Allegro.eu S.A.

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Allegro's Q4 2025 results conference call. At this point, all participants' lines are in listen-only mode. After the presentation, there will be an opportunity to ask questions. So without further ado, I will now pass the line to Tomasz Poźnia, Director of Industrial Relations. Please go ahead.

Thank you, Rafał, and welcome to all participants of our call. Let me introduce the presenters of today. Mr. Marcin Kuszmisz, the CEO of Allegro Group, will provide you with highlights of Allegro performance in Q4 and full year 2025, with a summary of key takeaways towards the end of our presentation. And Mr. John Istik, our CFO, will guide you through the financials, update of medium-term aspirations, and the outlook for the full year 2026. 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 such statements. Please make sure you review the full disclaimer on slide number two. Also, please note that the 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, Marcin, and the floor is yours.

Good morning. Thank you so much for the introduction. Today, John Listig and I are pleased to meet with you and present and discuss the results for Q4 and for the entire year 2025. Let's move on to the presentation. We are delighted to present the successful year and the results we achieved in relation to updated guidelines. We delivered them in all areas. Our international operations even have exceeded our expectations and plans. And this is a very good sign for 2026, especially since we have a lot of great projects and initiatives in the pipeline that are focused on accelerating the growth of the company. Moving on to the annual summary of results, we show the enormous scale that Allegro has achieved and how various financial indicators contribute to strengthening its financial profile. Group GMV is nearing the 70 billion zloty mark, achieving a 9% growth rate. Our consolidated group revenue reached 12 billion, a robust 11% increase, while the group adjusted EBITDA rose over 15% year-over-year to 3.5 billion zloty. Total group capex was around 940 million zloty, showing around 52% year-over-year growth and finishing in line with expectations. A significant achievement this year was our profitable growth in Poland, where we reached a full year GNV margin at 6%. This marks the second straight year we have exceeded our mid-term margin aspirations in our home market. Our Polish revenue growth specifically reflects rising take rates, higher advertising penetration, and the successful expansion of our fintech and logistics engine. To understand our current momentum, we turn to the fourth quarter top line results. We demonstrate Allegro's continued leadership in the Polish market, where we are constantly growing faster than the broader economy. In Q4, Polish GNV grew by 8.6% year-over-year, steadily outpacing the domestic nominal retail growth of 4.4% for the same period. We saw our group active buyers base advance to 21 million, which over 15 million are in Poland. Crucially, average annual spend for the group accelerated to 8% growth, while in Poland the average spend reached over 4,000 zloty per year, up over 7.3% euro per year. Financial discipline and balance sheet sank the focus for the group. We successfully reduced our leverage, showing good progress quarter after quarter. This strong position was maintained even after funding a share buyback of 1.4 billion zloty. In Poland, our adjusted EBITDA to GNV margin remained stable year over year at 5.59% for Q4. Group capex for the quarter was nearly 300 million zloty up 60% year over year as we accelerated investment in our logistics all out and new platform functionalities. Looking ahead, we are refining the strategic focus to ensure solid fundamentals for the future. We show our evolution from simply growing the core to supercharging it through AI automation and high value services. Our revised priorities include transforming our international expansion model into one that is low capital intensive and replicable. We are also focused on externalizing our assets by offering wider change of logistics, advertising, financial services to our partners to improve unique economics and build deeper loyalty. Our ambition and first of all the plan we have is to speed up the growth of the company and grow faster than in the previous years. Allegro is technology native organization, and we use artificial intelligence as a primary driver of internal efficiency. We are currently running almost 100 specific AI projects across the whole organization. We are targeting a 20 to 25% productivity increase in 2026 by integrating AI across full product development cycle. Our goal is to have AI embedded in around 40% of our tech portfolio by year-end 2026, aiming for 33% performance gains in our processes by the end of 2028. To make AI tangible for our users, we are rolling out specific customer-facing products. We've introduced our newest AI tools based on conversations designed to simplify journey for both buyers and merchants. For buyers, our AI assistant offers a new way of discovering products through natural language search. For selling partners, we are testing Ali, a new, all-new AI assistant that provides instant sales support and step-by-step guidance for seller-centered tools, helping them to manage daily operations much more effectively. It is worth emphasizing that we treat AI as a booster for our growth. Increasing work efficiency is one very important dimension. The second is ability to acquire new customer groups have an attractive sales channel and generate traffic. We work with all leading providers of this technology so that customers in Central and Eastern Europe have access to the latest and best AI-based solutions. Our core marketplace remains our greatest competitive value. We are expanding selection and technology to ensure Allegro remains the first choice for consumers. Our best price guarantee batch reached a record 1.7 million products in Poland. We continuously onboard major brands like Bestseller Group or FCMoto. Additionally, we deployed semantic search for our market in Czechia, Slovakia and Hungary, allowing buyers to find products using natural descriptions, instead just keywords. Customer loyalty is cornerstone for our long-term value. Last year, we showed the significant progress of our Allegro smart program and strategic changes ensuring its continued growth. We have reached 7.5 million smart users in Poland with nearly 90% of them on paid subscriptions. To use more often smart in daily life, we also launched a multi-area exclusive partnership with Żabka last December. We also announced that starting March 2026, the minimum order value for smart renewals will move to 49 zloty. In practice, this means that we have equalized MOV deliveries for APMs and courier, significantly expanding the group of customers who can benefit from door-to-door deliveries. Advertising is our fastest growing high margin revenue stream. This segment is transforming Allegro into a powerful retail media platform. Advertising revenue grew 24% year-over-year in Q4, reaching 2.24% of GMV. Our flagship sponsored offers produced 1.2 billion zloty in annual revenue, driven by advanced algorithm developments and bidding optimizations. Furthermore, our off-Allegro network advertising grew by an impressive 70% year-over-year, supplying additional traffic to drive the marketplace flywheel. We see significant headroom for further growth in advertising. Here we see our roadmap for 2026 and beyond, focusing on reaching customers earlier in their journey. Ad revenue growth is expected to continue outpacing GMV over the medium term. In 2026, we will accelerate investment in upper funnel advertising solutions to help brands build awareness and consideration. Machine learning enabled improvements have already increased ad relevance, driving 10% higher click-through rates. FinTech has shifted to major financial pillar to the group. This slide tracks the growth of Allegro Pay and its role in financing marketplace volume. Low origination reached closely 14 billion zloty for the full year. A 26% increase year-over-year. We reached over 10 billion slots in total GNV finance in 2025, which represents 20% growth. Our innovation in fintech will accelerate in 2026. We plan to move Allegro Pay beyond our platform and deepen integration with daily banking flows. We will scale Allegro Click and externalize Allegro Paycard to extend credit origination beyond Allegro. For selling partners, we are increasing Allegro Capital fixed-term loan limits with PKO BP up to 500,000 zlotys. We are also developing our first merchant credit product for release in 2026. Control over the delivery experience is central to our strategy. We showed a rapid shift toward Allegro managed volumes, allowing us to guarantee quality and manage costs. Allegro managed volume share grew by 17 percentage points during 2025, reaching 41% in Q4. Over 90% of parcels are delivered within two days, with the majority arriving next day. We successfully manage peak demand using Allegro delivery alone to service extended times on December 24th. This shift in volume is a major tailwind for our margins. Diversified delivery partnerships and our own infrastructure allow us to manage unit cost effectively. All Allegro delivery partners are currently cheaper than the highest price supplier in the market. Continued growth in our one box network is driving unit costs down and total Allegro One volumes, including one box, 1.1 courier, were up 80% year over year. To support our volume goals, we have built the most accessible pickup network in Poland. Here we see the scale of APMs infrastructure. Our network reach over 36,000 APMs and 37 PUDO points by year end 2025. We do it together with DPD, DHL and Orlen Paczka. Customer satisfied is a lead with NPS of nearly 80 points for Q4. We also plan to extend one box network by another up to 4,000 units in 2026 alongside additional investment in sorting facilities. Data shows that convenience is driven by proximity is quickly closing the gap with competitors. Nearly 55% of buyers already have Allegro delivery APM as their closest or equal distance pickup option. Closely 70% of buyers, an Allegro machine is closer or no further than 200 meters away from the highest price supplier. We are moving rapidly to cover remaining gaps to ensure that we are the most convenient choice for every Polish consumer. Turning our international presence, we present highlights of the strong performance of new marketplaces. Allegro international marketplaces, specifically in Czechia, Slovakia and Hungary, saw very strong top-line growth with full-year GMV up to 60% year-over-year. This has been achieved alongside significant optimization of cost lines, resulting a major improvement in adjusted EBITDA margin since 2023. To understand our international scale, let's look at how our customer base is evolving in Central Eastern Europe. We present the rapid adoption of our new marketplaces and the deepening engagement of international shoppers as we successfully replicate our Polish flywheel across the region. In 2025, our international marketplaces reached a major milestone with 4.6 million active customers, representing nearly 40% increase over a year. This growth is being driven by the expansion of our footprint in CE markets, including the launches of Allegro Slovakia in February and Allegro Hungary in October 2024. We're seeing strong signs of increasing trust. For example, NPS in Czechia has climbed to nearly 60 points, trending toward Polish levels. Customer engagement is also stepping up, with an 80% increase in highly engaged buyers making 10 or more purchases annually. Moving on to mall turnaround, this slide details the successful completion of the transformation. This was a critical strategic objective to move away from heavy asset legacy models toward a lean marketplace-centric approach that aligns with our core strength. We have officially transitioned the mall and CZC brands to lean merchant model, integrated them into Allegro Marketplace, To further sharpen our focus on the core business, we divested the MOLF South segment in Slovenia and Croatia, with the sale concluding in February 2026. Our logistic capabilities were also streamlined, with WIDU integrated into technological staff and rebranded as One Courier. Beyond financial metrics, our success is built on a foundation of strong culture and corporate responsibility. We present industry-leading performance as a top employer and deep commitment to ESG. We are proud to be ranked as the number one employer in the retail category and number 12 overall among Poland's top employers for 2025. Allegro remains committed to equality, having been certified by the Equal Salary Foundation for paying women equally for equal work. Our social impact is tangible. Allegro's charity raised over 70 million zlotys in 2025, a 25% increase year over year.