new markets until we were confident that we were really, really executing well in our existing ones. And this is just, I think, a natural pause. It enables us to realize a whole bunch of synergies in terms of the cost side, And now we have a great space in this next two quarters, really, to introduce a whole bunch of further innovations in terms of how the marketplace works. So it's a pause as opposed to a stop. And that I think as the year progresses, and certainly I would say with some confidence into next year, we'll be looking at what is the place that makes the next sense to go to. But let's get it right. Let's get profitability right in these new markets because, again, the further you move, the more commitments you have, and you need to be sure that you have the scale and the power behind you to successfully go into new markets. There's nothing worse than dipping your toe into someplace new. You have to go with conviction. So the other question was about logistics. And, I mean, look, logistics is really simple. Volume is king. It is the all-determining factor. And whatever assets you have, the more volume you run over them, the cheaper your unit cost needs to be. And normally, volume also teaches you how to be a more effective operator. And that is what's really driven that. started in 2022. That is frankly, not that long ago. And we've boosted volume considerably. We already told you the growth, I think it was over a hundred percent, 115%. I think it was in the course of the year and been very judicious in where we've expanded, you know, put in new infrastructure and that will continue. And then again, it's, I don't think any of us are really wedded to our own capability. I do think that we're probably a little bit faster at executing than maybe some of our other highly talented and capable partners, and it's just an arbitrage about we direct the volume to whoever is performing best, and that is also true for ourselves. Did I answer your question on logistics efficiently? Yes, thank you very much.

The next question is from the line of Resetnev Roman with Goldman Sachs. Please go ahead.

Yes, hello. Thanks for the call and congratulations on the strong results. The first question on international. I appreciate your comment that you have managed to improve order frequency, but could you please elaborate to what extent it was driven by increased marketing spend and other initiatives? and how sustainable this improvement going forward, taking into account the market structure and different customer shopping habits compared to Poland, which you've liked previously. And in general, how would you evaluate marketing activity of Chinese marketplaces across international markets over the past few months, as you appear to go more like head-to-head with them? And do you see any impact from these marketplaces on your pricing power, seller acquisition, and customer retention? And the second one is just on the new CEO search process. If you could provide an update on that, and should we expect any impact on the company's current direction once a new CEO is appointed? Thank you.

Yeah, thank you for the questions. The first question around the marketing efficiency, I wasn't quite clear whether you were asking about the international or the Polish business?

International.

Okay. Yeah, so I'll take that. I'll do this one. Yeah, what we're actually seeing is that the first signs of really improving flywheel are starting to emerge, especially in the Czech business, which has been running the longest. Because the brand recognition is improving, gradually as well the frequency is going up, and that is reflected also in a better conversion rate. Increasingly, we're able to buy traffic, which is always the fundamental starting point when you enter a new market. We're able to buy the traffic at falling cost per click, which means that the margin or the loss relative to the GMV that we're generating in the Czech market is improving quite quickly. you only see a six point improvement overall because we had two new launched markets, uh, Slovakia and Hungary, Hungary. We're not really advertising, but in Slovakia we had our first Christmas where there was a lot of ATL, um, uh, relative to the GMV being, uh, being generated, right. To help build the brand. So, so yeah, overall the marketing spending is getting more, uh, more efficient in those markets. When it comes to Temu, they're very aggressive everywhere. We're defending our position very strongly, especially in Poland, which is one of the reasons for the step up in marketing spend compared to last year. I'll move over to Roy, I think, for the CEO. There's one, and the second question was?

Chinese marketing spend.

It was the second question.

Okay.

So I covered that. Sorry for that.

You deal with the CEO. So regarding the CEO search, there's really not a huge amount more than we can reveal at this point. There are a number of candidates that have been in the process. The process is being led by our chairman, Gary McGann, and our Renumco head, Nancy Cruikshank. And we're targeting to have the future CEO to be at least nominated before I leave at the AGM. And I think there's a very, very high confidence level that we'll achieve that. And who knows? I can't even comment about when the potential candidate could join. But I think you should have every confidence that there will be a fairly smooth transition between me and whoever succeeds me.

Okay. Thank you very much.

The next question is from Ross Andrew with Barclays. Please go ahead.

Great. Good morning, everyone. Three for me, if that's okay. The first one is to, I guess, just to come back to the logistics cost. I mean, if you can give us a bit more view in terms of what your medium-term ambition here is and what kind of game we're playing, because you had this volume-based agreement with InPost in 24. We're back to an indexation in 25, and you're diversifying your network. Obviously, the contract with them expires, I think, in 27. So can you just give us the puts and takes kind of into that renegotiation and kind of what you're hoping to achieve as we think in the mid to long term around managing your logistics costs? That's the first one. The second one is when I look at the margin guidance for Poland of kind of broadly stable in 25 and then the medium term guidance is a bit lower than that. You know, why would the margins go down in the medium term? Just give us a sense in terms of what kind of downside scenarios you built into that or any flex that may exist. I mean, the third one, I guess, is to ask you about M&A, which is one of your capital allocation priorities. You know, is there anything in the pipeline now, in theory, what kind of thing would you be interested in? Thank you.

Okay, I'm going to do that. I'm going to do that. Huge passion of mine. And that is, I think there's a general consensus that we don't do very large acquisitions well. And quite frankly, I don't see a lot of large opportunities that are truly opportunities. What is really useful, and I think with thin AI and with open nets, And with a few other smaller acquisitions that we over time, I think John likes to call these bolt-ons, which are basically fundamental competency acquisitions where you're actually buying what the founders have between their ears. They have been very successful indeed. Most of the lockers in Poland, for example, run on OpenNet software. That includes Impost. And the competency that we acquired with that, I think, has been essential to some of our success. Similarly, FinAI brought together a group, brought to us a group of individuals who lived and breathed FinTech, were, I think, quite good on the product side, as well as sort of developing the software. And those sorts of Smaller acquisitions where we're actually acquiring know-how as much as anything else are things that are interesting, but they're also, comparatively speaking, cheap because they're small. And that, I think, is by and large what we go for. In terms of the logistics costs, I think, again, it's... I don't think we're really interested in going for volume-based deals anywhere at this point because what we also see is a lot of the new participants in Allegro Delivery and Brandless are coming at it with assets that need to be utilized and therefore they can price aggressively and we'd like to be able to move between the various ones to do that. What I would say though is that to some extent our success has also come from impulse willingness to invest in assets ahead of demand in times actually when perhaps no one else in the market was willing to do that. And so with always with these things is we also need to track who is investing to support our volume and what kind of unit costs they can provide for the same or better delivery reliability and click-to-delivery times. So it's a mix. We know that the returns that we're getting in our own rather small investments in the past year in particular has been really quite high, and we want to stick to that. Ideally, the number one thing in logistics is Christmas is king, and you want to invest in what assets you need to get through the Christmas peak and no more. Ideally, actually run in 105 to 110% capacity. So that speaks to actually a rather judicious view in terms of our own capabilities based on what's available from our other suppliers. Are they able to ramp their capacity in line with our needs?

The second question from Andrew was about why would the margins potentially drop from the 5.9 level that we had in 2024? I think that the starting point is to look at cost of inputs, in particular cost of people. Real wages have been rising fairly steadily, not only in Poland. Similarly, software is also especially software as a service. Sometimes you have suppliers who are very deeply embedded and prices can go up quite quickly. So the first issue that we need to take into account is cost pressure. We've been offsetting cost pressure with take rate increases, which Frankly, the merchants have absorbed with little negative impact over the last couple of years, but we are acutely aware there's a limit to that and we really don't want to bake into our plan constantly increasing the prices that we're asking the merchants to pay. Therefore, there's an element of conservatism in here in terms of what may happen in terms of the operating margins. When it comes to the three growth engines, which are basically there to help us on the one hand with revenue, but also even more so with margin, as I've said a couple of times in the presentation, they're all performing really well and all have a potential to provide support to our margins and counteract this ever increasing pressure on people cost and software. And then the final question was, that's covered all of it, right?

Yeah. Mr. Ross, are you done with your questions?

Yes, thank you.

The next question comes from the line of Strauss-Mia with BNP Paribas. Please go ahead.

Hi, good morning, and thanks for taking my questions. A couple of them have already been answered, but maybe just some clarification on some of them. Just starting on Timu, you said that they're quite aggressive everywhere, but is this just in terms of buying traffic, or are you seeing this impacting volumes as well? And then maybe just on international shopping frequencies, where you've seen in Chechia the seasonal customers coming back in Q4, 24, versus a year ago. Is there a risk that... you know, Q4 becomes quite heavily profit-weighted? Or have you seen that the shoppers have been quite stable between Q4 and into Q1 this year? And then just a last question on the free smart customers in international. Has there been any improvements of these converting into paid customers? Thanks.

So, look, as the online segment continues to grow and take an increasingly large share of consumer spending, it attracts more and more players, particularly in our region where customers every year or almost everywhere every year are doing better than the previous year, even though they may not always feel that way. And Temu, in terms of traffic... has addressed, I think, a shopping style that's relatively new, which is shopping for entertainment. And they've done all sorts of things that make it fun to buy things you hadn't even considered buying. And that is reflected in where some of the traffic is actually going. So we do see their share of overall traffic increasing. We saw that they came a little bit off the boil for Christmas, which is not surprising because their click-to-delivery times are not really competitive for Christmas shopping. And it certainly affects also what we have to spend on marketing. That was particularly true when they first came into our marketplaces where we trade. And I think that will continue. I think, though... Overall, some of these new entrants have had a different view to sort of not only trading conventions, but trading regulation. You might even say they've been testing the levels of enforcement. And I think that is going to affect them quite severely in the future. And I think you see this in all the markets, at least the Western markets in which where Tamu and Shane and some of the others trade. I wouldn't be surprised if they top out at some point. Either that or they're going to have to invest substantial amounts in local positioning, inventory positioning, and the rest. In terms of, I think it was shopping frequency, I can't, first of all, I don't think we say anything about paid versus non-paid memberships yet in international, right? Not specific. So, you know, obviously when you're building a loyalty program in a new country where you the shopping frequency is not as high as it is in your home country, um, then it's, it's going to take a while to build. I mean, you do not get to where we are after 25 years in the space of 18 months. Uh, so, so, uh, I would say it's fair to say in general terms that frequency is both lower and paid membership with smart, uh, is also lower, but these are mechanisms to, uh, to boost frequency. To that, I would add simplifying the online shopping experience. We made, I think, some great improvements in delisting certain types of merchants from the marketplaces outside of Poland that I think had a rapid effect, quite quick effect in the perceptions of consumers. And we've got a whole bunch of things lined up again replicating all sorts of things across all of the markets that will not only increase trust, but also ease the shopping experience, which again drives loyalty. So I think really at the moment on sort of international frequency, those are the general things that we'll cover.

Sorry, if I could just maybe clarify on the international shoppers. On the point where you said that you're seeing the Techechia customers coming back a year later for over Christmas, is that a risk that it will happen again this year, meaning that Q1, Q2, and Q3 are potentially a bit lighter and then we expect a bit bigger volume in Q4?

I'll say one thing, and I think John wants to add on it. Look, it's retail. And Christmas, there's clear seasonality. Typically in Western markets, right about now, around the Easter time, is a typical low point in terms of shopping frequency and intensity. And Christmas is a high one. So it is almost always the case that you acquire more customers in that period of the year because that may be the only time of the year that many of them shop online. What we also see is that the customers that we acquire during the Christmas period are the ones that typically, with some attrition, progress with us through the year. So incremental gains in Christmas translate into incremental customers in the subsequent quarters. So I think that's true in most markets. I think it is true that the Czech Republic, we're not in Czechia yet, but it is in Chechnya, but certainly in Czechia, we're, you know, is I think probably a little bit more seasonal than some of the other markets.

No, I think Roy's covered it pretty well, but the business that we have with Occasional shoppers as a starting point tends to be very peaky in the fourth quarter because that's the main shopping season. What happens over time as people get more loyal and increase their engagement is it starts to migrate to be more of an everyday habit to come and shop on Allegro, which is what we see in Poland where people are spending eight times more than in the international markets. And you don't see nearly the same seasonality in the Polish business as we see at this point in time in international. So year on year, things should start to level out as the international businesses start to resemble more and more what we're offering in Poland.

Thank you for the call. You are super helpful.

Ladies and gentlemen, this concludes our audio question session. I will now give the floor to Mr. Posniak.

Thank you, Jora. We have run out of time. I promise that all the questions asked online will be responded to by email. And if you have any follow-up questions, please address them at ir.alegro.eu. We'll be happy to help. And thank you very much for participating in this presentation and speak to you after Q1.

Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling. Have a good day.