Naspers Ltd

Hello partners, welcome to our results day. I am Fabricio, I am CEO of Prozos. Today morning we released our results. I am very excited about what we are delivering and I hope you will enjoy our results call today. Today is a special call. I am not going only to show you the numbers, but we have two special guests. Last time you asked me to talk more about ecosystem and food delivery and today we have the CEO of iFood and the CEO of Just Eat here with me to tell you much more details about what's happening at process. I'm very excited about the results. I'm going to make a introduction to you about your ecosystem and hope you enjoy what we are going to see today. So to start first I'm very happy on how Prozos is delivering. We are now much more focused. We are focused in delivery, we are focused in finance, we are focused in experience and all our business are growing and doing well and I'm going to open to you today much more info about how we are operating. We are also focused in Latin America, in Europe and in India and I think with this focus, Focusing results and also our innovation capacity, we have many more years of good results to share with you. As you know, we have around 1 billion customers, we have around 5 billion partners, around 100 billion dollars that we sell, and we are going to open much more about how we operate. As you know, we got to almost $10 billion in revenue, it's going to keep growing to more than $13 billion next year. We got to $1.3 billion in EBITDA, that's 84% more than last year, what is very good in my opinion. But if some of you think this is adjusted EBITDA, how much cash you are generating, We increased our cash flow, free cash flow by 2 billion dollars in the last two years from minus 0.5, 0.6 to plus one and a half. So I'm very confident we are in the right direction. As I told you a few months ago, the center of our vision is how we make our ecosystem work. And I know one year ago, six months ago, it was a plan. My plan was we are going to build an ecosystem as a competitive advantage. We are not here just to show you plants, we are here to show you real results and we are going to open a lot to you how our Latin American ecosystem works today and how this is going to connect to what we are going to do in India and in Europe. So today we are going to talk a lot about our ecosystem and also food delivery. Hope you enjoy seeing process with much more details. Moving on, ecosystem is the core of everything we talk about here. Some people think process in Latin America is iFood. It's not. iFood is the foundation. iFood is a very important foundation. But our competitive advantage, what we can do better than everyone else, is how to run a full ecosystem. And now it's time to open all the details for you. So, as I told you, that was the What some people think, process is iFood. Process is food delivery. Yes, process started as food delivery in iFood. iFood is amazing. iFood is growing a lot. We are close to 200 million orders today. It was like when I started 20,000 orders, now close to 200 million. iFood besides doing food delivery is the right foundation because we have many customers with a very high frequency and on top of that we can keep growing we have a big moat against competition and now it's time to open that for you so as i told you food delivery is an amazing business iFood is an amazing foundation but that's the vision i sold to you last year it's not only for delivery it is travel grocery ads events classifieds The good news. This is not a plan anymore. This is a reality. It's a reality with very good results. Why? Because the total directable markets of all those business are much bigger than food delivery. They are ten times bigger than pure food delivery. But I don't have a plan to do that. We are executing that. Over the last one year, we made so much progress in all those areas. Some of you are going to be surprised. But we have Despegar. You all know we made a big acquisition. It's not only Despegar. We are very strong in grocery. And we also invest in two important grocery companies, Shopper and Daki. In dine-in, iFood is strong in delivery but also iFood is very strong today in making the transactions inside restaurants. We acquired five companies including kiosks for food for restaurants and loyalty programs for restaurants and ERP for restaurants and now we have tens of millions of orders in the dine-in and the markets that we have there are very big markets. In FinTech and Credit, it's a big business. In Payments, it's already a big business. Not only iFood but also Zoop and Coin. In Pharmacy, we are growing very fast but we also invested in Evo that's enabled us to grow even faster. I'm going to get in details on that today and Diego is going to be here with me to show you all the details. Everything I'm showing you here, the ecosystem besides food delivery, today have revenues of $1.5 billion and today is growing more than 40%. So the ecosystem plan of last year is not a plan anymore. It's a very big business growing fast and we have so much more ahead of us. Today, the ecosystem is more than 50% of our revenue. You can see here, pure foods 45%, fintech 17%, travel 29%, and other marketplace categories 7%. So we are much more than food delivery, growing 40%. It's very good to know that because this whole market has a lot of runaway of growth. We have a lot of growth ahead and it's very difficult to compete against a company like us that has customers buying and having the benefits of us offering them many services together, cheaper, faster, with less friction. All those markets together has a lot of runaway. You can see here comparing Brazil to China on all those markets We believe we are going to keep to see growth for many years ahead. Look at that, starting to give you some more details and some more colors about the existing ecosystem that we run in Latin America. If you look to our grocery business, we are growing 50% over the last three years. Today, we are two times bigger than the number two players selling groceries online. The second player is an amazing marketplace company. They are very good. And even so, we are two times bigger than them, growing 50% in a market that is going to keep growing for many years. On pharmacy, we are growing 70% year over year. And now that we invested in Mevo, we expect not only to keep this growth rate, because now we can also sell prescription medicine. On fintech, we never show this number open one by one. Many of our fintech business are growing 100% year over year. Our credits for restaurants are growing 115%, our infrastructure for fintech 100%, and new vouchers 60%. All of those business are not only growing much faster, but their profitability are increasing aggressively. So I show in the other slides, Our ecosystem, besides food, generates something more than $150 million in profits. So that's what we built in the last one year. Food Deliver is a foundation. We have a big brand, we have lots of customers, we have very good technology, but then now we built a Amazing ecosystem. Latin America has another company, a marketplace company that values between 50 and 100 billion dollars and it's an amazing ecosystem. That's what we are building and we will build another 50 to 100 billion dollar ecosystem in Latin America. Let me show you some more data with you. Ads is growing 100% year over year and we have a lot of runway to grow on ads. Today we acquired a company called Advolve and our Ed's business is accelerating and growing amazingly well. We are serving tens or hundreds of companies having the best solution to increase sales for, for example, for companies like Coke or Heineken or AB InBev.

It's not only Ed's.

Destagar, as you know, last year, I promise you, it is possible because we acquired Destagar. Destagar is going to grow faster because they are part of our ecosystem. We got a lot of questions on that. Can we really help travel open to grow faster? Look to this data. Today, Destagar is growing The whole Despegar 30%, only Brazil 40% year-over-year. Before we acquired Despegar, Despegar was growing around 10%. And the reason of that is the second chart. 21% of Brazil revenues of Despegar are related to cross-sell together with the process ecosystem. That was our vision. We can, because of our frequency of our technology, Our customers are happier because they can buy easier and better and cheaper travel business. And as I told you, it's not only travel. It is grocery, it is fintech, it is credit, it is meal voucher. That's the Prozos ecosystem. I want to give you this overview on the ecosystem, but I hope you will stay tuned because after me we will have Diego here explaining you in much more details how each of those companies are working and we will be here for questions today. Besides developing the ecosystem, and part of the ecosystem vision is how technology makes all of that work. One week ago, we made an event called Prozos Forward, and I'd like to invite you to go there and watch the Prozos Forward event, where we showed how we are using AI to change completely our business. We really, really use AI to operate the whole iFood business. Last year I told you about large commerce model. That was our dream to train a model that is smarter than everything else we have to offer better service to our customers. It's a reality. 100 million customers in Latin America are modeled in our AI model. It operates 10 to 50 times cheaper than if we bought a model from a leader model in US. So if you think you didn't heard it right, We developed our own model, traded using our own data, and we operate 50 times cheaper than if we just buy from a global AI company. That's when AI is cheaper and faster, because we do distillation on models, so we make sure that we can have the results as fast as we need. So process is very good in the large commerce model. It's a reality now. We are expanding to all ecosystem now. So all those companies you saw, they are going to use the same model and improve their numbers. Token Claw Token Claw Token Claw Token Claw Token Claw What is happening? They just asked for an app that connects to LCM and connects to our old data so everyone can work faster, everyone can work together. We create skills and these skills are used between the other people inside the company. I think we have the best implementation in a company of AI helping the company to move faster. But it's more than that. We just expanded Token Claw. to all our 5 million restaurants. So now if you are a partner of Prozos as a restaurant or as a partner, you have access to the best AI in the world. And we just launched last week in Prozos Forward how we came through Zapier, have access to the best assistance to deliver whatever you need. You can say just help me with that, negotiate, buy, etc. So Prozos is positioned as best in class in AI, for sure best in class in Europe, Latin America and India. And we are going to see a little today how this is connected to the reality. So in the core of the Latin American ecosystem that we are going to talk about today, we have large commerce model defining how everything operates. And on top of that, many assistance like Zapia, as I just said, but also many others like Sofia and Ailo and Toki and Luzia. AI for us is generating results, reducing costs, accelerating growth and serving better services. Today we are open how the ecosystem works. Hope you watch also PROZOS Forward and hope you enjoy seeing how we operate. I will be back here in a few minutes, but now I want to ask Diego to come here and share more about PROZOS in Latin America. Diego. Thank you, Fabricio. Hello.

Big pleasure. Thank you. Thank you very much. It's a big pleasure to be here and to have the chance to double click on the ecosystem that Fabricio was explaining. The whole idea here is to show exactly how the synergies work and how we are organizing each pillar of it to generate the results that we believe in our strategy. So to start, I want you to take a look on this chart that Fabricio already showed, but more importantly, to show that we have developed an ecosystem that is ten times bigger than the original pillar, the food delivery one, iFood. More importantly, in each of these blocks you can see companies that are mentioned, companies that we developed internally or that we acquired or we invested in the beginning and worked with them throughout the journey. What does companies mean? It means optionality. These companies are the ones that we are integrating, that we are learning, that we are being able to extract synergies and build the entire ecosystem that you're going to see. Everything starts from the foundation. iFood is the foundation because it can give us the chance to have a business with high frequency, high retention and high growth. In these charts you can see how we are being able to grow fastly during the last years and you can see not only from the revenue point of view but also from the client's point of view. On both graphs It's already important to mention that the other categories, the new business, the adjacencies, they are already becoming meaningful. So all the blocks that you saw in the previous slides is already represented here by more than 30% of the revenues generated inside the ecosystem. All these revenues are actually based in one thing, in the loyalty program, in the capacity that we have to not only attract but to retain while we increase frequency of the users. So, the program that we developed that we call Club, it was developed four years ago and already presents a retention and a frequency that is much higher than the average customer at iFood. The more we bring the customers, the more we put them inside Club, the more the company grows with very important qualitative fundamentals. Also, Club was not only important to the food delivery business, but now it's much more important to adjacencies. As you can see in the chart, groceries, pharma and pet, they already have around 50% of the orders originated by clients that are linked to the club. And the club now are moving from the food delivery ecosystem to the entire Prozos Latam ecosystem. When we are able to do that, what we do is we fuel, we create the capacity to grow much faster, much stronger the other adjacencies. As you can see, grocery is already growing more than 50%, pharmacy is growing more than 70%, and on top of that, we create several optionalities. So now it's time to invest in beverages, in pets, in flowers, small electronics, gadgets. The good thing here is to have the possibility to make these questions, and then to decide when to speed up one or the other. Because we are able to generate so much traffic with so much quality, we gained the optionality to explore the ads business. As you may know, ads have been very important to marketplace around the globe as a way to have a marketplace business that is very focused on the transaction while you can grab much more profitability on the ad side. So, Fabricio already mentioned this, our ad business is growing more than 100% per year, spread in all the categories, not only food delivery but also grocers, pet, pharmacy, among others. The capacity to increase the traffic through club allow us to generate what we are seeing here in terms of ads. And this entire ecosystem is what gives us the chance to sell more, and the more we sell, the more we attract the merchants. The more we attract the merchants, the more we generate data, the more we can do finance. Fabricio already showed this slide, but I want to pinpoint here one specific thing. What we are doing here in terms of FinTech is not what the traditional banks are doing. What we are doing in FinTech is to understand the operational and financial data that we grab from the merchants and build intelligence on top of that using our AI models and as a consequence offering products that are not available for them in the Brazilian marketplace. As a consequence we see the credit grows strongly with a great ROI. We are seeing ZOOP which is our banking as a service as well growing more than 100% with very long term contracts, very low churn portfolio and the new voucher business which has the largest LTV to the food delivery business. So with all of that we gain the capacity to keep thinking about the future. When we say about future here, it again comes to the same flywheel. The idea to find much more clients that has a good value, that generate traffic with retention and give us the chance to bring more sales to the merchants. And it's exactly where our future stands right now. Why? Because Brazil has an immense market in the low-income side of the society. And this market is very tough. Most of the players, they will try to play in this market just getting subsidies. And subsidies may work in the beginning, but in the low AOV markets, subsidies don't create fundamental value. We've been working with HITS since 2018, testing, learning, testing, learning, testing, learning, and one year ago we understood how we could do that. We understood how we could operationally change the way we deliver, the way we attract the customer, and the way that the immersion works to make very low AOV works economically for everybody linked in this equation. So the slide shows how we were able to decrease by more than 30% the AOV, how we are able to increase the TAN by more than 25%, and finally how we are being able to scale the operating margin to the breakeven level so if you think that we are doing almost 1.5 negative operating margin in this order which in dollar goes to almost zero actually in a more a few months we've been able to reach the breakeven point and Fight and play in a market where, historically, it's not possible to invest. Why? Because the AOV is very low. So, the way that the future holds for us gives us the chance to answer a question that probably you may be thinking. So, how the competition is going in Brazil, especially because some companies arrived in the last 12 months. So, let me show you the mechanics of the P&L of iFood during these last 12 months. First of all, the main source of revenue for us is commission. The commission is exactly the same as we had a year ago. Let me jump the CPO and I will come back to it. Our ads revenue keep growing as expected because the traffic is very strong. The company grew orders, clients, frequency and retention during these last 12 months. The logistics margin is still in the same place, which means that we are being able to operate even with the intensity of the competition, we've been able to operate with the same economics. Payment costs and platform costs are in the same level as well. What does it mean? It means that a year after a very intense competition in Brazil, our structural economics remains in the same place. So, what we have to discuss here is the CPO, the cost per order, the cost to acquire an order, how much we spend to make an order happen from the consumer point of view. And this, of course, went up. It's because the competition just brings irrationality at this point in time and we have to fight against it. Fight in a good sense, fight in the sense that we want to fight for the consumer. So as soon as irrationality goes down and come back to the rational field, CPO comes down naturally. And as a consequence, we go back to the same place that we were before. Why? Because the structure of the economics are still the same. And we keep working on it. And of course what I expect is to have more sources of revenue in the ecosystem in the future. When we go back to the story, what we are saying here is, we have a foundation. Strong growth, strong retention, strong frequency. With this foundation, we can spread the customers towards all their adjacencies. We bet on options in the past that materialized and allow us to have a 10 that is 10 times bigger than iFood. We are now grabbing growth from these adjacencies and incremental profitability coming from that. More and more iFood will be seen as an ecosystem. Half of the revenues in the next 12 to 24 months should be coming from other adjacencies versus the original food delivery. And this gives us the confidence that what we are building will be much stronger in the future. Thanks very much. Now I pass to my colleague Roberto.

Thank you, Diego. Hello, everyone. It's a pleasure to be here with all of you. I'm Roberto Gandolfo, the CEO of Just Eat Takeaway. My last 12 years I spent in iFood helping to build the food delivery business there. So just to start with, today we're going to talk about JET on this new chapter where we are very much focused on growth and to reposition the company as an AI-first company. So let me start with this chart. So JET has been struggling over the past few years to really grow. and you can see now we are in a new trajectory bringing the company back to growth So what we did, this new chapter just started like less than six months ago. The first approach was let's test and learn extremely fast in a small cohort of cities where we can prove that we can grow much faster than what we are doing today. And we did it. We have more than 25% growth. We saw this level of growth in those cities where we did this test and building this playbook of new growth flywheel. And now the challenge is to bring that to the entire portfolio of JET. And that's what we are doing exactly here. And you can see month over month the trajectory that is changing. Of course we are not there yet, but we are in the right path for sure. And here you can see the scale of JET. The challenge is how we turn all this scale, all this density of JET into back to growth. That's our focus for now. So how we are repositioning JET to become an AI first company? This is very important to understand. So just to simplify here is basically we are talking about three main layers. The first layer is a unified platform where you have one backend everywhere and you can operate multiple countries in a much more scaled and efficient way. Then we are building on top of that our LCM model. LCM is the large commerce model that Fabricio just mentioned in his presentation and basically this helps us to understand much better who is the customer, what the customer really wants and then we can leverage on that to bring the right offer. So you're going to see that we can personalize what we are showing in terms of contents, subsidies and so on. And then, on top of that, sits our Growth Flywheel. The Growth Flywheel is basically bringing more traffic to the platform, a high quality traffic that can be converted into orders. And once we deliver an amazing experience in the post-purchase, then it will lead us to a higher retention and higher frequency. The same foundation that you just saw Diego explaining here about iFood. So we are doing this repositioning here. How we are executing all of that? So we have here six main blocks where we are focused on to really deliver this plan. So culture and management model, which is very important for us, is the foundation of everything that we are doing. Our rights to win, this is being part of an ecosystem like Prozos. Capital allocation, the discipline to have the capital allocation, the tech platform, logistics and our supply. So let's go through each one of them. Starting with culture. Culture is the foundation of everything that we do. We are really raising the bar inside the company. When we look at the results and what we are doing, that's what we need to do. We are here to really bring the best customer experience ever to our customers. And we need to move extremely fast. This is a very important behavior on everything that we do. We have this tech profile to test and learn, use the data to drive our decisions. We are operating more and more as one jet, as a team that is a cohesive team that operates together and you see very good early signals that we are getting there. So the company now understands the strategy, they have clarity, they believe in this strategy and we have clear ownership about each of those things that we are doing, which is very important for us. The other point is I started in iFood when we were doing like a million orders a month and we had a 120x growth over the past few years. Based on technology, bringing the best experience to the customer and this is what it means to be part of an ecosystem like Prozos where you can exchange knowledge and leverage on this knowledge to start to repositioning JET in this new chapter. So this is what really helped us in the whole flywheel. This is exactly what we delivered over the past few years. That said, JET, as I said, is a scaled business. So the P&L is there. What we have here as an opportunity is to do a better capital allocation. So we are investing. What's the principle behind on how we invest? It's basically we invest where we have the density and scale to really deliver the best experience to our customers. When we do that, you can expect better returns, better paybacks on our investments because we have the foundations in these cities. So it's a city-level approach that we are doing for all the 16 countries, which is very important to reinforce this discipline of capital allocation. We are also all the time reviewing our entire portfolio and really making sure that where we are, we will have a relevant position. So we just exited Australia and Denmark in the past few months because it was not part of the core strategy anymore. And we are doing a cost management that is very important. I'm going to show one example of this in logistics where you're going to see a very important improvement in our efficiency here. This efficiency allows us to reinvest in the business to grow. And we are focused on investing P&T, product and technology, and to invest to build our large customer base. So that's what we are doing in capital allocation. When we go to technology, as I said, we are unifying the whole backend. This will give us speed to deliver a new capability and be live everywhere immediately when we build something new. And as another example is the LCM, the large commerce model. Fabricio talked about this cost reduction. This is really important. So the cost to identify the user profile and understand who is this customer is now 90% cheaper than before. This enables us to really scale this model to the entire portfolio. Now you can expect that it's coming soon, that we're going to have all the components you see in the app, They will be driven by LCM behind. So you have the AI engine behind saying what's relevant to this customer, what kind of subsidy, what should be the restaurant that they are seeing. This is what will bring us this customization, this personalized experience. Here is logistics as one example of cash management and discipline on how we operate the business. So you can see on a weekly basis how much progress we made, really adjusting the demand shaping, the network optimization. This is our scuba, which is basically the employer's model that we operate in some countries. And you can see the level of evolution. When we are talking about 5 million a month, we are talking actually 60 million euros a year in terms of impacting our EBITDA. And we did that in just a few weeks. and now this allows us to reinvest in the business to reinvest in our growth this is technology behind it's impossible to do a number like that without being more efficient through the technology that we are applying to the business and here we also have the supply we need to bring the best choice to our customers that's very important when you open the app what really matters is what you see around you what are the options that you have to to bring and Here, just as an example, we are bringing the best content at this level as 80% in the Netherlands and the same principle, the same approach applies to other regions where we are. We want to make sure that when they open the app, they really have the right and the best content. We are also using data, which is our model, to say where should we bring more offers. Groceries, restaurants, to our customers. So this will directly connect with the increase of conversion rate in the app. And then we are also automating and using a Gentech operations to speed up the process of onboarding a new restaurant at Jet. So doing all of that, we can spin our flywheel faster than ever before. And this will lead us to a higher growth. So what we did over the last five months, less than six months, was basically setting the new strategy that is really very focused on growth and a sustainable growth, cultural shift, so raising the bar, bringing these behaviors to be live on a daily basis, and started the path to grow, like testing and learning in a few cities. And now what we're going to do is to, as I said, accelerate this flywheel, to really put a system in place where we have a unified platform everywhere for logistics, for the consumer, the back end, and do product improvements as you probably saw in the process forward two weeks ago when we launched STOCAN for partners in the Netherlands with good feedback and experience. So that's our expectation. I hope now you can have a better view of what's going on in Just Eat's takeaway, and I will call Fabricio back through here to the stage. Thank you.

Thank you very much. Thank you, Gandolfo. Hello everyone. Hope you enjoyed to learn more about food delivery with iFood and JET. And I want to finish this presentation and we will be here for lots of questions talking about the next steps. The ecosystem was a dream one year ago. Now it's a reality. You saw one and a half billion dollars growing more than 40%. But that's the first step. We are going to move that through the world. Pros of the delivery, finance and experience. You see that in details in Latin America. We are doing the same thing in India. The foundation there is Hapidu, SWIG, Meishu and Peiyu. Peiyu is the bigger foundation because infrastructure of payments. But for example, we have also Swiggy and this year, Rápido and Ixico and Micho are part of what we are offering there. Then we have finance and we have experience. What you've seen in Latin America, we are going to the same direction in India. We are replicating the technology, we are replicating the learning, we are replicating the cross-sell and we are replicating the LCM and the assistance. Right now we are expanding LCM after a lot of success in iFood to our ecosystem in India. And we are starting in Europe. To be direct with you, we don't have the full ecosystem in Europe. We have some amazing business. For example, Alex is amazing in Europe. To me, food delivery is very important as a foundation. So I need just it to go from now it's minus four year over year growth. and many more. The same learners you saw in Latin America, where we are having a lot of success to our other regions. So, very briefly, you know that PEIU was the center of India, but now we have many more, and just to highlight, Ixigo is travel, just like we have TESPEGAR in Brazil, and again, we are learning a lot from each other. We invested in Rápido. Rápido is growing more than 100% year-over-year in mobility in India. So here we have hundreds of millions of customers, and we will share next time with you how we are also developing the same things you saw in Latin America, how it's being replicated in India. Europe, we are starting. We have OLX, we have NE and NEG, but the big priority now is to make sure that our foundation just works. We are going to keep delivering that. and in the future we will analyze more how we can keep growing also with the European ecosystem. It's not our priority for now to expand or do other bigger positions right now. That's what we are doing. Hope you enjoyed to learn more about the ecosystem, about innovation in process forward and about food delivery. We'll be here for one hour of questions, so I ask Eoin to organize our Q&A session. Eoin?

Great. Thanks very much Fabricio, thanks Diego, Gandalfo. I think that was a really great look at food how through scale, frequency, retention and density can serve as the foundation of the ecosystem and the ecosystem with its inherent growth and profitability can then unlock and significantly other bigger opportunities through the TAM. So we'll go to Q&A right now and we'll also have Fabricio, we'll have Diego Gandalfo and we'll bring up our CFO Nico and it's clear that I'm going to have to add another O on my name so I can retain my job here. So let's get to Q&A where as we said we're going to have an hour to speak with you. So let's go to the first question and that comes from Cesar at Bank of America.

Hello Cesar.

Hi Fabricio, hi everyone. Thank you so much for the opportunity to ask questions and congratulations on the FY26 numbers. I think they were very good. But now I'm going to ask some difficult questions on on looking forward. The first question, which I think I wanted to understand a year ago when you hosted this Capital Markets Day, you mentioned that you're very confident that Process is on track to deliver billions in EBITDA in the next couple of years. And of course, you know, we've seen that in the next 12 months, you're going to have to Thanks for watching! Thank you very much. on the LCMs were very insightful. I just wanted to probably understand a little bit better. When are we going to see the impact of this AI into the numbers, especially on the easy data side? Thank you so much.

Thank you, Cesar, for the comments. I agree with you. The results are very good for last year. And a comment on your comment is, When I showed that those expectations for one year ahead got into $1.3 billion in EBITDA, many people also said, but can process keep the current numbers or keep the current trajectory? And over the last 18 months, we are consistent in delivering, so I'm sure you are going to keep seeing these results ahead of us. Your first question is, if I'm still bullish in profitability for the future, so I think We will get there for sure. Yes, you are right. So this is not a year that I expected to increase profitability. This is not, as I said in my letter one month ago. And the rationale to that is the following. We have good business. First, I'll start with JET. I could just say I'm going to invest more in JET or increase profitability in JET. That's not the objective. The objective is to have a global food delivery leader. So first we're fixing technology, growth rate, how we treat the customer, lots of internal areas so we can have a company that can not only grow 10-20%, but we can have profitability on JET for many years. And that's my expectation. That said, for the moment, it's better for me to fix everything that we have and create the right foundation to grow than to just increase profitability in the short term. On iFood, it's nice that we have Diego here. The iFood business is doing very well. Yes, I know there is more competition there. The competition is not having better offer, better product, better logic. They are not. Actually, iFood offer, iFood brand, iFood communication, iFood is... Ecosystem. It's a very complete and good ecosystem and set of products. I could keep just increasing profitability, but I prefer to invest in what is growing. For example, you saw FinTech. It's growing super fast. For us, growing in iFood hits, it's super important. So, can I just say, let's Let's take the maximum profitability now. That's not my objective to make the maximum profitability next quarter or next six months. My objective is to have not only two billion, but many billions. And we will get there. So I'm as confident as ever. That said, there is cycles of investing more and delivering more results. Last year, many people questioned we could deliver the results. We delivered all the results. We are going to invest more this year and we are going to deliver much more results in the year after.

Fabricio, if I may, Cesar, one of the points that Fabricio mentions here that is very important is, do you have options? And that's the point. We have the option. For example, at iFood, could I grow less and deliver much more profitability, for example, on the adjacencies? Yes, I could. Is this the right option? The answer is no. The market is still growing. The habit is still being formed by the new options that we're bringing to the market. So the point for me here is not if we gonna deliver or not. It's when we decide to deliver. And I think that the right option right now, especially on the grocery side, the pharmacy side, among others, is still underdeveloped. I prefer to develop by myself and be the leader of the market than wait for this just to deliver more profits this year.

Did he make a second question?

I think maybe just to provide a bit more colour on the expectations for the year ahead. I think the first thing that I want to emphasise, for some businesses the expectations that we outlined at the CMD, we are actually packing on our head for many of those. Which are they? Things like OLX has had an Really stellar performance in the last year. 480 million of EBITDA, 16% top line growth. We expect that kind of improvement both growth as well as profitability and margin to continue. We have seen Paiu India growing but also returning to or being profitable. Again that trajectory is continuing. Within the iFood business we are seeing the adjacencies and you saw the presentation from Diego who are growing fast and starting to contribute a lot. So all of those businesses are actually in line and tracking well with the expectations that we've set a year ago. In terms of some of the new acquisitions, also Despegard as well as La Centrale that we acquired in the last year, they are tracking on or ahead of our investment cases. and then clearly there are certain investments and we've highlighted that in the presentation today but also within the CEI letter that we published in May where there will be investments this year going into JET as well as the core iFood business that Diego outlined and we've given you a range there because the market remains dynamic in terms of the spend and how competitors are actually reacting to that. So what is our expectations? From a revenue perspective, there is still an element of full year, like for like, like JET was only in for six months, will be in for a full year next year. So our revenue should grow still healthily to 12.3 billion at least next year and then you can see the dynamic of some businesses as I outlined really continuing on their growth and profitability path offset by some investments which then more or less get you to the conclusion that you came to Caesar in terms of overall profitability and then cash flow wise That should be the same. Our 10 cent dividend for the FY27 year, we've already received that in June this year and clearly as our e-commerce business remains profitable, it will continue to generate additional cash flow on top of that.

The second question was on the LCM and some of the products we announce forward and when they should be showing up in revenue in Ibra.

I can explain regarding the LCM and the impact in the business and in the numbers. So if you see that we are challenging ourselves in JET to deliver growth this year. So we want to bring the entire company back to growth while we remain profitable. This is only possible if we use LCM properly. If we have an efficiency in terms of CPO, otherwise it would be impossible to bring the entire company back to growth and we would need to spend much more than what we are doing now. So here is where you can see the impact of this kind of technology in the business.

Just to complement here, You're not the first person that asked me these days, but look for example, DeskH has 20% of its revenue coming from the iFood ecosystem. DeskH is growing like 30 or 40% overall. This is a lot related to LCM and data and AI. Look, our profits, I go to these events sometimes and say, no, let's talk only about the future. It's 1.3, this video, it was zero two years ago. We are using AI heavily to reduce costs, to serve customers better, to increase sales. So the results are already there. The point is they are going to keep compounding because we are not just using some technology that someone developed. For example, now, when I expand LCM to the whole world, that's what we are doing right now, Our results in many other companies are going to keep improving. When I put LCM in all that, we showed 10 companies in Latin America, all of them are going to use LCM. Our results there are going to improve too, but we are already having strong results due to AI.

Fabricio, if I may, in the same line that Gandolfo mentioned, think about the synergies of iFood and Vespager. Because someone is ordering food doesn't mean it will buy a hotel ticket or a flight ticket. So where the synergy comes from and where the MCM impacts here? The fact that I can have the power that LCM brings me, I can identify the behavior of a specific customer and I can know exactly what to do with that customer in a specific moment. So because LCM provides me this quality of information, I can provide to Despegar, from iFood to Despegar, the exact moment where someone is not in their town or has a certain frequency of travel and so on and so forth. And therefore, when you compare what this program is doing right now versus when it was publicly traded, you will see a company that is more profitable and grow much more. Where does it come from? It comes from the intelligence of the LCM. So, not only LCM, but also LCM. So, the answer in the end is, you will not see LCM as a specific line of revenue, because it's quite a fast business, at least until now. You want to see this inside each of the lines of the PMO of the company.

Just adding to that, we launched this week, maybe that's what you were asking about, Tocantins Claw. So we offered Tocantins Claw to the restaurants. We had a few restaurants, because we had like a thousand using before launching to everyone, that are saying, I have, using this model, substantially better experience than I had using the public global leaders. We are not selling it today to the restaurants, because we operated 10, Around 10 times cheaper than if you are using a global leader model. So over time we may charge specifically for that. Over time we may offer it for free for our customers and for other customers we may charge depending on how much they use. But our focus today is not make this line as a revenue line. It's to say we are the best partner for restaurants in the world. Because here they can grow faster and better their business. That's our focus for now. And we are doing all of that The costs of that are inside our income statement, because we can operate it cheaper, because we built our own model.

Alright, that's question one. Now we'll go to Andrew from Barclays. Andrew.

Hey guys, good morning. Can you hear me okay? Great, I've got two if that's okay. First one is on checks. So you're clearly getting some early signs of positive return in the cities where you've made changes. Can you just give us more colour in terms of exactly what type of changes you've been making there? And then give us more colour as to how easy it is to embed back across the rest of the geographical footprint. So for example, can you tell us how long that's going to take to get onto a unified back end and have the LCM for the up and running? Just so we get a sense as to how easy it is to translate what you're seeing in the early cities into the rest of the group. That's the first question. And then the second one is on Divery Hero. Appreciating that there's a lot of moving parts here and you're probably limited in what you can say, but as it stands today you have until mid-October to further sell down in the company. Can you give us your considerations as to the moving parts here now as to the stake and I guess the angles we can bump in Investor conversations around whether you might be able to negotiate with the EC to extend that deadline further, whether you might buy more shares, what your perspective is on the Uber interest in the company, whether there are still some assets in the Debris Hero you might be interested in. I think it would be really helpful if we could get your views on the various puts and takes around that stage. Thank you.

Answer very well the first question. Let me answer the easy question first and the tough question will come to you later. But regarding what we did in the selected cities is really focus on the growth flywheel that you saw here. So bringing the right high quality traffic to the platform and starting to doing the customer segmentation but using LCM behind that to understand the behavior of the customer is what was driving this kind of growth. and the supply is a very important piece as it is logistics so there is no secret on that the secret actually is executing it with operational excellence we are as I said in terms of behaviors raising the bar moving extremely fast and really focus on our customers to understand the pain points and solve them and the other piece of that is technology. When we start to apply the pros of technology, the technology that we also saw in iFood and here, you can see the level of change and we said that in the letter. Please do not extrapolate the 35% very short because we are building that to the entire platform. You can imagine the complexity when you go from a few cities Thank you for watching!

There is one slide in our internal presentation that shows number of tests of marketing or new products last quarter and this quarter.

Before actually JET was not testing too much. It was not part of the culture. So now we are running hundreds of tests. We want to bring this to thousands of tests because this is the speed that we can learn is what we're going to drive our results for the future. So that's what we are accelerating to spin this flywheel faster and faster. This is very important. You talked about the unified platform. This is a central project for us. I will talk about one piece of that so we expect to have in a few months launching one new country using already the new logistics platform which is a unified platform so we expect let's say in six months less than that to really start to operate one entire country with this new platform and then it comes naturally a rollout to all the countries after that this is the kind of speed we are trying to build internally and that's some of the areas that you're investing in this year correct? Yes, for sure. If you look at the investments that we are doing, for example, product and tech, this is exactly what we are doing. Like we said, we need this unified backend, unified platform, and it takes longer, of course, to do the entire company, but instead of doing it in like 24 months, we are breaking it down and delivering one piece at a time, so we can see the progress quicker.

I think that's really important across both JET and iFood. Yes, you're investing in demand, but also in supply with the product that sustains after competition or after your background to growth.

Let me just highlight this point which is very important. We are not the kind of operators that just use subsidies to move forward. Actually what we love to do is to test a lot, to build products. And these products remain for a cycle of years and years generating the results that we want.

So I can reinforce to you the change on how JET are approaching to frequency and retention are substantial. You see that chart? Obviously I'm not proud to say that 9 is 4%, but it was minus 9 like in March. These numbers are going to keep going up because we are doing profound change and I'm very confident about that. Andrew, your second question. Obviously I'm frustrated that I think we could do better. When process was the biggest challenge of DeliverHero, the results could be better for process and for Europe. But it is what it is. We had some commitments. We executed our commitments. We are not the biggest shareholder anymore. There is other bigger shareholders. So I think you should call them and ask what are their plans. There is nothing I can talk now in what are the plans or next steps. It would be inappropriate. So you have to wait more. I'm sorry.

So we'll go to the next question but before we do I'm going to remind you to unmute your phone before you speak and stop making me look bad. So we'll go to Will Packer at BNP. Will.

Hi there and thanks so much for taking my questions. Three from me please. Firstly, there was a very useful slide Thank you very much. Clearly, we've already touched on the noise in Brazil from the Chinese new entrants. You've cut 2027 EBITDA expectations quite sharply. On the other hand, when I look at KPIs by traffic, it's actually very resilient. A little bit of an update on the state of the nation of Chinese competition and the prospects for EBITDA to rebound in 2028, back to 26 levels or beyond. And then final question around the risk for the ecosystem growth From the rise of alternative consumer agents. So we know from Tencent they're working very hard to be the agentic AI assistant of China. But one would think in the West, Meta, Google, OpenAI, Anthropic, we're all working hard on the same. Could this imperil your own ambitions? The rise of big tech consumer agents? Or could we look at something like Latin America? Do you plan to coexist? Or will you be the consumer agent? Just any color on how you think about that. Long-term risk could be very interesting. Thank you.

Thank you for all the questions. I'll try to go to the first. Is that the vision for India and Europe? Yes, that is the vision. I finished with one slide saying if Brazil was more advanced, like it helps. I was the CEO there in Brazil. I started to dream about that two, three years ago, four years ago. What I want to show you is that we delivered much more than everyone recognize or know because we are releasing more data today. And I think the ecosystem in Brazil is strong. The region in India is the same. We are going to do the same. We are already executing a lot of the same. We already did more than we are talking about and we will go for Europe later. Then you say, so can we expect acquisitions now? No. My biggest goal now is Deliver real results in just it, because this is the foundation for our next steps. In India we did a lot actually, just to remind you. Hapido is doing 110, 120% year over year. It's an amazing company, it's a mobility company. Xebo also has a lot of synergies with Crozes. So hopefully we will make a presentation just like today on India in a few months. But I think the good thing to show you is that we are delivering technology and knowledge that is replicable. So, food delivery may be a $10 billion potential revenue thing in Brazil, but the whole market we are is $100 billion. And if you look in Europe, maybe it's $300 billion. And we are just to keep executing delivery more, that's our biggest priority, we should keep replicating that.

Just one comment on this, Fabricio, which is very important. Some people, when they look at that slide, they think a lot about acquisitions. That's not the point. Acquisition is not the strategy. The point here is what's the culture and management model that allow you to build an ecosystem. Because it's easy to buy a lot of companies or develop a lot of products. The point is how you make everything work synergically. So that's what we were able to prove in Latin America and of course it's a great framework for the other places. So, regarding the competition in Brazil, as Fabricio mentioned, we didn't see anything different from what we knew. So, the way that logistics is operated, the way that the algorithm works and so on and so forth. The focus of the competition at this point in time, it's been heavily focused on surgeries, especially on the outskirts where the low-income segment sits in Brazil. and in very small restaurants. We saw a market that grew heavily based on that. Discounts generally goes around 50% and of course we could just play with that, but that's not what we're going to do. We have to do some offensive in that sense, but that's not our focus. Our focus is mainly focused on product and one of them is hits that I showed here. So, can we go back to the same levels of returns in the next year? Of course we do. It will depend a lot on the behavior of the competition on the irrational side. As soon as things come back to the rationality, and it will eventually come back, we will go back to the profitability and As a new ecosystem, we have a push that will make us much more profitable than we expected in the past.

But can you estimate how much the competition is spending in those low orders?

They are giving 50% discounts through subsidies.

How much reais they are losing per order?

They are losing more or less $8 per order, which is something unbelievable.

More or less. So you showed our slide that we are losing 1.5 in average. In some cities we are losing like 0 or 0.5. So we are going to invest a lot to fight competition without the subsidies. So I think our position is It's very good.

It's very, very good. And the results up to this point are great. I mentioned, we grew orders, we grew customers, we grew frequency, we grew retention. So after one year of this irrationality, having these figures is something that is very meaningful.

And some Brazilians are getting free foods. They'd be happy. But we are going to offer to all Brazilians cheaper food through better products. That's what we are doing. And having the capability to invest for that makes a difference. And we are ready for that. We are a big enough company that we have a competition, we are going to win. And we are doing that profitably, rationally, with a good reasonability of how we are implementing that. So I think we are doing well. The third question was on agents. I was trying to be quick because we are talking too much in each question. Thank you for this question. What you just asked is part of our vision on process. Some companies in China, they are more advanced than OpenAI and Google, Gemini, but actually what we are seeing in some places in China, sometimes Alibaba, I think there is lots of expectations on Tencent too, is to have agents that are much smarter than just ask a question. It's agents that do things. We are leading on that in our region, so this week in Crossroads Forward we show Zapia, where you can tell Zapia, exactly what I'm telling you, by voice, Zapia, call my three daughters, offer them three places where we should have lunch, negotiate with them a place, then call the restaurants, Make the schedule, the reservation with them, then let me know what's the conclusion I put in my agenda. So it's an agent that they really commit and do things and they work for one, two hours until they finish everything. We are integrating that in all our ecosystems. So that we launched last week. We started to do just eat orders and also iFood orders. Also we are integrating that inside, for example, Despregar. At Despregar we have Sofia and we are making Sofia much more hygienic, just like Open Claw, but with capabilities of complete detransaction. Our agents now can make approaches much cheaper, Faster and easier than most of the other agents. You talked about the competition with the American companies. I don't think we are leading. I think we are doing a better job. Alibaba and Facebook are doing better jobs and TikTok and ByteNess. So I'm very proud that we are doing technology and we are moving at speed in Europe and Latin America and in India. In India we have also another agent called Equal. In Europe we are going to push more Zapier now. In Latin America we have three or four. We are doing its best in class. And I suggest you, I think, who made the question this time?

That was Will.

Will. Go there, download Zapier, test it, and you will say, oh my God, this is better than what I've seen from the American players. We are here to lead in AI and I think we're starting to deliver real results. What we showed last week in token claw, it's better than what exists. People are using cloud codes in other places, especially in the US. We are doing it cheaper and we are sharing the data between all the companies so our restaurants, they can get skills from other restaurants so they can operate better. This is better than what exists outside. So I think we are leading innovation, not only in Latin America and Europe and India, but also globally. And that's where it can grow. Our numbers are good because we are a very, very tech-first company, and I think the results are coming.

And Fabricio, just to compliment, what I would say as an operator is, The point here is not to say everything will change and I have to be prepared. The point here is to have the option at your hand, try to shape the future, and if you are not capable to shape the future, you are ready to understand how the future was shaped. Of course you're going to try to shape, but the point, and again, every time that we start to talk about innovation, people come six months after and say, where are the revenues? The point is not about revenues in six months. The point is to shape the future or be ready for how people will shape the future.

And we are doing that. I think another interesting point, an important point is what you say, integration of these life systems into your ecosystem because they are able to, when they are actually connected, they can do more.

Yeah, a good example on this is with Zapia. We are integrating Despagar and iFood. So, therefore, Zapia wasn't born only as an agent. It was born as an agent that can do everything that Fabricio said and also complete an entire transaction in a marketplace such as ourselves.

All right. Great. So, the next question will go to Monique at Citi. Remember to unmute, Monique.

Good morning, everyone. Can you hear me okay? so I had a couple of questions on food delivery if I can and then one on capital allocation so the first one I was just interested in when I look at the slide on the iFood revenues the core food delivery revenues look pretty flat year on year in the second half and actually down a bit from the first half presumably that is the vouchering or subsidies you've been giving so just was keen to understand how the core food delivery business is growing revenues if we were to X out the sort of vouchering you've needed to do because of the irrational competition at the moment. and then the second question also on iFood was around the profitability of the cargo and new initiatives because that was quite a dramatic swing in profitability 1H versus 2H so 1H down 112 million Brazilian Real and then 2H up to 427 million Brazilian Real so if you could just talk us through you know what has driven that sort of dramatic improvement in profitability so we can you know start to understand how to think about that going into 2027 and beyond because presumably that's going to be a big driver of profitability medium term and then the the final question I had was just on there was a slide showing you know the dividends total to process so you know the 10 cent dividends but also you know you've got a load of dividends coming in from OLX that have ramped materially as the OLX profitability has continued to grow and pretty stable dividends from iFood. As I think into next year, it also seems likely the case that you're going to get improvements in the dividends into process. So just wanting to understand how we think about that against the $5 billion buyback target and whether that buyback target, for instance, could expand as we go through the year if, you know, You know, OLX does very well, or if you dispose of more non-core assets than you think at the moment, for instance.

So I can start here with the iFood financial performance. So, yes, there is an impact in the revenue side and on profit as a consequence of the irrational competition. So for me, that's why it's so important to understand the entire P&L and how the operational metrics are going. So again, the customer base is bigger, retention is better, frequency is higher, we don't have any swing on the club, loyalty program and so on and so forth. On the profitability side, what we have as an impact is the increase of the CPO as I showed in the last graph of the presentation. So this is basically this movement. What are the good news? The good news is that all the clients that are the ones that generate more economic profits for the company is still there with the same level of frequency and therefore I'm not seeing any impact on this. So as soon as irrationality goes down, profitability comes up as a natural consequence.

Just to clarify, you had a question on iFood Pargo, so on that slide it's iFood Pargo and other, so you correct that there was sort of H1 versus H2 and a ramp up? Included in that was an element of a once-off relating to certain indirect taxes that we were able to recoup, which we also used to invest in the food delivery side of the business, where you would have seen order drive about 8% year over year. Then there was also a question about the cash flow and dividend extraction that we have at the top. So we see that in the past year we had a 10 cent dividend, OLX as well as iFood. So clearly the 10 cent dividend for FY27 that's already been received and that's increased a bit. OLX are on a further growth as well as profitability path. That element of cash flow generation and hence dividends that we can extract should remain and grow going forward. And iFood clearly as it will be an investment here, that will be sort of more depressed. So you then ask but how does that impact our sort of ability in terms of the share buyback? So from an overall share buyback perspective, clearly we continue with an open ended share buyback program. We have adjusted that where we fund with both the sale of 10 cent shares as well as other capital which comes from either non-core assets that we've sold or other assets that we have available. That part we will continue and for the year ahead 5 billion is what we will do. So I think that the way to see it is that it's just one component of other resources that we have that we can deploy besides Tencent that makes the program actually more efficient. It increases our per share exposure to Tencent and you would have seen how that has actually played out For instance, in our core headline earnings per share achievement this year, where underlying core headline earnings could be 13%, on a per share basis it was 24% because of the effectiveness of the share buyback.

Great.

Let's move on to Joe at UBS.

Joe, we'll mute your line, please.

Excellent. Thank you very much for taking my two questions. So firstly, last week you announced you're investing $460 million in Allen, a French AI-powered health tech business. This is the biggest investment beyond JET, Despargar and La Centrale to date. Could you give a bit more colour on the investment? What got you excited about it and how it folds into the wider process strategy? And then secondly, I want to spend another minute on Zapier. As you say, it's live in Europe and fascinating to use. Don't tell my dad that his birthday WhatsApp message this morning was both written and sent by Zapier. But anyway, Eoin mentioned agent integration versus and that versus the services in Europe feels like it is the differential versus the US majors. What's the impediment to moving even faster on identity integration? Do you expect to deploy ad dollars behind Zapier? And do you see Zapier or other personal assistants as something you can monetize?

The difficult part of that is that you have to make sure three questions, you always get one. But on Alan, we talk too much about AI as models. To me, models We have not only American models, but we have now Chinese models, we have open source models. The layer above is much more important. We are doing that on commerce, and large commerce model is super important for that. To be the impact on AI in health is unbelievable big opportunity. I really believe the opportunity is going to be very big. It's not our core to execute the health services itself, but our is especially amazing in a life assistance for healthcare. So, by far, what connects us a lot is that they have a life assist that people use every week. They have more than a million users, every week, talk, checking, what are you doing with your healthcare, how are you feeling, do you want to talk about something, do you want to talk to a doctor, do you want to do a video call, do you want to schedule something. So this idea of making AI, you know, Alan is also one of the founders of Mistral, getting a lot of intelligence to take care of health. I think it's a very big market. We are not a pure investor. We are buying part of the company because we think we can help. We can help on the life assistance and we will integrate somehow, not to give too much details today, the Allen Healthcare with our assistance. So we will integrate many more things. Second, we can help a lot in the B2C approach. We have hundreds of millions of customers that we can help on that. Third, they need to go to international expansion, and we will help substantially in the international expansion strategy. And we are working a lot on AI together. Our AI is very good, theirs too, and we think we can... So, it's an investment. I think Alan is going to be a $10, $20, $30 billion company, but we are not a pure investor. We are helping through our technology how to make them operate better. Very connected to the second question when we talk about Zapier. Zapier is the first life assistant we are pushing. We made so much progress on that in the last six months and now we started to talk about You told me your father got this message. Lots of my family members also talk to that quite often. It's amazing. I'm not going to say names, otherwise I will have problems in my family. But that is super sophisticated, and you said how aggressive we are to integrate. Very aggressive. Over the next few weeks you have many announcements on Zapier, how she can do things that no one else can do, because very fast you just send a message by voice and amazing things happen. Can we invest as dollars on that? Probably we will. Probably Zappi is going to keep increasing their investment and I think he started to position us as a technology innovation. It was only in Brazil, I think in one more South American country. Now it's in Europe. We integrated with Just Eat. There will be more important integrations in the next few days to be announced and demonstrated. I'm very excited about that and I think we are ahead of what other people are doing. Obviously, it's amazing to use, let's say, ChartGPT, but you can ask a question to them. On Zapier, you can say, solve my problem. This person is going to do that, call to 10, like I used to do that, my car has a problem, call or write to five places, give mentors in your car, negotiate the date and the price, close the deal. and we are going to do similar things for example in food delivery. So I think we are again, I think in token cloud we are ahead of the market, I think in LCM we are ahead of the market, I think exactly we are ahead of the market too.

Great, keep going and we'll go to Giles from Jefferies.

Thank you, good morning everyone. So first question for Fabricio please. Your strategies come under some public criticism of late. with an open letter to the process board using the fable of the emperors you close to frame the argument. So your thoughts on some of the criticisms you face there. Then question for Diego coming back inevitably to the question of competition in Brazil, perhaps to illuminate it from a new perspective, if you could give your thoughts on why Kita has indefinitely postponed its Rio de Janeiro launch earlier in March. And then finally, Roberto, please could you tell me or tell us what conditions you would exit further markets?

I'm a founder of a tech company for 25 years. Someone always disagrees about what we're doing. It's part of life. So I know some shareholders disagree. Part of life. I can survive with that. I read this letter, my first reaction is, I think he used AI to write the letter and to polish the site, so I'm sure he also liked the AI as much as me, he doesn't know that, but I think he liked it. You know my strategy, we are very good in what we use in AI, what we show in process forward, very few companies are doing LCM training model with the destination of the best model, Tocan Claw, Zapia, we have more 18 life assistants that we are going to keep pushing and testing in smaller regions. I think we are substantially ahead. Some people can say, ah, prove me, have you seen our numbers? The numbers happen because we are a tech-first company, not because we are lucky and Europe is growing 20%. No, it's not. It's because we are executing technology very well. We are going to keep being very aggressive in having the best technology and delivering the results. Not the last six months. I'm doing that for 15 years. That's why iFood is so big. Some people disagree. Okay, I can live with that. I think those people are wrong. I think we will deliver results over time. But come back in the next year results and I'm going to have more nice slides and you can maybe make this question again.

Well, Gils, nice to talk to you. Last time you were in Brazil, now I'm here visiting you. So, I really don't know why they decided that. There are so many moving parts That is impossible to know if it's the fact that there is a war in China or there are a great contender which is iFood or other aspects that we don't know. What I care is what they are doing and with this science it's how I redefine my tactics without necessarily changing my strategy. So that's it.

And I think there was a question, if I got it right, was basically what's the expectation in the market in Europe. What I see is the most challenging thing to build in a food delivery business is the foundation in terms of scale and density. This is exactly what Jeff has. If now we apply the whole technology, the management model and the culture that we said here, it's much easier to turn this high scale business with the right density into a back to growth, like in a company that can grow again, than doing the opposite. So for sure there are good operators in the market, but we are very focused on the customer. That's why we are deploying, for example, the LCM. Because if we understand better the customer than anyone else, then we can have the right services, the right supply, the right choice. So this is exactly where we are focused on. Just have the density, just have the scale. Now we need to leverage on that to bring the company back to growth.

I think what he was also getting at was, are there any conditions that will cause you to exit another country? Probably the opposite of what you just said.

Good question, so the conditions to exit a country or not is basically based on the principles on how we allocate capital. If we don't see the right density to have the right return on capital and it's impossible for us to win there or be a relevant player there, it does not make sense to remain in this country. So all the time we'll be assessing our portfolio and make sure that where we are, we are a relevant player. So that's the principle behind, that's why we left those two countries and we're going to be assessing all the time.

Great, thanks. Let's go to Markus at JPMorgan.

Hi everyone, I have also three questions. The first one is again on the Capital Markets Day last year, part of that was also creating a flywheel in Natam. Clearly you've done a lot, you highlighted the synergies between Destega and iFood, you've done a lot there. I think your comments I read that we're not going to see larger scale acquisitions, so we can debate what larger scale is, but it doesn't look like, given your comments previously, that there's a lot. So what is Flywheel and LATAM from here? I mean, what do you need? Is it something that we think will be built on organic revenue growth and strong execution? or how does it go from big to bigger yeah really I mean that's that's the question the second question is unfortunately I'm just eat again I mean clearly the minus four percent is on the content was down minus eight percent the year before yeah so it seems that it takes a long time but I've tried to understand it's really a question how do you get to revenue growth yeah I mean you're doing clearly a lot of things and then AI will help but I'm sure Your competitor is also very busy in his tech department. So is it about market share gains? Is it about consumers just ordering more because there are more systems and hence you have better order growth? Or do you really envisage market share gains at the end of the day? That would be interesting. And then the third question is just again on Tencent. Nico, the share price of Tencent is where it is right now. to keep going with the five billion dollar buyback is there a debate how much of Tencent you actually want to sell at these levels versus taking or funding the buyback more from the balance sheet yeah that would be my three questions hope that makes sense good that you distributed a little thank you so on Latin America

you said we talked about that last year but I think we get the credit that I told you that's our plan that we are going to do in Latin America and today we are showing that is the results we show that we are growing a hundred percent in three or four or five different business we are not looking for big very big acquisitions in Latin America now we show more less five to ten companies we invested or acquired in the last one year They were much smaller acquisitions. So, for example, I showed three or four companies doing software as a service for restaurants, one doing kiosks, one doing... There were many companies there and they were much smaller acquisitions. The point is that there wasn't one that I deleted. It would be useful now. We have the DSPH chart that shows going from 0 to 20% in one year. We have the same slides with more 4 things that was DSPH and then more 4 showing CRM Bonus, Mevo, Shopper, and someone else. And we are showing we have the same kind of growth in all the companies we acquired. Not in all, but we showed like this more 5. So, last year we had a dream ecosystem was a competitive advantage. Now it is, we are doing it sometimes in small acquisitions or investments, and all companies are accelerating their growth. That's our thesis, we are going to keep delivering organic growth a lot in small acquisitions within 10. So we are going to keep doing that. And also, we didn't show a slide about profitability month by month, all those companies, but you've seen that it is like $160 million in profits outside food delivery, growing a lot. We have some areas we started a few years ago that are every time more profitable. So I think the ecosystem is not a thesis anymore and that's what I try to show today.

So regarding JET and the revenues, what do we see? Like over the past few years, JET has been declining and trying to compensate for that JET as all the food delivery platforms in the world, they started to operate the delivery fees and service fees and so on. That's not our strategy to grow revenue going forward. The strategy is to grow order volume. To grow order volume, you need to grow your customer base. And we are investing exactly in these cohorts of the customers in the lifetime value. That's what will bring us incremental revenue over time. And to add to that, retail media. Diego shared here some numbers of retail media ads in iFood and that's the importance of just having this scale because retail media can also be a better ROI for our partners, for our restaurants, so they can invest to grow and have a good return on that. So when we put more order volume and more retail media, you have a path to grow the revenue. Delivery fees, of course, all the fees in the platform, they are part of this strategy, but has to be optimized over time. The intention here is not to become more expensive for the customer. The intention here is to become more efficient and try charging the right price in the right place.

That's what we need to do. Just something. We started his presentation with a chart showing minus 9. It was like March, if I'm not wrong, or a few months ago. Then now it's minus 4. We didn't put a date yet, but we are talking about a few months to start growing again. From someone that was doing minus 9 in January, I think it is a very good result. Our expectation is very few months.

Then just on the question on the share buyback, so I think when we introduced in November last year the fact that we will not just use 10 cent proceeds but also proceeds from other non-core assets, I think we've made our share buyback program and the capital allocation around that more efficient. Last year we did sell about 2 billion from non-core assets. In the first quarter of this year we've sold almost a billion and we have additional assets like MateOne and so on that we can use to actually supplement that. So I think That really helps because we are obviously one to be long term large shareholders in Tencent because of the potential that that has and by doing the capital allocation and the share buyback this way we've actually enhanced the effectiveness at least on a per share exposure to Tencent. in this way so we will continue on that path and here's five billion within that you know we have got significant financial flexibility to actually fund that all right guys we're at time but you have you feel strong can you do one more yeah yeah okay well Adam take us home please yeah hi I'll do two quick ones

First, you gave us the number for iFood in Brazil competition losing $8 in order. Any idea of their monthly order volumes so we can kind of calculate how much money they're losing a month? And the second question, when I look at the cash flow statement in the annual report you put out today, when you look at working capital there, there's a huge swing from a $10 million inflow to a $570 million outflow. Can you just explain the moving parts on that? I know some of it's trade related, but I think there's other things in there as well.

Yes, so on my side here, of course, this is just an estimation, but when we take everything in account, what we see is that they are spending like $150 million per month, combined.

On the cash flow, if you look at the statutory cash flow, it obviously includes a lot of merchant receivables and payables. When we measure essentially our free cash flow element, we sort of exclude that. So if you then look at the actual working capital element, it's a lot lower. Where does most of that go? Essentially it goes into growing many of our fintech businesses because there's a capital requirement. It's obviously a big debt. We have a number of other questions here that we will get to from the IR team. We will reach out to you directly. Fabricio, do you want to make any closing comments to send us on our way?

Hope you enjoyed our results. There was lots of questions. Can we deliver this improvement in EBITDA and free cash flow? We did. For the future, the ecosystem is working. We are going to keep expanding our innovation. I think we are going to come here every time much well-dressed because our innovation is going to connect us for an amazing future. Thank you for coming here and hope to see you next time.

Thank you.